Are Congresspeople Omniscient?

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Are we talking about the same consumers who spend their money on stupid, useless shit they don't need?

One person's trash is another person's treasure.

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No. If taxpayers had one single fucking clue about what society needed the idea of the state would be obsolete. .

What? The baker you give your money to would give some of his taxes to the police because he doesn't want to be robbed. Where's the difficulty?

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Oh I believe in consumer sovereignty. I'm for universal welfare (means to survive guaranteed for everyone on earth) and the implication of that is that ALL personal spending is discretionary.

You're for disenfranchising anyone whose personal earnings don't reach the taxable level. I don't think we'll ever agree on anything more than "consumer sovereignty" but nice try.

Right now people can only indirectly choose where their taxes go. Does this mean that we're all disenfranchised?

In a pragmatarian system, sure, your personal earnings might not reach the taxable level. But how many different people do you give your money to whose personal earnings do reach the taxable level? In all seriousness, can you answer that question?

In a market system, anybody you give your money to is somebody who represents one or more of your interests. It's a ridiculous amount of people because you have a ridiculous amount of interests. But it would be even more ridiculous to try and pick one person to give all your money to in order for them to protect all your interests. It wouldn't be so bad if it was a 1 to 1 ratio. But if their "clientele" keeps expanding...then most of your interests would be lost like tears in rain.

Poor people give their money to the people who represent their interests. I want the people who represent the interests of the poor to spend their taxes on the public goods that they need to better serve the interests of the poor.

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Values are dependent on the valuer, certainly, but surely you agree that each person has a utility function? I was proposing a set of utility functions that, even if they were known to the market actors, would still not be optimized by your tax choice system. If you cannot prove that a set of such functions does not exist, then you cannot prove that tax choice is optimal (and, indeed would be in some cases suboptimal).

Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. - James M. Buchanan, Order Defined in the Process of its Emergence

Like I said, if your utility function was fixed, constant, static...under a rock somewhere...and it could be found and known along with everybody else's utility functions, then sure, great, Samuelson was right on. No need to allow people to shop for themselves anywhere at anytime...because planners have them covered.

But in real life, your choices are so complex that it's not even funny. All that complexity is lost and wasted when we allow 300 personal shoppers to shop for an entire country. The consequences are going to be infinitely negative...but this will only be known and understood and grasped by those who can sense the alternate reality where all that complexity is integrated.

It really should't be that difficult though to pin down the cause of the allocation disparity between China under Mao Zedong and China under Deng Xiaoping.

Excellent, so you would agree that a society that inefficiently (say at 75%) allocates a $10 value of goods and services is preferable to one that perfectly allocates $5 worth of goods and services?

Eh, the size of the pie absolutely depends on the efficiency of the allocation. Right now our pie is still bigger than China's (not for much longer though). So China with pragmatarianism is infinitely better than the US with socialism.

1) No it's not. It need not be to be utilitarian, as I have shown.

You can't know people's utility functions.

2) Ok, now we must show that this has negatives and no positives. Unless we have some credible evidence of the orders of magnitudes of these effects.

There can't be any positives to limiting input. You just perceive positives because you're failing to see the alternate reality where input is not limited.

3) Do you deny that crashes would occur in the absence of state participation in the market (see: bitcoins)?

Again, markets facilitate heterogeneous activity. The more centralized the economy...the more homogeneous the activity...the greater the frequency and magnitude of the crashes. You're putting far too many eggs in one basket. You're gambling way too much on way too few ideas. The consequence are a given. You're going to have massive failures WITHOUT even moderate successes to balance them out.

The market is not the epitome of a group effort. If it were, then there would be no incentive to lie, and negotiations would consist of honest, accurate accountings of how the total resources of both parties could best be split. The market is merely the only way we have to enforce any amount of cooperation for many goods. Again, do you deny that failures would occur absent government intervention? If you cannot say yes to this question, then you must accept that the market is not perfect (which is what I assume you mean by definitive).

It's a group effort in the sense that the most people can give feedback on how well other people are using society's limited resources. People just don't give positive feedback to uses of society's limited resources that don't make sense to them. Therefore, we minimize nonsensical uses of society's limited resources.

Again, the market is a vetting process. Resources cannot be efficiently allocated without people's freedom of entry and exit. Forcing people to board trains and preventing them from exiting assumes that some people are omniscient. But contrary to popular belief nobody can do enough homework to guarantee the success of any endeavor. And if they are guaranteed funding then it's a given that they won't do even the smallest fraction of the homework that an entrepreneur will do whose funding depends on how well he can persuade others of the potential value of his idea.

First off I have explicitly and repeatedly not assumed that congress people are omniscient, and I would appreciate you refraining from characterizing my argument as such.

How can I not characterize your argument as such? If you're willing to skip the part where you persuade people to invest in your idea...then clearly that degree of certainty implies omniscience. And omniscience is the most charitable characterization for this type of behavior/mindset.

It's not that this information is wholly worthless (though, it's I don't think it's worth as much as I suspect you imagine it is). Rather, it's that a group of independent actors choosing where to put there money aren't going to pick the option with the most total good. Even if they know that that collective choice is optimal. Are you denying that people will try to maximize their own value?

It's a given that people will try and maximize their own value...and this is the only way to determine which option provides the most good/value. I don't know how, in the absence of everybody's spending decisions, you can feel mildly comfortable saying that an option provides the most good. Again, the only way you could be that confident is if you assumed that congresspeople are omniscient. Because you can never never never do enough homework to be that certain.

So we give people the freedom to shop for themselves. Just like in the private sector, they'll give their money to whichever organizations provide them with the most value at that point in time. The government organizations that provide more value will gain funding...while the government organizations that provide less value will lose funding...and we'll derive far more value from the public sector.

Imagine a candy store 500 years ago. It would have provided x amount of value to children. Does a candy store today provide the same exact amount of value? Obviously not. It's a given that it's going to provide infinitely more value. This is simply because in those 500 years...billions and billions of kids gave their money to whichever candy producers came up with more valuable candies. Consumer sovereignty incentivized producers to innovate and come up with better uses of society's limited resources.

A candy maker could never "know" beforehand which candy would produce the most value. This is because nobody is omniscient. Yet through our entire exchange you've held on to the idea that it's reasonable to assume that congresspeople can "know" beforehand which public good will produce the most value. If you drop that assumption then taxpayer sovereignty is the logical conclusion. You really don't want taxpayer sovereignty to be the logical conclusion so you cling to your assumption with all your life.

A collective entity with full control of the purse strings would (assuming pure motivations) pick the options that bring the most value everywhere. Even if that failed to pick what an omniscient actor would pick, the gains from collective action could easily outweigh their small misteps.

Given that we're talking about the public sector...every action should be collective in nature. Therefore, in order to maximize the gains from collective action, we have to allow taxpayers to choose whichever collective action provides them with the greatest gains.

An example: It might have been optimal if I-64 were built exactly 15ft to the north of where it is. The difference in value between that and it's current location, however, is probably much smaller than the difference between it's current location and many small intermittently maintained roads instead of the highway across the country.

If taxpayers were willing to forego the I-64...then it's a given that they had more valuable collective actions to spend their limited tax dollars on. There's a difference in value between a new highway and additional funding for cancer research. Is it possible to compare the potential gains from the two different uses of society's limited resources? Of course, and it's absolutely essential to give people the freedom to do so if we are going to maximize the value we derive from society's limited resources.

I'm saying that even if I could prove beyond any sane doubt that it was a recipe for 1000 years of war (i.e. would be the most valuable possible option), the DoD would not be funded sufficiently. Upon further consideration, I'm not even sure it would be rational for any individual to do so. If I' m part of the 30%, I can fund my favorite program while still reaping the benefits of the DoD being funded.

