Are Congresspeople Omniscient?

[The Parkus Empire]

I think the real question here is, are you a wizard?

[The Republic of Llamas]

Just going to answer the question:
NO.
It's one of the two major flaws of democracy. Winston Churchill explains the second better than I ever could:
"The greatest argument against democracy is a five-minute conversation with the average voter."

So that means that politicians are stupid, but they tend to be better-informed than the average person. And seeing as how they're elected, they'll still mostly represent the interests of the people.

[The Serbian Empire]

The answer is I wish they were so they could actually do their job better.

[The United Colonies of Earth]

No, they are not. Anyone who claims humans can have knowledge of all things is proposing something that violates the amount of data processing space in the universe and is therefore absolutely uninformed.
Although having the people decide who pays might be a bloody romp. The bankers and everyone else who pays less than what they're supposed to will try to bribe us into having them pay nothing at all. And there would be oppression of those who didn't have enough money to pay, so they would be figuratively enslaved to provide enough revenue for the lazy richer people.
Krugman's article is sixteen years old. I wonder if he's changed, although I know him as a liberal economist.

[Uiiop]

om·nis·cient: knowing everything
Knowing where taxes go /=/ Knowing everything
Therefore Congressblokes aren't omniscient.
Besides despite what misinterpreted quotes you may have on you i'm sure that congresspeople have other people to do that for them so that they only know that broadly.

[Uiiop]

http://www.cracked.com/article_19899_5-popular-forms-charity-that-arent-helping_p2.html

Therefore? Let's vote for 300 people to choose how donations are allocated? Yeah! You'll get a far more efficient allocation as a result! No more overspending on "sexy" things. Only one minor detail. The "outpouring" of money will be reduced to a trickle...not just for sexy things...but for everything. Because that's exactly what happens when you spend people's money on things that they really don't value.

And nonprofits realize this which is why some of them do allow donors to earmark. Clearly they think it's worth it to sacrifice some control for greater revenue. They are receiving money that people wouldn't have chosen to donate if they hadn't been presented with the opportunity to be more specific.

But to argue that the "solution" is to elect 300 people to choose how donations are spent in the nonprofit sector...is the epitome of throwing the baby out with the bath water. You'll go from $300 billion in donations to $25 billion. Way to solve the "problem".

If you truly want "unsexy" endeavors to receive more funding...then figure out how to make them sexier...



Do you find Edward Weston's photo of a bedpan as sexy as I do? No? Well I guess sexy is in the pants of the beholder. And for some twisted freaks out there, practical will always be sexier than flashy.

Until you start a blog and put your time where your mouth is, I'm calling bullshit on your belief that electing 300 people to spend everybody's money is a good solution. You know its a crappy solution but you just aren't willing to accept that allowing taxpayers to shop for themselves is a better solution. So you're stuck in this weird limbo where you know it would be the epitome of stupid to prevent donors from shopping for themselves in the nonprofit sector, but you refuse to accept that it would be the epitome of brilliant to undo the epitome of stupid by allowing taxpayers to shop for themselves in the public sector.

Wait what? what does having a blog got to do with anything? I know blogging doesn't make people good financial manager or else tumblr would be a business school.

[Uiiop]

Have you ever taken an economics course? Or picked up a book on the subject? What I'm describing are the fundamental theorems of welfare economics. This is absolutely fundamental stuff (ho ho ho).

I don't want it in your own words. Find a credible paper on the topic and share the relevant passage. If you were actually knowledgeable about the subject, then you shouldn't even have to search for a relevant paper. You should already have plenty on hand to choose from.

Wait...he cited a Wikipedia article. How's that his own words? I got a feeling that your glass house is projecting. So...
*Starts to throw stones on your house of cards n' glass*

[United Dependencies]

They're not omniscient, but they do have access to quite a lot more information than your average person.

[United Dependencies]

SE here's a simple test: I want you, in your own words, to answer this question: What is a public good?

What should the government do? Whatever enough people are willing to pay it to do.

