The question is motivated by a facebook meme of all things. I saw this two days ago, and when I saw it again yesterday I decided to comment on my friend's post of it the second time:
My response was simply "how about hands off all of the above?". Curiously, it got a "like" from the person who initially posted it - which was a little confusing to me.
One of the things that I've enjoyed in a weird way about the recent gun control debate is that I've gotten the chance to criticize liberals* again (American liberals - not the ones Keynes was talking about). Liberals have been so sane over the last several years that I've focused a lot of my attention on conservatives and libertarians, but they can get pretty kooky when it comes to gun control. That's not the only issue of course. Although I haven't met many liberals that are rabidly anti-GMO food (sometimes people insist there are hoards of these - I only know a few), that's another area where liberals can support restrictive policy that I'm happy to disagree with them on. You could imagine various anti-corporate measures, perhaps trade protection for a few. Certainly campaign finance. And then there's cultural issues like the Confederate flag where few are proposing prohibitions, but I can still criticize most liberals for being too nosy about it. I can still assert that it's not used for what you think it's being used for in most cases. Liberals are not as bad as conservatives when it comes to personal liberty, but there is plenty to scoff at. And I'll admit - it's been fun to scoff at it during the gun control debate.
But this got me thinking - there's not really a home for this sort of attitude. I think a lot of people think in terms of the Nolan Chart. Liberals are pro-personal freedom, anti-economic freedom; conservatives are anti-social freedom, pro-economic freedom, libertarians are pro-personal freedom, pro-economic freedom, and populists are anti-personal freedom, anti-economic freedom.
I hate that dichotomy to begin with, as you might guess. It makes me want to line up with the libertarians, but that doesn't sound right for obvious reasons. That's a big part of my problem with the Nolan Chart - how it conceptualizes "economic freedom". Also, because of the restrictions listed above, it doesn't necessarily sound right that liberals are "pro-personal freedom", although I'll grant they're better than most conservatives.
I don't feel like I have a truly comfortable home because I would say that the distinguishing features of my politics are pro-personal freedom and pro-economic freedom, but more importantly a sense that:
1. There is a lot of good that the government can do because there are things we do better collectively than individually, and
2. There are not a lot of individual things that the government is good at telling us to do or directing us on.The problem with the Nolan Chart is that it completely ignores collective action arguments for government. It only thinks of government action as freedom-limiting action, so it pin points you based on whether you (allegedly) want to limit freedom in the economic sphere, the personal sphere, or both. There's no discussion at all of collective provision of goods and services.
For an economist this way of thinking about government in the Nolan Chart (and in most of our society) is very jarring. There are a lot of ways we think about government, but there are two really big ways: (1.) as something that interferes in choice - which is usually considered bad, and (2.) as something that deals with externalities - which is usually considered good. My assessment of government along these dimensions is pretty standard for an economist. You can even think about more ambiguous things like regulation along these dimensions - I support regulation that provides a public good insofar as it establishes sensible rules of the game and protects people from injustices associated with negative externalities, but I don't support regulation insofar as it goes beyond that and restricts personal freedom to trade and create. When you look at things like an economist like this, common libertarian exercises like counting the pages of regulations doesn't make much sense as a way of assessing whether we've got good regulation or bad regulation.
This brings me back to Keynes's essay. As soon as I figured out the two political dimensions that I think are the more important ones, it reminded me of Am I a Liberal? (1925). In the essay he chastizes Labour for going beyond the valuable sorts of economic policy that government can do and flirting with socialism and nationalization. He talks about how the Conservatives are often steered by their "Die-Hards" and Labour is often steered by its "Catastrophists". He also notes that there are good people in both parties, and that establishing his own political identity is often an exercise in choosing between "the best type" in each party: specifically, the "Conservative Free-Traders" and the "Socialistic Reformers" from Labour.