There's a calculus here. Let's say that you value the EPA and DoD equally. If the DoD is at 100% funding while the EPA is at 10%...well...it's a no brainer how to allocate your taxes. If the DoD is at 90% and the EPA is at 20%...then it's still a pretty easy choice. But obviously as the DoD goes down in funding...and the EPA goes up in funding...then you become more concerned with the safety of the country...and less concerned with the safety of the environment.

So you prioritize your spending decisions to address your biggest concerns...and everybody else does the same...and we minimize concern and maximize prosperity. And this is exactly what happens in the private sector.

Let's say you were convinced of that this was the case on Syria, but you also had the option to give money to "The Xero relief fund." Which would you choose?

Obviously I'd choose the Xero relief fund. You know why? Because in order for that to be an option enough voters would have wanted me to be on the menu. Clearly they derive collective action value from whatever it is that I'm doing with society's limited resources.

Your own page with a few quotes is not really a source. And your rule is based on the assumption that you are infallible. Considering that you have yet to reduce your logic to an axiomatic system whose logic can be check devoid of context, I consider this assumption suspect.

I know that the "logic" of basic economics is seductive, but it is based on a large variety of (not universally valid) assumptions.

The rate of progress has to have an explanation. I'm as certain as I'll ever be that my explanation is correct. If you have a better explanation then I'm all ears.

Did you know that you provide me with more value than any other participant in this thread? If I could only pick one person to exchange with...it would be you. But this can't be known beforehand. And there's no guarantee that another member won't come along and provide me with more value. The point is that it's the Truth that we maximize value when we give people the freedom to choose who they exchange with. Given that it's the Truth it's relevant whether we're talking about this forum or the public sector. Limiting who people trade with limits value. Right now we prevent people from trading in the public sector. If we eliminate this barrier to trade, the result will be infinitely valuable.

[Xerographica]

Why do you want a small clique of ultra-wealthy persons, many of whom inherit their wealth rather than even pretending to earn it and many more of whom "earn" the money shuffling numbers on sheets of paper to maximise short-term profits even though it means their employers will go bankrupt in 5 years, to decide what level of taxation I should pay, and what should be done with the money?

Why do you want Paris Hilton to have a greater say in how the public finances work than, say, Paul Krugman?

This is pretty great. LOL. I love it. Paris Hilton versus Paul Krugman? That's a really tough one. Is Paris Hilton an idiot? Is Paul Krugman all that? How would Paris Hilton allocate her taxes? How would Paul Krugman allocate his taxes? How much taxes do they each pay? I think you really have to come up with some credible theories regarding their allocation decisions.

What would you consider to be a huge allocation mistake on the part of Paris Hilton? What public goods are so bad that we'd all be worse off if she spent her tax dollars on them? Maybe the war on drugs? Doesn't she do drugs? Does Paul Krugman do drugs? Maybe they both wouldn't spend their tax dollars on the war on drugs?

Who has more loyal followers...Paris Hilton or Paul Krugman? If Paul Krugman tweets that the EPA is underfunded...how much money would would the EPA receive as a direct result? If Paris Hilton tweets that a wall need to be built between us and Mexico...how much money would the INS receive as a direct result?

Paul Krugman has a 1,072,031 followers on twitter while Paris Hilton has 11,939,304 followers. But I'm sure that Krugman's followers pay far more taxes than Hilton's followers. Right? So I think he would have far far far more influence than she would.

Personally, I've shared this article by Krugman...In Praise of Cheap Labor...far more times than I've ever shared anything written by Hilton. Well...I haven't shared anything written by Hilton...so maybe it doesn't say much. But that article by Krugman is pretty excellent. Especially the part where he argues that liberals fail to think things through.

I think if you could manage to think things through in an open minded fashion...then you would see the value of allowing people to shop for themselves in the public sector.

You're assuming that people are (a) economically irrational, (b) utterly altruistic and (c) not short-sighted.

Is giving up all your material possessions and becoming a monk a mistake? Most people would consider it to be a huge mistake. But monks don't pay a lot of taxes. Therefore, their mistake simply limits their influence. People who make more mistakes will have less influence over how taxes are spent than people who make less mistakes.

To be sure, Congress is often not much better - see, for example, the Bush tax cuts of 2001 and 2003, which every serious economist knew would plunge the budget into the red but were done anyway to please the wealthy donors - but at least there are mechanisms for accountability as far as Congress is concerned.

And there wouldn't be mechanisms for accountability in a pragmatarian system? You wouldn't be able to boycott congress? Of course you'd be able to boycott congress...and the president...and the DoD...and any other government organization. You can't have ethical consumerism if you can't shop for yourself.

There is nothing "pragmatic" about your suggestions. Wildly impractical on a practical level, yes (after all, how does one apportion the votes in a consumer-sovereignty political system? Should we present our shopping receipts for votes?). Utterly reprehensible on a moral level, that too. Completely asinine in its unthinking assumptions of benevolent omniscience on the part of a handful of heirs and heiresses, as well. It's also, incidentally, doomed to fall apart within a decade of implementation.

But "pragmatic"? No, nothing of the kind.

So let's have donors to PETA and donors to the NRA pool their donations and elect representatives to divvy up the pool between the two organizations. Because that would be so practical.

If you don't think shopping for yourself is at all practical, then please show me one place where you've promoted allowing congress to spend all our money.

In regard to the italicised, it's nice to see that you subscribe to the essence of Ayn Rand's philosophy, in which there are two classes of people - the heroic makers who know best what to do with everything, and the greedy takers who should be grateful that the makers let them live.

Consumer sovereignty isn't a difficult concept. You know how I know that? Because even Michael Moore gets it...

I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. That's pretty good, isn't it? - Michael Moore

Please tell me that, at least in this one regard, that you're as smart as Michael Moore.

Here it is in more economical terms...

Within the market society each serves all his fellow citizens and each is served by them. It is a system of mutual exchange of services and commodities, a mutual giving and receiving. In that endless rotating mechanism the entrepreneurs and capitalists are the servants of the consumers. The consumers are the masters, to whose whims the entrepreneurs and the capitalists must adjust their investments and methods of production. The market chooses the entrepreneurs and the capitalists, and removes them as soon as they prove failures. The market is a democracy in which every penny gives a right to vote and where voting is repeated every day. - Ludwig von Mises Omnipotent Government

Michael Moore isn't "Atlas" because he's the only one who wants him to be Atlas...he's Atlas because so many other people value how he is using society's limited resources. They build him up because he effectively serves him. And he who can create a thing can destroy a thing. He's at their mercy...they aren't at his mercy. He caters to their preferences...they don't cater to his preferences. He dances to the beat of their drum...they don't dance to the beat of his drum. Why? Because they have the money that he wants.

It would be absurd if the relationship was reversed. But this is exactly the type of absurdity that you support in the public sector. You want consumers to be the subjects rather than the rulers. It's the epitome of counter-productive.

Ashmoria did not claim that Congress should be peoples' "personal shoppers", and no-one - except perhaps yourself - is sufficiently deluded as to believe that this is the function they fulfil.

Congresspeople aren't our personal shoppers? If not, then they are only shopping for themselves. Your interpretation is far less charitable than my own.

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Question to the OP: since you insist that crowdsourcing works, how would you feel about a modified system in which the tax money is collected, then distributed equally between all of the country's citizens and then each person allocates it? It would better represent the ideal of tax money being spent on behalf of all of the country's citizens, while also disabusing you that the money that goes to taxes is in any way 'yours.'

It would be great, as long as you first collected everybody's talents, skills, abilities, intelligence, insight, foresight and distributed these things equally between all of the country's citizens. Except, if you did this, then money would already be equally distributed.

Because we can't equally distribute skills...then you'd be royally screwing everybody by distributing money with complete disregard to how well people use society's limited resources.