Can you step outside yourself? Can you set aside your own personal biases regarding the proper scope of government? Give it a try...and we'll have my good friend Herbert Spencer take us on a trip...

Alright let's pack it in.

Seriously: that was a good go, but it's over now.

[United Dependencies]

If you fail to do this, then by "bravely" running away you're implicitly acknowledging your vast economic ignorance.

It takes some nerve to come into a thread and say someone is economically ignorant when you can't even define what a public good is.

[Vectrova]

Why does the phrase "ideological masturbation" always spring to mind when I think of your threads?

Because that's exactly what he's doing. He ignores any criticism he doesn't like and responds to the remaining portion with absurd, out of context quotes, misrepresentations of arguments, and regurgitation of the same tired lines he's been saying since page one with very, very little change in tactics. Any attempt to force him to acknowledge any of this is met with more of the same.

It's unearthly boring and, really, I don't know why anyone's still posting. Ya'll peeps are crazy and gone talking to a wall.

[Xerographica]

Our current system is based on the assumption that congresspeople are omniscient. (True/False)

If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...then it has to be true that congresspeople can know, better than society itself, exactly how much benefit society derives from milk. So if we're better off allowing congresspeople to determine how much public education should be supplied, then we're also better off allowing congresspeople to determine how much milk should be supplied.

The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.

[Xerographica]

No.

When has anyone actually claimed that except as a ridiculous straw man?

The Nobel Prize winning liberal economist Paul Samuelson provided the definitive economic justification for government...The Pure Theory of Public Expenditure. It's been cited over 5,000 times. His argument basically boils down to the free-rider problem. It's a really reasonable argument. Of course everybody wants something for nothing. Everybody wants a free lunch. The problem is though that Samuelson "conveniently" assumes that government planners are omniscient...

Essential though the efficiency model of public goods [Samuelson] is as a theoretical construct, standing by itself it has little practical use. The omniscient referee does not exist and the problem of preference revelation must be addressed. - Richard A. Musgrave, The Nature of the Fiscal State

Determining the efficient level of public goods requires knowing consumer preferences. That knowledge is often assumed as given in theoretical models of optimal provision [Samuelson], but obtaining it is a major challenge when it comes to actual policy. - Richard A. Musgrave, Peggy Musgrave, Providing Global Public Goods

The question is...how many passages do I have to share with you before you agree that our current system is based on the assumption that congresspeople are omniscient?

[Xerographica]

I don't know anything about Paul Samuelson. You're going to have to try a bit harder if you want to convince me that the US's system assumes congresspeople are omniscient.

The US system has to be based on some theory. Right? We don't just take people's money without having a reasonably good explanation. Samuelson is the guy that provided the theory that our current system is based on. According to his theory, there's no need to determine consumers' preferences for public goods because congresspeople already know consumers' preferences. In other words, our current system is based on the assumption that congresspeople are omniscient.

If you want to argue that our current system is not based on this theory, then it's up to you to share exactly which theory our system is based on. It shouldn't be too difficult. If somebody comes up with a theory that our system is based on, then chances are good that they would have received a Nobel Prize in economics for doing so. So just review their work and find which ones focused on public finance.

[Xerographica]

Source? Samuelson looks old, but I'm fairly sure the system was designed before he was around.

Some explanations for our current system are better than others. Samuelson has provided the best economic explanation for our current system. Find another explanation that has been cited more than 5,000 times.

Let's see it in his words, not yours.

In other economist's words...

There is also the perennial problem of the revelation of public preferences for public goods and of people's willingness to pay. These issues have been ignored in some approaches, particularly Samuelson's. But the difficult issues they raise cannot be ignored. - Meghnad Desai, Public Goods: A Historical Perspective

You have yet to provide any evidence that this system is based on Samuelson.

Again, I can't show you an economic explanation for our current system that has been cited more than 5,000 times. This doesn't mean that one doesn't exist...it just means that I haven't found it. But I have studied public finance enough that if a more widely recognized theory existed, then chances are extremely good that I would already have run across some mention of it.

