Markets vs. Committee

Box office receipts tell us which movies the public, in general, preferred.  The Oscars tells us which movies a small group of people preferred.

As people who follow the Oscar’s each year should know, these two sets of preferences don’t often line up.

When we hand over large swaths of our markets to committees, we may satisfy the preferences of the committees, but not the everyone else.

Imagine a world where only the Oscar-worthy movies were made.  Consider which of your favorite movies wouldn’t exist.

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24 thoughts on “Markets vs. Committee

    • Sure. Only that’s analogous to the Academy of Motion Pictures drafting a pledge to not interfere with or dictate which films to make. What’s wrong with that?

        • I’m not asking you what the ‘proper’ scope of government is. I’m asking, what scope of government do you think IS embedded in the Constitution?

          The reason I ask is because I think you are oversimplifying to fit your mental model. You are asking how a committee can know the proper role of government better than the invisible hand.

          Either you don’t realize or you don’t want want to acknowledge that the purpose of the Constitution is to preserve and protect the invisible hand.

          In your link, Eric Evans asks you a question that I’ve asked you before. I don’t believe you answered me and I don’t believe you answered him. “Why be taxed at all then?” Can you answer that question in one or two sentences?

          • That you’re asking me why we should be taxed at all leads me to believe that you’re still not following my argument. If I don’t know what the proper scope of government is…then how could I possibly know that forcing people to pay taxes is not within the proper scope of government?

            A committee of government planners wrote the constitution to preserve and protect the invisible hand…from…future government planners? If they really wanted to preserve and protect the invisible hand then why wasn’t the constitution just a second magna carta? Meaning…why didn’t they just pass the power of the purse to taxpayers?

            Actually, the problem was that the states were not paying off the revolutionary war debts…therefore, there was a free-rider problem that the government committee that wrote the constitution failed to foresee. So government planners then forced taxpayers to pay taxes in order to help pay off the revolutionary war debts…and pay for the post office…and probably a couple of other things.

            Now how many things fall within the scope of government? And your solution is to follow the constitution? Which one? The one that failed to foresee the free-rider problem or one of the subsequent revisions that followed? in other words…which constitution is the one that you believe actually reflects the proper scope of government? Which of course leads us back to my original question of how a government committee could possibly know the proper scope of government.

        • I’m not following your argument. Help me out. I’m dumb. I need you to give me short and simple answers to these questions.

          1) Why have taxes at all?
          2) Under you system, how would tax rates be determined?

          • 1) Part of the point of tax choice is to determine if there is a free-rider problem.
            2) We can’t know the tax rate without knowing the proper scope of government. Part of the point of tax choice is to determine the proper scope of government.

            If the private sector is better at providing A, B, and C then why would any taxpayers allocate their taxes to the public provision of A, B and C? In other words, if the private sector provides subway sandwiches…then why would any taxpayers allocate their own, hard-earned money to pay for the public provision of turd sandwiches?

            Here’s how simple it is. What should the government do? The government should do what we pay it to do…no more and no less.

        • See if I have this straight. Taxpayers decide how much and to which government agencies they are going to give? By doing so, they’ve established the scope of government? They can decide to not pay any of these “government programs”?

          If that’s correct, in essence government doesn’t exist. It’s just a name you’re giving to some private market activities, no?

          • You have the first part right…”Taxpayers decide how much and to which government agencies they are going to give? By doing so, they’ve established the scope of government?”

            This second part is pure conjecture…”They can decide to not pay any of these “government programs”?” Here are the only situations in which taxpayers can decide not to pay any government programs…

            A) taxpayers boycott the IRS out of existence
            B) the IRS decides to rely solely on non-coercive methods to encourage people to pay taxes

    • Well…congress would still be, for all intents and purposes, responsible for setting the tax rate and the IRS would be responsible for tax collection.

      Here’s an example for us to consider. Let’s say that you really value national defense and the tax rate is 20%. What do you do if you allocate all of your taxes to national defense but you still feel that the military is underfunded? Well…nobody would stop you from just giving more money to the military. Nobody would stop you from writing blog post after blog post encouraging others to do the same. Nobody would stop you from pressuring congress to increase the tax rate.

      But if I’m a pacifist….does it matter to me if you manage to convince congress to raise the tax rate to 50%? Even if the tax rate was 100% I still wouldn’t give any of my taxes to the military. I’d just give more money to the EPA, public healthcare, etc.

      So by encouraging congress to raise taxes you’re only forcing people to allocate more of their money to the government organizations that they already value. But at a certain point…people are going to say…jeez…all the government organizations that I value are adequately funded. These people are going to put pressure on congress to lower the tax rate.

      Therefore, the more that government does…the greater the pressure there will be on congress to increase the tax rate. The less that government does…the greater the pressure there will be on congress to decrease the tax rate. Who determines what the government does? Taxpayers.

      • Thanks. That’s the part of your plan that has been murky to me. It wasn’t clear to me how tax rates were going to be set. It took much too long to get here though.

        I do think your scheme has some instructive value in this regard. Many folks are quick to want to raise taxes on others to “reduce the deficit”. It’s easy to avoid making tough spending choices when it’s other people money.

        Imagining a world where you could only have a say on the spending that you pay in may make people focus a bit more on those hard choices of cutting spending. They will also scream because they so desperately want to say in how to spend other peoples’ money. I believe the underlying assumption in their mind is that “what’s mine is mine and what’s your’s is ours'”.

        • Yeah, I agree it took way too long to get here. That’s my fault. But…it’s not like there’s anybody else who has explained it before…so I can’t just link you to the best article on the subject. If you get a chance you should do create a post and try and explain the concept better than I have. It shouldn’t be too difficult 😀

          A very important objective of pragmatarianism…aka tax choice…is to force people to consider whether the supply of a public good should ever be greater than the demand for that public good.

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