Of course I'd love a surgeon's money...but arbitrarily giving me half his money implies that what I'm doing with society's limited resources is equally valuable. If it truly was equally valuable then I would already have the same amount of money as he does.

Spend a week evenly distributing your money and let me know whether you're better off or worse off as a result. You won't do it though. You know why? Because you're not crazy. You know very well that no two people provide you with the same exact amount of value...and your shopping decisions reflect this.

Even in this thread no two people are going to provide you with the same exact amount of value. How much value am I providing you by spending my time typing this? I can't know that. Only you can know that. If you don't value this exchange, then you're free to find another member who does provide you with value.

The process of shopping around for more value is priceless. Redistributing wealth destroys value that people made an effort to find.

If I provide you with maximum value...then how would you like half of the time you would have spent on me to be given to another member who doesn't provide you with any value? Clearly you wouldn't. But that's exactly what redistribution is. The incredibly valuable distribution results of millions and millions and millions of shoppers are disregarded by congress who've been given a mandate by voters to come up with a more valuable distribution. The system is beyond absurd. It might take a while but eventually people are going to come to their senses and realize this.

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I think you may have misunderstood me. The money that would be distributed would be the money that is already collected in taxes. Since it is meant to be spent on behalf of the citizens of a country rather than on behalf of its taxpayers, you should have no problem including all the citizens' value preferences. After all, however successful a millionaire may be, there is no way he can know someone else's preferences, right? Or at least your own argument goes like that.

Imagine that your preferences are a giant diamond with a billion different facets. A successful millionaire isn't successful because he knows all your facets...he's successful because he shines one of your facets better than anybody else does. That's why you choose him to give your money to.

So there he is shining one of your facets. But obviously he's not a alone. There are a billion other people swarming your giant diamond and each one is focusing on shining the facet that you paid them to shine.

Shopping is the process by which you find the people who can shine one of your facets better than anybody else can. Right now you're shopping for economic discussion. And here I am trying to shine this particular facet of yours. But I'm completely oblivious to all your other facets. I have no idea whether you have an artichoke facet or a Paris Hilton facet.

But in the public sector...rather than having a billion representatives each focused on shining a different facet...you have one representative who is trying to shine all your facets. Given that the public sector is half our economy, it behooves us to understand which method is more productive/effective/efficient/valuable.

I think maybe the person closest to you might know quite a few of your facets...but nobody can know your facets better than you can. Nobody can know how you rank the importance of each of your facets. Therefore, everybody would be infinitely better off if taxpayers could choose where their taxes go. Even if you don't make enough money to pay taxes...you're still going to get infinitely better/accurate/customized/tailored representation from your billion representatives who do have to pay taxes.

If the artichoke farmer is one of your representatives then he's going to spend his taxes on the public goods inputs he needs to successfully output artichokes. If Hot Chip is one of your representatives then they are going to spend their taxes on the public goods inputs they need to successfully output awesome music.

The moral of the story is...shine on you crazy diamond. Don't let them put a bushel over your brilliance.

[Xerographica]

"We maximize value when we give people the freedom to choose who they exchange with."

This statement does not follow:

"Given that it's the Truth it's relevant whether we're talking about this forum or the public sector."

You are conflating dissimilar goods and markets with no reason to assume that these things behave in exactly the same way. It is my contention that you cannot by any means prove that they do (indeed, I believe that they do not), and the examples and situations I have proposed exist to show that this conclusion is incorrect.

Goods can't behave at all. People behave. And you either value their behavior or you do not. A market is a bunch of people going around deciding how much they value other people's behavior.

Public goods are dissimilar though in the sense that people can benefit from them without having to contribute to them. For example, let's say that Bob values my efforts to share basic economics with others. But he strongly suspects that I'm going to continue to do so whether or not he gives me some positive feedback (money). So he doesn't chip in...and because of a lack of positive feedback...I discontinue my efforts and Bob is worse off (by his own standards) as a result. But if Bob was forced to set aside $40 a month for "public goods"...then why wouldn't he give me some money if he valued my efforts more than he valued the alternative uses of these "tax dollars"?

However no decentralized pricing system can serve to determine optimally these levels of collective consumption. Other kinds of "voting" or "signalling" would have to be tried. But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. I must emphasize this: taxing according to a benefit theory of taxation can not at all solve the computational problem in the decentralized manner possible for the first category of "private" goods to which the ordinary market pricing applies and which do not have the "external effects" basic to the very notion of collective consumption goods. - Paul A. Samuelson, The Pure Theory of Public Expenditure

False signals. Sure, people are utility maximizers. Everybody wants the most bang for their buck. If taxes were voluntary...and people understood that their tax obligation depended on the answers they gave...then obviously they would have an incentive to lie about how much benefit they derived from any particular public good...in order to pay less taxes. They would have a monetary incentive to lie.

But what happens if their tax obligation was a given? If they have to pay $10,000 in taxes no matter what, then what incentive could they possibly have to give false signals? If the $10,000 is a foregone conclusion, given that people are utility maximizers, they'll have an incentive to shop around and try and get the most bang for their buck.

Millions of taxpayers shopping around trying to get the most bang for their buck will incentive producers to give taxpayers the most public goods for their tax dollars.

So yes...public goods are dissimilar to private goods. But once we incentive people to give true signals, then in both situations we simply have people going around deciding how much they value other people's behavior.

Thus, considered in themselves, in their own nature, in their normal state, and apart from all abuses, public services are, like private services, purely and simply acts of exchange. - Frédéric Bastiat, Private and Public Services

You exchange $5 for a haircut because you value the haircut more than you value the alternative uses of those $5 dollars. You exchange $300 for environmental protection because you value the environment more than you value the alternative uses of those $300 dollars. Opportunity cost is relevant and essential no matter whether we're talking about private goods, club goods or public goods.

Once a tax obligation is a foregone conclusion, then heck, you might as well get the most bang for your buck...

Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes

We cannot provide efficient levels of public goods without knowing people's true preferences for public goods. Samuelson's theoretical model assumes that people's preferences are given...but most public finance economists understand the necessity of determining people's true preferences.

This is the best "nutshell" description...

Nevertheless, the classic solution to the problem of underprovision of public goods has been government funding - through compulsory taxation - and government production of the good or service in question. Although this may substantially alleviate the problem of numerous free-riders that refuse to pay for the benefits they receive, it should be noted that the policy process does not provide any very plausible method for determining what the optimal or best level of provision of a public good actually is. When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponents of such devices tend to concede that public goods will still most likely be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy

"Given the other possible uses of their money"...opportunity cost. If we create a market in the public sector and allow taxpayers to shop for themselves, then it's a given that they will evaluate the alternative uses of their tax dollars. The result will be the optimal provision of public goods.

Poor choice on my end. I did neglect the collective veto you include in your tax choice system. Lets say, instead, that you value the Department of Education, but not as much as you value a millennium of peace and prosperity. Also assume that as long as at least 70% of the budget goes to the military, these 1000 years will be wonderful, but nothing will be different from 71-100%. The Department of Education has a positive return on every dollar you give it (but is still not as valuable as having at least 70% go to the military).

Which would you choose to fund?

Why am I assuming that defense, rather than education, will be the key to future peace and prosperity? If I could truly know that then yeah, you should really want me to be a dictator. But I can't know that so we infinitely increase our chances of success by allowing people to invest in different solutions to the same problem...

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

I could value a highway system 100X more than anything else, but if I know it's going to be funded, I should dump my cash into the next best thing. It is terribly irrational to prioritize you spending decisions based on what you value most. Do you agree with the last sentence?

If what I value most isn't at all feasible then maybe I should focus on investing in plausible endeavors. But nothing ventured nothing gained. If people could choose where their taxes go...then there are going to be as many different investment strategies as there are people.