[Xerographica]

So you have nothing to show? I think we're done here.

The Pure Theory of Public Expenditure has been cited by over 5000 papers in the relevant field. And I've shown that Samuelson's theory assumes that congresspeople are omniscient...

Our discontent with the original Samuelson rule stems from its failure to account for tax payers’ response to public expenditure and taxation. The rule was derived for an omnipotent, omniscient and benevolent government, a government which, by definition, need not consider people’s responses to its actions. Drop that assumption, restrict government to the choice of tax rates and public expenditures, and the response to its actions must be taken into account. - Dan Usher, Should the Samuelson Rule Be Modified to Account for the Marginal Cost of Public Funds?

I've shown plenty and you've shown absolutely nothing to disprove what I've shown.

[Xerographica]

Taxation is not positive feedback; it is what pays for the fucking schools and roads. It is a necessary evil.

And if we're better off allowing congresspeople to determine how many roads and schools should be supplied...then we're better off allowing congresspeople to determine how many cars and restaurants should be supplied.

Paul Samuelson, the guy who provided the best economic justification for our current system, agreed...

The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive. - Paul A. Samuelson

Clearly there's a problem with assuming that congresspeople can know, better than society itself, exactly how much benefit society derives from any given good/service.

[Xerographica]

"Elected representatives aren't omniscient, therefore representative democracy is bad!"

Elected representatives aren't omniscient, therefore we need a way to determine exactly how much the public values a military strike against Syria, the war on drugs, environmental protection, a wall between the US and Mexico, public healthcare and so on. We can easily determine the public's values simply by creating a market in the public sector and giving taxpayers the freedom to shop for themselves. Their spending decisions will reflect their values. As a result, we'll maximize the amount of value we derive from society's limited resources.

[Xerographica]

Some explanations for our current system are better than others. Samuelson has provided the best economic explanation for our current system. Find another explanation that has been cited more than 5,000 times.

And you have yet to show us Samuelson's theory in his own words. You're just a broken record repeating the same useless quotes over and over. You've got nothing.

Let me see if I can get this straight. You're basically arguing that Richard Musgrave and other respected economists completely misinterpreted Samuelson. And/or, you're arguing that your interpretation of Samuelson will be more accurate than their interpretations. Is this correct?

If so, then why not just read Samuelson's theory yourself? Did you miss the part where I linked you to it? Here it is again...The Pure Theory of Public Expenditure. There's his theory in his own words. Have at it and let me know where/how/why so many respected economists completely misinterpreted Samuelson's theory.

[Xerographica]

Our current system is based on the assumption that congresspeople are omniscient. (True/False)

False. Our (USA, I assume) current system is designed to produce the most wealth with limited resources, which can be done despite congresses non-omniscience. In the ideal case of course. I wouldn't go so far to claim that the house and senate are the utilitarian solution to governance, but it's at least a shot. See below.

False? Therefore congresspeople do not know how much public education you'd prefer...therefore you have the freedom to decide for yourself how much of your own tax dollars you spend on public education. Except, this is obviously not the case. Why? Because our current system is based on the assumption that congresspeople are omniscient. They already know how much you value public education. Therefore, there's no need for you to shop for yourself in the public sector.

That doesn't follow at all. Determination of the allocation of a resource is highly dependent on the nature of the resource. I daresay that it would be easier to predict how much milk a given population would need than it would be to predict how much money should be spent on public education and where it should be spent.

Either congress knows more accurately than society does how much benefit/value/utility society derives from any given good/service...or it does not. If congresspeople can reach inside your head and pull out values that you can't access...then this is true for any given good/service...public or private.

The amount of foresight is irrelevant (and somewhat debatable depending on the congress critter, but I'll stipulate that for now), congress can choose "cooperative" options that self interested players cannot. Cooperative options (in many cases) can have such large payoff that they still produce more wealth despite being otherwise inefficient.

