Tuesday, October 2, 2012

Three things I don't understand

1. This post from Bryan Caplan (HT - Bob Murphy). It's posts like these that really convince me (a.) most libertarians don't understand the people they are arguing with, and (b.) most libertarians do not consider the robustness of their own ideal society, or at least are not aware of or curious about whether other positions on the robustness of their own ideal society. The thrust of the post is a little different - it's about when different people just say "tough luck", and that's a reasonable point. What really bad is his grasp of what much of the other side thinks.

2.  The second one is from a facebook conversation excorciating state tax breaks as just "moving jobs around" rather than being "job creators". The post concluded with the claim that real job creators are immigrants. This guy is a thoughtful libertarian, not some kind of reactionary. And he's not alone in that assessment. It's a very mainstream/neoliberal view of things. What I don't get is how a guy like that can hold such a zero-sum view of the economy when talking about state tax breaks but abandon it in the next sentence when he's talking about immigration. Another example of this is the way some people (I've heard Russ Roberts and David Henderson do this in an Econtalk, for example) get the general equilibrium demand lead growth argument when talking about immigrants, but compeltely miss the exact same point when talking about the minimum wage. The supply curve slopes up and the demand curve slopes down in both cases. Demand lead growth arguments make a lot of people comfortable with the impact of immigration on native workers. Why the disconnect with the exact same argument when it comes to the minimum wage? A final example gets back to my facebook friend's point about state tax incentives. These are often denounced as "beggar they neighbor" policies. Why is it that the same people who call this "beggar they neighbor" don't similarly dismiss corporate tax cuts as "beggar thy neighbor"? Both states and the federal government are cutting taxes on businesses. Why is it mercantilism when the states do it but A-OK when the country does it?

3. Some writing on Cafe Hayek about Keynes recently has been so stupid that it's not worth talking about here. But this morning Don had a post that is a common enough sentiment that it's worth talking about. I still don't understand it at all, though. He is sharing a quote and references the fact that the writer is "speaking chiefly of economics circa the mid-1960s - the heyday of Keynesianism and of the related heady belief in the policy prowess of the best and the brightest". I genuinely don't understand this view. I understand what the common response to me would be, but I don't understand how people can bring themselves to consider that sort of response a convincing one. If Keynes and subsequent Keynesians (Krugman and DeLong are perfect examples of this today) have been trying to communicate anything, it's how supremely dumb policymakers can be and how tempting it is to do exactly the wrong thing. The thing that radiates from everything Keynes writes, from Economic Consequences of the Peace to Treatise on Probability, to all his writings in the 20s about the gold standard, to the General Theory is the failure of policymakers and the damage that people can do when they claim that hubristic high ground we call "certainty". All the well known Keynesian public intellectuals have trumpeted this point in one way or another too. Ex-Keynesians that grew into monetarists regularly make this point as well. I genuinely don't understand how Don comes to this view, except that he is doing what Bryan did. Don assumes that because Hayek thought X Keynes and Keynesians must think not-X. It seems to me that we should note that this is a great overlap between Keynesians and Hayekians (some people do recognize this). Now, we still have macroeconomics to argue about when that's done. And I'll still marvel over the fact that Don can hold his libertarian blueprint for social engineering even after reading Hayek, and I'll propose instead we use what we've learned tacitly - from trial and error - and move cautiously in another direction. But I'll at least recognize that he thinks of himself as not having a blueprint for social engineering (I'll keep insisting he does, but I recognize he doesn't think he does). I get the impression he doesn't even realize that we Keynesians are cognizant of this point, though - and that's really what I don't understand.

40 comments:

  1. This comment has been removed by a blog administrator.

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  2. I think Bob Murphy had a point a couple of weeks ago when he said a lot of your posts seem to deal with what you think people meant to say as oppose to what they actually did say.

    Take your comment on Bryan's post, for example. You explicitly say that what Bryan *actually* said is reasonable (about when different people just say "tough luck"), but you spend most of your time complaining things you think Bryan had in mind when he said those things (specifically what you think he thinks the other side...thinks).

