Caninope wrote:Because you're making participation in the pricing system optional. This would increase the demand for bread (as people are more willing to take something free than something that costs money as per the law of demand) while decreasing the supply of bread (as people are less willing to make bread when they are not guaranteed adequate payment for their services, particularly as humans tend to be risk-averse).
Maybe if you went to a supermarket and bread was the only free item. But everything at the supermarket would be free...so filling up your cart/car/cupboard with only bread would simply limit the amount of space available for all the other items that you also value.
Caninope wrote:But why do you make the assumption that there will be an abundance of bread and not a shortage?
The supply of bread will be determined by the demand for bread. And demand is how much people are willing to pay for bread. This means that the supply of bread will be optimal...bakers will only be able to produce as much bread as consumers demand.
Of course, in no system is the supply ever truly "optimal". There's no such thing as perfect equilibrium. But markets get far closer to optimal than command economies. This is because "optimal" is determined by you trying to get the most bang for your buck...not a small handful of government planners.
Caninope wrote:And what if someone chooses to use both services but pay for neither?
Then they'll pay for the third service...or the nth service. If they have money...then why not use it to influence how society's limited resources are used? What else are they going to do with it?
Caninope wrote:Exactly. However, getting rid of the pricing model moves people along to different points on those preference functions. While this is most certainly not a problem in a system in which everyone participates in a pricing model, in your alternative model, people are allowed to use services without payment for their use. Hence, there are shortages. Your system does not deal with the issue of scarcity. Your system would only work in a system of overabundance, where there would be a certain minimum standard that could be met for everyone at a minimum cost. This is, however, a fantasy world.
The fact that you bring up the issue of "scarcity" means that we're at least in the same ballpark. Unfortunately, you don't see that you'll have unlimited wants but limited funds. This means that you'll spend your money on whatever shortage concerns you the most. I'll do the same thing. As a result, resources will be efficiently allocated.
Right now the shortage that concerns us the most is a lack of economic discussion. So here we are, sacrificing the alternative uses of our limited time, in order to try and address this shortage. And this is how resources are efficiently allocated. Prices are not needed for individuals to have the freedom to choose which use of their limited resources they value the most. It's all about opportunity cost.
So it's great that you know about scarcity...the next step is for you to learn about opportunity cost.
Caninope wrote:The problem with that line of logic is that people have a tendency to favor immediate and tangible gains (particularly with vague and long term costs) than the inverse, and this is only amplified when it does not apply to one particular person.
There are people who give up momentary pleasure for future benefit...and there are people who do not. In the world I described...which type of people would have more influence?
Caninope wrote:Let's take unemployment insurance as an example. It has beneficial effects, but allowing people to choose whether their tax money will be spent going to UI or not would result in quite a number of them choosing to defund the program. You're equating importance to society with popularity in society while I'm equating it with the consequences upon society.
If you can truly know the consequences...then what's your paypal address? I'll send you all my money.
Money that goes to unemployment insurance has to come from somewhere. Where should it come from? If you take it from the bakery then you'll have unemployment insurance at the cost of jobs. Is that a good trade-off? "We have unemployment insurance for days...which is great because for some reason there aren't any jobs!"
Again, just like I said with bread, if you want unemployment insurance to be a more important priority for consumers...then it's up to you to convince them that this one particular use of their limited money will provide them with more value than all the other possible uses. If you're not willing to sacrifice the alternative uses of your time to do so...then you can't really say that UI is that important to you.
I can say that pragmatarianism is important to me only because here I am sacrificing the alternative uses of my time in order to try and persuade you that it's worth it to sacrifice the alternative uses of your time in order to learn about pragmatarianism. This is scarcity, opportunity cost, decentralized knowledge and individual valuation...all of which result in the efficient allocation of resources...without any need for profit or prices.
