Public vs Private System of Representation

We have two completely different systems of representation...private and public. Which system is better?

Elena uses society's limited resources to make an excellent Greek Salad. I give her my dollar votes because she represents my interest in good food. Elena is my representative...I value how she uses society's limited resources so I give her positive feedback.

Elizabeth Warren is also my representative. I didn't vote for her though. Why bother voting? I'm supposed to vote for somebody who represents all my public interests? If this makes any sense why don't I also vote for somebody who represents all my private interests?

With the private system of representation...I have a robust repertoire of representatives. Everybody I give my money to is my representative. And I give my money to a lot of different people because I have a lot of different interests. If I could replace all these representatives with a couple of people...then I could save all the time that I spend shopping.

But there's a problem with trying to find one person to represent all my interests...nobody comes even close. So if I did give all my money to one person...I'd be really worse off. My interests would suffer incredibly. Especially if this one person also had to represent the interests of 100,000 other people. My interests would be lost like tears in rain. Chances are that my Greek Salad would be replaced with a hamburger...without pickles, jalapenos, onions, lettuce or tomatoes. Elena would be flipping generic burgers instead of doing something that she really loves. So if the public system can't adequately represent our interest in food...then why do you think it can adequately represent our interest in anything?

All of you who share my interest in economics...for goodness sake! Choose you this day whom you will serve. Use some brain grease to compare both systems of representation and ask yourself which one provides better coverage. You're not thinking hard enough if you don't grasp how tax choice would far better protect our interests.

You are on the right track, but you're missing a pretty big part of this picture. Regardless of how much money you earn in a particular period of time, you are not required to spend a single penny in the private market. If you have the desire, you can become completely self-sufficient and not have a need to become involved at all in commercial trade with others. Granted, this is highly unlikely for all but a miniscule minority, but the capacity itself exists and is real.

Contrast this to any theory of public choice short of anarchy. Even if you do not have the need or desire for any particular public goods, you are still required to "purchase" an established amount. It would certainly be more efficient if you could choose which public goods your money went towards, but it would do absolutely nothing with regards to the fact that your payment is still coerced.

TNAR, what you're referring to is the concept of "exit". There's also "voice" and "entry". Some passages...

"It’s the threat of exit that makes people listen." - Alex Tabarrok, The Tragedy of Jonathan Kozol

"But in the case of PGs they may not have an avenue for criticism nor a feasible exit opportunity. They may be compelled to consume a particular good. Therefore, it is important to ascertain whether a good’s publicness in form goes hand in hand with publicness in substance – actual enjoyment of the good by all." - Inge Kaul Public Goods: Taking the Concept to the 21st Century

"Society can and does execute its own mandates; and if it issues wrong mandates instead of right, or any mandates at all in things with which it ought not to meddle, it practices a social tyranny more formidable than many kinds of political oppression, since, though not usually upheld by such extreme penalties, it leaves fewer means of escape, penetrating much more deeply into the details of life, and enslaving the soul itself." - J.S. Mill, On liberty

"What do we want with a Socialist then, who, under pretence of organizing for us, comes despotically to break up our voluntary arrangements, to check the division of labour, to substitute isolated efforts for combined ones, and to send civilization back? Is association, as I describe it here, in itself less association, because every one enters and leaves it freely, chooses his place in it, judges and bargains for himself on his own responsibility, and brings with him the spring and warrant of personal interest? That it may deserve this name, is it necessary that a pretended reformer should come and impose upon us his plan and his will, and as it were, to concentrate mankind in himself?" - Frédéric Bastiat

"Capitalism is the best. It's free enterprise. Barter. Gimbels, if I get really rank with the clerk, 'Well I don't like this', how I can resolve it? If it really gets ridiculous, I go, 'Frig it, man, I walk.' What can this guy do at Gimbels, even if he was the president of Gimbels? He can always reject me from that store, but I can always go to Macy's. He can't really hurt me. Communism is like one big phone company. Government control, man. And if I get too rank with that phone company, where can I go? I'll end up like a schmuck with a dixie cup on a thread." - Lenny Bruce

