“To suggest that people actively signaling their interest is not “in any meaningful sense” revelatory of people’s values is to be willfully ignorant and willfully dismissive of active signaling in a marketplace.”
Here’s why taxation is compulsory…
But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. — Paul Samuelson, The Pure Theory of Public Expenditure
Let’s say that you ask me how much I value a story of yours. Will my answer determine how much money I spend on your story? If so, then I’ll have an incentive to pretend that I value your story less than I truly do. If not, then I’ll have an incentive to pretend that I value your story more than I truly do.
It’s important to appreciate that the premise here is that false signals are bad… which means that true signals are good…
Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his “true” preferences for public goods. — James M. Buchanan, The Economics of Earmarked Taxes
Let’s say that I subscribe to Medium but I can “earmark” my fees to my favorite stories. If you ask me how much I value a story of yours… then there’s no point in pretending that I value your story less than I truly do. If my true valuation of your story is $3 dollars but I pretend that my valuation is $1 dollar… it’s not like I can take the $2 dollars that I “saved” and spend it on groceries. All I can do is spend it on stories that I value less than yours. Which I would have absolutely no incentive to do.
Ok, so there you go. Two papers written by Nobel economists about the importance of accurate signals in the marketplace.
Do you perceive that this is simply more “pretentious” references to actual economists? Or do you see the relevance to my argument?
Let me reiterate my argument. Subscribers should…
- have the option to spend their fees on their favorite stories
- be able to see exactly how much money has been spent on a story
- have the option to sort stories by their value