    Similarly, you say later in the post that "If Keynes and subsequent Keynesians (Krugman and DeLong are perfect examples of this today) have been trying to communicate anything, it's how supremely dumb policymakers can be and how tempting it is to do exactly the wrong thing." Is that REALLY what Krugman and Delong have been trying to communicate or is that what YOU are trying to communicate at this moment?

    I can find lots of examples where Krugman and Delong talk about how supremely dumb policy makers can be when they don't agree with them (i.e. when they are Republicans). But that isn't the same thing as being skeptical of the "policy prowess of the best and the brightest". In fact, Krugman and Delong seem pretty certain that if we just had the actual best and brightest (i.e. people that agree with them) in office, everything would be better.

    Pro-tip: Save yourself key-strokes and heart-burn and only deal with people actually said.

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    1. Dee -
      Not sure what you're referring to with Bob, but I couldn't disagree more with Bryan. Yes, I acknowledge the "tough luck" point. So what? I'm still addressing what he actually said. He actually thinks those questions will elicit a "tough luck" from non-libertarians comparable to the other question from libertarians. This isn't what "I think he's saying" - this is the whole purpose of asking those questions! Or am I wrong? Anyway, I'm not challenging the "tough luck" point, I'm challenging the questions. I'm under no obligation to take issue with everything Bryan writes, am I? Can't I agree with part of it?

      re: "s that REALLY what Krugman and Delong have been trying to communicate or is that what YOU are trying to communicate at this moment?"

      Of course it is. What are you talking about Dee? Krugman especially. Krugman's whole public image is that of the thorn in the side of policymakers - the critic of everyone's fawning over "very serious people". You can criticize me on a number of things, but you really can't pretend this is in my head and expect me to take you seriously, Dee. Keynes was similarly a thorn in the side of policymakers who thought they knew everything, and he repeatedly demanded that people take fundamental uncertainty more seriously.

      Pro-tip: don't confuse your frustration with Keynesians for a well articulated point.

      I can recognize, for example, that Don thinks he is following the Keynes/Hayek point about the fallibility of policymakers. I think he misapplies the lessons in a lot of cases, and I'll tell him that. You can think Krugman misapplies the lessons in some cases and you can tell him that. But don't make things up about what Krugman feels about the underlying argument and then tell me that I'm putting words in people's mouth.

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    2. "He actually thinks those questions will elicit a "tough luck" from non-libertarians comparable to the other question from libertarians."

      I'm confused. What you said in your original post was that Bryan wasn't considering the robustness of his ideal society and all that jazz. Was your actual point that you think non-libertarians would answer Bryan's questions differently than he expects??? I certainly don't see that in what you originally posted.

      "Of course it is. What are you talking about Dee? Krugman especially. Krugman's whole public image is that of the thorn in the side of policymakers - the critic of everyone's fawning over "very serious people"."

      Wait. You're confusing me again. I thought you were holding up Krugman as an example of someone that doesn't believe in the "policy prowess of the best and brightest." But that ISN'T the same as being a critic of "very serious people" generally or Republicans specifically. So why bring it up?

      Krugman pretty clearly thinks that if the right people were in charge (that is to say the people that agreed with him), everything would be better. Isn't that almost the very definition of believing in the "policy prowess of the best and brightest"??? Delong is an even worse. He has pretty openly advocated for technocracy.
      http://factsandotherstubbornthings.blogspot.com/2011/08/id-like-democratic-federalist.html

      "Pro-tip: don't confuse your frustration with Keynesians for a well articulated point."

      To the extent I hold any views on macroeconomics, they are Keynesian. There you go again. Reading into what people actually say. :P

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    3. re: "I'm confused. What you said in your original post was that Bryan wasn't considering the robustness of his ideal society and all that jazz. Was your actual point that you think non-libertarians would answer Bryan's questions differently than he expects??? I certainly don't see that in what you originally posted."

      I'm saying both... and I thought I lettered them each (a.) and (b.).

      I really feel like we are talking about two different Krugmans. The whole point is that "the right people" are in charge. The problem with the "very serious people" isn't that they're dumb. That's the whole point! They're not dumb people.