He then goes on to talk about five issues he thinks will be of growing importance: (1.) Peace Questions, (2.) Questions of Government, (3.) Sex Questions, (4.) Drug Questions, and (5.) Economic Questions. If I were to force his answers into the two-dimensional rubric I lay out above, I'd say that Keynes comes out roughly where I do. He thinks there's a lot of good that free people can do when they act collectively through government, but he does not think there's a lot of good that the government can do in telling us how to live our lives. He settles on the Liberal Party and outlines a platform of what he thinks the Liberal Party should support. I don't know all that much about British politics, but I know enough to know that being a Liberal means that you're a bit out in the cold and not exactly at home in any one movement. That's how I often feel. I used to use the word "moderate" a lot. I use that less now because "moderate" implies a lukewarmness that doesn't exactly describe me. I now use "center left" more often (because there's no denying what rough side of center I sit on, and it's less pretentious than "centrist"). But this still implicitly uses Nolan Chart type dimensional thinking, which isn't entirely satisfying. Another thing to say is simply that I'm a classical liberal, because all of this thinking on my part originates with that. But a lot of people unfortunately take that to be synonymous with liberatarianism.
So there are no answers to the problem really, but I thought those two dimensions might be useful to highlight for readers.
* - Of course some people think that because I'm willing to let the government research it and do minor regulation like background checks that means I'm for gun control. If that's what you want to call "gun control" (and to a certain extent it is), then I suppose I am - but I mean wanting to limit what you can actually own or carry, as well as the general disposition that guns are only for hunting animals (not for potentially killing people that need to be killed), or the view that the 2nd amendment is useless, etc..
Posts
The poster of that facebook meme could be pointing out the hypocrisy of gun advocates (using liberty as a defence) without advocating gun control.
ReplyDeleteAs a Brit, I must admit that I fail to see the usefulness of the 2nd Amendment nowadays. Perhaps there's a compelling argument that I've missed, but the idea that citizens' firearm use is meant to counterbalance the military seems implausible.
This isn't to say that banning guns outright is the best policy, however; I agree that could be an unnecessary restriction.
Some kind of citizens' defense is not something that's going to happen every day, but I think it's a good reason to have an armed populace. Of course if there is never a need for it, it's hard to parse out whether you never needed to revolt against a tyrant because it was a stupid thing to anticipate in the first place or that arming the populace worked.
DeleteI don't want to dismiss that reason for the second amendment - but I don't want to focus on either.
The way I see it, the point of the second amendment is personal protection and presumption of innocence. As a day to day issue, owning a gun isn't about securing yourself from a tyrant so much as it is to secure yourself from danger in general. I don't see how the government has a right to prevent you from doing that. It's frustrating when people talk about hunters. Sure people hunt, but we shouldn't dismiss the fact that guns are tools for killing people too.
That leaves open questions about large magazines, for example, that arguably aren't necessary for personal security. On this point I think it simply becomes a personal freedom/innocence until proven guilty question. The reason why people want to regulate large magazines is that it could make committing a crime easier. Not because it poses an inherent danger. Not because it inherently imposes a cost - like, say, pollution. But because it may be used in a crime. That strikes me as being an entirely insufficient argument for telling someone how to live their lives. If by merely owning a larger magazine you were imposing costs on someone, I could see the argument for regulating that. But that's not the case.
Daniel, it seems to me that in thinking about "guns," you might want to stop and consider several propositions
DeleteFirst, the entire proposition that there is any broad individual right to bear any "arms," remains very dubious, as the entire premise of the amendment is now false (the US did not anticipate the need for a standing military).
This is especially so as the Supreme Court reached the result that there is a right to bear arms against the states, thru legal casuistry, via selective incorporation under the 14th Amendment, as to the States.
In the future, as to the states, a Court could very easily take away the "right," unless it wants to breath life into the privileges and immunities clause.
Second, there is real room in the Constitution for the Government to end gun ownership and manufacturer under the Treaty Power. Consider, for example, a treaty between the US and Mexico that bans everyone in both countries from making or owning guns, to stop the flow of weapons into Mexico. Similarly, one could have multinational agreements to disarm, as well.
Third, if one just looks at the text of the Amendment, there are several points of intervention.
First, the amendment does not define "arms" and it does not define "infringe."
As to the later, that needs to be contrasted with the First Amendment that provides that Congress shall pass "no law." Thus, very clearly, the Amendment permits Congress to legislate so long as such does not infringe.
Thus, for example, interesting questions arise.