But it is my assertion that market actors would not build I-64 despite it being globally better (and demonstrably so) than a patchwork of locally maintained roads. It is the continued problem of local rationality not producing global rationality.

In a pragmatarian system, I don't think it would be unreasonable for taxpayers to have the option to give their taxes to foreign governments...A Global Free-trade Agreement for Public Goods. That's infinitely more global than our current system.

I've addressed the notion of approximation above, so I'll focus on the latter accusation.
? If you could convince me that tax choice would lead to a better world, I would certainly support it whole heartedly. I would also be glad to be certain of something in economics - rarely does one encounter a field with such complexity and political muddling of the messages.

Scarcity means that you can either choose x or y...

It is through the gaze of my extinguished self that I realize the limitations that make scarcity necessary. Through this gaze into my own limitedness - a limit always established by the impending cessation of space and time for me - through this gift of death, I discover in nature the best way to be efficient. Thanks to death I must choose x rather than y. This has become a feature of 'nature' - a demystified 'nature' that bears no possibility of participation in the eternal. This is consistent with capitalism. - D. Stephen Long

Yeah...no participation in the eternal...but definitely participation in building a better world.

Basically you have an idea of...heaven...but on earth. So you choose whichever option (x or y) will result in the shortest distance between you and your utopia. Should you give your tax dollars to the EPA...or the DoD...which decision will bring you closer to a better world?

Each taxpayer could be contributing to a community which would become more reflective of the kind of world in which he or she would like to live. Gaudeat Emptor! - Daniel J. Brown, The Case For Tax-Target Plans

But by forcing people's interest's to compete, you lose the cooperative benefits. In some cases it seems plausible that this out weighs efficiency gains.

Given scarcity...people's interests are always competing...

By preferring my work, simply by giving it my time, my attention, by preferring my activity as a citizen or as a professional philosopher, writing and speaking here in a public language, French in my case, I am perhaps fulfilling my duty. But I am sacrificing and betraying at every moment all my other obligations: my obligation to the other others whom I know or don’t know, the billions of my fellows (without mentioning the animals that are even more other others than my fellows), my fellows who are dying of starvation or sickness. I betray my fidelity or my obligations to other citizens, to those who don't speak my language and to whom I neither speak or respond, to each of those who listen or read, and to whom I neither respond nor address myself in the proper manner, that is, in a singular manner (this is for the so-called public space to which I sacrifice my so-called private space), thus also to those I love in private, my own, my family, my son, each of whom is the only son I sacrifice to the other, every one being sacrificed to every one else in this land of Moriah that is our habitat every second of every day. - Jacques Derrida, The Gift of Death

God I love that passage. Here's the same thing in economic terms...

The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed. - James M. Buchanan

No, my repeated assertion is that centralized spending decisions give more power than decentralized actors and that, in some cases, this makes up for the inefficiency in allocation of the power created. The whole point is that you don't need to be as informed as the market to have a net benefit.

The size of the pie also absolutely depends on concentration of decision making. A person with $1 Billion dollars to spend has more economic and real power than 10,000 people with $100,000 dollars each have total. Do you agree with this statement? I believe I can prove it if not.

And it's the power that matters because it's the power that provides utility.

Let's say that I find you the absolutely cheapest ticket to Timbuktu. Therefore, you should buy the ticket regardless of your preferences?

The public sector fails because because preferences are assumed. As a result, it's a given that we end up with quantities of public goods that do not match the preferences of taxpayers...but it's ok because the public goods were produced in the least costly manner. Taxpayers would have preferred more education...but instead they received more war. But no worries...the bullets were bought in bulk. I didn't need to have a heart transplant...but at least I got a great deal. My preference is to date women, but at least the guy I'm dating is low maintenance. I like to look on the bright side.

Economies of scale are only valuable when whatever is being produced truly matches consumers' preferences. Otherwise, you're simply destroying value. You're shifting resources away from more valuable uses.

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This doesn't even begin to make sense.

None of the people I give my money to in the marketplace understand whether or not I have a preference for roads without potholes, frequent police patrols within my neighborhood, or a globalist foreign policy aimed at preventing world wars before they happen.

They know that you prefer whatever it is that you paid them for. And they also know which public goods inputs they need to supply the private goods that you prefer. Are any of them going to spend their taxes on the same inputs? Of course. Perhaps one common input will be roads. They'll need roads for customers and employees to travel on in order to go to and from their business. Plus they'll need roads for inputs and outputs to be delivered.

So if you give your money to a million different representatives in a year...then chances are extremely good that your public goods interests will receive far greater protection than they would with our current system. And if you don't make enough money to owe any taxes...on the really off chance you felt that one of your interests was really not covered...then absolutely nothing would stop you from sacrificing the alternative uses of your money in order to give some to the government organization in question. It's really doubtful that any government organization is going to have a prohibitive minimum contribution requirement.

Worse, because none of them are experts in highway engineering, community policing, or geopolitical grand strategy; none of them are inherently any more capable of judging what is best for America than I am.

They are experts in supplying whatever it is that you value enough to sacrifice for. And if their competitors are better at selecting inputs than they are...then this will become apparent when you start giving their competitors your money. So it would behoove them to do their homework. And millions and millions of business owners are going to be able to do infinitely more homework than 300 congresspeople.

Indeed, it's quite likely — given the amount of time and energy that they spend trying to do nothing else with their lives save for making lots and lots of money, let alone the fact that they probably live in different neighborhoods than I do (and thus understand neither how potholes nor crime are a problem where I live, or because their attachment to multinational corporations makes them indifferent to the question of whether the nation in which I live gets conquered and enslaved by another [they'll probably just move to some other country, or maybe even collaborate with the aggressors if offered any money to do so and sell me out for a cut of my slave labor]) — that these people are less qualified than I am to make such decisions.

Your willingness to pay somebody indicates that you believe them to be sufficiently qualified to use your money to continue to serve your interests.

You've made the usual libertarian mistake of failing to realize that some services can't be delivered through the marketplace — especially if we don't even correctly identify who the "consumers" of those services are to begin with (HINT: They're not the taxpayers, especially as individuals; rather, they are the citizenry-at-large, as a collective body with collective interests).

My argument is not that public goods should be kicked over to the private sector. My argument is that we have to create a market in the public sector in order to guarantee the optimal provision of public goods. Therefore, I'm a pragmatarian...not a libertarian. The distinction is extremely significant. Unlike a libertarian, I have absolutely no problem with a 50%, 60%, 70% or even higher tax rate...as long as taxpayers can choose where their taxes go.

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It doesn't matter that you don't think that they're a particularly valuable avenue of discussion because they're still ideas that make your assertions wrong. To an extent, the criticisms I mentioned last time still apply now.

There's really not much of interest/value in your posts. I figured I'd read them and not bother to respond. But, for some reason (perhaps optimism?) I decided to try a somewhat different approach.

I'm simply going to throw some stuff at you and give you the chance to say something at least vaguely interesting/valuable. If you say something of interest...then I'll respond to it...if not, then I'll just throw something else at you.

Of course, obviously you're welcome to decide that you have more valuable things to do with your limited time.

So here we go...

Read this essay...The Use of Knowledge in Society...and share one passage that you disagree with the most and explain exactly why you disagree with it.

In case you missed it, Hayek received a Nobel Prize in no small part because of that essay.

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Here's the basic thing... I'm not disagreeing with him. I'm disagreeing with you.

You're not disagreeing with Hayek...but you're disagreeing with me? Eh? What? How is what Hayek said any different from what I'm saying?

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I'll be frank, I didn't read it, just ran a series of searches for key words from this thread and its OP. It's pretty clear you're just chucking it out there in lieu of actually addressing any rebuttal offered by me (and only me, I'm an exception).

