Is This Forum A Market?

[The Joseon Dynasty]

Yes, there aren't any economists trumpeting tax choice from the roof-tops...but neither are there any economists decrying tax choice from the roof-tops either.

Because it's implicit that no one supports it. Why decry something that no one worthwhile is advocating?

[Galloism]

Can you point on where Samuelson said that they are omniscient? I can't see anything of the kind.

With the help of equations and diagrams, Samuelson showed how the planner would derive for each individual his demand function and the collective consumption goods that would contribute to his utility maximization. In this system, the planner is expected to have an omniscient presence and be able to ascertain individual preferences even when they are not voluntarily revealed. Samuelson attempted to show the combination of public and private goods and their distribution that would maximize social welfare. His concern was with the total community's welfare and with all goods; it did not have much to do with the central reality of the budget in the ordinary world. - A. Premchand, Government Budgeting and Expenditure Controls: Theory and Practice

Samuelson, laying particular emphasis on the problem of preference revelation, takes as a premise the existence of an omniscient planner. - Christian Bastin, Theories of Voluntary Exchange in the Theory of Public Goods

In Samuelson’s model, the optimum value of public goods expenditure is determined by an ethical observer who has information on the preferences and incomes of all individuals in the economy. - Marianne Johnson, Public Economics, Market Failure, and Voluntary Exchange

The well-known Samuelson (1954, 1955) public goods articles offer a good example. Samuelson titles his first article “The Pure Theory of Public Expenditure,” indicating that his analysis of a possible market failure in the production of public goods is, in fact, not a theory, but the theory, of public expenditure even though the article contains no analysis of how government would succeed in producing public goods where the market would fail. The only way Samuelson's public good theory can be a theory of government expenditure is if the government is an omniscient benevolent dictator. - Randall G. Holcombe, Make Economics Policy Relevant: Depose the Omniscient Benevolent Dictator

Though an old theme, Samuelson's rigorous analysis of public goods in a general equilibrium setting (Samuelson, 1954) captured the attention of a wide range of theorists, and soon became the center of fiscal theory. Wicksell's concern with how to secure preference revelation was noted, but was set aside as unmanageable by economic analysis. Implementation of budget choice was again left to an omniscient referee. - Richard A. Musgrave, Public finance and the three branch model

What he said was:
"No decentralized pricing system can serve to determine optimally these levels of collective consumption", and "it is in the selfish interest of each person to give false signals".
Your view of pragmatarianism does not change those facts.

When given the opportunity, people will choose to externalize their costs. In other words, if I was given the opportunity, then I would have the incentive to put my drinks on your tab. Because, we all want a free lunch.

At first I thought you didn't understand economics, but it seems clear now you don't understand logic.

At first I thought that you would give up. Good job proving me wrong.

Wherein you miss the point that all three papers made: it is in people's interests not to reveal their true preferences for public goods.

Errr...what? It's in people's interest to externalize costs. Therefore, we limit their opportunity to externalize costs. How could consumers externalize costs in a pragmatarian system? You can only spend your own money.

The point is to AVOID that situation. The purpose of compulsory taxation is to avoid letting people spend their own money on public goods because they won't truly indicate their preferences.

Samuelson said that compulsory taxation was necessary because people would choose to externalize costs. In a pragmatarian system, people wouldn't have that choice.

Uh, how the hell do you figure that?

Pragmatarianism, as you've defined it, allows everyone to externalise all costs of government, and focus on the department that puts money directly in their pocket.

This is even more true, given you would also attempt to disconnect all inputs/outputs in dealing with government by eliminating all pay-as-you-use taxes.

Yet you're going to take the worst of both situations: compulsory taxation yet letting people 'spend' the money themselves and therefore falsify their preferences.

So pacifists would spend their money on war? Just like vegetarians spend their own money on meat?

Externalizing cost is where a meat eater passes the cost of his steak onto a vegetarian. But that wouldn't be possible in a pragmatarian system. You can only spend your own money. You can't spend other people's money.

The problem with democracy is that everybody endeavors to spend everybody else's money. We all vote for free lunches. Compulsory taxation is necessary for the same reason that democracy doesn't work.

Compulsory taxation eliminates the free-rider problem and pragmatarianism would eliminate the forced-rider problem.

False equivalence fallacy: meat/vegetarianism is a private good. Here's a better analogy:
Imagine how absurd it would be if the only way you could avoid listening to your neighbour launch fireworks is to move to a town where nobody can purchase fireworks.
... and OMG, that is actually how the world works!

Imagine how absurd it would be if the only way you could avoid paying for prohibition would be to move to a country where alcohol was legal. Imagine how absurd it would be if the only way you could avoid paying for the Vietnam war would be to move to a country where taxes weren't being spent on the Vietnam war. Imagine how absurd it would be if the only way you could avoid paying for the drug war would be to move to a country where drugs are legal. Imagine how absurd it would be if the only way you could avoid paying for the war on terror would be to move to a country that didn't spend any taxes on the war on terror.

The only thing wrong with government is the absence of specific exit.

You can exit anytime. Somalia is lovely this time of year.

[Maqo]

Can you point on where Samuelson said that they are omniscient? I can't see anything of the kind.

- snip a quote dump -

Its a very simple question. Can YOU point out where Samuelson said they are omniscient? Its a short paper - shouldn't take you more than 5 minutes to find. All of those quotes are simply making the same assertion that you are, and I would like a quote of Samuelson's paper that backs the assertion.

What he said was:
"No decentralized pricing system can serve to determine optimally these levels of collective consumption", and "it is in the selfish interest of each person to give false signals".
Your view of pragmatarianism does not change those facts.

When given the opportunity, people will choose to externalize their costs. In other words, if I was given the opportunity, then I would have the incentive to put my drinks on your tab. Because, we all want a free lunch.

And I totally agree with you there. I just disagree that pragmatarianism stops people from externalising costs.

At first I thought you didn't understand economics, but it seems clear now you don't understand logic.

At first I thought that you would give up. Good job proving me wrong.

I'm an educator by profession. It pains me to see when people are glaringly wrong and I try my best to correct them.

Wherein you miss the point that all three papers made: it is in people's interests not to reveal their true preferences for public goods.

Errr...what? It's in people's interest to externalize costs. Therefore, we limit their opportunity to externalize costs. How could consumers externalize costs in a pragmatarian system? You can only spend your own money.

The point is to AVOID that situation. The purpose of compulsory taxation is to avoid letting people spend their own money on public goods because they won't truly indicate their preferences.

Samuelson said that compulsory taxation was necessary because people would choose to externalize costs. In a pragmatarian system, people wouldn't have that choice.

It isn't always about explicitly spending other people's money. Its about benefiting from the ways that other people spend money their own, which occurs with public goods / goods with externalities.
We've used this example before, but it doesn't seem to have stuck, so we'll try again:

Lets say you want to fund the fire department. In order to protect your apartment, you pay $50,000 of your special tax credit dollars into the fire department, and guarantee your safety.
I, living in the apartment next door to you, see that you have spent money on the fire department. I know that as part of their job they'll need to put out ANY fire in the building in order to protect your house, so I don't need to spend money on the fire department even though that would have been my first priority. Instead, I can spent MY $50,000 of tax credit dollars in the DOD (or insert agency that you do not support).

Here I have successfully externalised the cost of my fire emergency services. All I need to do is let YOU pay for it voluntarily: no coercion, no convincing, no trickery or lies. By watching or anticipating the way that you spend money on public goods which I benefit from, I can spend money on public goods which are goods which benefit myself more than they benefit others.

It works the other way around as well: I pay for DOD services first because I anticipate that at least one other person in the building will pay for the fire department. Sure enough, someone else does, and my costs are externalised.

Imagine how absurd it would be if the only way you could avoid paying for prohibition would be to move to a country where alcohol was legal. Imagine how absurd it would be if the only way you could avoid paying for the Vietnam war would be to move to a country where taxes weren't being spent on the Vietnam war. Imagine how absurd it would be if the only way you could avoid paying for the drug war would be to move to a country where drugs are legal. Imagine how absurd it would be if the only way you could avoid paying for the war on terror would be to move to a country that didn't spend any taxes on the war on terror.

In a pragmatarian system, when I spend money on the DOD and you spend money on the fire department, you are indirectly paying for the DOD by virtue of subsidising my fire department costs.

Yet you're going to take the worst of both situations: compulsory taxation yet letting people 'spend' the money themselves and therefore falsify their preferences.

So pacifists would spend their money on war? Just like vegetarians spend their own money on meat?

'Falsifying preferences' does not mean 'signalling the complete opposite'. In the above example, I 'falsified' my preference for the fire department by not spending money there, not by starting fires.

Externalizing cost is where a meat eater passes the cost of his steak onto a vegetarian. But that wouldn't be possible in a pragmatarian system. You can only spend your own money. You can't spend other people's money.

Your steak analogy doesn't work (unless you have a government department of steaks). A steak is a private good.
For a public good (eg, the fire department) as soon as one person buys it, other people benefit. Not because of the political or economic structure of the nation, but because of inherent properties of the public good. You externalise your costs by waiting for other people to buy the fire department.

The problem with democracy is that everybody endeavors to spend everybody else's money. We all vote for free lunches. Compulsory taxation is necessary for the same reason that democracy doesn't work.

Compulsory taxation has nothing to do with democracy; it exists in pretty much every form of existing government.
Democracy just gives the people a voice in the allocation of the collected taxes, rather than just the monarch / whatever form of government.

Compulsory taxation eliminates the free-rider problem and pragmatarianism would eliminate the forced-rider problem.

No, it wouldn't. The free rider effect comes from the ability for people to allocate away from more public goods to more private goods. You still get the free rider effect, just people must choose the 'most private' of the public goods on offer instead of a truly private good. Its just the free-rider effect in a different place. You can't eliminate both the free-rider and the forced-rider effects unless every single person has the same benefit function.

[Zaldakki]

Technically, it is a market. Today at least.

[Orham]

So I have adequate information when it comes to milk but inadequate information when it comes to fighter jets?

You have all the necessary information to determine whether your household requires milk, right? You know what purchasing more milk will cost, you know how much milk you have right now, you know how much milk you consume on average, you know everything there is to know about Xerographica's milk supply. By contrast, unless you hold a secret or top secret clearance I can easily imagine that you don't have an equivalent amount of information concerning the DoD, and so are less able to make an informed decision about the fighter jet supply.

Why can't I just vote for a representative who likes milk as much as I do? Actually, I don't drink milk...I drink soymilk. So why can't I just vote for a representative who likes soymilk as much as I do? You expect pacifists to vote for representatives who like peace as much as they do.

Why can't you indeed? I don't know, because I didn't say that.

Imagine if there were only two goods in the world...milk and fighter jets. A lot of resources go into the production of those two goods...but let's pick one in particular...the smartest person. Any time this genius spends improving milk can't also be spent improving jets...and vice versa. This is the oh so important opportunity cost concept. Therefore, better jets means worser milk...and vice versa.

Right now you're saying that congresspeople can know when we need better jets. But if they can know that we need better jets...then it has to mean that they can know when we need worser milk. Spending more money on jets means stealing more resources from milk. Except, you're telling me that they don't have the necessary information about milk.

Actually, I'm not saying representatives don't have (or rather, cannot reasonably obtain) the necessary information about milk. I'm saying you don't have, and cannot reasonably obtain, the necessary information about national security.

If a politically significant number of people vote for pro-milk candidates, milk consistently polls more strongly than jets, the milk lobby is well-funded and enjoys strong popular support, and people consistently tell their representatives that they're pro-milk in open meetings, the message that representatives' constituents want greater funding for milk-related projects will be heard loud and clear. There is no need to assume that representatives are omniscient since there are practical means through which they may determine their constituents' collective preferences.

However, it's not as simple as representatives simply giving constituents whatever they want at the time since representatives are privy to classified information which might affect the decision making process concerning funding allocations. Since we can't just throw classified information to the winds in an effort to allow the general population to make informed decisions on these matters without creating serious problems for ourselves, simply taking the decision out of representatives' hands and allowing constituents to decide directly whether a grant for a defense project ought to be approved or denied (that is, choosing where your taxes go yourself) is an impractical option. The degree of efficiency of public funding allocation relative to constituents' preferences you're asking for cannot be practically obtained for reasons such as this, and I've said as much all along.

Imagine there are two pragmatarian countries...Orham and Xero. Both countries only have two goods in their public sectors...defense and roads. What's a realistic scenario in which these two countries go to war?

If businessmen in either country spend all their taxes on defense...then they won't earn any money because there won't be any roads to transport their inputs/outputs. If they don't earn any money then they'll have nothing to spend on defense. But what kind of businessmen don't want to earn any money?

In order for a country to have a lot of money to spend on defense/offense...they need to be extremely productive. But you can't be extremely productive by spending a lot of money on defense/offense.

I can imagine many situations where countries skimp on defense. Therefore, it's hard for me to imagine a situation where citizens in a country perceive defense important enough to splurge on. If they do splurge on defense...then this will cut into their productivity...and they won't be able to maintain their jets.

Businessmen are selfish and greedy. Why are they going to spend their money on more defense if more defense doesn't help their bottom line? That would be a poor investment. People who make poor investments generally do not have a lot to invest.

Roads, telephone poles, dams...these are durable goods, Xero. They're not like a chicken sandwich, you don't have to make a new one every time you put the good to use. Defense implements such as bases and vehicles are also durable, for that matter. So the realistic scenario you're pretending is so difficult to imagine is one where the two hypothetical countries begin by investing large sums in the construction of their respective infrastructures, then simply devote the necessary (and much smaller) amount to maintaining those infrastructural elements. This leaves more funding available for strengthening national defense by constructing more jets and tanks.

Also, as it turns out defense projects can and have historically spurred economic and technological growth, and it is possible for the state to contract with private manufacturers for construction of its defense goods. So...yeah. And if it's really that difficult to imagine a situation where the population strongly supports increased military expenditures, you might want to read about this thing called the Cold War. It was kind of a big deal.