First, can the Congress legislate uniform specifications and confiscate non-uniform and obsolete arms? How far can Congress go in regulating the safety of arms against mfg. defects? For example, could Congress declare any gun more than 3 years old obsolete and unsafe and mandate that they be destroyed or rendered inoperable. This is not an infringement if the owner can replace the arm with one that is safer.
Can Congress split the amendment?
Can it say you may keep your gun at home but if you want to bear an arm, you have to come down to the local armory and check it out and carry it in the open?
Clearly, there is no right to carry a concealed arm.
Moreover, unlike the 14th Amendment, Congress has no power to pass laws in aid of the Amendment, so it cannot pass laws that forbid employers from firing a person for owning an arm or for carrying an arm and Congress cannot force people to let you on their property, etc.
Can Congress or the states ban hunting to protect wildlife and then ban hunting weapons to carry out the ban?
Now, as to your argument about cost, it is legally meaningless. What cost is there to anyone if I own an RPG or bomb or anti-aircraft missile or fully automatic machine gun or a tank with an automatic cannon? These are all arms. In fact, what cost is there to anyone if I own anthrax or nerve gas or an atomic bomb? Your argument is so shallow it is not even cleaver, let alone a meaningful distinction. It is, as best, what is called in the law a distinction without a difference.
Further, how far can Congress go in banning agreement or conspiracy. The Congress has, wisely, made it a crime to organize a private army in the United States for the purpose launching an expedition against a friendly nation. 18 U.S.C. § 960. Can it ban the possession of any military thing or object which could be used to launch an expedition against a friendly nation?
Last, it needs to be recalled that, at the time of the Amendment, all arms were single shot, requiring perhaps as much as 1 minute to reload. Accordingly, a real and substantial argument will always exist that there is no right to carry any modern weapon. There is certainly no constitutional argument for carrying a weapon that fires more than one shot without reloading, unless one believes in a living Constitution, but that is the last thing that gun nuts believe.
Max H,
DeleteFrankly that's also the way I took it.
As for the whole nowadays an armed civilian populace surely can't defeat a well-maintained military force, well, that's been the case since the advent of states (which explains why most efforts to overthrow a central authority fail - or such would be my guess based on what I know of the history of such things - revolutions, etc. tend to fail in other words). So the likelihood of success wouldn't be the main selling point of such an idea; the cost of containing an insurrectionist armed population would be the selling point (and of course armed mobs, etc. are known to get their way throughout human history even when they are defeated - governments often quietly repeal or amend whatever is making people angry after the fact). To use an American historical example, while the Whiskey Rebellion was a failure initially the folks rebelling against the tax eventually got what they wanted (and they were heavily involved into kicking the Federalists out of office in 1800 as well). In other words, these sorts of things are part of a continuum of political protest. The question is, should such things remain part of that continuum?
Sorry I packed so many things into that one paragraph.
Max H,
DeleteAlso, if you're curious where my roots intellectually come from on this matter, I am heavily indebted to (amongst others) the work of Judith Shklar - most importantly "The Liberalism of Fear," _Ordinary Vices,_ and _The Faces of Injustice_.
Max H,
DeleteI am French so when I came to the United States I was very much in agreement with you. The French have a culture which is somewhat to the British in that respect. But I've come around mostly to the idea that in a free society, we should start with the assumption that most people will act appropriately and that only when either 1) that assumption can be rebutted or 2) the cost of a liberty is too high even under that assumption, can you pass a law to limit that liberty. (I think that's what Daniel means when he talks about "innocent until proven guilty") With guns, we can see that the vast majority of gun owners do not use them to commit crimes. A single criminal using guns can usually inflict only very limited damage. (Yes, it is spectacular and tragic, but very little compared to say, explosives) So the balance goes towards letting people own guns.
You are definitely a liberal. I know this for a fact because you think it's possible for 500+ congresspeople to accurately guess the public goods preferences (demand) of 300+ million citizens...which would mean, from your perspective, that the supply of public goods must be adequately close to optimal.
ReplyDeleteExcept, if the guesses of congress are so good, then why have so many economists made such a monumental effort to try and develop preference revelation mechanisms?