Congresspeople can't know how much value that you'd derive from any option...cooperative or otherwise. When it comes to values, the only place that accurate answers can be found is within people themselves. How much do you value public education? Well, I'm pretty sure that the answer is under this rock. Nope, maybe it's in this alley over here. Nope, maybe it's in some book. Nope, maybe it's written on a cloud. Nope, maybe its in these chicken bones. Nope Nope Nope Nope.

How much you value public education can only be revealed by how much you're personally willing to sacrifice for public education. If you're not given the freedom to choose exactly how much you'll actually sacrifice for public education...then the answer cannot be revealed. If you think otherwise, then you're making the assumption, like Samuelson, that congresspeople are omniscient. Congresspeople will know exactly how much you'll sacrifice for public education even before you're given the freedom to do so. Therefore, there's no need for you to have the freedom to choose how your money is spent.

There's no need for taxpayers to demonstrate their preferences for public goods because people's preferences are "given". They are assumed.

Economic planning in a socialist system must necessarily founder on the rocks of ignorance. First, the data necessary to find out the pattern of production that best fits consumer preferences are never given, as often assumed by planning proponents. Second, and even more important, the central planner cannot obtain the necessary data. Much of the data on available resources, production alternatives, and consumer demand constantly changes as economic conditions change. Thus, decentralization is the only means of coordinating economic activity through which the specialized knowledge of individuals can be taken into account and used promptly. - E.C. Pasour, Consumer Information and the Calculation Debate

How, then, are demand functions revealed? It would be disingenuous, to say the least, in an exercise whose object is to discover how demand is revealed, to assume that, ex ante, centers of power know the preferences of consuming households. We must then begin our analysis of the forces that motivate citizens to reveal their preferences by focusing on a fundamental information problem. I therefore assume that as a consequence of imperfect information concerning the preferences of citizens, centers of power will provide, except by accident, goods and services in quantities that will be either larger or smaller than the quantities desired by consuming households at the taxprices they confront, and I show that these departures from optimality inflict utility loses on these households. - Albert Breton, Competitive Governments: An Economic Theory of Politics and Public Finance

[Xerographica]

No, it's not. I went through some effort to demonstrate to you that, assuming we are pursuing a utilitarian system, our congress people need not be omniscient. I would like you to explain to me why the math in my scenario is incorrect or how it cannot apply to the real world. If you cannot do one of these things, then you must accept that allowing congress control of some public funds maximizes value. This fact is independent of any other arguments you make or quote, so please address it (I would really love to know if my understanding of game theory is wrong - I'm pretty sure I'm right, but it's always possible).

How can congress possibly know the maximum value (optimal provision) in the absence of everybody's opportunity cost decisions? I know that McDonald's is successful because so many consumers are willing to sacrifice the alternative uses of their money for a Big Mac. You know that the DoD is successful because...? Because they produce x amount of bullets, y amount of tanks and z amount of aircraft carriers? Because they attack 5 countries per decade?

The government can successfully supply bullets...and I can successfully supply boogers. In the absence of people's opportunity cost decisions...one is equally as valuable/valueless as the other. We can both scream at each other that the value of one far exceeds the other. But the only way to determine the truth would be to allow consumers to decide for themselves. If they give the DoD more money than they give me, then clearly they value the government's bullets more than they value my boogers. Oh well, you were right about that. But are you right that consumers value bullets more than they value books for students?

A second point of broad consensus among critics stresses that publicness in consumption must not necessarily mean that all persons value a good’s utility equally, Mendez (1999), for example, illustrates this point by examining peace as a PG. Some policy-makers might opt for increased defense spending in order to safeguard peace. However, this decision could siphon off scarce resources from programmes in the areas of health and education. Other policy-makers might object to such a consequence and prefer to foster peace through just the opposite measure -- improved health and education for all. Especially under conditions of extreme disparity and inequity, the first strategy could indeed provoke even more conflict and unrest, securing national borders by unsettling people’s lives. - Inge Kaul, Public Goods: Taking the Concept to the 21st Century

We all value things differently. Therefore, math can't reveal values...only sacrifice can. You can show me all the math in the world...but it's not going to accurately predict what a parent is willing to sacrifice for the well being of their children. Without that information, there is no "maximum value" or "optimal provision". There's simply a waste of resources that could have been put to more valuable uses.