RETROSPECTIVE EDIT FOLLOWS:

While I addressed your argument concerning the difficulty imagining a situation where a country's population would perceive defense spending as a high priority, I didn't address one very important thing: your effort to use democratic peace theory as a foundation for the hypothesis that two pragmatarian countries would be less inclined to go to war with one another. I'm not sure a pragmatarian system would actually be doing anything that the institution of liberal democracy isn't already doing as far as maintaining peaceful interactions between countries is concerned, and since the hypothesis you've presented is as of yet untested I cannot say as a matter of fact whether you're right or wrong.

You're sharing a flawed critique. The more people who read it...the greater the chances that some people will see the flaw.

Considering you never posted a response to Galloism explaining that flaw, and considering I pointed out additional problems created by your system in this thread...yeah...I don't believe you.

If you've ever thought about it then you might be. If you've never thought about it then it's doubtful.

Considering you can't even call the increased popular call for defense-related expenditures during the Cold War to mind as a realistic scenario despite the fact it happened, I'll surely be excused for not worrying about your opinion on my analytical capacity.

[The Joseon Dynasty]

Game theory is really not relevant. If you want people to change their priorities...then the onus is on you to provide them with the necessary information. Which is exactly what I'm currently endeavoring to do.

So what you're saying is that you possess information about what is best for society that the vast majority of people don't?

[Galloism]

Businessmen are selfish and greedy. Why are they going to spend their money on more defense if more defense doesn't help their bottom line? That would be a poor investment. People who make poor investments generally do not have a lot to invest.

It's funny you should admit this. I'm going to take a real world example:

Lockheed Martin.

Now, imagine I am Lockheed Martin. I am the embodiment of all rational, cruel, selfish, greedy personification of Lockheed Martin.

Now, I pay lots of taxes. I pay social security tax (employer), medicare tax (employer), unemployment tax (fed), unemployment tax (state(s)), and income tax (federal and state).

Suffice to say, I don't know how much that would be for Lockheed Martin, but income tax alone is 1.2 billion dollars. I don't think 3-4 billion dollars is unreasonable for that and all the other taxes (total sales are 45 billion). IN fact, it's probably too low. I'll give you the benefit and say 3 billion.

Now, who pays me?

DoD mostly, and some NASA.

Now where should I focus my tax money? DoD and NASA. My employees probably would too, given it's also their bread and butter.

Now, what government costs have I effectively externalized?

Well, there's too many to name, but the obvious ones are below:

Unemployment Compensation (maintaining an available workforce)
Department of Transportation (maintaining the roads to move my goods)
Social Security/Disability Insurance for Employees (SSA)

Now, what agencies are in my interest not to get funded?

For starters:

Department of Labor
National Transportation Safety Board
Federal Aviation Administration
Environmental Protection Agency
Department of the Treasury (particularly the IRS)

Why do I not want them funded? They cost me money, making me comply with Federal rules. If they were not able to effectively enforce them, I could get away with most anything. So, even though I need to have them on my tail for the good of society, it is in my interest they not get funded. Therefore, my costs of doing business are either externalized onto those that will fund those agencies, or externalized onto the people who will suffer because they aren't in play.

[Infactum]

It's ludicrous on its face once we change threads->forks, market->metal, wage law->pencil, and wood->minimum wage. If an argument is logical, replacing thins like this shouldn't matter. Ergo, your argument is not logical.

Errr...what? There's block or flow. If we mandated the minimum amount of replies that threads received...then this would be a block. Just like a minimum wage is a block.

I read you as implying that there is a deductive link between the two ideas. There is not.

Allowing people to comment on articles...block or flow? Locking a thread...block or flow? Preventing women from voting...block or flow? Preventing Americans from voting on Brazilian issues...block or flow? Preventing kids from voting...block or flow? Theft...block or flow? Murder...block or flow? Preventing people from shopping in the public sector...block or flow? Slavery...block or flow? Marionettes...block or flow?

You either facilitate input (flow)...or you hinder it (block).

Natural monopolies... block or flow? Natural inefficiencies in the low wage labor market (mostly due to switching costs and lack of collective bargaining)... block or flow? Non-discrimination hiring laws... block or flow?

All of those are, by definition, blocks. If you claim removing the minimum wage (or other labor market regulations) allows "flow" of some kinds of input, you ignore that it "blocks" other kinds due to difficulty finding and switching jobs. Thus, it is not clear to me that removing the minimum wage increases the overall flow of input to the Market (to use your terminology - I would phrase it in different terms, but we'd be arguing about definitions for a while).

Would you argue that a spam/troll/flamewar filled forum is better than its current state*? If not, then you must accept that - in some sectors - a command economy can serve the public good better than a free market.

It's like come...on. We've been discussing back and forth long enough for you to know that I'm not an anarcho-capitalist. The only thing wrong with the government is that we can't specifically exit. That's it.

Just because some moderation is better than no moderation...doesn't at all mean that any moderation is better than better moderation. You're welcome to attack anarcho-capitalism all you like...and I could certainly join you...but then we really wouldn't be making much progress with pragmatarianism.

Aye, you have maintained that in the past. But here you have branched out into a manifestly non-fiscal realm as an example. It is not clear to me where you draw the line between "Ethical rules" (of which you presumably think there should be some), and "Economic rules" (Which you seem to claim should be minimized). In my mind, it would be perfectly consistent in your argument to claim that the content of thread should not be regulated and that they should be judged purely on their reply count. If however you view moderators as police, then posting messages that seem like spam is a "crime" rather than an economic activity. Why then do you not view paying people below minimum wage as a "crime"*, but do view it as an economic activity (that should be allowed).

And real quick on the specific exit: You realize that you cannot exit from public goods at all, correct? That's the definition. Your air is clean and your food is safe whether or not you pay for it. Your system only allows exit from paying for it, which is not exiting the market. If you could allow an exit from the market (essentially making them private goods), then your system would be much better supported.

*legally, now, it is, but I am using crime as a stand in for "disallowed under properly implemented pragmatarianism;" I'm sure you'll correct me if I'm wrong.

If you claim that Samuelson said governments would maximize value, then he assumed government planners are omniscient.

If you make the more defensible claim that he said central planning could, in some specific cases, be better than decentralized decisions, then he makes no such assumption.

In specific cases? Maybe you missed the part where he said...."the Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."

Samuelson's political commentary is not relevant to the conclusions he draws. That he was wrong about a Soviet-Style command economy in no way invalidates his proof. His proof states quite clearly that it is - possible - for central planning to outperform a market under certain circumstances (which are often satisfied by public goods). Not one paper you have put forth disproves this. I would be very worried if it did, as unless it presented a flaw in the proof, we'd have Principle of Explosion problems (http://en.wikipedia.org/wiki/Principle_of_explosion)

Now I'm a little confused. You claim to know that many trained economists have tried to solve the preference revelation problem. You also claim that you have a solution. Since I don't hear many econ Ph. D.'s trumpeting tax-choice from the rooftops I am left with several possible conclusions:

1) Very few economists are utilitarian or wish to make comments on utilitarian solutions.
2) Almost all trained economists are less capable at economics than Xerographica.
3) There is no proof that Tax-choice provides anything like a utilitarian solution. Xerographica is incorrect.

I beleive this list is exhaustive. Can you think of another option? If not you'll forgive me for choosing option (3).

You claim that pragmatarianism wouldn't work...and I claim it does. Samuelson claimed that command economies would function and thrive...Mises and Hayek claimed that they wouldn't.

I make separate claims in separate parts of my posts, and I apologize if it is not clear.

When I am attacking your arguments, I am usually attempting to get you to present fuller proofs. You seem to be fond of "Proof by Example," but I would like to see actual analysis that backs up what you say (As I've demonstrated at length, Buchanan's paper does not). I am an outsider to the field, but such analysis seems impossible. I don't really care if you demonstrate it yourself or provide a paper, but I'd like to see proof that it works in all cases (not just on milk or flowers or whatever).

When I am presenting my own argument, I attempt to provide a reasonably complete example of a situation in which your system would not work. Such analysis should be self contained. I think most of the situations I describe are a subset of Samuelson's (or related works) class of collective action problems. I take the fact that papers disproving Tax Choice's value are sparse to mean that disproving an unpopular theory is not widely publishable.

And by the way, Samuelson claimed that a command economy (in some sectors) - could - thrive. NOT - would - thrive in all sectors.

Yes, there aren't any economists trumpeting tax choice from the roof-tops...but neither are there any economists decrying tax choice from the roof-tops either.

I suspect strongly that this is because it is obviously non-tenable, and therefore not worth decrying. Anyone with a passing familiarity with game theory can see the collective action problem pretty quickly. Indeed, pretty much everyone that I've seen give you a serious response has. That analysis was ground breaking stuff in Samuelson's time, but it's well known now. Again, I am an outsider and may be wrong, but it seems pretty clear cut.

Let's pick out some economists...you ask half why pragmatarianism wouldn't work and I'll ask the other half why it wouldn't work. And then we'll share their answers. Deal or no deal? Or is the burden of proof all on me?

When you make the positive claim, the burden of proof is all on you. You have one paper that defines a completely unrealistic scenario where tax-choice could work. That is not, really, evidence. If it works in all cases, there ought to be a highly cited paper that shows this.

When I provide examples of it not working, the burden of proof is on me. I have tried to make them self contained, but you are of course free to pick them apart (as you have attempted to).

The fact of the matter is...you, like everybody else, have greatly endeavored to dodge my argument. Why wouldn't it work to allow representatives (elected or otherwise) to choose which threads we replied to?

For pretty simple reasons. The act of replying to a thread provides me with what is basically a private good. I get the satisfaction of people reading it and (maybe) enjoy the time I spend writing it. These are both rivalrous and excludable, and so are best allocated by a market (especially a market as efficient as the internet), not public representatives. This is a major stumbling block when trying to generalize these results to non-rivalrous and non-excludable public goods.

Contrast this with the kind of good you are actually creating - a public good. All can read it and no one can keep others from reading it. We regulate pretty strongly the form of OP's, and replies are subjet more to negative restrictions. A "command economy" in parts of this "public sector" seems to work pretty well.

Instead of dealing with my argument...you challenged me to prove that anarcho-capitalism would work. Errrrr...what? If I thought that anarcho-capitalism would work...then I would be an anarcho-capitalist. But I'm not an anarcho-capitalist...I'm a pragmatarian. I have absolutely no problem with the government providing police, jets, cheese, milk or threads...as long as there's specific exit.

I'm still not sure where you draw the line. It is completely unclear in your analogy. I assume people vote (somehow there's money for this to happen).

Regarding game theory...did you know that I love plants? My favorite plants are epiphytes. Some epiphytes need more water than other epiphytes.

Picture an epiphyte on a tree. It needs water. Who should be responsible for ensuring that it receives sufficient water? People who love epiphytes or people who hate epiphytes?

I think anybody who makes the effort to ensure that the epiphyte has sufficient water is somebody who loves epiphytes. Erich Fromm would agree...

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, The Art of Loving

Ok, direct question time. Do you agree that the prisoners in the prisoners dilemma* Would rather spend 2 years in jail than 1 year in jail? Because this is what I'm getting:

1) Xero: Choices define preference (love).
2) Math: Rational prisoner's will choose to spend 2 years in jail when they could have spent 1.
3) We must conclude that rational prisoners want to be in jail longer.

3 is of course a contradiction, as rational prisoners, by definition, want to spend less time in jail. I can only conclude that collective choices do not represent collective preferences. How does this mesh with your theory of love?

*numbers form wiki: http://en.wikipedia.org/wiki/Prisoner's_dilemma

Right now my active concern is to promote a system that allows everybody's active concern to freely flow. Once pragmatarianism is in place...then I can focus on directing my active concern to conserving/expanding natural habitats. And you can direct your active concern to uh, was it space research?

Game theory is really not relevant. If you want people to change their priorities...then the onus is on you to provide them with the necessary information. Which is exactly what I'm currently endeavoring to do.

Game theory is incredibly relevant. People could completely agree on their priorities (as far as optimal funding levels) and still fail to fund them. This seemingly paradoxical statement is a trivial game theory result and undermines your system.

[Salandriagado]

Democracy is an electoral system. It has precisely nothing to do with economic structure.

Yet the government allocates billions of dollars.

Which has precisely nothing to do with how that government is selected.

I suppose you blame the market when the economy falters.

Lack of regulation, most recently. I mean, that's a completely irrelevant non-sequitur, but hey.

No I'm not. I'm throwing my opinions at the world in general. You, quite frankly, are irrelevant. If somebody else started responding to my posts instead of you, I almost certainly wouldn't notice the change (unless it happened to be one of the handful of people around here that I know well enough to recognise). I'm not, in any way, giving you time, any more than somebody who reads a book is giving the author anything more than the purchase cost. We are not trading time, we are choosing how to spend our time. I'm not giving you the time, you don't have more time because I'm spending time reading your posts.

Market = choosing how you spend your money
Not-market = choosing how you spend your time

That's not right. It's wrong wrong wrong. Time, like money, is a resource. If you can choose how you spend your resources, whatever they might be, then it's a market. If you can't choose how you spend your resources, whatever they might be, then it's a not-market.

No. A market, by definition, requires exchange of goods and services. I am not doing this. I'm not GIVING you any time. To correct your equalities up there:

Market: Choosing what you exchange things you have for, and who you exchange them with.
Not-market: Throwing ideas around.

No it isn't, there's no trade happening.

Allocation is happening. And it's certainly not top down allocation. Therefore, it's a market.

Do you have any economic education at all? Like, enough to know what the word "market" means?

Money: yes, you are giving them something. Time: no, you don't give them anything.

Is that what your friends and family tell you when you spend your time with them?

What the fuck are you even trying to say? That isn't even remotely coherent.

Both of these involve some form of mutual, exclusive benefit. There is no such in this situation.