That's not even close to a necessary assumption. For instance, consider a carbon tax. Sure, it would be hard to evaluate the exact cost of a ton of carbon being released in the atmosphere. But the cost is surely above 1 cent. So we could charge 1 cent and get closer to the optimal. That is the kind of process which can lead us to a better position even if we don't hit the target dead center.
DeleteLast year the EPA received $10 billion dollars. How close was that to dead center?
DeleteI don't know enough about the facts to say either way.
DeleteThe fact that you know, which nobody else does, is exactly how much you value environmental protection. Just like you're the only one who knows exactly how much you value chicken and asparagus...
Delete"If a socialist came to me and argued that my purchases don't count because my single purchase can't possibly affect the price level, I would not respond that I have a duty to keep markets working. I would point out that I wanted chicken and asparagus for dinner and that's why I went to buy them and that's why my true preferences were aggregated."
Regarding decentralized knowledge (aka "facts")
"The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world." - Hayek
In other words...
"If the knowledge problem identified by Mises and Hayek make rational central planning impossible for something as simple as a quart of milk, what chance do central planners have to make rational, effective plans for something as complex and difficult as educating the children of a diverse nation of more than 300 million?" - Kevin D. Williamson, The Politically Incorrect Guide to Socialism
You can't have it both ways. You can't say that government planners have enough "facts" to know exactly how much of society's limited resources should be used for environmental protection but they can't have enough facts to know how much of society's limited resources should be used for milk, asparagus and chicken.
Does the book Scroogenomics match your preferences? If so, then buy it. If not, then don't. Does giving your taxes to the EPA match your preferences? If so, then do so. If not, then don't. Does liking tax choice on facebook match your preferences? If so, then do so. If not, then don't. Does discussing economics with me match your preferences? If so, then do so. If not, then don't.
"You can't have it both ways. You can't say that government planners have enough "facts" to know exactly how much of society's limited resources should be used for environmental protection but they can't have enough facts to know how much of society's limited resources should be used for milk, asparagus and chicken."
DeleteOf course. But I am not saying that the government can know what the optimal level of environmental protection is. I am simply saying that there are some areas where some lower-bound approximations can be made and that facts can help narrow that approximation somewhat. The EPA obviously does not know the optimal price for a ton of pollutants being released in the atmosphere, but the scientific consensus does point to some costs such as climate change, a higher prevalence of some diseases, etc... (You may dispute some of the particular costs, but I think we can agree that there is some sort of cost) So obviously, a price of 0 is below the optimal price level. So rising the price from zero can bring us closer to the optimal. A careful analysis of the facts (such as by looking at medical costs incurred or property value issues, etc...) can let us evaluate that while we do not know the exact price, it surely is above (for instance) $1. Under such a framework, we could set the price of a ton of carbon at $1 and get closer to an optimal outcome. Hayek is still right about the knowledge problem. The government does not know the price at which I value clean air, chicken or asparagus. But to say that we do not know everything about something is not the same as saying that we can only know nothing about anything.
My argument is that somebody is a liberal if they believe that the guesstimates of government planners are close enough...as in horseshoes and hand grenades. But based on many socialist experiments...it's clear that the guesstimates of government planners are not nearly close enough. Which is why I support tax choice.
DeleteRegarding the EPA knowing exactly how much to charge for pollution...again...if you believe that they can get close enough to the actual price...then you're a liberal. It helps explain why you're not advocating tax choice.
In a market system, whether or not a price is reasonable is completely up to consumers. If we created a market in the public sector...then the EPA would be able to put whatever price it wanted on pollution. Wherever it maximized its revenue would be the optimal price.
The market allows us to give each other positive feedback. If you engage in activity that benefits me...then I'll reach into my pocket and reward you for doing so. When it comes to collective goods though, because of the free-rider problem, we have to force people to pay taxes. I have no problem with that. My problem is that liberals, such as yourself, think that we adequately solve the preference revelation problem by allowing government planners to choose exactly how much of society's limited resources are directed to the various public goods. The consequence is that some government organizations receive too much positive feedback while others do not receive nearly enough. We end up with deadweight loss which hinders our progress and limits our prosperity.
But the bottleneck isn't the government planners...it's your belief in them. But in actuality it's my failure to dissuade you of your belief.
I don't tend to think that governments are doing a great job at this. I'm merely saying that some form of liberalism is possible even taking into account the knowledge problem.