"The second broad principle is that government power must be dispersed. If government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does, be it in sewage disposal, or zoning, or schools, I can move to another local community, and though few may take this step, the mere possibility acts as a check. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations." - Milton Friedman, Capitalism and freedom

Now, this might be a bit nitpicky...but there's a glitch in your argument. In a pragmatarian system...nothing would stop you from living off the grid and becoming entirely self-sufficient. If you want to follow in Dick Proenneke's footsteps...then power to you. But here's the thing...if you're not making any money then you don't have to pay any taxes. So your argument, in the case of somebody who is entirely self-sufficient, is completely a non-starter.

If you don't make any money, you don't have to pay any taxes. Honestly I'm a bit surprised that you didn't catch this.

It's nitpicky though in the sense that if somebody does make money...then your logic isn't that faulty. But it's shortsighted.

If you make money...then you'll have to spend your taxes in the public sector even if there aren't any public goods that match your preferences. How many people would this apply to? If it applied to enough people, then it would be easy enough to set up public savings accounts. Keep your money in there until your circumstances or preferences change...and/or a new public good is supplied that does match your preferences.

It's shortsighted to perceive that the supply of public goods wouldn't change if we created a market in the public sector.

Think about how this forum works. You visit this forum and look through the topics. If you see a topic that matches your preferences...you reply to it. If you don't find any topics that match your preferences...you can start a new topic. Doing so will give other members a new option.

If we created a market in the public sector...I think it's a given that taxpayers as consumers are going to want a larger variety of better options. This will incentivize producers to come up with new and better options. The producers who do provide better options will receive more funding. That's the incentive for paying attention to the preferences of consumers. It's a process of discovering what others have missed...or overlooked.

We already taking a step in this direction with civic crowdfunding.

If taxpayers can shop for themselves in the public sector...the supply of public goods is going to conform to their preferences/circumstances. Why? Because the taxpayers will have the money in their hands. If a new and better option comes along...nothing will stop them from spending their money on this new option. It's for this reason that we can guarantee a far better rate of progress in a pragmatarian system.

Xerographica said:

We have two completely different systems of representation...private and public. Which system is better?

Elena uses society's limited resources to make an excellent Greek Salad. I give her my dollar votes because she represents my interest in good food. Elena is my representative...I value how she uses society's limited resources so I give her positive feedback.

Elizabeth Warren is also my representative. I didn't vote for her though. Why bother voting? I'm supposed to vote for somebody who represents all my public interests? If this makes any sense why don't I also vote for somebody who represents all my private interests?

With the private system of representation...I have a robust repertoire of representatives. Everybody I give my money to is my representative. And I give my money to a lot of different people because I have a lot of different interests. If I could replace all these representatives with a couple of people...then I could save all the time that I spend shopping.

But there's a problem with trying to find one person to represent all my interests...nobody comes even close. So if I did give all my money to one person...I'd be really worse off. My interests would suffer incredibly. Especially if this one person also had to represent the interests of 100,000 other people. My interests would be lost like tears in rain. Chances are that my Greek Salad would be replaced with a hamburger...without pickles, jalapenos, onions, lettuce or tomatoes. Elena would be flipping generic burgers instead of doing something that she really loves. So if the public system can't adequately represent our interest in food...then why do you think it can adequately represent our interest in anything?

All of you who share my interest in economics...for goodness sake! Choose you this day whom you will serve. Use some brain grease to compare both systems of representation and ask yourself which one provides better coverage. You're not thinking hard enough if you don't grasp how tax choice would far better protect our interests.

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Jesus Christ .... the reason is Elizabeth Warren is not a personal commodity, she's a representative to make Public policy .... you buying Greek Salad doesn't mean everyone has to buy Greek salad. If Elizabeth Warren was perchased instead of voted for, you'd have plutocracy, i.e. the Rich making Public policy.

