In a pragmatarian system, “concentrated benefits and dispersed costs” will be logically impossible. With the current system… corn farmers have the ability to reach into my pocket. In a pragmatarian system… corn farmers will not have this ability. If they want my money then they will have to do a really good job of persuading me to give it to them.
Creating a market in the public sector would entirely eliminate “legal plunder”.
Would corn farmers have the ability to put their own tax dollars back into their own pockets? It depends on how many other people would choose to put their own tax dollars into the pockets of corn farmers. If corn farmers are the only people who would choose to put tax dollars into their pockets… then this will be painfully obvious…
Economic demand has a shape. If we created a market in the public sector… then we would easily be able to see the shape of the demand for every single item on the “menu”. And if the shape of the demand for an item is too narrow/skinny… then the item will be removed from the menu.
In other words, if we implement pragmatarianism, and too few people spend their tax dollars on corn subsidies… then we will be able to clearly see that the shape of the demand for corn subsidies is too skinny… and corn subsidies will be removed from the menu and corn farmers will no longer have the ability to put their own tax dollars back into their own pockets. Instead, corn farmers will be required to put their tax dollars into other people’s pockets. But of course they will be able to choose whose pockets they put their tax dollars into.
For the sake of comparison here’s what the shape of the demand for public healthcare might look like…
The shape of the demand for healthcare is not skinny. It’s fat.
Imagine a small town with one doctor, one sheriff, one teacher and one mayor. There are 300 people in this town and they all have to pay taxes. On April 15 everybody goes to the town square and gets to decide for themselves how many of their own hard-earned tax dollars they put into the doctor’s pocket, the sheriff’s pocket, the teacher’s pocket and the mayor’s pocket. If lots of people choose to put lots of their tax dollars into the doctor’s pocket… and few people choose to put few of their tax dollars into the mayor’s pocket… then… in terms of public service… the doctor will have a lot more legitimacy than the mayor. Either the mayor will be replaced… or his position will be eliminated. And would it be problematic if the doctor put his tax dollars into his own pocket? I don’t see the problem. And I doubt that the townsfolk would see the problem either.
Of course the logistics in this small town system wouldn’t be very practical for a country with 300 million people. If we created a market in the public sector…. then taxpayers would be free to shop in the public sector whenever they wanted. Rather than give their tax dollars to the IRS… they would give their tax dollars directly to the government organizations that match their preferences. The general concept is exactly the same. We’d still be able to see and compare the demand shapes for the various items on the menu.
Would it be meaningful if lots of taxpayers spend lots of taxes on healthcare? Of course. The more money that doctors, nurses, technicians and researchers get paid…. the greater the incentive that students would have to choose these careers. Logically, as more and more people choose the healthcare profession… the supply of healthcare would increase and increase. Eventually, taxpayers would allocate less and less tax dollars to healthcare. As far as careers in healthcare go… the green light would turn into a yellow light and then a red light.
It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations
Markets are all about communication. We spend our money to communicate with each other. So creating a market in the public sector would simply facilitate communication about public goods.
We can apply the same concept to Netflix. A market could be created in Netflix simply by giving subscribers the option to allocate their fees to the content that matches their preferences. If you love sci-fi content… then you’d allocate your fees accordingly. Would subscribers benefit from their ability to use their fees to communicate the intensity of their preferences? Of course. Unless you want to believe that Netflix “planners” are somehow omniscient or superior…
Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority. — Bastiat