      DeLong does advocate what he calls technocracy, but he is equally (probably more) critical of how technocrats have gotten it wrong. Some of these are framed as a mea culpa, some aren't. I think Brad is making more of a rules vs. discretion point than a "trust the wise men" point, but maybe this is one we could argue about. He's come out and called the Hayek that talked about decentralize knowledge "good Hayek" as opposed to Hayek the macroeconomist who he's called "bad Hayek". I don't think you're going to make any headway tarring him as someone who trusts wise men in authority.

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    4. "I'm saying both... "

      Alright then.

      "I don't think you're going to make any headway tarring him as someone who trusts wise men in authority."

      And I don't think you're going to make any headway misreading Don's original post. Do you honestly think the point he was trying to make was that Keynesians must totally trust wise men in authority? If so, then I agree with you that Don is crazy and both Krugman and Delong have become well known for criticizing those in authority.

      Of course, that isn't what Don was talking about. He was pretty clearly talking about how economists advocate policies based on "black-board economics" without regard for the actual institutional or information limitations policymakers face. In other words, these "black-board economists" believe that the only impediment to making good policy is not having good policy makers.

      NOW, understanding Don that way, do you honestly think it is wrong to say that both Delong and Krugman believe that if we simply replaced the bad policy makers (Republicans) with good policy makers (people they agree with) that we would have better policy?

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    5. At this point I don't know what to do but copy and paste what I wrote in the earlier comment about blackboard economics.

      If that is not clear, then I'll just agree with you using your exact words: Don is "clearly talking about how economists advocate policies based on "black-board economics" without regard for the actual institutional or information limitations policymakers face."

      I agree.

      re: "NOW, understanding Don that way, do you honestly think it is wrong to say that both Delong and Krugman believe that if we simply replaced the bad policy makers (Republicans) with good policy makers (people they agree with) that we would have better policy?"

      For the millionth time, yes. I think it is wrong to say that. I don't know how much clearer I could be, Dee.

      I might not phrase it the way you do here. "Better" is a low bar. Don probably thinks Ron Paul, in exactly the same institutional framework, would still probably do "better" than Obama. I think the same in reverse.

      But that doesn't get to the main point. The main point is that Keynesians have a history of agreeing with Coase on this point.

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  3. I can't speak for Don Boudreaux or others with reference to views on Keynesians and politicians but thought sharing my perspective might offer some light on the matter...

    I agree with you that Krugman, DeLong, and others often point out the flaws and failures in govt policies and politicians. However, underlying their views of economic public policy appears to be a vision that not only could a good govt improve economic/societal outcomes, but that such a govt is realistically possible. Both camps can therefore agree on the past troubles yet come to different conclusions about the correct way forward. Russ Roberts podcast yesterday with Robert Skidelsky highlights these diverging visions.

    In my opinion, the important question/debate is whether political institutions can be structured in such a manner to overcome enough of policymakers' failures as to improve upon alternative outcomes.

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    1. Well both sides have a view of what good government would do in a particular situation. Don blogs about what he thinks constitutes good policy all the time.

      And yes, those views of good policy are different.

      The question is, do we think that wise men in authority are worth placing unquestioning trust in? Do they have the information or can they aggregate and use the information required to consistently do that?

      Neither Boudreaux nor Krugman think so. They both have their views of what good government would consist of, but neither of them think that and both make this point regularly (often citing different people, of course). Another way of saying this is that both are on the right side of the calculation debate.

      I agree on your important question.

      It's kind of a big-picture question. I think there are a variety of important short-run questions to address as well. But I agree that's a very important question.

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    2. Is the Skidelsky talk good?

      After that god-awful post by Russ I had no interest in listening to it, but perhaps I should.

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    3. Tough for me to discern whether or not you will find it worth the time (I'm driving from Van Ness to Fairfax most days). The discussion comes to revolve around a similar question to that posed here, namely how could public policy be structured differently to achieve 'better' outcomes. I found some of the conversation about issues with a solely growth/output focus interesting and though provoking.

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    4. Not sure if I've swayed Joshua, but for other skeptics along his lines, one way to think of it is this: if Krugman really thought there was some magical ability that policymakers have that we can trust them to make the right decisions and follow good economics, then why does Krugman complain so much about them? He sure doesn't seem to play the part of someone who trusts policymakers very well. Someone who trusts policymakers teaches and writes and doesn't constantly point out the temptations of politicians to do the wrong thing.