Really struggling to see the relevance and that's not helped by your set up either.

My argument has two components...

1. the free-rider problem (Nobel Prize liberal economist Paul Samuelson)
2. the knowledge problem (Nobel Prize market economist Friedrich Hayek)

If you disagree with my argument...then either you disagree with Samuelson or Hayek. If you don't disagree with Hayek...then you disagree with Samuelson.

Clearly you disagree with me...so do you disagree with Hayek or Samuelson?

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1) Do you agree that goods have varying degrees of publicness? That is, under a tax choice system, there would be some goods which are more dispersed in their benefits than other goods despite both being offered on the "menu".

Unlike 100% of the other houses in my neighborhood here in Southern California..my front yard does not have a lawn. Instead, it has a collection of some of the most interesting and unusual tropical dry forest succulents and drought tolerant plants from around the world. My city actually gave me an award for it. Basically my front yard is a small slice of what people have to pay to see at local botanical gardens. Of course, nobody has to pay to see my yard. It's "free" for anybody who happens to be in the area. Does this mean though that everybody values my yard equally? Nope, my next door neighbor who frequently tells me how much she enjoys my yard told me that that the neighbor across the street said my yard was too full of "branches".

How dispersed are the benefits of my front yard? How many degrees of publicness does my front yard have? Just because the benefits are dispersed...does not mean that everybody values my front yard equally. The current system forces people to pay for things that they don't derive any benefit from. It's the equivalent of forcing my neighbor across the street to pay me for the maintenance of my yard despite the fact that my yard provides her with negative utility.

1. Is the forced rider problem a real problem?
2. Is the preference revelation problem a real problem?
3. Is it a problem that our current system concentrates benefits and disperses costs?

No, Bob wouldn't. He strongly suspects that you will continue regardless, so he'll chip into other public goods (classing your efforts as a "public good" is suspect from my perspective, but I'll go with it) that he also values. Unless, of course, Bob is behaving irrationally and is not consistent with the assumptions of a market actor.

If Bob doesn't chip in, and has never chipped in...then how can you can jump to the conclusion that Bob values my efforts? What evidence do you have that he's straying from his true preferences?

1) As long as there is a spread in the publicness of goods available, there is still incentive to lie.

So pacifists would have an incentive to pay for war? Because that would certainly be a lie. My neighbor across the street would have an incentive to pay for my front yard? That would also be a lie. Environmentalists would have an incentive to pay for a massive public works project that would destroy the habitat of extremely endangered plants and animals? That would also be a lie.

Honestly it's not a "lie" if somebody doesn't pay for something they think is adequately funded. Neither is it a lie if they are willing to forego funding something that they truly believe is underfunded...in order to avoid an even greater sacrifice.

The EPA is usually an environmentalist's priority...except when Canada is threatening to invade and kill everybody that the environmentalist knows and loves. How are you going to say that he's lying if he funds the DoD rather than the EPA? You're going to tell him that he's giving a false signal because he's not willing to sacrifice his family for snail darters?

2) If I can get you to pay for the highway, I can dump more money into the DoE. Both are public, but the DoE benefits me more than you (and we both benefit from the highway). The DoE also benefits me less than the highway does*. The best way to get you to fund the highway is to convince you that I am completely uninterested in the Highway and believe it to be useless, despite knowing it is useful. I may even try and convince you that I am irrational and cannot be convinced to fund it. It's an interesting new take on Highway Chicken. You would probably do the same to try and fund your favorite slightly less public agency. And we can see that there are all kinds of benefits to sending false signals.

It's a false signal to try and persuade you to fund something that I value? It's a false signal to try and persuade you to buy me lunch?

If the environmentalist can get out of paying the EPA simply by persuading you to pay the EPA instead...then good for him. But what the chances that your contribution is going to make up the difference? Are you that wealthy? Clearly the environmentalist isn't going to waste his time/energy trying to persuade you to pay for something that he feels is adequately funded. Therefore, from his perspective, the EPA is inadequately funded...which is why he's trying to persuade you to make a contribution to the EPA. If you think he's trying to pull a fast one on you...then why not just ask to see his receipt? If he already spent all his taxes on the EPA...then he could prove it simply by showing you his receipt.

There's not going to be anything "false" about neighbors trying to persuade each other that one shortage is more dire than another.

Also, I'll admit to not having read the Samuelson paper because the conclusion is reasonable, I am short on time, and your arguement is invalid independent of Samuelson's correctness. He appears to be making approximately the same argument I am, however.

You really seem to be genuinely interested in the topic, but you're not willing to sacrifice the alternative uses of your time to read one of the most important (and shortest) papers on the topic? Are you giving me false signals? I'm just giving you a hard time. Clearly I appreciate the necessity of respecting people's freedom to prioritize.

I agree completely, which is why a set of rational actors will tend towards the least public goods on the menu, which, in turn, often causes them to choose the least total good.

Regardless of their preferences? Regardless how underfunded a valued government organization is? All the people who voluntarily contribute to non-profits are going to lie about their priorities simply because they can choose where their taxes go? Environmentalists are going to forego funding the EPA in order to fund the least public good on the menu?

If something lacks that much publicness...if the benefits are so narrow...if the interests are so special...then why in the world hasn't it been removed from the menu? What percentage of citizens would have to spend their taxes on a war in order for you to agree that the war constituted a genuine public good? For example, if only one person gave their tax dollars to the DoD in order to help fund a strike against Syria...would you say that the military strike was a public good? Would you say that it should be on the menu?

What would be the threshold for a public good to be credible? What is the minimum percentage of the population that would have to fund a public good in order for it to be on the menu? Would you say that farm subsidies should be on the menu if only .001% of the population was willing to pay for them?

I won't pretend to speak for Samuelson, but you DO NOT need to precisely know a utility function to provision public goods in a good way. If you can approximate one at all you can have real utility gains. That is, over providing a Highway is probably better than optimally providing local roads. It is certainly possible, and that possibility is all you need to make tax choice not provably a better system.

Over providing a highway is never better than optimally providing local roads...given that optimally providing local roads frees up resources for more valuable uses. Why would I overspend on clothing when doing so would sacrifice money that could be spent on more valuable things?

Indeed, presuming that individuals need and will choose to buy, regardless of price, a given level of safety is a grossly simplistic and paternalistic view of human behavior. Consumers are often willing to forgo safety, because of the cost, in deference to other things. Some are even willing to forgo health and years of life in order to have other things now. People smoke even though they know that smoking is harmful. Poor people buy cheap, less-than-reliable electric appliances because by doing so, they can have more of other things. - Richard B. McKenzie, Bound to Be Free

If people forego the best/biggest highway possible...in order to give more money to cancer research...it would't be the "wrong" answer. It would be the allocation that provides the most value. It might not provide the most value to you...but clearly it provides the most value to society as a whole. It would be the most good for the most people.

Sacrifice reveals value. If people are willing to sacrifice the war on drugs...then it's because there are other public goods that they value more.

1) Buchanan, if I am parsing this quote correctly, seems to be saying that there is not incentive to lie under the current system. That is debatable, but not obviously false. Unless he is talking about transitioning the current collection system to choice on the back end. It is not clear from the quote.

He's talking about people "earmarking" their taxes...designating exactly where their taxes go. He's saying that if the cost is a foregone conclusion, then people have an incentive to reveal their true preferences.

To my knowledge, Samuelson never once critiqued a decentralized system where the tax obligation was a foregone conclusion. Therefore, Samuelson, at least in his paper, definitely was not agreeing with your critique of false signals in a pragmatarian system. That I know of, there aren't any Nobel Prize economists that have critiqued a market in the public sector.