[Xerographica]

Once again, even if we stipulate that the market is the best way to apportion things for ALL goods and services, this does not mean it is the ONLY way that has any usefulness at all. I can tell you with fair certainty that spending government resources growing apples is better than spending those same resources paying people to systematically break every chair on capitol hill. Are you willing to argue that the market is the ONLY way to determine which one of those endeavors will produce more value?

Yes, the market is the ONLY way to definitively determine which one of those endeavors will produce more value. Entrepreneurs make guesses. One entrepreneur guessed that selling rocks as pets would produce value. Another entrepreneur guessed that selling pooping dog toys would produce value. That's all we can do is make guesses...with various degrees of insight/foresight. Whether or not we guessed correctly...can only be determined by the opportunity cost decisions of consumers. Are consumers truly willing to give up the alternative uses of their $10 for a pet rock? I would have guessed no. Most people would have guessed no. Everybody with half a brain would have doubted the business model.

People are weird strange crazy bizarre absurd irrational and unfathomable. And we aren't exceptions. Therefore, we live and let live and allow people to decide for themselves what is worth their sacrifice. And for heaven's sake we drop the assumption that congresspeople are superior enough to skip this essential vetting process.

[Xerographica]

You are making the claims with respect to what Samuelson is saying, so the onus is on you to back this up. I skimmed the article you posted. Nowhere does he claim congresspeople are omniscient. In fact, your critiques seem to have very little relevence to this article, and your posting a couple short quotes, no doubt taken out of context, does nothing to discredit it. Colour me unimpressed.

Thank you for actually reading the paper. Maybe I was wrong that Samuelson argues that congresspeople are omniscient. So please tell me what exactly was the point of Samuelson's paper. Over 5000 papers refer to it...so surely it has a significant and noteworthy point. My judgement seems to be off...so please share your own judgement regarding the main thrust of Samuelson's argument.

[Xerographica]

But the point is that it doesn't have to be definitive. You have ignored the relevant portion of my post where I show that more goods and services are available to a congress (or any cooperative entity) than to a set of independent actors. Congress people don't have to be superior for this to be useful. Indeed, this can be more useful than the efficiency gains of the market for many goods.

If it isn't definitive then it's merely conjecture. We'd be better off by attacking Syria. Maybe...yes...no? You make a guess and allocate your own resources accordingly. But please don't be so full of yourself that you're willing to gamble my own resources on your conjecture. Feel free to shoot yourself in the foot but I kindly ask that you abstain from shooting me in the foot.

If people are certain that a train is eventually going to crash, don't let your giant fatal conceit block them from getting off at the next station. Step aside and let them off. If the train crashes well...at least some people survived to make it to another destination. If the train doesn't crash...at least some people made it to the desired destination.

The only way around the essential value of hedging our bets is omniscience. And nobody's omniscient. Therefore, we're welcome to try and persuade the heck out of each other...but at the end of the day, if we can't convince people that our way is superior...then we have to let people go their own way.

[Xerographica]

Thank you for actually reading the paper. Maybe I was wrong that Samuelson argues that congresspeople are omniscient. So please tell me what exactly was the point of Samuelson's paper. Over 5000 papers refer to it...so surely it has a significant and noteworthy point. My judgement seems to be off...so please share your own judgement regarding the main thrust of Samuelson's argument.

Do your own homework. You made this thread, so we expect you to know what you're talking about.

So you read Samuelson's paper...and you're certain that he did not say that congresspeople are omniscient...but you don't know what he actually did say.

I've done my homework, I've read the paper and know exactly what it says. I've told you what it says and you say that I'm wrong. If you say that I'm wrong then tell exactly what the paper does say.