This situation isn't mutually beneficial? We aren't both deriving utility from this use of our limited resources? Shenanigans. It's shenanigans because neither of us has to be here. Really.

Mutual exclusive benefit.

Because it isn't a question. It's a claim, that is clearly false.

Do you enjoy the freedom to choose which threads you reply to? Would you prefer if you could elect somebody to choose for you?

That has precisely nothing to do with markets. Once again, you demonstrate that you have created this thread without even understanding the question you are asking.



That's a strawman.



Yes, I do. It has precisely nothing to do with anything, though. The fact remains that you are horribly misusing the word.

You clearly don't. For starters, there is precisely no ideology involved in any part of this discussion, which is what makes your little rant irrelevant. It's a simple matter of checking a definition. Having done that, the fact that this forum is not a market is obvious.

[Xerographica]

Its a very simple question. Can YOU point out where Samuelson said they are omniscient? Its a short paper - shouldn't take you more than 5 minutes to find. All of those quotes are simply making the same assertion that you are, and I would like a quote of Samuelson's paper that backs the assertion.

The quotes are making the same assertions that I am? Are you sure that I'm not making the same assertion that numerous economists have made? It's fine if you don't want to believe me...but perhaps you need to do some more research before you call shenanigans on Richard Musgrave.

From Samuelson's paper...

…I assume each individual has a consistent set of ordinal preferences (collective as well private) which can be summarized by a regularly smooth and convex utility… - Paul A. Samuelson The Pure Theory of Public Expenditure

Same subject different paper...

I shall present a pseudo-demand analysis that would provide an omniscient planner with one method of solving the optimality equations of the original model…
[...]
If there were only private goods, we could rely on each man to calculate and present his demand functions once we gave him his budget income and market prices at which he could trade freely. With public goods, he has every reason not to provide us with revelatory demand functions. So I imagine a referee, who is appointed by the planning authority and who somehow knows man i's indifference function u(i). - Paul Samuelson, Pure Theory of Public Expenditure and Taxation

I'm an educator by profession. It pains me to see when people are glaringly wrong and I try my best to correct them.

It's entirely possible that I'm glaringly wrong. Therefore, even if I could, I wouldn't force you to allocate your resources to supporting pragmatarianism.

Lets say you want to fund the fire department. In order to protect your apartment, you pay $50,000 of your special tax credit dollars into the fire department, and guarantee your safety.
I, living in the apartment next door to you, see that you have spent money on the fire department. I know that as part of their job they'll need to put out ANY fire in the building in order to protect your house, so I don't need to spend money on the fire department even though that would have been my first priority. Instead, I can spent MY $50,000 of tax credit dollars in the DOD (or insert agency that you do not support).

Here I have successfully externalised the cost of my fire emergency services. All I need to do is let YOU pay for it voluntarily: no coercion, no convincing, no trickery or lies. By watching or anticipating the way that you spend money on public goods which I benefit from, I can spend money on public goods which are goods which benefit myself more than they benefit others.

It works the other way around as well: I pay for DOD services first because I anticipate that at least one other person in the building will pay for the fire department. Sure enough, someone else does, and my costs are externalised.

You're not pushing the cost onto me if I voluntarily buy something for us. That's because I'm choosing to internalize the cost of our benefit. There's absolutely nothing wrong with buying lunch for other people. Altruism is hardly the problem.

'Falsifying preferences' does not mean 'signalling the complete opposite'. In the above example, I 'falsified' my preference for the fire department by not spending money there, not by starting fires.

You're totally putting the cart before the horse. The objective really isn't to figure out what people's preferences are. The objective is to make sure that we have enough of the things that we need to thrive. In your example...do we have enough fire protection to thrive? Well...yeah...I reached into my own pocket and paid for more than enough fire protection. Did I have to? No, I could have only spent 1% of the optimal amount. Then other people would have had the opportunity to chip in for the rest.

The market is a decentralized system where the crowd finds/fills the biggest gaps. If you buy a fixer upper...then you prioritize improvements. Our public sector is a ginormous fixer upper. There's a lot of room for improvement. If your first priority is to fix the roof...but somebody beats you to it...then how is that a problem? Somebody took care of your number one priority before you did. That's a good thing. We want necessary improvements to be made sooner rather than later. And that's exactly what will happen when we crowdfund the public sector.

For a public good (eg, the fire department) as soon as one person buys it, other people benefit. Not because of the political or economic structure of the nation, but because of inherent properties of the public good. You externalise your costs by waiting for other people to buy the fire department.

If there are epiphytes on trees...and they need water...do I sit around waiting for it to rain? Not here in Southern California I don't. Each day I go outside and look at the epiphytes. Each day they look more and more wilted. If I don't water them...then they will die. If I have to water anyways...then why not water the epiphytes that need water the most?

Compulsory taxation has nothing to do with democracy; it exists in pretty much every form of existing government.
Democracy just gives the people a voice in the allocation of the collected taxes, rather than just the monarch / whatever form of government.

Are you saying that voters don't want a free lunch?

No, it wouldn't. The free rider effect comes from the ability for people to allocate away from more public goods to more private goods. You still get the free rider effect, just people must choose the 'most private' of the public goods on offer instead of a truly private good. Its just the free-rider effect in a different place. You can't eliminate both the free-rider and the forced-rider effects unless every single person has the same benefit function.

People don't have the same benefit functions which is why it's necessary to allow them to shop for themselves. If we have to maintain a garden...then I'll spend my time watering the epiphytes and you spend your time stomping the snails. That's f'ing teamwork.

And don't forget that our impersonal shoppers would still be there. You really wouldn't have to shop for yourself if you didn't want to. If you're just going to wait around for others to fill the gaps then you might as well just give your money to congress. If you don't derive any utility from fixing problems sooner rather than later...then why would you bother shopping for yourself if you didn't have to?

[Galloism]

You're not pushing the cost onto me if I voluntarily buy something for us. That's because I'm choosing to internalize the cost of our benefit.

Now, pop quiz. If you internalize *my* costs, what is it called from my perspective?

Keep in mind, I still have the cost of whatever. I'm just not paying for it. You might say a third party, someone external is paying for my cost. Now what is it called when someone external to me pays for my costs?

There's absolutely nothing wrong with buying lunch for other people. Altruism is hardly the problem.

It's not altruism if you have to pay for other peoples' costs because it's a public good and they won't pay for their own. It's putting money up with a gun to your head.


By the way, I have posted several times in this thread, in response to you, thoroughly proving, by examples and logic, that your ideas are bad at their core, worse when examined, and either circumvented so easily they're laughable, or crippling to the government if you close the loopholes.

I would sincerely appreciate some responses to my posts. Please do not ignore them simply because they are inconvenient to your arguments. It's the mark of a very poor debater.

[The Serbian Empire]

Yes, a market of ideas more than anything.

[Xerographica]

You have all the necessary information to determine whether your household requires milk, right? You know what purchasing more milk will cost, you know how much milk you have right now, you know how much milk you consume on average, you know everything there is to know about Xerographica's milk supply. By contrast, unless you hold a secret or top secret clearance I can easily imagine that you don't have an equivalent amount of information concerning the DoD, and so are less able to make an informed decision about the fighter jet supply.

The supply of milk depends on how much people value milk. The only way we can know how much people value milk is to give them the opportunity to shop for themselves. Right now we don't know how much people value defense. Yet, despite the absence of this essential information...you clearly believe that the government can supply the optimal amount of defense.

Why can't you indeed? I don't know, because I didn't say that.

Right, you didn't say that...but that's what this thread is all about. Why can't we vote for representatives to choose which threads we reply to? If you don't know the answer to this question...then why do you think you know the answer to whether or not people should be allowed to shop in the public sector?

Actually, I'm not saying representatives don't have (or rather, cannot reasonably obtain) the necessary information about milk. I'm saying you don't have, and cannot reasonably obtain, the necessary information about national security.

Let's review...

"I have previously stated and I repeat now that the United States plans no military intervention in Cuba," said President John F. Kennedy as he planned military action in Cuba. "As president, it is my duty to the American people to report that renewed hostile actions against United States ships on the high seas in the Gulf of Tonkin have today required me to order the military forces of the United States to take action in reply," said President Lyndon Johnson as he fabricated an incident to justify expansion of American involvement in Vietnam. "We did not, I repeat, did not, trade weapons or anything else [to Iran] for hostages," said President Ronald Reagan in November, 1986, four months before admitting that U.S. arms had been traded to Iran in exchange for Americans being held hostage there. "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction," said Vice President Dick Cheney before the invasion of Iraq; when it turned out that these weapons did not exist, Assistant Defense Secretary Paul Wolfowitz explained that "for bureaucratic reasons, we settled on one issue, weapons of mass destruction [as justification for invading Iraq], because it was the one reason everyone could agree on"
(Cockburn and St. Clair 2003, 1). - Benjamin Ginsberg, Autonomy and Duplicity: Reply to DeCanio

If a politically significant number of people vote for pro-milk candidates, milk consistently polls more strongly than jets, the milk lobby is well-funded and enjoys strong popular support, and people consistently tell their representatives that they're pro-milk in open meetings, the message that representatives' constituents want greater funding for milk-related projects will be heard loud and clear. There is no need to assume that representatives are omniscient since there are practical means through which they may determine their constituents' collective preferences.

So now you're saying that it would work if we elected representatives to choose which threads we replied to?

However, it's not as simple as representatives simply giving constituents whatever they want at the time since representatives are privy to classified information which might affect the decision making process concerning funding allocations. Since we can't just throw classified information to the winds in an effort to allow the general population to make informed decisions on these matters without creating serious problems for ourselves, simply taking the decision out of representatives' hands and allowing constituents to decide directly whether a grant for a defense project ought to be approved or denied (that is, choosing where your taxes go yourself) is an impractical option. The degree of efficiency of public funding allocation relative to constituents' preferences you're asking for cannot be practically obtained for reasons such as this, and I've said as much all along.

Because...it's a good idea to ask your barber whether you need a haircut? Shall we also ask Lockheed whether we need more jets? Should we ask the milk lobby whether they need more subsidies?

There's a problem with demand opacity. If we don't know what the interests of the many truly are...then it's a given that they will be sacrificed for the benefit of the few. The solution is to clarify the demand for public goods.

The amount of people that spend their taxes on a public good (demand breadth) will help us create the public goods menu. What percentage of the public would have to spend their taxes on a public good in order for it be on the menu? At least 10%? Where's the public goodness threshold?

Also, as it turns out defense projects can and have historically spurred economic and technological growth, and it is possible for the state to contract with private manufacturers for construction of its defense goods. So...yeah. And if it's really that difficult to imagine a situation where the population strongly supports increased military expenditures, you might want to read about this thing called the Cold War. It was kind of a big deal.

Yeah, it was a big deal...which is why I'm a pragmatarian. Now...the trick is to help you understand the problem with demand opacity. It's not the easiest thing.

What voters vote for and governments supply does not accurately reflect the demand for public goods. In a pragmatarian system...very few taxpayers on either side would have voluntarily funded the cold war. In other words...the cold war would have been removed from the menu due to insufficient demand breadth.

While I addressed your argument concerning the difficulty imagining a situation where a country's population would perceive defense spending as a high priority, I didn't address one very important thing: your effort to use democratic peace theory as a foundation for the hypothesis that two pragmatarian countries would be less inclined to go to war with one another. I'm not sure a pragmatarian system would actually be doing anything that the institution of liberal democracy isn't already doing as far as maintaining peaceful interactions between countries is concerned, and since the hypothesis you've presented is as of yet untested I cannot say as a matter of fact whether you're right or wrong.

In a pragmatarian system, people would put their money where their mouth was. If there wasn't a disparity between words and actions...then compulsory taxation wouldn't be necessary. There is a disparity between words and actions...so compulsory taxation is necessary for the same reason that democracy fails.

If people truly want a war...then they are going to have to reach into their own pockets and give their own money to the DoD. If not enough people give their money to the DoD...then the war would be removed from the menu.

Can you name a war that was started as a result of enough citizens voluntarily funding it?

Considering you never posted a response to Galloism explaining that flaw, and considering I pointed out additional problems created by your system in this thread...yeah...I don't believe you.

The flaw of one GO giving money to another? The entire point of pragmatarianism is to allow consumers to vouch/vet/validate for how GOs are using their money.

Considering you can't even call the increased popular call for defense-related expenditures during the Cold War to mind as a realistic scenario despite the fact it happened, I'll surely be excused for not worrying about your opinion on my analytical capacity.

Heh. My tentative opinion was that you are more analytical than most.

[Maqo]

Its a very simple question. Can YOU point out where Samuelson said they are omniscient? Its a short paper - shouldn't take you more than 5 minutes to find. All of those quotes are simply making the same assertion that you are, and I would like a quote of Samuelson's paper that backs the assertion.

The quotes are making the same assertions that I am? Are you sure that I'm not making the same assertion that numerous economists have made? It's fine if you don't want to believe me...but perhaps you need to do some more research before you call shenanigans on Richard Musgrave.

From Samuelson's paper...

…I assume each individual has a consistent set of ordinal preferences (collective as well private) which can be summarized by a regularly smooth and convex utility… - Paul A. Samuelson The Pure Theory of Public Expenditure

Nothing about government omniscience there....

I shall present a pseudo-demand analysis that would provide an omniscient planner with one method of solving the optimality equations of the original model…
[...]
If there were only private goods, we could rely on each man to calculate and present his demand functions once we gave him his budget income and market prices at which he could trade freely. With public goods, he has every reason not to provide us with revelatory demand functions. So I imagine a referee, who is appointed by the planning authority and who somehow knows man i's indifference function u(i). - Paul Samuelson, Pure Theory of Public Expenditure and Taxation

And again, he doesn't assume that government is omniscient: just that preferences for public goods will not be signalled correctly, but IF preferences for public goods were properly known an omniscient planner would be able to *solve* the problem, and that 'more omniscient' planners will solve the problem better than 'less omnisicient' planners or individuals acting within the market.