DeleteAnd your tax choice system does not change this. You describe it as setting up a market in the public sector, but it does nothing of the sort. In a market, I get something if I pay for it and I don't get that thing if I don't pay for it. That's how the knowledge problem is solved. If I pretend that I like asparagus in market transactions, I end up with more asparagus and less money than I want. So the market gives me a good reason to reveal my true preferences.
But that is not what happens in a tax choice system. Let's say that in the tax choice system we are choosing between the DEA and the EPA. Now let's say my policy preference is that the DEA be shut down and the EPA get all the tax revenue. Now, because it makes me feel self-rightenous to attack drugs, I send 100% of my tax revenue to the DEA. How does that affect the outcome in terms of the funding of the DEA and the EPA? Just about not at all. The incentive for me to reveal my policy preferences is not there. Tax choice creates a market in communicating about policies, not a market for actual policies.
If you gave 100% of your taxes to the DEA...then my conclusion would be that the activities of the DEA more closely matched your preferences than the activities of the EPA. Just like if you gave 100% of your donations to Greenpeace...my conclusion would be that you prefer their activities to the activities of the other non-profits. Are you saying that there are no opportunity costs because the benefit is social in nature?
DeleteWhat are you saying? Are you saying that somehow pacifists are going to derive value from giving their taxes to the DoD and Christians are going to derive value from giving their taxes to abortion clinics and global warming deniers are going to derive value from giving their taxes to the EPA? If you're a vegetarian are you going to derive value from eating meat? If you say that you're a vegetarian, but then I see you gulping down chicken tacos...should I believe your actions or your words?
I really don't think you understand how the market works if you think that market principles are only applicable to situations where there are literal price tags on goods.
There is no cost to discussing this topic with you...but there is an opportunity cost. I am sacrificing other priorities to share my partial knowledge with you. Why? Well...obviously because I derive more value from this discussion than the alternative uses of my time. Is that always going to be the case? Obviously not. Life changes and our priorities change.
Is it a priority for you to learn about the opportunity cost concept? I think it is...but it's up to you to decide. That's why the market efficiently allocates society's limited resources.
"If you gave 100% of your taxes to the DEA...then my conclusion would be that the activities of the DEA more closely matched your preferences than the activities of the EPA."
DeleteSuch would be a reasonable conclusion. But not a conclusion supported by the concept of revealed preferences. The only preference that would be revealed would be my preference for giving money to the DEA instead of the EPA. You would then have to deduce that my preference for giving money to the DEA is caused by my preference for the activities of the DEA. But that is a second step for which you need to provide an argument.
"Are you saying that there are no opportunity costs because the benefit is social in nature?"
No, I am saying that the opportunity cost is the opportunity lost as was long ago taught to me. And that in my example when I allocate my taxes to the DEA, the opportunity I lost was for my taxes to be allocated to the EPA. The allocation of my taxes to the EPA or the DEA do not change the ability of those two agencies to act. Therefore, the opportunity cost does not include the regulatory activities of those organizations. By allocating my tax dollars to the DEA instead of the EPA, I have not lost any noticeable amount of EPA action.
"What are you saying? Are you saying that somehow pacifists are going to derive value from giving their taxes to the DoD and Christians are going to derive value from giving their taxes to abortion clinics and global warming deniers are going to derive value from giving their taxes to the EPA?"
Those are bad examples, but yes. What I am saying is that you have not shown that people's personal allocation preferences would align with their public policy preferences. I am further saying that for your system to produce an optimal global allocation of tax revenue, you must show that personal allocation preferences align with public policy preferences. I am also saying that you cannot show that because it is not true. There are massive externalities which are of an identical nature as the ones in the present system.
"I really don't think you understand how the market works if you think that market principles are only applicable to situations where there are literal price tags on goods."
The question isn't whether we are talking about literal price tags on goods. The question is whether people bear the cost of their choices and reap the rewards of their choices. If not, if the costs and rewards are mostly born by others, you have massive externalities which is a well-known case of a market failure.
The question is whether people bear the cost of their choices and reap the rewards of their choices. If not, if the costs and rewards are mostly born by others, you have massive externalities which is a well-known case of a market failure.