      I really think people miss this because Krugman doesn't cite the same people or use the same buzzwords that people are used to, and because people confuse disagreements about what good policy consists of with disagreements about more fundamental public choice questions.

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    5. "[I]f Krugman really thought there was some magical ability that policymakers have that we can trust them to make the right decisions and follow good economics, then why does Krugman complain so much about them?"

      Wow. Talk about being obtuse.

      Are you SERIOUSLY trying to say that Don's point was that all Keynesians should accept government authority and trust that policy makers will always make the right decision?

      If that is how you want to read him, fine. But it is hard to take that reading seriously.

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    6. Dee, if you want to hold a conversation with me, please don't call me obtuse.

      I'm not entirely sure what you're getting at, so let me try to rephrase my point.

      Someone who misses Coase's point about "blackboard economics" (that Don talks about in the post itself) would not second guess the motives, conflicting interests, institutional detours and distortions, or information processing or knowledge aggregating capacities of policymakers. We can't just take blackboard economics and tell policymakers to have at it. We ought to have good blackboard economics (blackboard economics is useful stuff) but we shouldn't use it without being cognizant of what libertarians often refer to as "public choice problems".

      Since Krugman spends a great deal of his time writing about these public choice problems (just not calling them that), it seems hard to argue that he misses the point. He just doesn't cite the same literature Don does.

      Now - you've referred to Krugman's views on Republicans at several points now.

      It's true, he doesn't like them. But he's been famously critical of Obama and Clinton, as well as Bush. Not just a few points on the side: a well known critic of how things have gone. He was on the front of Newsweek for his criticisms of Obama and is constantly on talk shows for it. He wrote a book about it. So I don't see what you're trying to get at with that.

      Don similarly criticizes Republicans and Democrats, although he's given Ron Paul and a lot of the Tea Party movement a pass for the most part in a way that Krugman hasn't given them a free pass.

      We could stack and count who criticized who, and all it would show us is what we already know: that they have a different view of "good policy". What we won't see is Krugman as a simply a garden variety anti-Republican or Don as a garden variety anti-Democrat. Neither of these men is a yes-man.

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    7. "Since Krugman spends a great deal of his time writing about these public choice problems (just not calling them that), it seems hard to argue that he misses the point. He just doesn't cite the same literature Don does."

      Yes. We are clearly talking about 2 different Krugmans. I read Krugman regularly but can't remember him making public choice problems a central part of his arguments. My guess is that you are just seeing what you want to see. Though you can post links if you have any.

      Otherwise, I really AM NOT interested in having a conversation with you. I mean, one minute you say you can't take me seriously. The next you get tender titted because I say you're being obtuse? Good grief, guy. No thanks.

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    8. Tender?

      I take "obtuse" to mean stupid (perhaps wrongly?). I think I can write one sentence complaining about that. I was simply pointing out that I didn't think you made a good argument - an argument I couldn't take seriously. You certainly seem intelligent to me, I just am not obligated to consider everything you say to be a serious rebuttal. You're spilling an awful lot of ink over this point (and now here I am spilling even more). If I'm wrong that obtuse means stupid, then great. If I'm not wrong, I'm gonna tell you not to call me stupid.

      re: "My guess is that you are just seeing what you want to see."

      This is kind of where I'm coming down with you... except what keeps bugging me about what you're missing is that Krugman is so well known for this.

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  4. I genuinely don't understand this view. I understand what the common response to me would be, but I don't understand how people can bring themselves to consider that sort of response a convincing one. If Keynes and subsequent Keynesians (Krugman and DeLong are perfect examples of this today) have been trying to communicate anything, it's how supremely dumb policymakers can be and how tempting it is to do exactly the wrong thing. The thing that radiates from everything Keynes writes, from Economic Consequences of the Peace to Treatise on Probability, to all his writings in the 20s about the gold standard, to the General Theory is the failure of policymakers and the damage that people can do when they claim that hubristic high ground we call "certainty".