Lets say you want to fund the fire department. In order to protect your apartment, you pay $50,000 of your special tax credit dollars into the fire department, and guarantee your safety.
I, living in the apartment next door to you, see that you have spent money on the fire department. I know that as part of their job they'll need to put out ANY fire in the building in order to protect your house, so I don't need to spend money on the fire department even though that would have been my first priority. Instead, I can spent MY $50,000 of tax credit dollars in the DOD (or insert agency that you do not support).

Here I have successfully externalised the cost of my fire emergency services. All I need to do is let YOU pay for it voluntarily: no coercion, no convincing, no trickery or lies. By watching or anticipating the way that you spend money on public goods which I benefit from, I can spend money on public goods which are goods which benefit myself more than they benefit others.

It works the other way around as well: I pay for DOD services first because I anticipate that at least one other person in the building will pay for the fire department. Sure enough, someone else does, and my costs are externalised.

You're not pushing the cost onto me if I voluntarily buy something for us. That's because I'm choosing to internalize the cost of our benefit. There's absolutely nothing wrong with buying lunch for other people. Altruism is hardly the problem.

A few things here:
1) Are you really 'choosing' to internalise the costs of everyone else? Or have we forced you to do it? If the other 99 people in the apartment approximate everyone else's priorities (which they can probably do with reasonable accuracy as people living within the same apartment probably have reasonably similar lives and morals), and from this approximation know that fire protection is the highest priority... the incentive then is to spend their money before you spend yours. When it finally comes to your turn to pay, you are forced to absorb everyone else's cost because every other resource allocation will result in less benefit for you.
2) Internalising someone elses cost, from their point of view is them externalising their cost. They gain a net benefit from the resource allocation.
3) Altruism IS a problem because it cannot be relied upon. Selfishness can be relied upon. Every individual acting for their own self-interest, that is what causes the 'invisible hand' to work. The entire point of compulsory taxation is that (given a choice) people will opt out of spending on public goods in order to gain benefit for themselves. Your idea of how people will act under pragmatarianism is incompatible with the reason for compulsory taxation.

'Falsifying preferences' does not mean 'signalling the complete opposite'. In the above example, I 'falsified' my preference for the fire department by not spending money there, not by starting fires.

You're totally putting the cart before the horse. The objective really isn't to figure out what people's preferences are. The objective is to make sure that we have enough of the things that we need to thrive. In your example...do we have enough fire protection to thrive? Well...yeah...I reached into my own pocket and paid for more than enough fire protection. Did I have to? No, I could have only spent 1% of the optimal amount. Then other people would have had the opportunity to chip in for the rest.

Obviously 'enough to thrive' isn't the correct measure. Otherwise the government could over-tax and over-spend and give us (more than) enough to thrive. What you've constantly touted is 'optimum'.
There is quite clearly a problem that if the two people in this scenario spend their money in a different order, different outcomes will ensue. Because both people do not have exactly the same benefit functions, under your definition one of them must be either the 'free rider' or the 'forced rider' under each situation.

If your first priority is to fix the roof...but somebody beats you to it...then how is that a problem? Somebody took care of your number one priority before you did. That's a good thing.

That's a good thing for you; somehow you've managed to make someone give you a free lunch. It's not a good thing for the other person; they shouldn't have done that, and a 'rational' consumer wouldn't have done that. For every individual it is not an optimum choice to pick something which is the highest priority of someone who hasn't paid, even if it is your highest priority.
This is very very simple game theory.

For a public good (eg, the fire department) as soon as one person buys it, other people benefit. Not because of the political or economic structure of the nation, but because of inherent properties of the public good. You externalise your costs by waiting for other people to buy the fire department.

If there are epiphytes on trees...and they need water...do I sit around waiting for it to rain? Not here in Southern California I don't. Each day I go outside and look at the epiphytes. Each day they look more and more wilted. If I don't water them...then they will die. If I have to water anyways...then why not water the epiphytes that need water the most?

If it cost you $10 to water the plants each time you did it, and you know that your neighbour ALSO likes the flowers, would you do it?
(The rational consumer argument says: no, you shouldn't. And if you want to build this system around the belief that consumers aren't rational, then your 'invisible hand' truly disappears.

Compulsory taxation has nothing to do with democracy; it exists in pretty much every form of existing government.
Democracy just gives the people a voice in the allocation of the collected taxes, rather than just the monarch / whatever form of government.

Are you saying that voters don't want a free lunch?

Not at all. But that isn't a property inherent to voters. Compulsory taxation would still exist under a monarchy, oligarchy or any-other-archy.

No, it wouldn't. The free rider effect comes from the ability for people to allocate away from more public goods to more private goods. You still get the free rider effect, just people must choose the 'most private' of the public goods on offer instead of a truly private good. Its just the free-rider effect in a different place. You can't eliminate both the free-rider and the forced-rider effects unless every single person has the same benefit function.

People don't have the same benefit functions which is why it's necessary to allow them to shop for themselves. If we have to maintain a garden...then I'll spend my time watering the epiphytes and you spend your time stomping the snails. That's f'ing teamwork.
And don't forget that our impersonal shoppers would still be there. You really wouldn't have to shop for yourself if you didn't want to. If you're just going to wait around for others to fill the gaps then you might as well just give your money to congress. If you don't derive any utility from fixing problems sooner rather than later...then why would you bother shopping for yourself if you didn't have to?

I'd shop for myself because I could derive higher personal utility from externalising my costs of public goods onto others, and 'purchasing' those public goods which I personally derive more benefit from than others do.

You have all the necessary information to determine whether your household requires milk, right? You know what purchasing more milk will cost, you know how much milk you have right now, you know how much milk you consume on average, you know everything there is to know about Xerographica's milk supply. By contrast, unless you hold a secret or top secret clearance I can easily imagine that you don't have an equivalent amount of information concerning the DoD, and so are less able to make an informed decision about the fighter jet supply.

The supply of milk depends on how much people value milk. The only way we can know how much people value milk is to give them the opportunity to shop for themselves. Right now we don't know how much people value defense. Yet, despite the absence of this essential information...you clearly believe that the government can supply the optimal amount of defense.

The way that we can determine value from spending with milk is because milk is a private good.
We cannot know how much people value defense from how much they spend on it, because it is a public good, and people would hide their true preferences if possible.

No-one necessarily believes the government can supply the 'optimal' amount of defense. We do however believe that a government can determine a *more optimal* supply of defense than the market can, because in the 'market' for public goods people will hide their true preference to gain more personal benefit.

If a politically significant number of people vote for pro-milk candidates, milk consistently polls more strongly than jets, the milk lobby is well-funded and enjoys strong popular support, and people consistently tell their representatives that they're pro-milk in open meetings, the message that representatives' constituents want greater funding for milk-related projects will be heard loud and clear. There is no need to assume that representatives are omniscient since there are practical means through which they may determine their constituents' collective preferences.

So now you're saying that it would work if we elected representatives to choose which threads we replied to?

I don't know where you are getting this weird idea that 'elected representatives' and 'government' are synonymous. Why not a monarch?
And no, I don't believe that is what Orham was saying. He was saying: there are enough ways to communicate your preferences to your representatives that we don't need to introduce the word 'omniscient': they are being directly told by you what your preferences are when you talk to them or vote for them.

Because...it's a good idea to ask your barber whether you need a haircut? Shall we also ask Lockheed whether we need more jets? Should we ask the milk lobby whether they need more subsidies?

Isn't this exactly what pragmatarianism would do? If you give Lockheed the ability to determine where its taxes go, surely it would put its taxes towards more jets? If you give milk farmers the ability to determine where their taxes go, surely they would put their taxes towards milk subsidies?

The amount of people that spend their taxes on a public good (demand breadth) will help us create the public goods menu. What percentage of the public would have to spend their taxes on a public good in order for it be on the menu? At least 10%? Where's the public goodness threshold?

Oh, I see you've moved on to the 'number of people' purchasing these goods, as opposed to 'the amount spent' on those goods. Two problems with that:
0) Just because something is supplied by the government does not make it a public good.
1) The 'number of people' wanting to purchase a good for as much as they are willing to spend does not make a market. Quite obviously, 0 Ferraris should be produced if 100 million people want to pay $5 each for them.
2) If you are only looking at the number of people wanting the government to supply X good... haven't you just created democracy? Vote for the set of preferences which represents your views?

[Maqo]

Considering you never posted a response to Galloism explaining that flaw, and considering I pointed out additional problems created by your system in this thread...yeah...I don't believe you.

The flaw of one GO giving money to another? The entire point of pragmatarianism is to allow consumers to vouch/vet/validate for how GOs are using their money.

How do you fix that without giving voters a direct, line-item 'vote' of every single department's budget?

Can you not see why that would be a stupid idea?

If you can't... can you tell me why the general public shouldn't also be able to vote for line items on Wal-Mart's budget? If indeed every single product can be treated the same like you suggest, surely the average voter's input should be able to run Wal-Mart more efficiently than it currently is?
If you disagree with this, can you outline why?

[Xerographica]

Lockheed Martin.

There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest in war. - Mancur Olson

Here's what that would look like...



Right now, because of demand opacity, the benefit of the many is being sacrificed for the benefit of the few. The chart illustrates that society's resources are shifted from broadly beneficial goods...like public healthcare...to narrowly beneficial goods...like war. Well...the chart just shows a narrow demand for war...but we we should all be familiar with the opportunity cost concept...that resources used for war have to be taken from alternative uses...

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron...Is there no other way the world may live? - Dwight D. Eisenhower

In order to prevent narrowly beneficial uses from stealing resources from broadly beneficial uses...it's absolutely essential that we clarify the demand for public goods.

Now, what agencies are in my interest not to get funded?

For starters:

Department of Labor
National Transportation Safety Board
Federal Aviation Administration
Environmental Protection Agency
Department of the Treasury (particularly the IRS)

Why do I not want them funded? They cost me money, making me comply with Federal rules. If they were not able to effectively enforce them, I could get away with most anything. So, even though I need to have them on my tail for the good of society, it is in my interest they not get funded. Therefore, my costs of doing business are either externalized onto those that will fund those agencies, or externalized onto the people who will suffer because they aren't in play.

Demand breadth will determine the public goods menu. People will know this. They will know that the more people that spend their money on a public good...the more likely it is to remain on the menu. Therefore, if people want a public good to stay on the menu...then it would behoove them to make their preferences known by spending any amount of money on that public good. By doing so...they will help increase the breadth of demand for that public good.

[Galloism]

Lockheed Martin.

There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest in war. - Mancur Olson

Here's what that would look like...



Right now, because of demand opacity, the benefit of the many is being sacrificed for the benefit of the few. The chart illustrates that society's resources are shifted from broadly beneficial goods...like public healthcare...to narrowly beneficial goods...like war. Well...the chart just shows a narrow demand for war...but we we should all be familiar with the opportunity cost concept...that resources used for war have to be taken from alternative uses...

How are you sure of that. Your massive theoretical charts do not prove your point.

You also assume that those paying taxes stand to benefit from welfare type goods. This is exactly the opposite of what seems logical and would be expected.

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron...Is there no other way the world may live? - Dwight D. Eisenhower

In order to prevent narrowly beneficial uses from stealing resources from broadly beneficial uses...it's absolutely essential that we clarify the demand for public goods.

Once again, prove that aggregate demand for public services is related to the amount of taxes paid.

Now, what agencies are in my interest not to get funded?

For starters:

Department of Labor
National Transportation Safety Board
Federal Aviation Administration
Environmental Protection Agency
Department of the Treasury (particularly the IRS)

Why do I not want them funded? They cost me money, making me comply with Federal rules. If they were not able to effectively enforce them, I could get away with most anything. So, even though I need to have them on my tail for the good of society, it is in my interest they not get funded. Therefore, my costs of doing business are either externalized onto those that will fund those agencies, or externalized onto the people who will suffer because they aren't in play.

Demand breadth will determine the public goods menu. People will know this. They will know that the more people that spend their money on a public good...the more likely it is to remain on the menu. Therefore, if people want a public good to stay on the menu...then it would behoove them to make their preferences known by spending any amount of money on that public good. By doing so...they will help increase the breadth of demand for that public good.

That's great for me, being Lockheed Martin. I've successfully externalized all government costs, and maximized my revenue from the government.

Lets talk about real "demand breadth" under your system:

http://www.ntu.org/tax-basics/who-pays- ... taxes.html

The top 1% control 37% of the taxes. 1% has a voice 37 times higher than average under your system. The 1% would control over a third of the Fed's purse strings.

The top 50% - which have no need of welfare, making over 32,000 on average, by the way - will control 97.75% of the government's purse strings.

You have effectively ordered the destruction of food stamps, public healthcare, utility assistance, government support of homeless shelters, and things like.

You have effectively disenfranchised half the country and removed their voice in government.

I rather suspect that's the point.

[Xerographica]

Natural monopolies... block or flow?

If somebody has an innovative idea...either through luck or extensive research...then they should have a natural monopoly for an appropriate amount of time. If you develop a cure for cancer...then you should definitely be able to reap ridiculous rewards for doing so. Because we, as a society, stand to benefit by ensuring that people have the maximum incentive to be at the right (most valuable) place at the right (most valuable) time. So flow fo sho.

Natural inefficiencies in the low wage labor market (mostly due to switching costs and lack of collective bargaining)... block or flow?

Switching costs? Lack of collective bargaining? Messing with wages or prices is a definite block. Do you think messing with value signals helps put better options on the table? It really really really really doesn't. If you want workers to have better options on the table...then embrace builderism. If it's not easy for you to legitimately give people better options...then perhaps you'll be a little more appreciative when anybody gives anybody else a truly better option.

Non-discrimination hiring laws... block or flow?

