Trading values
Koen Smets
52

Lots of what you wrote so nicely is correct… but it’s important to recognize that the basic economic premise of government is that people’s voluntary sacrifice to the common good will be less than their valuation of the common good…

sacrifice < valuation

The amount of money that I spent on your story was less than my valuation of it. Well yeah. Of course. Why buy the cow when I can get the milk for free? Therefore, taxation isn’t voluntary… it’s compulsory.

So if you suspect that people will somehow voluntarily pay their valuation for common/collective/public goods… then you throw the basic economic premise of government under the bus. Which would make you an anarcho-capitalist.

Are you an anarcho-capitalist? I’m certainly not.

If you genuinely believe though, as I do, that people’s sacrifices should equal their valuations… then what you throw under the bus is the idea of representatives spending everybody’s taxes. Once that idea is thoroughly destroyed…. then the only logical conclusion is that people should have the freedom to choose where their taxes go.

If Medium charged us $1/month but allowed us to choose which stories we spend our pennies on… then the amount of pennies that I sacrifice to your story might as well accurately reveal/reflect/communicate my true valuation of your story….

sacrifice = valuation

What’s my valuation of your story based on? It’s largely based on my perception of your story’s relatively scarcity. Everyday I quickly scan the recent stories on Medium that are tagged with “economics”. Rarely do I find a story that’s based on the idea of people voting with their money.

The considerable amount of information in my brain leads me to believe that “dollar voting” is a very important topic. Your story is based on a very important topic that precious few other authors on Medium have written about.

If Medium implemented the pragmatarian model, then I would use my pennies to communicate to the world that there are too few stories based on the topic of dollar voting. Of course if I was the only one to spend my pennies on your story… then my sacrifice would create a relatively dim value signal and few people would see it… which means that few people would respond to it. So the more people who were willing to spend their pennies on your story… the brighter its value signal… and the quicker there would be an abundance of stories on the topic of dollar voting.

Here are the three logical and simple steps…

  1. Determine the importance of knowing people’s valuations. Can society somehow have an abundance of valuable things without actually knowing people’s valuations? Nope.
  2. If you accept the necessity of determining people’s valuations… then you need to figure out how, exactly, to do so. Surveys? Mind-reading? Spending/sacrificing? I’m pretty sure the last method is the correct answer.
  3. Next you need to decide whether there’s a difference between private and public goods. This isn’t a difficult step. You can benefit from public goods without having to pay for them. Therefore, contributions to public goods must be compulsory.

Once you’ve taken these three logical and simple steps… then you should arrive at the pragmatarian model. Unless I’m wrong. Which is entirely possible.

Really it boils down to knowing how much our behavior truly benefits others. If we don’t have this knowledge, then it’s a given that society is going to suffer from a shortage of beneficial behavior.