    You really don't understand this view? The view is based upon viewing Keynesians as people:

    1. Who believe that average people are too stupid to know how to price their own labor and goods for sale (and/or are too dumb to manage their own lives at all) and need technocratic Keynesians backed by government powers to manage the process.

    2. Who believe that most politicians and technocrats are dumb and corrupt but that the individual advocate himself (Keynes, DeLong, Krugman) is smart enough to properly manage the process.

    aka "megalomania".

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    1. Right, I don't understand how you can think (1.) and (2.) and expect me to take you seriously, Bob.

      Although "manage the process" in #2 is a little vague... depending on what "the process" is they may think that. Don would think that too, depending on what "the process" is.

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    2. Whether you want to take the view seriously or not, I believe that it is the view held by most libertarians of Keynesians. Think Hayek and Mises. Knowledge is dispersed among the entire population and cannot reside with the technocrat. The Keynesian is a central planner who is fatally conceited and does not understand that part of reality. Isn't there a book about that?

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    3. I know what libertarians say. That's the whole problem.

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    4. So, where do you get all of your special knowledge that average people don't have?

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    5. Not sure I follow you. I don't have special knowledge.

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  5. People in general do not understand those on the other side of an argument. It is a good idea for people to state their opponents' views such that their opponents say that they have got it right. That is far from the rule in political speech, where people state their opponents' views as broadly as possible, to the point of absurdity, if they can.

    IMX, people tend to propose simplistic policies, without regard to systemic effects. Their critics often look further and raise systemic objections. Typically, though, when the critics make counter-proposals, they are also simplistic and short-sighted.

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  6. I don't understand your point on Bryan's post with regard to robustness. All he said is that all social systems sometimes fail and so simply pointing out that outcomes won't be perfect under a libertarian society is no argument. Why is that like saying that he doesn't care about robustness?

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    1. I am extrapolating a little on that, and thinking about some things said over at Bob's blog too. Sorry for the confusion.

      There is a not so subtle allusion to the robustness problems libertarians associate with non-libertarians in the second half of the post. That this is something he would find relatively questionable or lacking among non-libertarians makes me feel like he is overestimating how successfully libertarians have handled this.

      It is not all on the surface - sorry if that was confusing.

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    2. I'm still not completely sure I understood your point. All dat fancy university book-learnin's got you writin' officialese 'stead of simple American.

      Is the core of your complaint this: "Bryan implies that non-libertarians are oblivious to problems presented by social democracy, republicanism and other forms of governmental systems, which is wrong"?

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  7. The work for A Treatise on Probability was done actually earlier than 1921, Daniel Kuehn. It was done in 1907-1908. Keynes only found time to expand on it after World War I, because other things kept him busy. Dr. Michael Emmett Brady has stated before that uncertainty/ambiguity affects decision-making (individual and collective) in the public AND private sectors. Otherwise, pretty good post!

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  8. "economics circa the mid-1960s - the heyday of Keynesianism and of the related heady belief in the policy prowess of the best and the brightest"

    Uh.... I don't claim to be an expert; I just lived through that period. Anyhow, "The Best and the Brightest" was a David Halberstam history (1972) describing how very bright people in the Kennedy administration had brought about the Viet Nam War. The title was reasonazbly ironic, it's come to be a label for self-styled intellectuals with good intentions who produce tragic results. In the nature of things the well-intention fools are generally political liberals.

    It's important to note that NO ONE IN THE WORLD IN THE 1960'S DESCRIBED THE KENNEDY OR JOHNSON ADMINISTRATIONS IN SUCH TERMS. There were people credited with being bright, certainly, even some described as brilliant. But the notion of the nations leaders then being a political elite eventually destroyed by its arrogance and educated incapacity is a very modern notion.

    So when Bordreaux takes his slap at the "heady belief in the policy prowess of the best and the brightest" he's being ahistorical. What it boils down to is "the 1960's, when people I dislike ran the government." That's him; it isn't the voice of God.

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  9. I hope you have a nice day! Very good article, well written and very thought out. I am looking forward to reading more of your posts in the future.human growth hormone

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  10. If you don't understand Bryan Caplan or libertarian discussions of immigration vs. the minimum wage, what about this post by Bryan Caplan on immigration and the minimum wage?