Definitely block. If somebody doesn't want to give Canadians better options...then you would block their input by forcing them to do so. Forcing people to trade is certainly a block. If you think Canadians are being harmed...then again...feel free to engage in ethical builderism.

All of those are, by definition, blocks. If you claim removing the minimum wage (or other labor market regulations) allows "flow" of some kinds of input, you ignore that it "blocks" other kinds due to difficulty finding and switching jobs. Thus, it is not clear to me that removing the minimum wage increases the overall flow of input to the Market (to use your terminology - I would phrase it in different terms, but we'd be arguing about definitions for a while).

If every country gives false value signals...then how in the world can labor be efficiently allocated? Why do you want some countries to have a shortage of labor and a surplus of jobs and other countries to have a surplus of labor and a shortage of jobs?

If resources are to be put to their most valuable uses...then that means preventing good intentioned but economically ignorant people from distorting value signals. Clearly this is easier said than done.

Aye, you have maintained that in the past. But here you have branched out into a manifestly non-fiscal realm as an example. It is not clear to me where you draw the line between "Ethical rules" (of which you presumably think there should be some), and "Economic rules" (Which you seem to claim should be minimized). In my mind, it would be perfectly consistent in your argument to claim that the content of thread should not be regulated and that they should be judged purely on their reply count. If however you view moderators as police, then posting messages that seem like spam is a "crime" rather than an economic activity. Why then do you not view paying people below minimum wage as a "crime"*, but do view it as an economic activity (that should be allowed).

I've never argued against rules/regulations in general. But the optimal amount of resources allocated to a block can only be determined by free flow. Want to make pollution illegal? Sure...but please understand that every resource you allocate towards preventing pollution has to be taken from alternative uses. And we certainly decrease total value if we take resources from more valuable uses. Therefore, it's imperative that we create a market in the public sector. If you think that saving the environment is more pressing/valuable than going after marijuana users...then your input should be able to freely flow accordingly.

And real quick on the specific exit: You realize that you cannot exit from public goods at all, correct? That's the definition. Your air is clean and your food is safe whether or not you pay for it. Your system only allows exit from paying for it, which is not exiting the market. If you could allow an exit from the market (essentially making them private goods), then your system would be much better supported.

Just because somebody exits from buying meat...doesn't mean that meat won't be eaten (well...unless they were the very last meat eater). It just means that marginally less meat will be supplied. Slightly less of society's resources will be used to supply meat and slightly more of society's limited resources will be used to supply fruits, grains and veggies.

Just because you exit from the war on drugs...doesn't mean that the DEA won't continue to go after drug users/suppliers. It just means that marginally less drug war will be supplied. Slightly less of society's resources will be used to go after drug users/suppliers and slightly more of society's limited resources will be used to supply education, healthcare, environmental protection, etc.

Samuelson's political commentary is not relevant to the conclusions he draws. That he was wrong about a Soviet-Style command economy in no way invalidates his proof. His proof states quite clearly that it is - possible - for central planning to outperform a market under certain circumstances (which are often satisfied by public goods). Not one paper you have put forth disproves this. I would be very worried if it did, as unless it presented a flaw in the proof, we'd have Principle of Explosion problems (http://en.wikipedia.org/wiki/Principle_of_explosion)

Sorry that I haven't supplied any papers that prove that government planners are not omniscient.

When I am attacking your arguments, I am usually attempting to get you to present fuller proofs.

Fuller proofs that government planners are not omniscient?

You seem to be fond of "Proof by Example," but I would like to see actual analysis that backs up what you say (As I've demonstrated at length, Buchanan's paper does not).

I'd like to see actual analysis that backs up your assumption that government planners are omniscient.

I am an outsider to the field, but such analysis seems impossible.

1. Samuelson and I both agree that people have an incentive to externalize costs
2. Samuelson assumed that government planners are omniscient (false)
3. Democracy? Nope, see #1.
4. Therefore? Pragmatarianism

The analysis is ridiculously simple. I'm not saying that a market in the public sector would be perfect...I'm saying that it would be infinitely better than the known alternatives. And if you want to argue that a command economy can truly provide superior results...then please provide proof by starting your not-market forum.

I don't really care if you demonstrate it yourself or provide a paper, but I'd like to see proof that it works in all cases (not just on milk or flowers or whatever).

I'd like to see proof that a command economy works in any case. For me, personally, I think a command forum would provide such proof. Members would vote for representatives to choose which threads they replied to. If it thrives...then you'll have your proof.

If you can think of any easier way to provide any evidence...feel free to let me know and I'll share my feedback on how it compares to a command forum.

When I am presenting my own argument, I attempt to provide a reasonably complete example of a situation in which your system would not work. Such analysis should be self contained. I think most of the situations I describe are a subset of Samuelson's (or related works) class of collective action problems. I take the fact that papers disproving Tax Choice's value are sparse to mean that disproving an unpopular theory is not widely publishable.

Again, an example of market failure only has any meaning when you can prove that the government supplied something that was actually demanded. Was the Iraq war an example of government success? We can't say because we have no idea what the actual demand was.

So we have countless examples of market success...but absolutely zero examples of government success. In the absence of actual demand...we can't say that the government has successfully supplied anything that was more valuable than the alternative uses of society's limited resources.

Therefore, you have absolutely no evidence to support your claim of government success. With that in mind...it would behoove you to start your command forum. If it thrives...which I definitely would not bet on...then you would have the only existing evidence of a successful command economy. How epic would that be for you? You could prove what nobody else has been able to prove.

And by the way, Samuelson claimed that a command economy (in some sectors) - could - thrive. NOT - would - thrive in all sectors.

No, Samuelson assumed that an omniscient planner would know people's preferences for public and private goods. Samuelson, for all his faults, understood that resources can't be efficiently allocated without knowing the demand for all goods. This is something you're still fuzzy on. You think government can know the "optimal" supply of defense without knowing the "optimal" supply of milk. It's a logical impossibility. Any resources used for defense have to be taken from alternative uses. Directing the optimal (most valuable) amount of resources to defense requires knowing the amount of value that will be lost from stealing those resources away from other uses. You can't say resources are efficiently allocated without knowing the amount of value created by the various uses.

The optimal amount of milk in your cereal depends on the amount of cereal that's in your bowl.

The problem is that we've kind of skipped over the basics...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations

There wouldn't be any "profit" in the public sector...but nobody is going to derive any value from giving their tax dollars to a GO that they perceive to have more than enough money. Just like I'm not going to derive any utility from watering a well-watered plant. Just like you're not going to derive any utility from pouring too much milk in your cereal.

When you make the positive claim, the burden of proof is all on you. You have one paper that defines a completely unrealistic scenario where tax-choice could work. That is not, really, evidence. If it works in all cases, there ought to be a highly cited paper that shows this.

You're making a positive claim that command economies function. There's absolutely zero evidence to support this. So let me know when you start your command forum. Like I said, it doesn't have to be a forum...but that's the easiest thing that I can think of.

For pretty simple reasons. The act of replying to a thread provides me with what is basically a private good. I get the satisfaction of people reading it and (maybe) enjoy the time I spend writing it. These are both rivalrous and excludable, and so are best allocated by a market (especially a market as efficient as the internet), not public representatives. This is a major stumbling block when trying to generalize these results to non-rivalrous and non-excludable public goods.

If your preferences are not necessary for resources to be efficiently allocated then...
-----Your command forum would thrive
Else
-----If planners are omniscient OR democracy effectively communicates preferences then...
----------your command forum would thrive
-----Else
----------your command forum would not thrive
-----End If
End If

Ok, direct question time. Do you agree that the prisoners in the prisoners dilemma* Would rather spend 2 years in jail than 1 year in jail?

How is the prisoner's dilemma relevant? Neither prisoner has any idea which choice the other will make. They are in separate rooms...they can't see or hear each other. They have absolutely no clue what the other person is doing. They lack the information needed to make an informed decision.

The prisoner's dilemma would only be relevant if I couldn't see the epiphyte attached to a tree. If I can't see an epiphyte attached to a tree...then I would have no idea whether anybody else has watered it. Then, and only then, would the prisoner's dilemma be relevant.

Given that, in a pragmatarian system, people will be able to clearly see whether the epiphyte has been watered or not...game theory is not at all relevant.

If I value epiphytes then
-----If an epiphyte is wilted then
----------I water it
-----Else
----------I don't water it
-----End if
End if

In a pragmatarian system...you're going to be able to see exactly where other people put their money. If you perceive that a GO is adequately funded...then you're not going to fund it. This removes any adequately funded options from the table. This leaves inadequately funded GOs. If any of them don't match your preferences...then they will be removed from the table. What options are left? Inadequately funded GOs that match your preferences. However you spin it...you're going to spend your money on inadequately funded GOs that match your preferences. Are you going to strategize to try and maximize your ROI? Sure...but that's what you're supposed to do. You're supposed to process/analyze/evaluate information from previous years in order to make an informed decision. And if it turns out your gamble doesn't pay off? Then absolutely nothing would stop you from paying more than your fair share of taxes to help fund an inadequately funded GO that matches your preferences.

And again, if you want to argue that government planners are better than consumers at identifying and responding to inadequacies...then please provide any real evidence of this. A command forum that thrives would certainly be suitable. But I'm open to other possibilities.

[Maqo]

Xero, there was so much wrong in your previous post that I'm still laughing while I'm writing this. Logical fallacies abound. I might get back to them later. However, I'm going to focus on just your last paragraph for now:

Actually, a note about your damn flower example:
Your flower example does not illustrate any point. It is not applicable to the situation we are discussing, as it is lacking in many key characteristics.
For it to be even remotely applicable, you need to have in your analogy:
1) Other actors. Some who value the flowers, and some who do not.
2) Some other competing uses of your resources. Do you water the epiphytes, or the roses, or the tulips, or play xBox?
3) A rational consumer who exhibits the preference revelation problem.

Ok, now on to your last paragraph.

In a pragmatarian system...you're going to be able to see exactly where other people put their money. If you perceive that a GO is adequately funded...then you're not going to fund it. This removes any adequately funded options from the table. This leaves inadequately funded GOs. If any of them don't match your preferences...then they will be removed from the table. What options are left? Inadequately funded GOs that match your preferences. However you spin it...you're going to spend your money on inadequately funded GOs that match your preferences.

In agreement so far. However...

Are you going to strategize to try and maximize your ROI? Sure...but that's what you're supposed to do. You're supposed to process/analyze/evaluate information from previous years in order to make an informed decision.

Aha! You're relying on pragmatarianism to show the 'true demand' for public goods... yet you acknowledge that people will strategise their demand. Both cannot be true:
In a private goods system, the way to maximise the return on investment is to purchase the item from the top of your priorities list, and work down until you have no money or no demands left. You strategise by analysing/evaluating which item is going to give you the biggest benefit.
However in a public goods system, once you order your items by which you personally value the most... the way to optimise your return on investment is to NOT purchase the highest item on the list IF you know/suspect that it is the highest on someone elses list.
This is the preference revelation problem. It hasn't gone away.

And if it turns out your gamble doesn't pay off? Then absolutely nothing would stop you from paying more than your fair share of taxes to help fund an inadequately funded GO that matches your preferences.

Well, there is the preference revelation problem. There is nothing 'stopping' you from doing it... except that it is rational to wait for someone else who's gamble didn't pay off to pay for it first.

You start from the basic premise:
1) Citizens work within the market to determine an optimal allocation of resources, indicating their desire for particular goods by their spending habits.
You seem to acknowledge the problem:
2) However, there is a class of goods which citizens do not spend money on: public goods. Even though they profess to want the goods, this demand is not reflected by spending habits. Given free reign with their finances, they would purchase less-public/private goods instead even if they valued the public goods more.
And support the solution to this:
3) Compulsory taxation of citizens to gather money and have a planner/referee spend the collected funds on public goods which the citizens want but would otherwise not purchase.
But you then introduce 'pragmatarianism'
4) Let citizens have free reign with their 'taxation finances' in order to 'create a market',
Which re-introduces the problem in #2
5) Citizens spend their 'taxation finances' on the less-public goods, even though they profess to want the more-public goods more.

If you agree that the problem in #2 exists, you must see that it appears again in #5. Which means pragmatarianism does nothing to alleviate the preference revelation problem / correctly indicate demand for public goods.
All of your examples so far demonstrate a consumer correctly revealing his preferences even when it would benefit him not to - meaning that compulsory taxation would not be necessary.

And again, if you want to argue that government planners are better than consumers at identifying and responding to inadequacies...then please provide any real evidence of this. A command forum that thrives would certainly be suitable. But I'm open to other possibilities.

A command forum that thrives... sure. http://www.engadget.com/ There you go.
There is one producer of goods: only the website editor (the monarch, the dictator) is allowed to create posts. He 'forces' the 'consumers' to either respond or exit completely.

[Orham]

The supply of milk depends on how much people value milk. The only way we can know how much people value milk is to give them the opportunity to shop for themselves. Right now we don't know how much people value defense. Yet, despite the absence of this essential information...you clearly believe that the government can supply the optimal amount of defense.

The optimal amount of defense at any given point is determined not by how much people value a strong defense, but by the amount needed to ensure the capacity of the defense community to overcome any foreign and/or domestic threats. The optimal amount of defense is therefore something the general public is never going to be in a position to evaluate without flinging classified information to the winds, and that would just be damned foolish. This is one reason why a command model is superior in the case of defense, it's why we leave making such determinations in the hands of representatives which have been vetted and cleared prior to obtaining classified information needed to do so in an informed fashion.

Right, you didn't say that...but that's what this thread is all about. Why can't we vote for representatives to choose which threads we reply to? If you don't know the answer to this question...then why do you think you know the answer to whether or not people should be allowed to shop in the public sector?

I'm pretty sure I already addressed this, but I'll try again.

We can put all goods into representatives' hands (which would include letting an elected site administration team decide what threads we may reply to), we can leave no goods whatsoever in representatives' hands (which is what you're effectively wanting to do), or we can put some goods in representatives' hands while leaving others in our own depending upon the nature of the good in question (such as allowing us to decide what threads to reply to, but not to decide which forum software to use). That's a pure command economy, a pure market economy, and a mixed economy respectively.