You don't have to know, you just have to believe. Lets say 85+% of the tax base believed that 70% level. Furthermore, they all believed that 85+% believed that. This, according to you, would be the absolute best prediction of the the future.

As a member of that tax base, would you fund the DoD or the Department of Education? This answer is important.

Either I believe that the DoD is worth my sacrifice...or I do not. If I fund it then clearly I believed that doing so would be worth the sacrifice. If I continue to fund it then clearly I confirmed that it was worth the sacrifice.

Either you believe that it's worth it to sacrifice your time for me...or you don't. If you sacrifice your time for me...then clearly you're guessing that it will be worth the sacrifice. If you continue to sacrifice your time for me then clearly you confirmed that it was worth the sacrifice.

Every investment is a guess. If it turned out that the investment was profitable...then we continue to make the investment until a possibly more profitable opportunity presents itself.

Honestly I'm struggling with your question...so if the answer is important then you're going to have to rephrase it.

The point is that a highway is entirely very feasible. For Congress. Getting independent actors to act in concert is somewhere between much harder and impossible (depending on rationality and information).

Yeah, and world wars are entirely very feasible as well. But just because something is feasible in no way shape or form means it's more valuable than the opportunity cost.

My apologies, I slipped into math jargon mode. By local I mean independent rationality, and by global I meant the the best collective set of choices for the actors.

Errr, the best collective choice for actors...within the US? Because those are the only individuals we care about? A more valuable answer can't possibly be found by eliminating barriers to trade? An individual is not collective enough...a global collective is too collective...so a national collective is just right? If environmentalists around the world want to give their taxes to the Brazilian EPA in order to conserve the Brazilian rain forest...then that's not the best collective choice for them?

Yes, I understand opportunity cost and scarcity. These are not complex, and people waxing poetic on them is not actual argument.

Derrida wasn't just waxing poetic, he was giving a personal insight into the myriad of trade-offs and sacrifices that he has to make on a daily basis. It's the epitome of complexity.

1) That depends heavily on wherever everyone else chooses to put their funds. This dependence makes it a global game, which independent actors are bad at. Contrast things in the private sector: my utility/$ from buying diet coke does not go markedly down because enough money has been spent on diet coke by other people.

The goods/services available in the private sector does not heavily depend on where everyone else chooses to put their funds? Artichokes are an option solely because I choose to purchase them? If I stop purchasing them then they'll cease to be an option? Actually artichokes are an option because enough people are willing to pay for them to be an option. If enough people are not willing to pay for them to be an option...then they really shouldn't be an option. Resources shouldn't be taken away from more valuable uses.

If I have enough artichokes...then there's no reason for me to buy more. If the EPA is adequately funded...then there's no reason for me to give them my tax dollars.

You have this concern that in a pragmatarian system people are going to fundamentally stray from their preferences. Yet, somehow you have absolutely no concern with how far the current system forces people to stray from their preferences.

3) If reading a passage that agrees with you brings so much pleasure, I ask that you consider that confirmation bias might be clouding your judgement.

Passages bring me pleasure because other people have easily said what I struggle to say. Therefore, they bring me pleasure because they facilitate communication. Sometimes I struggle trying to understand what you're trying to say. So it might help you hedge your bets if you shared passages that convey your point using different words.

1) And we're back to assuming the government know nothing about what people want. This is demonstrably false. Even if you assume all humans are special snowflakes with wildly diverging interests (we're demonstrably not), the government can easily gather data on mass trends. You can claim that this data may not be as good as a market system, as I have been stipulating for the sake of argument, but you would be hard pressed to show that this data is really bad.

I know you need food, clothing and entertainment...therefore just give me all the money that you'd spend on food, clothing and entertainment and I'll be your huckleberry? Close enough counts for horseshoes, hand grenades...and personal shoppers. C'mon, it will be a fun experiment. You'll be able to give me as many "hints" as you give your congressperson. How often do you personally talk to your congressperson anyways? Once a never? So it will be the same frequency with me.

I'm actually not at all hard pressed to show that the data is bad...Does Consumer Irrationality Trump Consumer Sovereignty? If the data is really bad for somebody who knows you spending their own money on you...then the data has to be far worse for somebody you've never even met spending other people's money on you. Close enough counts for horseshoes and hand grenades...not personal shoppers.

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It's quite simple, politicians are not and should not be considered personal shoppers, the idea is absurd and underpins your entire argument.

Read this essay...The Use of Knowledge in Society...and share one passage that you disagree with the most and explain exactly why you disagree with it.

In case you missed it, Hayek received a Nobel Prize in no small part because of that essay.

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Do you think I base my choice of cat food on the political views of the owners of the company that manufactures the brand I buy? Because let me assure you, that's not at all a factor in my buying decision — nor can it be, if my cat has any kind of special dietary need due to health issues as he grows older.

The business practices of your cat food company can't be a factor because you value the well-being of your cat? So ethical consumerism is only relevant when somebody does not value the product/good in consideration?

Do you think I base my choice of laundry detergent on the views of the manufacturer? Or the brand of tea I buy? Or the kind of eggs? Rest assured, I don't make my purchasing decisions on these things, and neither do the vast majority of consumers. No, we buy what suits us — what gets our clothes clean, what suits our tastes, or what works within our budget.

Great, so if we created a market in the public sector then consumers would spend their money on the public goods which suit their tastes, or what works within their budget.

Moreover, even if we wanted to base our purchasing decisions on these things, we can't; the information is simply unavailable. As a consumer, I am not entitled to a list of the shareholders of the company that manufactures my laundry soap, nor is that information listed beneath all the different brands of laundry soap or paper towels or toilet tissue in the store; then, too, even if I had that information, I have no right to demand that the shareholders of these companies present their political views to me so that I can choose intelligently when I "vote" between them by buying their products; and given the way the market works, there's no guarantee that it will offer me a "political party" of manufacturers to whom I can turn to meet all my household product needs.

If you want it to be available...then you vote for its availability and then give your taxes to whichever government organization is responsible for ensuring compliance.

I could continue along this vein for a very long time, but I believe at this point everybody but you probably grasps the fundamental absurdity of thinking that everyday marketplace purchasing decisions serve as some kind of proxy — Hell, as any kind of proxy — for an ordinary elections process. And that's without considering the way in which secondary purchasing decisions affect who gets my money; every time I buy gasoline for my car, I'm sure that some of that money ends up in the hands of the Koch Brothers — because the oil that is used to manufacture gasoline is generally bought, sold, and stored as an undifferentiated commodity, which means that Koch Oil is commingled with everybody else's oil before it even ends up at the refinery as fuel or additives or the raw materials for the manufacture of plastics. A modern economy is full of situations such as this: Oil, grain, coffee, electricity, and a huge list of other things are sold in bulk on the primary resource markets for use in manufacturing parts and then goods; services are provided by companies like Haliburton and Academi (a/k/a "The Artist Formerly Known as Blackwater") to other companies along the line in the course of product or service development and manufacture without any transparency whatsoever; the idea that I could effectively "vote with my pocketbook" in such a complicated economy is utterly laughable — not to mention hopelessly naïve.

The economy is complicated...therefore let's have 300 people determine the allocation of half the economy? It's too big a sacrifice to spend your money ethically...but it's a small sacrifice to vote ethically?

"Have to"? No, we don't have to. And we don't even want to. You still haven't addressed (for example) the complete lack of knowledge on the part of both the general public and the ultra-rich elites into whose hands you would entrust society regarding military matters and geopolitical strategy; nor have you addressed the differential class interest between those who pay the bulk of the Nation's taxes and the greater mass of its population (which was rather my point when I spoke of streets and crime; after all, we don't see the super-rich backing candidates who want to see the bulk of their countrymen earn a living wage, now do we?). All in all, your system is both completely impractical and shamelessly immoral, and it's just not worth even trying to save, let alone something that we "have" to do.