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    1. The minimum wage/immigration/taxes point was actually the most interesting to me of all of those - thank you.

      Yes, if you try to reconcile the two via a partial equilibrium explanation it doesn't seem to make sense.

      If you try to reconcile the two via a general equilibrium explanation it does.

      Often, libertarians will try to smack down basic "the demand curve slopes down" analyses for immigrants by making an appeal to general equilibrium effects. Fine. Then they should apply the same logic to minimum wages.


      I don't know what Card has said about the partial equilibrium implications of his studies to say whether Bryan is accurately characterizing the issue. What I will agree with Bryan on is that they don't seem to be reconcilable through partial equilibrium thinking (but I should probably look at this closer).

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  11. Regarding point number #2..."moving jobs around" vs "creating jobs"...the difference is painfully clear. Jobs in the private sector were created as a result of demand while jobs in the public sector were not. Now...not sure where the confusion is. Perhaps we have different definitions of "demand"?

    Perhaps you think that people voting for more public sector jobs reflects demand? But this would imply that you don't believe that actions speak louder than words. Is that really the case? Do you really not see the value in people putting their money where their mouths are?

    True demand is based on sacrifice...aka spending. If you truly want something then you'll spend your money to purchase it. As Henry David Thoreau said, "The price of anything is the amount of life you exchange for it." In the private sector if you exchange a portion of your life to create a job that there's truly a demand for...then other people will voluntarily exchange a portion of their lives for the products/services that you are supplying.

    Without knowing how much of their own lives people would sacrifice for what they want...there's no way to truly know how resources should be distributed. Therefore, any distribution not based on personal sacrifice reflects a misallocation of limited resources. Misallocating limited resources is not how we overcome scarcity. The abundance that we all want and value depends on putting limited resources to their most productive uses. And the idea of one use of a limited resource being more productive than another use only makes sense if we are able to accurately convey what are true priorities are.

    All this is libertarianism 101...it was the point of Bastiat's Parable of the Broken Window. It's really basic stuff so it constantly surprises me when you fail to acknowledge this straightforward argument. You certainly don't have to agree with it...but you don't even seem to be aware of it. If you are aware of it then I must have missed it. If that's the case then please link me to your post where you acknowledge that resources can only be efficiently allocated by allowing consumers to consider the opportunity costs of their spending decisions.

    The thing is...libertarianism 101 is a prerequisite for pragmatarianism 101...

    As a pragmatarian I have absolutely no problem with the creation of jobs in the public sector...as long as taxpayers can choose which government organizations they give their taxes to. How they spend their taxes in the public sector will allow resources to be distributed according to actual demand. This is simply because taxpayers will have the opportunity to put their own taxes where their mouths are.

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    1. This kind of reasoning completely ignores public goods and market failures.

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    2. No it doesn't. It completely acknowledges the fact that neither the market nor the government has a monopoly on failure. The point of the public sector is to succeed where the private sector fails and vice versa.

      But how do we determine whether the public sector is truly succeeding where the private sector is failing? Allowing the government itself to evaluate its level of success would be as absurd as allowing business owners to determine how much revenue they receive. Yet, that's exactly what you advocate.

      Allowing taxpayers to choose which government organizations they give their taxes to is the only logical and rational way to gauge success/failure in the public sector. However taxpayers spend their taxes in the public sector will reflect the extent of failure in the private sector and success in the public sector. However consumers spend their money in the private sector will reflect the extent of failure in the public sector and success in the private sector.

      Here are the possible outcomes...
      1. Both sectors succeed at supplying the same exact good/service...consumers pay for private education and taxpayers pay for public education
      2. Only one sector succeeds at supplying a good/service. Consumers do not give any of their money to private healthcare while taxpayers give a large portion of their taxes to public healthcare
      3. Neither sector succeeds at supplying the same exact good/service. Can't think of an example...but it seems logically possible. The outcome would be that neither consumers nor taxpayers would give their money to the public/private organizations trying to supply this good/service.

      The bottom line is...you cannot say that a government organization is truly successful and then turn around and say that taxpayers would not choose to give it their taxes. Well...you can...but that would simply reveal how ignorant/irrational you are.