I'm effectively saying that the economic model which seems to work best is the one which has a mixture of both command and market distribution schemes, and that which fashion goods/services ought to be distributed in is dependent upon a number of considerations in addition to the relative economic efficiency either mode is able to produce. For example, national security operations, by virtue of their necessarily secretive nature, cannot be properly evaluated by the general public. The general public therefore has no practical way to determine the consequences of adjustments to defense funding levels, and so shouldn't be given the power to make such adjustments. The secretive nature of national security necessitates its status as a good which is subject to command economics rather than market.

No one can reasonably claim that civilians' milk supplies face an equivalent problem. There's no reason to distribute milk on a command basis at present, so we don't do it. We'd face enormous problems if national security were distributed through a market scheme, so we don't use that.

Let's review...

"I have previously stated and I repeat now that the United States plans no military intervention in Cuba," said President John F. Kennedy as he planned military action in Cuba. "As president, it is my duty to the American people to report that renewed hostile actions against United States ships on the high seas in the Gulf of Tonkin have today required me to order the military forces of the United States to take action in reply," said President Lyndon Johnson as he fabricated an incident to justify expansion of American involvement in Vietnam. "We did not, I repeat, did not, trade weapons or anything else [to Iran] for hostages," said President Ronald Reagan in November, 1986, four months before admitting that U.S. arms had been traded to Iran in exchange for Americans being held hostage there. "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction," said Vice President Dick Cheney before the invasion of Iraq; when it turned out that these weapons did not exist, Assistant Defense Secretary Paul Wolfowitz explained that "for bureaucratic reasons, we settled on one issue, weapons of mass destruction [as justification for invading Iraq], because it was the one reason everyone could agree on"
(Cockburn and St. Clair 2003, 1). - Benjamin Ginsberg, Autonomy and Duplicity: Reply to DeCanio

Is that supposed to convince me that information concerning national security operations shouldn't be contained? That's the argument you'd have to be making in order to attack the one I made, and I sincerely doubt you're crazy enough to argue that classifying information as secret is a practice which ought to be stopped. So what are you angling at? I suspect I know, but you know how the saying goes...to assume is to make an ass out of you and me.

So now you're saying that it would work if we elected representatives to choose which threads we replied to?

I'm saying that representatives have practical means through which to ascertain the preferences of their constituents, though their ability to do so is imperfect and there will be cases where the situation warrants acting in contravention of these preferences even if they're perfectly known. When such a case is present depends upon a number of factors, to include the nature of the good/service in question.

Because...it's a good idea to ask your barber whether you need a haircut? Shall we also ask Lockheed whether we need more jets? Should we ask the milk lobby whether they need more subsidies?

There's a difference between having a healthy amount of scrutiny concerning appropriations bills and just being plain cynical about them. It's not as if appropriations are just approved on request, they have to go through committees, they have to withstand open floor debates, they have to obtain votes, the whole bit. And those committees' meetings and open floor debates amount to quite a bit more than:

Dept. of Defense: We need more money to make you safe.
Senator Noname: Well, you heard them. They need more money.
Chamber: Aye, that's all we need to hear.
Senator Noname: The ayes have it, then. More money for the Dept. of Defense it is.

There's a problem with demand opacity. If we don't know what the interests of the many truly are...then it's a given that they will be sacrificed for the benefit of the few. The solution is to clarify the demand for public goods.

We're going in circles at this point. How about we stop talking about milk and forum threads, and you bring up a specific item which is currently distributed via command which you think is more appropriately a market kind of good/service. Establish a substrate, as it were.

The amount of people that spend their taxes on a public good (demand breadth) will help us create the public goods menu. What percentage of the public would have to spend their taxes on a public good in order for it be on the menu? At least 10%? Where's the public goodness threshold?

...I think you've posted your internal monologue, here. This doesn't go with the rest, and it doesn't seem to be addressed to me.

In a pragmatarian system...very few taxpayers on either side would have voluntarily funded the cold war. In other words...the cold war would have been removed from the menu due to insufficient demand breadth.

I'm not so sure.

I mean, let's imagine Xero and Orham again. Now, Orham and Xero are both pragmatarian societies for the purposes of this hypothetical situation, and for the sake of argument let's say they're both European countries which have as of yet remained unaffiliated with either the US or USSR. The USSR has been getting itchy about increasing its sphere of influence since a particularly nationalist and charismatic premier took charge, and is currently eyeballing both Orham and Xero as potential spots to dig in and set up a satellite state (whether the resident populations want it to or not).

Let's suppose that neither of the pragmatarian countries' populations wants to become a Soviet satellite state. I know I certainly wouldn't want to live in one. What are they going to do about it, Xerographica? What are these people going to want their leadership to do if the USSR becomes more aggressive about its agenda to turn them into satellite states? Build up stronger military and economic relations with the USA, that's what. And what are they going to do with their taxes? They're going to bulk up domestic defense capabilities in order to protect themselves from Soviet aggression, that's what. It's that easy to imagine pragmatarian societies having populations which strongly value national defense and choose to bulk it up as much as possible in a Cold War context.

If people truly want a war...then they are going to have to reach into their own pockets and give their own money to the DoD. If not enough people give their money to the DoD...then the war would be removed from the menu.

Can you name a war that was started as a result of enough citizens voluntarily funding it?

Can you name a pragmatarian society in the entire history of the world? If you can, we can look at its military history together and answer that question directly. An AnCap would do the trick as well, as I think about it. So let's see what the data say on the subject. Where and when should I be looking?

The flaw of one GO giving money to another? The entire point of pragmatarianism is to allow consumers to vouch/vet/validate for how GOs are using their money.

Now, that's just you saying that GOs doing what Galloism suggested defeats the entire point of a pragmatarian system. The problem is that this was exactly Galloism's point, that your system is one which can easily self-defeat. How will you prevent GOs from giving money to one another?

Heh. My tentative opinion was that you are more analytical than most.

After having been the recipient of comments lambasting me as wholly ignorant of even elementary economic principles and concepts, I erred toward the assumption that you were being passive aggressive. The way we have engaged one another up to this point has been inadequate. I shall work to cease in peppering my replies with snark, and I hope you'll do the same, in the hopes that misunderstandings such as this do not repeat themselves any further.

In any event, I appreciate the compliment.

EDIT: I removed an unnecessary "not", and I'd also like to comment that I will be tackling the idea that defense expenditures interact with the non-defense portion of the economy in a zero sum game in greater depth at my soonest convenience. It's an idea I'm not particularly fond of, and I feel a need to engage it directly. This seems to be the place.

[Galloism]

The supply of milk depends on how much people value milk. The only way we can know how much people value milk is to give them the opportunity to shop for themselves. Right now we don't know how much people value defense. Yet, despite the absence of this essential information...you clearly believe that the government can supply the optimal amount of defense.

The optimal amount of defense at any given point is determined not by how much people value a strong defense, but by the amount needed to ensure the capacity of the defense community to overcome any foreign and/or domestic threats. The optimal amount of defense is therefore something the general public is never going to be in a position to evaluate without flinging classified information to the winds, and that would just be damned foolish. This is one reason why a command model is superior in the case of defense, it's why we leave making such determinations in the hands of representatives which have been vetted and cleared prior to obtaining classified information needed to do so in an informed fashion.

Right, you didn't say that...but that's what this thread is all about. Why can't we vote for representatives to choose which threads we reply to? If you don't know the answer to this question...then why do you think you know the answer to whether or not people should be allowed to shop in the public sector?

I'm pretty sure I already addressed this, but I'll try again.

We can put all goods into representatives' hands (which would include letting an elected site administration team decide what threads we may reply to), we can leave no goods whatsoever in representatives' hands (which is what you're effectively wanting to do), or we can put some goods in representatives' hands while leaving others in our own depending upon the nature of the good in question (such as allowing us to decide what threads to reply to, but not to decide which forum software to use). That's a pure command economy, a pure market economy, and a mixed economy respectively.

I'm effectively saying that the economic model which seems to work best is the one which has a mixture of both command and market distribution schemes, and that which fashion goods/services ought to be distributed in is dependent upon a number of considerations in addition to the relative economic efficiency either mode is able to produce. For example, national security operations, by virtue of their necessarily secretive nature, cannot be properly evaluated by the general public. The general public therefore has no practical way to determine the consequences of adjustments to defense funding levels, and so shouldn't be given the power to make such adjustments. The secretive nature of national security necessitates its status as a good which is subject to command economics rather than market.

No one can reasonably claim that civilians' milk supplies face an equivalent problem. There's no reason to distribute milk on a command basis at present, so we don't do it. We'd face enormous problems if national security were distributed through a market scheme, so we don't use that.

Let's review...

Is that supposed to convince me that information concerning national security operations shouldn't be contained? That's the argument you'd have to be making in order to attack the one I made, and I sincerely doubt you're crazy enough to argue that classifying information as secret is a practice which ought to be stopped. So what are you angling at? I suspect I know, but you know how the saying goes...to assume is to make an ass out of you and me.

So now you're saying that it would work if we elected representatives to choose which threads we replied to?

I'm saying that representatives have practical means through which to ascertain the preferences of their constituents, though their ability to do so is imperfect and there will be cases where the situation warrants acting in contravention of these preferences even if they're perfectly known. When such a case is present depends upon a number of factors, to include the nature of the good/service in question.

Because...it's a good idea to ask your barber whether you need a haircut? Shall we also ask Lockheed whether we need more jets? Should we ask the milk lobby whether they need more subsidies?

There's a difference between having a healthy amount of scrutiny concerning appropriations bills and just being plain cynical about them. It's not as if appropriations are just approved on request, they have to go through committees, they have to withstand open floor debates, they have to obtain votes, the whole bit. And those committees' meetings and open floor debates amount to quite a bit more than:

Dept. of Defense: We need more money to make you safe.
Senator Noname: Well, you heard them. They need more money.
Chamber: Aye, that's all we need to hear.
Senator Noname: The ayes have it, then. More money for the Dept. of Defense it is.

There's a problem with demand opacity. If we don't know what the interests of the many truly are...then it's a given that they will be sacrificed for the benefit of the few. The solution is to clarify the demand for public goods.

We're going in circles at this point. How about we stop talking about milk and forum threads, and you bring up a specific item which is currently distributed via command which you think is more appropriately a market kind of good/service. Establish a substrate, as it were.

The amount of people that spend their taxes on a public good (demand breadth) will help us create the public goods menu. What percentage of the public would have to spend their taxes on a public good in order for it be on the menu? At least 10%? Where's the public goodness threshold?

...I think you've posted your internal monologue, here. This doesn't go with the rest, and it doesn't seem to be addressed to me.

In a pragmatarian system...very few taxpayers on either side would have voluntarily funded the cold war. In other words...the cold war would have been removed from the menu due to insufficient demand breadth.

I'm not so sure.

I mean, let's imagine Xero and Orham again. Now, Orham and Xero are both pragmatarian societies for the purposes of this hypothetical situation, and for the sake of argument let's say they're both European countries which have as of yet remained unaffiliated with either the US or USSR. The USSR has been getting itchy about increasing its sphere of influence since a particularly nationalist and charismatic premier took charge, and is currently eyeballing both Orham and Xero as potential spots to dig in and set up a satellite state (whether the resident populations want it to or not).

Let's suppose that neither of the pragmatarian countries' populations wants to become a Soviet satellite state. I know I certainly wouldn't want to live in one. What are they going to do about it, Xerographica? What are these people going to want their leadership to do if the USSR becomes more aggressive about its agenda to turn them into satellite states? Build up stronger military and economic relations with the USA, that's what. And what are they going to do with their taxes? They're going to bulk up domestic defense capabilities in order to protect themselves from Soviet aggression, that's what. It's that easy to imagine pragmatarian societies having populations which strongly value national defense and choose to bulk it up as much as possible in a Cold War context.

If people truly want a war...then they are going to have to reach into their own pockets and give their own money to the DoD. If not enough people give their money to the DoD...then the war would be removed from the menu.

Can you name a war that was started as a result of enough citizens voluntarily funding it?

Can you name a pragmatarian society in the entire history of the world? If you can, we can look at its military history together and answer that question directly. An AnCap would do the trick as well, as I think about it. So let's see what the data say on the subject. Where and when should I be looking?

The flaw of one GO giving money to another? The entire point of pragmatarianism is to allow consumers to vouch/vet/validate for how GOs are using their money.

Now, that's just you saying that GOs doing what Galloism suggested defeats the entire point of a pragmatarian system. The problem is that this was exactly Galloism's point, that your system is one which can easily self-defeat. How will you prevent GOs from giving money to one another?

Heh. My tentative opinion was that you are more analytical than most.

After having been the recipient of comments lambasting me as wholly ignorant of even elementary economic principles and concepts, I erred toward the assumption that you were being passive aggressive. The way we have engaged one another up to this point has been inadequate. I shall work to cease in peppering my replies with snark, and I hope you'll do the same, in the hopes that misunderstandings such as this do not repeat themselves any further.

In any event, I appreciate the compliment.

EDIT: I removed an unnecessary "not", and I'd also like to comment that I will be tackling the idea that defense expenditures interact with the non-defense portion of the economy in a zero sum game in greater depth at my soonest convenience. It's an idea I'm not particularly fond of, and I feel a need to engage it directly. This seems to be the place.

Actually my point was that, with unified command structure - one chief executive (The President), and one board of directors (Congress), attempting to have the public choose what portion of their purchase (taxes) goes to each organizational division is ludicrous.

It's like being able to pay for you $100 of groceries at Wal-Mart and designating 100% to corporate security, instead of having the board of directors make a unified budget.

I say we do it. With Wal-mart, for science.