DeleteDo you think that paying taxes would be optional in a tax choice system? Is that the problem? Because taxes really wouldn't be optional. So given that people would have to pay taxes anyways, what incentive would they possibly have for not seeking the most value for their tax allocation decisions?
The cost is a foregone conclusion. Taxpayers would still have to make a sacrifice...but it would be up to them to try and squeeze every drop of benefit that they could from their sacrifice. They'd have an incentive to give their taxes to whichever government organizations most closely matched their preferences at that point in time. In other words, they'd give their taxes to whichever government organizations gave them the most bang for their buck.
All consumers want more for less...taxpayers would certainly be no exception. They exchanged their life for their money so there's no absolutely reason to believe that they'll intentionally throw their money away in the public sector. So given that they'll all want more for less...they'll reward the government organizations that do more with less. That's the basis for abundance.
Am I missing something? If I value both the EPA and the DEA...but I value the EPA far more...but the EPA is already "adequately" funded...then I wouldn't derive any benefit giving my taxes to the EPA. Therefore, I'd give my taxes to my second priority...the DEA. And if the DEA was already adequately funded...then I'd give my taxes to the DoD...and so on and so on.
Let's pretend that I somehow managed to coerce you to give $200 of your own money to any non-profit organization of your choice. Why would you lie about your true preferences? If you gave that $200 to congress...how closely would their selection match your own?
"Am I missing something? If I value both the EPA and the DEA...but I value the EPA far more...but the EPA is already "adequately" funded...then I wouldn't derive any benefit giving my taxes to the EPA. Therefore, I'd give my taxes to my second priority...the DEA. And if the DEA was already adequately funded...then I'd give my taxes to the DoD...and so on and so on."
DeleteYes. You are missing the decision process and the incentives.
The way a standard economic actor will make that decision looks something like this: I sit at home contemplating whether to give my money to the EPA or the DEA. I first assume that I gave my money to the DEA and imagine what the world would look like under that assumption. Then, I assume that I gave my money to the EPA and imagine what the world would look like under that assumption. Then, I compare those two worlds and see which one I like best.
The first thing I will notice about the difference between these two worlds is that the actions of the two agencies is identical. The amount of money I send them isn't enough to make any difference I could possibly notice. So right there, my policy preferences fly out the window. It doesn't matter whether I want more drug war or less drug war or more environmental protection or less environmental protection. This decision won't impact the outcome in that regard. Since this decision won't affect policy outcomes, my preferences over policy outcomes will not come up at all.
So given that my preferences over policy outcomes is not engaged by this exercise, you cannot claim that preferences over policy outcomes will be aggregated.
"Let's pretend that I somehow managed to coerce you to give $200 of your own money to any non-profit organization of your choice. Why would you lie about your true preferences?"
No, but that's what you don't seem to get. Preferences over what? You are assuming I will give my money based upon what organization I want to have more resources. But really, I can't control that with my $200 donation. Such a donation won't make a difference. I will give my money based upon what organization I want to give my money to. And those two things may be (and in fact are) quite different: I would like the Cato institute to have more money. If I could make a contribution of significance to organizations, I may very well choose to give to the Cato Institute. But I don't. I give to the EFF. Why? Because even though I support the actions of the Cato Institute more strongly, I get a greater warm and fuzzy feeling from giving to the EFF. And anyways, my $100 per year won't make any difference at all to either organization. So I pursue warm fuzzy feelings instead of actions.
Compare that to my actions in the market. When I go to the supermarket, I don't buy very much adult kale. Why? Because despite feeling all self-righteous and healthy when I buy it, I don't like it very much. I would like to buy kale but actually eat broccolini which I find to be much better-tasting. But I can't because if I buy kale, then I have lost an opportunity to eat broccolini.
Do you see how I am revealing preferences in both cases, but very different types of preferences in the two cases? In one case, I am revealing my preferences for the products being offered. In the other, I am revealing my preferences for spending money. And in your system, I am not revealing my preferences for the policy outcomes. I am revealing my preferences for how to spend my tax money.
Now, following my wishes on how to spend my money may be more virtuous. But that does not make it a more accurate aggregator of policy outcome preferences which is what we were talking about earlier. It tells you nothing per say as to how much environmental protection I want to see. It just tells you how much of my money I want to be symbolically sent to the EPA.