      Do you honestly believe that success itself only matters? For example...perhaps you are very extremely successful at picking your nose...therefore people should pay you to pick your nose? People would not pay you to pick your nose because there's no demand for your boogers. Does the government produce boogers or does it produce things that people actually demand?

      And in case you missed it...in no way shape or form am I arguing that taxes be voluntary. If I was then I would be an anarcho-capitalist. But do you know how you can tell that I'm not an anarcho-capitalist? You can tell because I already told you that I am a pragmatarian. Taxes would not be voluntary but taxpayers would choose which government organizations they gave their taxes to. The result would be that the actual demand for public goods would determine the supply of public goods.

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    3. "The bottom line is...you cannot say that a government organization is truly successful and then turn around and say that taxpayers would not choose to give it their taxes. Well...you can...but that would simply reveal how ignorant/irrational you are."

      Yes, this is known as the 'free rider' problem.

      Seriously, I can't believe you are calling me ignorant.

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    4. We SOLVE the free-rider problem by forcing people to pay taxes. It's ignorant to be unaware that very basic fact...

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

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  12. Xerographics: "Allowing taxpayers to choose which government organizations they give their taxes to is the only logical and rational way to gauge success/failure in the public sector."

    But who are the taxpayers? Not necessarily those who send in their money, right? Landlords pass taxes on to tenants, businesses pass taxes on to employees and customers. How do tenants and employees and customers choose which gov't organizations their taxes go to?

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    1. They choose which gov't organizations their taxes go to by choosing who they give their money/labor to. This is known as ethical consumerism...

      "The first step in taking our power back is taking our money out of all the commercial banks and moving it into credit unions or community banks. Corporations didn't get big on their own...they got big because we pay them. So change your phone company...put your money where your heart is." - Occupy Wall Street Supporter

      It's not a new concept...

      "And if it seem evil unto you to serve the Lord, choose you this day whom ye will serve; whether the gods which your fathers served that were on the other side of the flood, or the gods of the Amorites, in whose land ye dwell: but as for me and my house, we will serve the Lord." - Joshua 24:15

      Of course, nobody would stop tenants, employees and customers from giving their own money to government organizations.

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    2. You are assuming a degree of freedom that many people do not have. They are therefore unable to exercise their rational choices. I think that a rational way for the real taxpayers, the consumers, the workers, the renters, as well as the businessmen and landlords, et al., to choose which gov't organizations to support is through voting. What a concept! :)

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    3. The painful irony is that your solution is actually what reduces people's degree of freedom.

      Most people would not consider working in a sweatshop to be a "good" option. So what does it mean when somebody chooses to work in a sweatshop? It means that it is their "best" option. Because if they truly had a "better" option then they definitely would have chosen it. Therefore, the owner of the sweatshop increased his employees degree of freedom.

      Then liberals come along and strive to force owners of sweatshops to provide better conditions and more benefits for their employees. Liberals are such idiots. If they truly believe it's economically feasible to pay employees more money and give them more benefits then all they have to do is to start their own factories.

      Why should they do this? Because it would give people more options. It would increase people's freedom. But instead of doing this they are happy to try and get sweatshops shut down...which would take the "best" option away from people.

      If you truly want to help people...you give them "better" options. If you truly want to screw people...you take away their "best" options.

      Here are the fundamental concepts involved...

      1. Everybody wants more for less
      2. Competition forces producers to do more with less (aka "resourcefulness")
      3. Resourcefulness allows us to overcome scarcity
      4. Abundance gives people a greater degree of freedom

      You don't give people a greater degree of freedom by wasting limited resources. Allowing people to vote on the 538 congresspeople who are allowed to determine which government organizations receive 1/4 of our nation's revenue is pure idiocy. It has absolutely no basis in economic fact. It is simply a vestigial trait left over from 1000 years ago when barons decided that the king truly did not have divine authority.

      If you want to give people a greater degree of freedom then you should advocate that taxpayers be given the freedom to seek more for less in the public sector. This will force government organizations to do more with less...which will lead to greater abundance which will provide everybody with a greater degree of freedom.

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