Secondary point: its annoyingly defeatable. We can defeat it, but now the president gets to order funds around all day like a clerk. Instead of, y'know, acting presidential and all.

[The Joseon Dynasty]

How is the prisoner's dilemma relevant? Neither prisoner has any idea which choice the other will make. They are in separate rooms...they can't see or hear each other. They have absolutely no clue what the other person is doing. They lack the information needed to make an informed decision.

Actually, they don't.

The prisoner's dilemma would only be relevant if I couldn't see the epiphyte attached to a tree. If I can't see an epiphyte attached to a tree...then I would have no idea whether anybody else has watered it. Then, and only then, would the prisoner's dilemma be relevant.
End if

It doesn't make a difference. If I observe that my partner has chosen to confess, I will choose to confess (making us both worse off than if we both stayed silent). If I observe that my partner has chosen to stay silent, I will choose to confess (making me very well off and my partner very badly off). I will always choose to confess, which is, in this context, the socially suboptimal thing to do. We arrive as Nash equilibria in simultaneous games by constructing best response functions, which are precisely defined as "if he does this, what's the best thing for me to do?". The optimal strategy is defined from there.

[Infactum]

Natural monopolies... block or flow?

If somebody has an innovative idea...either through luck or extensive research...then they should have a natural monopoly for an appropriate amount of time. If you develop a cure for cancer...then you should definitely be able to reap ridiculous rewards for doing so. Because we, as a society, stand to benefit by ensuring that people have the maximum incentive to be at the right (most valuable) place at the right (most valuable) time. So flow fo sho.

Markets fail to optimally allocate resources when monopolies (natural or otherwise) arise. If we take your information=>thriving thoery, this means they must be a block. And, there is no such thing as a natural monopoly for an "appropriate amount of time" - they are generally indefinite (until tech shifts, which is not predictable).

Natural inefficiencies in the low wage labor market (mostly due to switching costs and lack of collective bargaining)... block or flow?

Switching costs? Lack of collective bargaining? Messing with wages or prices is a definite block. Do you think messing with value signals helps put better options on the table? It really really really really doesn't. If you want workers to have better options on the table...then embrace builderism. If it's not easy for you to legitimately give people better options...then perhaps you'll be a little more appreciative when anybody gives anybody else a truly better option.

Non-discrimination hiring laws... block or flow?

Definitely block. If somebody doesn't want to give Canadians better options...then you would block their input by forcing them to do so. Forcing people to trade is certainly a block. If you think Canadians are being harmed...then again...feel free to engage in ethical builderism.

Switching costs are prohibitively high when you are on a subsistence wage. Forgoing work for even a short period may mean death. To use your terminology, this means that people who are in those sorts of jobs lack an exit, which means that the market fails to allocate resources efficiently.

To address your "builderism"* idea: It is significantly easier to not force people to work 80hr weeks for subsistence wages when my competitors aren't allowed to either. This allows me to stay solvent. Indeed, it pushes some of the costs onto the consumer (though not all - it's not a zero sum game), in general, though, it seems worth it**. This also leads to a better labor market (a public good, which is why the market won't tend this way naturally).

*An idea which I find somewhat repulsive along the lines of "the rich deserve to be rich because they provide the most benefit." I disagree with both of these, but have been assuming them for your benefit because to convince you otherwise would require a massive shift in your world view as far as I can tell.

**People can and will disagree about how "worth it" it is, but to dismiss the idea in the name of "information flow" is missing the point in my opinion.

All of those are, by definition, blocks. If you claim removing the minimum wage (or other labor market regulations) allows "flow" of some kinds of input, you ignore that it "blocks" other kinds due to difficulty finding and switching jobs. Thus, it is not clear to me that removing the minimum wage increases the overall flow of input to the Market (to use your terminology - I would phrase it in different terms, but we'd be arguing about definitions for a while).

If every country gives false value signals...then how in the world can labor be efficiently allocated? Why do you want some countries to have a shortage of labor and a surplus of jobs and other countries to have a surplus of labor and a shortage of jobs?

If resources are to be put to their most valuable uses...then that means preventing good intentioned but economically ignorant people from distorting value signals. Clearly this is easier said than done.

By the nature of humans as mortal, living creatures, labor (especially at the lowest wages) cannot be efficiently allocated in the traditional "market" sense. You either mess with price signalling (minimum wage) or you mess with the possibility of an "exit." There are other options, but they are even more command oriented (maximum wage, etc.). You must pick among the inefficiencies. Incidentally, it's the same with the allocation of public goods - I'll hit that on the Samuelson section.

Aye, you have maintained that in the past. But here you have branched out into a manifestly non-fiscal realm as an example. It is not clear to me where you draw the line between "Ethical rules" (of which you presumably think there should be some), and "Economic rules" (Which you seem to claim should be minimized). In my mind, it would be perfectly consistent in your argument to claim that the content of thread should not be regulated and that they should be judged purely on their reply count. If however you view moderators as police, then posting messages that seem like spam is a "crime" rather than an economic activity. Why then do you not view paying people below minimum wage as a "crime"*, but do view it as an economic activity (that should be allowed).

I've never argued against rules/regulations in general. But the optimal amount of resources allocated to a block can only be determined by free flow. Want to make pollution illegal? Sure...but please understand that every resource you allocate towards preventing pollution has to be taken from alternative uses. And we certainly decrease total value if we take resources from more valuable uses. Therefore, it's imperative that we create a market in the public sector. If you think that saving the environment is more pressing/valuable than going after marijuana users...then your input should be able to freely flow accordingly.

Only if your allocation can be trusted as a proxy for your preferences. You claim it can in all cases, I claim that there are at least some in which it cannot.

Another direct question: If a perfectly informed and rational individual can't be trusted to allocate their taxes in accordance with their preferences (Samuelson's proof, prisoners dilemma, etc), then why do you trust uninformed, imperfectly rational individuals to do so?

And real quick on the specific exit: You realize that you cannot exit from public goods at all, correct? That's the definition. Your air is clean and your food is safe whether or not you pay for it. Your system only allows exit from paying for it, which is not exiting the market. If you could allow an exit from the market (essentially making them private goods), then your system would be much better supported.

Just because somebody exits from buying meat...doesn't mean that meat won't be eaten (well...unless they were the very last meat eater). It just means that marginally less meat will be supplied. Slightly less of society's resources will be used to supply meat and slightly more of society's limited resources will be used to supply fruits, grains and veggies.

Just because you exit from the war on drugs...doesn't mean that the DEA won't continue to go after drug users/suppliers. It just means that marginally less drug war will be supplied. Slightly less of society's resources will be used to go after drug users/suppliers and slightly more of society's limited resources will be used to supply education, healthcare, environmental protection, etc.

There's an important distinction here. If I exit from the meat market, I don't get to eat meat. If I "exit" from the DEA market (and it's still funded), I am still less likely to be robbed for drug money.*

I cannot exit from the DEA market in the same sense that I can exit from the meat market; really we need different terms for these different actions. It's similar for all public goods (it's in the definition). You may value the benefit they provide differently from your neighbor, but you cannot exit from said benefit.

*lets assume for the sake of argument that the DEA works effectively to reduce drug use/addiction - that's a whole nother thread.

Samuelson's political commentary is not relevant to the conclusions he draws. That he was wrong about a Soviet-Style command economy in no way invalidates his proof. His proof states quite clearly that it is - possible - for central planning to outperform a market under certain circumstances (which are often satisfied by public goods). Not one paper you have put forth disproves this. I would be very worried if it did, as unless it presented a flaw in the proof, we'd have Principle of Explosion problems (http://en.wikipedia.org/wiki/Principle_of_explosion)

Sorry that I haven't supplied any papers that prove that government planners are not omniscient.

When I am attacking your arguments, I am usually attempting to get you to present fuller proofs.

Fuller proofs that government planners are not omniscient?

You seem to be fond of "Proof by Example," but I would like to see actual analysis that backs up what you say (As I've demonstrated at length, Buchanan's paper does not).

I'd like to see actual analysis that backs up your assumption that government planners are omniscient.

I am an outsider to the field, but such analysis seems impossible.

1. Samuelson and I both agree that people have an incentive to externalize costs
2. Samuelson assumed that government planners are omniscient (false)
3. Democracy? Nope, see #1.
4. Therefore? Pragmatarianism

Omniscience is irrelevant to his proof, so none of that disproves what that paper said. The proof portion of the paper doesn't even mention a government or planner; it focuses purely on markets.

His proof merely states that a decentralized decision making process will lead to a suboptimal allocation of resources for certain kinds of goods ("public" goods).

He then speculates that a planner could do better than this, though he explicitly rejects the possibility of an omniscient planner in section 3 (which really undermines point 2 up there). Incidentally, section 3 is where he explains why public goods can be inefficiently allocated by a market while private goods are generally efficiently allocated by a market.

So all we know for sure is that neither governments nor markets can allocate public goods completely efficiently. Governments for, among other reasons, lacking exact knowledge of values, and markets because they suffer from decentralized decision problems. The question is then how to choose between them and for which goods. We can argue about that, but only after we agree that markets don't necessarily always work.

The analysis is ridiculously simple. I'm not saying that a market in the public sector would be perfect...I'm saying that it would be infinitely better than the known alternatives. And if you want to argue that a command economy can truly provide superior results...then please provide proof by starting your not-market forum.

Addressed below.

I don't really care if you demonstrate it yourself or provide a paper, but I'd like to see proof that it works in all cases (not just on milk or flowers or whatever).

I'd like to see proof that a command economy works in any case. For me, personally, I think a command forum would provide such proof. Members would vote for representatives to choose which threads they replied to. If it thrives...then you'll have your proof.

If you can think of any easier way to provide any evidence...feel free to let me know and I'll share my feedback on how it compares to a command forum.

I can point to the fact that every successful and developed nation has a command economy in their military sector, but I suspect you would insist "the market can do better." Am I wrong? If not, what would this kind of thing look like to you? In a general sense*. If you want me to find something that would convince you, please give me the most general class of things that would convince you.

*I think we can agree that a command forum wouldn't thrive, but that's because the sector your looking at is a private good. Your evidence should at least be non-tautological by including public goods.

When I am presenting my own argument, I attempt to provide a reasonably complete example of a situation in which your system would not work. Such analysis should be self contained. I think most of the situations I describe are a subset of Samuelson's (or related works) class of collective action problems. I take the fact that papers disproving Tax Choice's value are sparse to mean that disproving an unpopular theory is not widely publishable.

Again, an example of market failure only has any meaning when you can prove that the government supplied something that was actually demanded. Was the Iraq war an example of government success? We can't say because we have no idea what the actual demand was.

So we have countless examples of market success...but absolutely zero examples of government success. In the absence of actual demand...we can't say that the government has successfully supplied anything that was more valuable than the alternative uses of society's limited resources.

Therefore, you have absolutely no evidence to support your claim of government success. With that in mind...it would behoove you to start your command forum. If it thrives...which I definitely would not bet on...then you would have the only existing evidence of a successful command economy. How epic would that be for you? You could prove what nobody else has been able to prove.

This is, at best, disingenuous. You claim that government success is unknowable and then compare "knowable" examples. Under your definitions, it's entirely possible that government is more successful than the market.

If we take your argument that there is no evidence of government success, then there is also no evidence that the market is better than the government. You assert that it is impossible to compare the two.

And by the way, Samuelson claimed that a command economy (in some sectors) - could - thrive. NOT - would - thrive in all sectors.

No, Samuelson assumed that an omniscient planner would know people's preferences for public and private goods. Samuelson, for all his faults, understood that resources can't be efficiently allocated without knowing the demand for all goods. This is something you're still fuzzy on. You think government can know the "optimal" supply of defense without knowing the "optimal" supply of milk. It's a logical impossibility. Any resources used for defense have to be taken from alternative uses. Directing the optimal (most valuable) amount of resources to defense requires knowing the amount of value that will be lost from stealing those resources away from other uses. You can't say resources are efficiently allocated without knowing the amount of value created by the various uses.

I understand that goods can't be allocated efficiently without knowing demands. I also understand that public goods can't be allocated efficiently by a market. The latter was proved in the paper. No amount of political assault on Samuelson changes the validity of that proof.

More direct questions: Do you believe that public goods can be efficiently allocated by decentralized decision makers?

If we say that the market is the only efficient way to know preferences, then we must conclude that it is impossible to allocate public goods efficiently.

Of course, this stretches our definition of "efficient." There ought to be an optimal solution given our constraints. Since markets fail for lack of centrality and command fails for lack of info, it's probably somewhere in the middle (indeed it must be if these are our extremes). We can argue about exactly where this point is, but it's definitely not "pure market." Hence "could thrive in -some- sectors".

The optimal amount of milk in your cereal depends on the amount of cereal that's in your bowl.

The problem is that we've kind of skipped over the basics...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations

There wouldn't be any "profit" in the public sector...but nobody is going to derive any value from giving their tax dollars to a GO that they perceive to have more than enough money. Just like I'm not going to derive any utility from watering a well-watered plant. Just like you're not going to derive any utility from pouring too much milk in your cereal.

This is true, but I can derive profit by taking advantage of the people who fund the "more public" institutions in my place. Whether they do this or not is not a good proxy for their preferences (look down at the prisoner's dilemma)

When you make the positive claim, the burden of proof is all on you. You have one paper that defines a completely unrealistic scenario where tax-choice could work. That is not, really, evidence. If it works in all cases, there ought to be a highly cited paper that shows this.

You're making a positive claim that command economies function. There's absolutely zero evidence to support this. So let me know when you start your command forum. Like I said, it doesn't have to be a forum...but that's the easiest thing that I can think of.

Pick a public good. Thread reply is a private good. Pretty much all private goods will fail under your constraints (as far as I can tell - you even trust nondiscrimination to the market).

For pretty simple reasons. The act of replying to a thread provides me with what is basically a private good. I get the satisfaction of people reading it and (maybe) enjoy the time I spend writing it. These are both rivalrous and excludable, and so are best allocated by a market (especially a market as efficient as the internet), not public representatives. This is a major stumbling block when trying to generalize these results to non-rivalrous and non-excludable public goods.

