The Libertarian Challenge
Jeremy Gardner

You’re expecting libertarians who theoretically pay taxes to also donate to charity. In other words, you’re expecting them to contribute more than their fair share to social welfare.

By far the best economic justification for government is the free-rider problem. Why buy the cow when you can get the milk for free? Is it greedy to not buy the cow when you can get the milk for free?

Ask any economist whether consumer surplus is a good thing. Chances are good that he’ll say that it is a good thing. Then ask him whether theft is a bad thing. Chances are good that he’ll say that it is a bad thing.

But what’s theft? Theft is when your allocation is a lot less than your valuation.

allocation < valuation

allocation = how much you pay/spend/sacrifice
valuation = your perception of relative scarcity

But what’s consumer surplus?

allocation < valuation

Intuitively we should understand that the problem with everybody stealing everything is that nobody would have any incentive to produce anything. Therefore… what truly matters is the incentive to produce. And if the incentive to produce is what truly matters… then clearly any economist who thinks that consumer surplus is a good thing really hasn’t thought things through.

Same thing with any anarcho-capitalists who worship the NAP. They don’t understand that the NAP is only good to the extent that it’s an argument against theft… but theft is only a problem because incentives matter. And since incentives matter… the issue is that it’s a problem when people’s allocations are less than their valuations… which is certainly an argument for taxation. But it’s also an argument against elected representatives deciding how our taxes are spent.

Therefore… I’m no longer a libertarian… now I’m a pragmatarian.

Am I going to donate money to your crowdfunding campaign? Probably not. Because not only am I a pragmatarian… but I’m also a coasian. Coasianism is all about replacing voting with spending.

Chances are good that Unsung isn’t a democracy…

We are biased toward the democratic/republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups. It is more tyrant than mob because it should be. In some sense, startups can’t be democracies because none are. None are because it doesn’t work. If you try to submit everything to voting processes when you’re trying to do something new, you end up with bad, lowest common denominator type results. — Peter Thiel, Girard in Silicon Valley

I’m not a big fan of dictatorships. I don’t like the idea of a captain making decisions for all the passengers.

What if your startup implemented coasianism? If a big decision needed to be made… each person would secretly indicate how much they were willing to spend on their preferred option. The amounts would be added and whichever option was the most valuable would be chosen. The people who supported the chosen option would then have to pay up. The people who did not support the chosen option would not have to pay anything. Instead, they’d get all the money spent on the chosen option. The amount of money they received would be in proportion to their willingness to pay.

It should be pretty obvious that this decision making process would utilize/harness far more information/brainpower than a dictatorship or democracy would. However, the only people in the entire world who are using this system to make decisions are 30 fourth graders.

When I was 24 would I have appreciated coasianism? When I was 24… I think that I was studying International Development at UCLA. I’m pretty sure that I would have been very intrigued by the concept of spending rather than voting. It was around that time that I started wondering what would happen if the Invisible Hand was in the public sector.

You said that the Invisible Hand is about self-interest… but it’s really about communication…

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

The Invisible Hand is a feedback loop. The more accurate the feedback… the more beneficial the behavior.

Today’s Mandeville is the renowned biologist Thomas D. Seeley, who was part of a team which discovered that colonies of honey bees look for new pollen sources to harvest by sending out scouts who search for the most attractive places. When the scouts return to the hive, they perform complicated dances in front of their comrades. The duration and intensity of these dances vary: bees who have found more attractive sources of pollen dance longer and more excitedly to signal the value of their location. The other bees will fly to the locations that are signified as most attractive and then return and do their own dances if they concur. Eventually a consensus is reached, and the colony concentrates on the new food source. — Rory Sutherland and Glen Weyl, Humans are doing democracy wrong. Bees are doing it right

Bees sacrifice their calories to communicate the intensity of their preferences. Humans sacrifice their cash to communicate the intensity of their preferences. When they don’t, it’s a given that limited resources will be put to less valuable uses.

God, what I’d give to be able to download all my information into the brain of my 24 year old self.