Find me a passage that states that the optimal provision of public goods does not depend on people's preferences. Until then, you're simply shoveling ignorant crap at me. You're pulling shit out of your ass to try and cover the fact that you don't have a clue what you're talking about. And you're going to continue to do so because it's easier than actually making the effort to learn something about public finance. In case you missed it, public finance is the topic of this thread.

But feel free to spew away...I find it mildly entertaining.

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Why? Does it defend your model?

Read this essay...The Use of Knowledge in Society...and share one passage that you disagree with the most and explain exactly why you disagree with it. Or just continue on with your irrelevance.

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The business practices of your cat food company can't be a factor because you value the well-being of your cat? So ethical consumerism is only relevant when somebody does not value the product/good in consideration?

Absolutely. I can buy choose to buy tasty beer, or "socially responsible" beer. If I'm lucky, the two brews will be identical; if not, I have to decide if "social responsibility" is worth drinking beer that tastes like vinegary piss. Guess which choice is going to prevail, especially if I reach the point where I get tired of throwing up?

How "socially irresponsible" is the beer?

Markets assume informed consumers.

How can markets assume anything? It's people who make assumptions. So who, exactly, assumes informed consumers?

Absolutely.

Voting ethically doesn't mean I have to drink bad beer.

So ethical consumerism requires that you give up something you value (beer) but ethical voting does not require that you give up something that you value?

You're missing the greater point. Your argument is that I can indirectly determine what government spends its money on by conditioning my choice is the market for private goods and services in such a way as to favor those among the wealthy who share my views. Yet in truth, I have no real way of even knowing who owns most of the companies that offer me private products, let alone what they believe in — and those owners are under no obligation to tell me what those views are anyway.

If taxpayers could choose where their taxes go...and there's absolutely no financial benefit for companies to share how they allocate their taxes...then clearly there's no demand for this information. In other words, consumers don't care what taxpayers spend their taxes on. Are you arguing that consumers should care? I thought you were initially arguing that people who don't pay taxes wouldn't have a say. Now it seems like you're arguing that they don't even care to know.

You're claiming that the power of the purse — a power on which all governmental operations depends — should be invested in super-rich taxpayers with no experience in or understanding of said governmental operations (such as, for example, the conduct of the defense of the United States and surrounding waters), and that this will work out better for everyone.

So prove it.

Why do so many people equate shopping to running an organization? Pragmatarianism doesn't put Bill Gates in charge of the DoD. It simply means that he can decide exactly how much of his taxes he gives to the DoD. Will he do his homework? What do you think?

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Not until you explain why that is relevant.

I already explained that pragmatarianism is based on two concepts...

1. the free rider problem (Nobel Prize winning liberal economist Paul Samuelson)
2. the knowledge problem (Nobel Prize winning market economist Friedrich Hayek)

Now read this essay...The Use of Knowledge in Society...and share one passage that you disagree with the most and explain exactly why you disagree with it. Or just continue on with your irrelevance.

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I'll be honest, I can't tell if an answer to my question is in there, unless you are declaring it unanswerable. Is this the case? I would think the obvious answer to the question is yes, but I would like to hear that from you.

My implied answer was that it's irrelevant . If you think "publicness" is relevant then please explain its relevance using my front yard as an example.

1) The forced rider problem seems ill defined (do pacifists REALLY not benefit from the DoD?), but I could see how it has a negative contribution to the efficiency of a plan. I guess that makes it a "real" problem.

Ill defined? This doesn't seem fairly straightforward?

Every set of institutions and policies tends, of course, to have both functional and dysfunctional effects. While regimes based upon free revelation or upon golden-rule revelation may be subject to some underallocation of resources due to free-riding, the apparatus of collective compulsion entails unintended detrimental side effects on its own. Most notably it results in "forced-riding" by individuals who are coerced into expressing nonexistent "demands" for collective goods. Or worse a "good" in fact may be a bad, in some views, from which it is economically not feasible for the individual to exclude himself, and for which compensation may be appropriate. - Earl Brubaker, Free Ride, Free Revelation, or Golden Rule?

2) Understanding people's preferences better will certainly has a positive contribution to the efficiency of any plan. I guess that makes it a "real" problem as well.

But tax choice wouldn't solve this problem because people would still have an incentive to "lie"?

3) Sort of. As it stands, what it means to "concentrate benefits" is ill defined. Lots of people may pay taxes to fund fewer people on welfare, but we all benefit from an efficient labor market. It would be a much much worse problem in a tax choice system where these concentrated benefits would exist as "defector" options.

Another ill definition? Many people pay for farm subsidies (diffused costs)...while only a few people benefit (farmers). How could this problem be worse in a tax choice system? Nobody is going to pay for anything that they don't benefit from.

The whole point is that there are ways to lie other than by spending money. You can just talk and lie about your priorities. Every lie you tell muddles the state of the universe for everyone else, which makes it harder for them to maximize their priorities. Considering that where I put my money depends so heavily on where you put yours, this is an issue. Unless you are willing to contend that spending is the only form of communication AND that tax choice contributions should be public.

I wouldn't be surprised if there were fundraising progress bars on government organization's websites.

If we do the whole pay as you go thing, I could spend my money in a globally suboptimal fashion and "defect" ASAP. Then show you the receipt and force you to choose the Highway system or your favorite slightly less public good. You, of course, would have the same option and idea. If we were both too fast, the highway would not get funded despite both of us preferring that to our pet project. Can you see how this would occur?

When something is a priority, it means that you take care of it first. Why? Because you've decided that you derive the most value by doing so. So whatever somebody takes care of first, is by definition, their priority.

If a woman told us that she loved flowers, and we saw that she forgot to water them, we would not believe in her "love" for flowers. Love is the active concern for the life and the growth of that which we love. Where this active concern is lacking, there is no love. - Erich Fromm

You say that you "love" the highway system, but you "forgot" to "water" it. It just doesn't follow.

Maybe you made a mistake? Like I said, every endeavor is a gamble. There are no guarantees. Taxpayers, by virtue of having taxes to pay, are the people who make the least mistakes. They are also the people who learn from their mistakes.

But it's doubtful that everybody would make the same mistake. So the Dept. of Transportation would receive some funding. And absolutely nothing would stop you from paying more than your fair share. Plus, nothing would stop you from holding a fundraiser. If enough funds weren't raised this year...then there's always next year. Rome wasn't built in a day.

But you're critiquing pragmatarianism because some people's 1st best option wasn't funded...but their second best option was funded. How does that compare to our system? In 2007 a liberal congresswomen proposed a bill that would have allowed taxpayers to opt out of funding the Iraq war. They could have chosen to have their taxes go to education instead. Do you think she proposed the bill because the Iraq war was her 2nd best option? Was it her 3rd best option? Maybe her 10th best option?

1) Absolutely, if they are rational actors. Lying about your priorities is one of the best ways to get other people to fund them.

Honestly this made me LOL. I want you to spend your time/money on pragmatarianism. Therefore, I should tell you that pragmatarianism is not my priority? What?

Some goods are not completely public, yet still more useful than money being spent on private goods. As a rule, these have less total benefit than fully public projects, but are still good uses of public funds once the fully public projects have been funded.

The war on drugs is a public good...therefore it provides more benefit than computers do? You can't determine how much benefit a good provides just by looking at how public or private it is.

(2-3) I wouldn't set a threshold, because I don't think the general public is qualified to judge whether or not such things are goods. Preventing global warming is undeniably a good, yet people are far too shortsighted to have done anything about it.

How do you know that taxpayers, if they'd been given the opportunity, wouldn't have given far more funding to the EPA than it currently receives? You agreed that the preference revelation problem is a real problem...which means that we don't currently know the preferences of taxpayers. You can't agree that the preference revelation problem is a real problem and then turn around and say that people have their hearts in the wrong place...or are shortsighted. If you think you know the true preferences of 300,000,000 people then clearly you don't believe that the preference revelation problem is a real problem.