If your preferences are not necessary for resources to be efficiently allocated then...
-----Your command forum would thrive (A)
Else
-----If planners are omniscient OR democracy effectively communicates preferences then...
----------your command forum would thrive (B)
-----Else
----------your command forum would not thrive
-----End If
End If

A) Nope, this inference is only true if you say "preferences are never necessary," which I don't think anyone here contends.
B) Also Nope, this inference is only true if it's "democracy is always the best way to communicate preferences," which again, I do not contend.

Ok, direct question time. Do you agree that the prisoners in the prisoners dilemma* Would rather spend 2 years in jail than 1 year in jail?

How is the prisoner's dilemma relevant? Neither prisoner has any idea which choice the other will make. They are in separate rooms...they can't see or hear each other. They have absolutely no clue what the other person is doing. They lack the information needed to make an informed decision.

What could you say that would change my decision? You could show my notarized proof that you had cooperated and I would still defect - I'd be better off. Joseon Dynasty covered this above, but I'd be interested in seeing what information you think would be relevant.

The prisoner's dilemma would only be relevant if I couldn't see the epiphyte attached to a tree. If I can't see an epiphyte attached to a tree...then I would have no idea whether anybody else has watered it. Then, and only then, would the prisoner's dilemma be relevant.

Given that, in a pragmatarian system, people will be able to clearly see whether the epiphyte has been watered or not...game theory is not at all relevant.

If I value epiphytes then
-----If an epiphyte is wilted then
----------I water it
-----Else
----------I don't water it
-----End if
End if

Excellent, I could value epiphytes 2x as much as you do, but as long as I don't make a move to water them, I get pretty epiphytes for free. But to agree with this you have to accept that value and sacrifice are not one in the same.

In a pragmatarian system...you're going to be able to see exactly where other people put their money. If you perceive that a GO is adequately funded...then you're not going to fund it. This removes any adequately funded options from the table. This leaves inadequately funded GOs. If any of them don't match your preferences...then they will be removed from the table. What options are left? Inadequately funded GOs that match your preferences. However you spin it...you're going to spend your money on inadequately funded GOs that match your preferences. Are you going to strategize to try and maximize your ROI? Sure...but that's what you're supposed to do. You're supposed to process/analyze/evaluate information from previous years in order to make an informed decision. And if it turns out your gamble doesn't pay off? Then absolutely nothing would stop you from paying more than your fair share of taxes to help fund an inadequately funded GO that matches your preferences.

But I wouldn't necessarily fund the ones I perceived as needing the most, as misrepresenting my preferences through allocation is in my selfish interest. I'm glad that you accept that strategizing is a probable outcome, but you need to see that this strategizing would bring the system down. Funding the "more private" goods will pretty much always leave me better off, so the "more public" goods won't get funded. This despite the fact that everyone would be better off if the "more public" goods were funded. This happens in pretty much the same way and for pretty much the same reason that the prisoners will spend 2 years in jail each when they could have spent 1.

And again, if you want to argue that government planners are better than consumers at identifying and responding to inadequacies...then please provide any real evidence of this. A command forum that thrives would certainly be suitable. But I'm open to other possibilities.

It's going to be difficult as there are very few examples of markets allocating public goods, so there won't be much explicit comparison. You've already rejected everything governments currently do as impossible to evaluate. I take the lack of examples as evidence that markets are bad at allocating public goods and so societies that do that don't thrive, but you may see it as just having never been tried.

I would point to nontraditional "markets" such as the moderation of this forum, but you reject those on the idea that they are "some regulations." I get the impression that this is where most of my other examples would end up in your mind. I am actually still not clear on this distinction of yours. Do you believe that it is a good thing to disallow spamming/trolling/flaming? If so, why? It is manifestly a block on the free flow of ideas.

If you can't think of any type of evidence that would disprove your theory (that isn't the (somewhat tautological) command allocation of private goods), then you may want to rethink the falsifiability of your hypothesis.

[Xerographica]

Well, no Federal agency could ever mail anything again.

That might prove problematic.

Would GOs go with USPS or FedEx? Consumers generally go with whichever organizations give them the most bang for their buck. Giving consumers the most bang for their buck requires that organizations get the most bang for their buck.

So if a GO randomly gives money to another GO...then that wouldn't give consumers the most bang for their buck. Therefore, the GO would rightly lose funding. Therefore, there would be absolutely no need to make a law preventing GOs from giving money to each other. If GOs waste taxpayers' money...then taxpayers will give them less money. That's how and why the market works. You're only here because you're deriving value from this thread.

Good PR - it's interesting you should mention good PR.

The plan inevitably involves all the federal agencies advertising - yes, advertising - in order so they can get funding. This means that, even if optimally all the federal agencies received the adequate funding they need, either taxes would have to rise dramatically, or they would have to spend a significant portion of their operating budget on advertising, leave them woefully underfunded for their actual jobs.

It's true, sometimes federal agencies have to advertise specific programs now and then, for public awareness. This is nothing compared to the huge advertising budgets needed under this system, and it's a strange twist on the prisoner's dilemma. For a particular agency, advertising extensively is a good thing. If all the agencies do it, it's a bad thing overall as they all lose effective operating budget trying to out do each other.

It boggles my mind that somebody would argue against GOs advertising in order to try and persuade taxpayers to give them money. Shall I just take your money and spend it on pragmatarianism? No way. If I want your money...then I'm going to have to persuade you to give it to me. It's a great system. It ensures that we maximize the value we derive from society's limited resources. It helps to minimize frivolous, useless and harmful expenditures.

Now, pop quiz. If you internalize *my* costs, what is it called from my perspective?

If I voluntarily internalize *your* costs then I'm buying you a gift. If I'm involuntarily internalizing *your* costs then you're externalizing your costs.

Keep in mind, I still have the cost of whatever. I'm just not paying for it. You might say a third party, someone external is paying for my cost. Now what is it called when someone external to me pays for my costs?

If a third party voluntarily internalizes *your* cost then they are a benefactor, patron, sponsor, sugar daddy, nice guy, etc.

If a third party involuntarily internalizes *your* cost then they are a victim. They are a victim of fraud...identity theft. If I drop my wallet and you take my money and spend it then you're externalizing your costs onto me. If you steal my identity and buy things with my credit card...then you're externalizing your costs onto me.

If I buy you something with my money...(externalizing benefit)...good/great
If you buy something with my money...(externalizing cost)...not so good/great

It's not altruism if you have to pay for other peoples' costs because it's a public good and they won't pay for their own. It's putting money up with a gun to your head.

It's called tax choice. Obama's kids are in private school. If he chose to spend his taxes on public education then it wouldn't be because anybody forced him to do so. And it's because we can't choose whether or not we spend our taxes on public education that Obama's kids are in private school. Eliminating consumer choice has logical and extremely detrimental consequences. If they didn't...then a command forum would thrive. Do you think a command forum would thrive?

By the way, I have posted several times in this thread, in response to you, thoroughly proving, by examples and logic, that your ideas are bad at their core, worse when examined, and either circumvented so easily they're laughable, or crippling to the government if you close the loopholes.

I would sincerely appreciate some responses to my posts. Please do not ignore them simply because they are inconvenient to your arguments. It's the mark of a very poor debater.

Why the double standard? You give me your time...and you expect magic in return. You give the government your buck...and you don't expect bang in return.

You might laugh at the idea of tax choice...only because you haven't thoroughly examined your own behavior. We're all unique...but we all want the most bang for our buck. So I take your demand for responsiveness...I multiply it by 300,000,000 people...and I very strongly suspect that it's imperative that we unleash this force on the public sector.

Except, here you are...demanding responsiveness on my part...demanding the most magic for your moment...while saying that tax choice is laughable. No...the jokes on you. It's on all of us if we fail to appreciate the beneficial consequences of consumer choice.

How are you sure of that. Your massive theoretical charts do not prove your point.

My point is that the public goods menu would be determined by demand breadth. My chart should try and help you understand the concept of demand breadth/depth...

You also assume that those paying taxes stand to benefit from welfare type goods. This is exactly the opposite of what seems logical and would be expected.

Looooooook at the chart. If too few people spend their taxes on a public good...then it would be removed from the menu. Therefore, anything left on the menu will be there because enough people spend their taxes on it.

Once again, prove that aggregate demand for public services is related to the amount of taxes paid.

The 1% pays a lot of taxes. So it sure would suck if the 1% only spent their taxes on public goods that only benefited the 1%. Therefore, if too few people spend their taxes on a public good...then it would be removed from the menu.

If a public good only benefits the 1%...and it's removed from the menu...then the 1% would perhaps spend their taxes on a public good that benefits the 2%. If the 2% benefit public good is removed from the menu...then the 1% would perhaps spend their taxes on a public good that benefits the 3%. If the 3% benefit public good is removed from the menu...then the 1% would perhaps spend their taxes on a public good that benefits the 4%.

Do you see the pattern? With our current system...the benefit of the many is sacrificed for the benefit of the few. It's called concentrated benefits and dispersed costs. This would be impossible in a pragmatarian system. Why? Because you can only spend your own money and demand breadth would determine the public goods menu.

Looooooook at the chart. The skinnier the green part (demand)...the more likely it is that it would be removed from the menu.

Skinny...



Skinny means insufficient demand breadth. It means that not enough people spent their money on farm subsidies. This means that farm subsidies would be removed from the menu. The money that will no long be spent on farm subsidies will instead be spent on fat public goods like public healthcare...

Fat...



Fat means sufficient demand breadth. It means that enough people spent their money on public healthcare. This means that public healthcare will remain on the menu.

Lets talk about real "demand breadth" under your system:

http://www.ntu.org/tax-basics/who-pays- ... taxes.html

The top 1% control 37% of the taxes. 1% has a voice 37 times higher than average under your system. The 1% would control over a third of the Fed's purse strings.

The top 50% - which have no need of welfare, making over 32,000 on average, by the way - will control 97.75% of the government's purse strings.

You have effectively ordered the destruction of food stamps, public healthcare, utility assistance, government support of homeless shelters, and things like.

You have effectively disenfranchised half the country and removed their voice in government.

I rather suspect that's the point.

Loooooooooook at the charts. Everybody would know that demand breadth would determine the menu. So if you're poor...and you want something to stay on the menu...then it would behoove you to spend $1 on that item. Doing so will increase the demand breadth. It will make the green part fatter. It will increase the chances that the public good will remain on the menu.

Narrowly beneficial public goods would be removed from the menu. This means that broadly beneficial public goods would get more funding. In other words...skinny public goods would be removed from the menu. This means that fat public goods would get more funding. Loooooooooook at the charts.

If rich people can't spend a lot of money on skinny public goods...then they'll have to spend a lot of money on fatter public goods. With the current system, because of demand opacity, way too much money is spent on narrowly beneficial public goods. This steals resources away from broadly beneficial public goods. Therefore, it's imperative that we clarify the demand for public goods.

Now, if you have some objection...then please illustrate it using a demand breadth/depth chart. Don't tell me that the supply/demand will be wrong...show it to me. Use a specific public good. In the process you'll be forced to think things through...and you'll realize that pragmatarianism is actually the solution to your concerns.

Actually my point was that, with unified command structure - one chief executive (The President), and one board of directors (Congress), attempting to have the public choose what portion of their purchase (taxes) goes to each organizational division is ludicrous.

It's like being able to pay for you $100 of groceries at Wal-Mart and designating 100% to corporate security, instead of having the board of directors make a unified budget.

I say we do it. With Wal-mart, for science.

Yes, it would be ludicrous if consumers at Wal-mart dictated how Wal-market spent its revenue. Just like it would be ludicrous if Wal-mart dictated which items consumers put in their shopping carts.

You can think of the government as Wal-mart...but when consumers go to Wal-mart...they choose for themselves which private goods they put in their shopping carts. In a pragmatarian system...when consumers shopped in the public sector...they would choose for themselves which public goods they put in their shopping carts.

And if you think there's benefit to be had by allowing Wal-mart to choose which items people put in their shopping carts...then put your money where your mouth is by starting a forum where representatives choose which threads consumers reply to.

Secondary point: its annoyingly defeatable. We can defeat it, but now the president gets to order funds around all day like a clerk. Instead of, y'know, acting presidential and all.

The president would order the EPA to give funds to the DoD? And the EPA would listen because? How many taxpayers would give their taxes to the EPA if the EPA just gives its money to the DoD? Any GO that stupidly spends its money isn't going to have a lot of money to spend stupidly.

Again, the market is a vetting/vouching/validating system. A lot of people vouch/vet/validate Wal-mart...so Wal-mart has a lot of money to spend. If Wal-mart starts spending its money stupidly...then consumers will give their money to companies that don't spend their money stupidly.

Consumer choice has logical and extremely beneficial consequences.

[The Joseon Dynasty]

But I wouldn't necessarily fund the ones I perceived as needing the most, as misrepresenting my preferences through allocation is in my selfish interest. I'm glad that you accept that strategizing is a probable outcome, but you need to see that this strategizing would bring the system down. Funding the "more private" goods will pretty much always leave me better off, so the "more public" goods won't get funded. This despite the fact that everyone would be better off if the "more public" goods were funded. This happens in pretty much the same way and for pretty much the same reason that the prisoners will spend 2 years in jail each when they could have spent 1.

There's substantial literature on this subject too, called "pubic choice games". Here's an introduction to the theory behind it (which I really encourage Xero to read), although the Wikipedia page explains it without the maths. The conclusions of both the theoretical and experimental literature on voluntary public good provision is that they will be under-supplied; the baseline game, which I can't seem to find, has that the optimal voluntary provision of public goods is 0. Introducing things like other-regarding preferences, inequality-aversion or preferences over reciprocity will have people provide some public goods in equilibrium, but the optimal supply is almost always higher.