Do you see how I am revealing preferences in both cases, but very different types of preferences in the two cases?
DeleteAre you Dr. Jekyll and Mr. Hyde? Do you have multiple personality disorder? Your arguments make absolutely no sense. The fact of the matter is that whatever you spend your money on IS your priority...it IS your true preference.
You'd have numerous public goods to choose from. If they all provided you with the same exact utility...then why bother directly allocating your taxes? Directly allocating your taxes would be completely optional. If you didn't value shopping for yourself in the public sector then you would certainly be welcome to just give your taxes to your personal shoppers (congress).
If a guy derives absolutely no utility from shopping for clothes...then chances are good that he'd be fine with having his wife shop for him. But if he wasn't happy with his wife's choices...then he'd have a dilemma. Should he endure his wife's lousy selections or make the effort to shop for himself? If he decides to make the effort to shop for himself, then why would he lie about his preferences? And if he didn't have a shortage of clothes then why would he go shopping in the first place?
If somebody makes the effort to shop for themselves in the public sector...then clearly they believe that the potential benefit is worth the effort. They are responding to some incentive...based on some partial knowledge...generally in the terms of some shortage of a good that they value enough to sacrifice for. They see a bottleneck...they see the weakest link...and they make the effort to try and do something about it. This is why markets allow resources to flow where they create the most value.
For some reason you want to argue that congress knows the true preferences of 300+ million people when it comes to national defense, environmental protection and public healthcare...but not when it comes to asparagus, chicken and milk. That's absurd. That's really absurd. And economists know it's really absurd which is why many of them have endeavored to come up with preference revelation mechanisms that will accurately divine your true preferences for public goods. But if you had the option to shop for yourself in the public sector, then you would have absolutely no incentive not to try and maximize the benefit you derived from your contributions.
Let me try again to explain this to you. So here is my model: In this society, we have tax choice and only two government programs: Schools and the Military. Everyone is taxed $100 and they have to choose where to send that $100: the schools or the military. Now, everyone in this society is identical. Their preference ordering looks like this from best to worst:
Delete-I send my money to schools and everyone else sends their money to the military.
-Everyone sends their money to the military.
-Everyone sends their money to the schools.
-I send my money to the military and everyone else sends their money to schools.
So what happens? Well, look at the Nash. No matter what everyone else is doing, I am better off sending my money to the schools. So what is the final result? Well, the final result is that we all send our money to the schools. And yet, consider what is the outcome that would best reflect our policy preferences. The outcome which would reflect our policy preferences would be where we send all the money to the military.
That is the problem with Tax Choice. It aggregates our preferences for sending money. Not our policy preferences.
Great model, here were are disagreeing and your model assumes that 300+ million people are going to agree on how to spend their taxes in the public sector. Your model is VERY realistic.
Delete"Both Samuelson and Musgrave pointed out that the free-rider problem means there are difficulties in a Pareto optimum being attained: ‘no decentralized pricing system can serve to determine optimally these levels of collective consumption’ (Samuelson, 1954, p. 388) because ‘any one individual will find it profitable to understate his preference, knowing that this will have no significant effect on the total supply but result in a smaller assessment on himself‘ (Musgrave, 1959, p. 80)." - John McMillan, The Free-Rider Problem: A Survey.
Again and again, in a tax choice system, no matter how you spend your taxes...there will not be a "smaller assessment" on yourself. You're going to pay the same amount of taxes no matter what. So why understate your preferences?
Going back to models...how about you create a model where you assume an omnipotent, omniscient and benevolent government? Ah...good model...you win! Well...I mean...not in the real world but certainly in a world based on absurd models.
"Great model, here were are disagreeing and your model assumes that 300+ million people are going to agree on how to spend their taxes in the public sector. Your model is VERY realistic."
DeleteSigh... Everybody agrees in my model because it makes finding the Nash easier. If you want, go ahead. Expand the model to more heterogeneous agents and you will see that my basic point holds: Tax Choice allows for free riding because you the policy effects of your choices are extremely dispersed. As a result, Tax Choice does not give you an incentive to reveal your policy preference. I don't know how to put it any clearer than that.