Allow me to be more precise. Overproviding a highway and overproviding local roads is almost assuredly better than underproviding a highway and perfectly providing local roads. The lost highway does make up the few percent gain in efficiency on local roads.

Because I'm not advocating that the tax rate be decreased...funding is a zero sum game. If a highway receives less funding than it currently does...then the difference in funding doesn't just disappear...it's gets allocated to more valuable public goods. As a result we'd derive the maximum value from the levels of funding.

But the point is that they don't want to underprovide the highway, they just want everyone else to do it for them and let them fund their pet projects. They aren't choosing to sacrifice the highway, as whether the highway is sacrificed is not really up to them.

By choosing to fund other projects, they are choosing to sacrifice the highway. Nobody forced them to choose their priorities.

1) By the way, that quote is something I disagree with. It presupposes that people values are defined by the choices they make, which seems to get the causality wrong. I could launch into a diatribe about what makes a self and an actor and such, but that would be for another thread. I just wanted to lodge my objection to the notion "Person smokes => person values nicotine more than health."

Actions speak louder than words. The only real thing I can know about your values comes from observing what you're willing to sacrifice. Right now the only true thing I know about your values is that you're willing to sacrifice a decent amount of time to discuss economics.

If you are correct, then Buchanan is provably wrong and seems to completely misunderstand game theory. Or he doesn't assume his economic actors are rational in the standard sense. He can be forgiven for this because the paper you quote from come less than a decade after vigorous investigation game theory started to pick up (according to my quick scan of wiki).

What specific game theory concept did Buchanan not understand?

Samuelson claims that "No decentralized pricing system can serve to determine optimally these levels of collective consumption" in his 1954 paper. I would imagine this includes your compulsory contribution system (His logic above that certainly extends to your system in my analysis).

He said no decentralized system would work for public goods because people could reduce their tax obligation by lying. Here it is in somebody else's words...

Belief in the inevitability of the free-rider problem has gained wide acceptance among economists. The essence of this problem is that; for a Pareto-optimal solution to be reached, individuals must reveal their preferences for public goods. But since each individual consumes the total quantity of public good supplied, it is in any individual’s interest to understate the satisfaction he gains from consuming the public good, thereby only slightly reducing the quantity of public good supplied but significantly reducing his own tax burden. Everyone reasons in this way and the public good will be under-supplied. Thus arises a paradox: individually rational action leads to an outcome which is collectively irrational. - John McMillan, The Free-Rider Problem: A Survey

"but significantly reducing his own tax burden". In a pragmatarian system you can't reduce your tax burden by lying about how much benefit you derive from public goods. The tax burden is a given, so you might as well spend your taxes on the public goods which most closely match your preferences...in order to try and get your money's worth.

(1) Wrong. Either you believe that your contribution to the DoD is worth your sacrifice or you do not. This depends heavily on what other people choose. Which is the point here.

But I can simply go to the DoD website and see if enough other people have funded it. It's doubtful that a government organization would benefit at all by hiding the amount of money they've received from taxpayers.

I'll be honest; I am unsure how to make the question any clearer. I have provided a situation that a member of your tax choice system could end up in and I want to know how you think that member would react. What additional information would you need (that you think our theoretical member could reasonably access)?

I am asking you, as a rational actor given a (fairly complete) set of preferences and beliefs about the world, to make a funding decision. If markets have any use at all, you should be able to do this. Please answer the question; it really is quite important.

If I'm unclear on the question...then I'm unsure how to help you make it clearer to me. I'll have a webpage that will display the fundraising progress bars for my top 10 government organizations ordered by importance. The fundraising progress bars will be updated real time. I won't value each of the 10 public goods equally...and they won't all be equally funded. I'll be able to pay taxes at anytime throughout the year. How/when should I allocate my $10,000 in order to maximize my utility? What's my investment strategy going to be? Should I try and second guess the allocation decisions of 300 million other people? If I could do so successfully then I'd I'd be a billionaire. Instead, I'll allocate my taxes to the best of my ability...and then encourage others to contribute to my biggest priorities that have the biggest funding shortfalls.

1) If you could by food and clothes for 1/10th the cost that I could and I could hold you to some degree of accountability, I would seriously consider it. Say by giving you 20% of what I would spend and letting you guess by buying twice as much as I might need and picking from it. Especially if it was your sole (theoretical) job to understand what spread of food and clothing people like. This, IMO, is the correct analogy to congress and public goods.

Why 1/10th the cost? Where you getting that from? Do you think congress buys you public goods at 1/10th the cost? Is the EPA going to charge you 10 times more for environmental protection than they'd charge congress?

[Xerographica]

One of the sections of that essay, to demonstrate why Xero needs to do what I suggest, that I read (when I made my control-f searches) last night seems to disagree flatly with Xero and solidly with ASB...

I didn't ask you to read this essay...The Use of Knowledge in Society...and share one passage that you agreed with the most. I asked you to read the essay and share the passage that you disagreed with the most and explain why you disagreed with it.

[Xerographica]

Congress isn't omniscient, but I am.

So we should give our money to you?

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

Your mind gets excited when you read my threads? And you just can't hide it? TMI man.

[Xerographica]

I'm pretty antitax but even i realize if you implement such a system most people are going to say meh, i don't really want to fund any part of government with my money i choose the tax break option.

I'm not anti-tax...and I'm not even anti-congress...I'm pro-choice. I believe that taxpayers should be allowed to choose which government organizations they give their taxes to. If they want to give all their tax dollars to congress...then they should have the freedom to do so.

That said, allowing people to indicate an initial preference for "their" tax dollars would be fine, as long as at the end money is redristributed among govt agencies as necessary to equalize funding (assuming certain govt programs are greaatly favored over others.)

If certain govt programs are far more favored than others...isn't it because they provide more benefit than others? If everybody wants to give quite a bit of their taxes to public healthcare...then yes, some other programs would suffer, but clearly people are more concerned with their health than the war on drugs.

[Xerographica]

Omniscient? Most of them can't even figure out what hole they shit out of and what hole they talk out of.

I've watched C-span for more than 10 minutes as well.

[Xerographica]

I've watched C-span for more than 10 minutes as well.

So consider this; if those are the people that receive enough support to become our leaders how does that reflect on the masses? What ever could make you think that individually people could make better decisions on how their money is appropriated?

Are taxpayers the masses? Taxpayers are the people who keep the masses fat, dry, and comfortable (FDC*). How do taxpayers do that?

Step 1: resources
Step 2: ?
Step 3: FDC

What's step 2? Imagine witches sitting around a boiling cauldron. They are trying to make a love potion? So they put in just the right amount of ingredients and voila...the result is a love potion.

What I'm trying to say is that everything that taxpayers make to keep us FDC...requires some magical combination of inputs/ingredients. The recipe will be ruined if they put in too much of one ingredient and not enough of another. Public goods are some of the ingredients that all recipes require.

Ok, but how many recipes are there? A gazillion different recipes? Maybe more? It's ridiculous to think that it's possible for a taxpayer to know all the recipes for all the goods/services that keep us FDC. Right? It's far more productive for each taxpayer to be an expert at one thing. This is the division of labor concept.

So rather than having 300 idiots (congresspeople) try and keep track of the optimal amounts of public goods that should go into all the gazillion different recipes...it's far more productive to allow each and every taxpayer to determine exactly how much of each and every public good should go into their own recipe. Therefore we should allow taxpayers to shop for themselves in the public sector. They'll spend their taxes on the inputs they need for their recipes...and we'll all be a lot more FDC.

*army infantry inside joke