"Again and again, in a tax choice system, no matter how you spend your taxes...there will not be a "smaller assessment" on yourself. You're going to pay the same amount of taxes no matter what. So why understate your preferences?"
Yes. I get it. Under Tax Choice, your choice does not impact your tax bill at all. You have to pay the same amount no matter where you allocate your dollars. I understood that from the beginning. That's never been in any way related to my point.
You seem to be confused by where the free-rider problem comes in. When looking at where I allocate those tax dollars, I have two potentially competing preferences. I want to see certain policy goals achieved. But I also want to like how I fill out the Tax Choice form. Maybe I want to show it to my friends and get their approval. Maybe I want to make a pretty picture when filling in the bubbles. Maybe I made a mistake and I don't want to go through the trouble of correcting my mistake. Whatever. Long story short, the policy goals I want to see achieved are not perfectly aligned with how I want to fill out my Tax Choice form.
Now, you come in and ask "why would you throw your tax dollars away?" Well, I'm not. So now I have to choose, do I fill out the form according to my policy preferences? Or do I fill it out such that my wife will like it? Well let's see. The cost of filling out the form according to my policy preferences is that I get yelled at by my wife. (my wife is actually quite nice and would never yell at me for that, I feel compel to clarify) The cost of filling out the form according to my wife's wishes is 0. That's right 0. Because the way I fill out the form does nothing of significance. But the aggregation of everyone doing this means your Tax Choice system is severely distorted. You don't get the policy preferences aggregated. You get the form-filling preferences aggregated.
I have two potentially competing preferences.
DeleteExcept, then you go on to list more than two...and then you seem to think that allowing people to choose how they divide their limited resources among numerous competing demands means that resources would not be efficiently allocated.
I linked you to my entry with all the opportunity cost passages...but obviously it wasn't a priority for you to actually read the passages. So I'll post a couple here for you...
"The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed." - James M. Buchanan
Which demands have priority? Is contributing to your wife's government organizations more important than contributing to your own? Is your wife's happiness more important than your own? How can your answer to that question not be relevant to determining how society's limited resources should be used?
"By preferring my work, simply by giving it my time, my attention, by preferring my activity as a citizen or as a professional philosopher, writing and speaking here in a public language, French in my case, I am perhaps fulfilling my duty. But I am sacrificing and betraying at every moment all my other obligations: my obligation to the other others whom I know or don’t know, the billions of my fellows (without mentioning the animals that are even more other others than my fellows), my fellows who are dying of starvation or sickness. I betray my fidelity or my obligations to other citizens, to those who don't speak my language and to whom I neither speak or respond, to each of those who listen or read, and to whom I neither respond nor address myself in the proper manner, that is, in a singular manner (this is for the so-called public space to which I sacrifice my so-called private space), thus also to those I love in private, my own, my family, my son, each of whom is the only son I sacrifice to the other, every one being sacrificed to every one else in this land of Moriah that is our habitat every second of every day." - Jacques Derrida
Preferences, demands, obligations, responsibilities, duties...we can't have our cake and eat it too. So Derrida has to make choices and his choices reveal what he's willing to sacrifice at that moment in time. His choices influence how society's limited resources are used.
If Derrida can't make a choice how his resources are used...if somebody makes that choice for him...then Derrida is removed from the equation that determines how society's limited resources are used. For some reason you think there's value in removing Derrida from the equation. You think we're better off if the supply of goods does not match Derrida's priorities.
Who cares what Derrida demands? Just supply him whatever you think is best! It surely doesn't matter if there's a significant disparity between supply and demand!
I give up for now. I might write a blog post about Tax Choice later. At least, you forced me to think about my point pretty thoroughly.
DeleteIt would certainly match my preferences if you wrote a blog post about tax choice. Basically I'm arguing that we would greatly benefit from giving taxpayers their freedom in the public sector. Most people don't think it's a great idea. Therefore, most people don't understand the value of freedom.
DeleteYou should check out these passages on the preference revelation problem.
For most Americans, guns are toys. Nothing more. Unless you are a hunter or spend a lot of time in the backwoods, gun ownership may be a good indicator of mental illness or predisposition to violence.
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