It isn't the Public systems JOB to figure out what kind of Food we like, nor is it anyones jobs, it isn't Elenas Job either, she makes Greek Salad, if you like it you go to her restaurant, if you don't you go somewhere else, she isn't figuring out Your best interest, you are going to her restaurant.

Now lets say we make the Public policy system, or Public instittuion system work like a restaurant .... then no greek salad for you, hell, not even if 80% of the People in Your area like greek Salad, as long as the richest People prefer hamburgers, it's gonna be hamburgers.

You're totally confused here, as alwasy, Your analogy doesn't work, a personal commodity is not the same as Public policy or Public institutions.

Xerographica said:

If you don't make any money, you don't have to pay any taxes. Honestly I'm a bit surprised that you didn't catch this.

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I was using the polar extreme as an example of why your concept is untenable. As I suggested, except for a tiny minority of the population, it is unlikely that anyone would live completely self-sufficiently. Trade is the driving factor behind progress and a high quality of living. So those who wish to venture beyond self-sufficiency suddenly find themselves saddled with taxes and regulatory burdens which they never agreed to. So whether you are “allowed” to set up some sort of savings account or forced to remit taxes within existing choices, the coercive extraction of wealth still exists. Choosing which goods a thief spends your money on does not change the fact that you’ve been robbed.

TNAR said:

I was using the polar extreme as an example of why your concept is untenable. As I suggested, except for a tiny minority of the population, it is unlikely that anyone would live completely self-sufficiently. Trade is the driving factor behind progress and a high quality of living. So those who wish to venture beyond self-sufficiency suddenly find themselves saddled with taxes and regulatory burdens which they never agreed to. So whether you are “allowed” to set up some sort of savings account or forced to remit taxes within existing choices, the coercive extraction of wealth still exists. Choosing which goods a thief spends your money on does not change the fact that you’ve been robbed.

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Again, you're really not thinking things through. In a pragmatarian system...who robbed you and why? Be specific. Was it the IRS? Did they rob you? Did they rob you voluntarily? Or did they get paid to rob you? If they got paid to rob you...then who paid them? Your neighbor perhaps? Why does your neighbor want to rob you? Why is your neighbor willing to PAY somebody to rob you? Why is your neighbor willing to PAY somebody to rob him as well? Wouldn't that be crazy?

If you want to argue that people are insane...then what's getting rid of the government going to solve? LOL. If there's a demand for coercion...then getting rid of the government will simply create a vacuum...and nature abhors a vacuum.

First we implement tax choice...and then we'll see whether you can argue that people are crazy. Well...unless you want to argue that you're omniscient...and you know exactly how people will spend their tax dollars when given the opportunity. Is that what you want to argue?

Xerographica said:

In a pragmatarian system...who robbed you and why? Be specific. Was it the IRS? Did they rob you? Did they rob you voluntarily? Or did they get paid to rob you? If they got paid to rob you...then who paid them? Your neighbor perhaps? Why does your neighbor want to rob you? Why is your neighbor willing to PAY somebody to rob you? Why is your neighbor willing to PAY somebody to rob him as well? Wouldn't that be crazy?

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Whatever the justifications of robbery, theft is still theft whether the act is undertaken by a single individual or a million. Within the framework of the American political system, it is businesses and the IRS which rob individuals (focusing solely on the federal level). Both entities collect taxes on behalf of the federal government. The collection of taxes is properly considered theft because these taxes are not voluntarily remitted.

The fact that a large portion of the American public allows themselves to be robbed in no way suggests that they support the robbery itself. In the current system, if a person is opposed to certain functions of the government he has no method of redress. Theoretically he has the ability to select those policies he supports by voting for candidates which concur with his ideals, but this is a fallacious concept. Even assuming a candidate acted strictly within his claimed platform, it is impossible for each individual to be represented in their myriad views by a single representative. This would be akin to voting for a single representative to select the groceries, television channels, clothing, household decorations, and transportation modes for a large region. No sane person would suggest that this is possible.

I presume this lack of representation is why you support your “pragmatarian” systems of taxation. As I suggested earlier, this would certainly have the effect of more accurately depicting citizen’s desires than the current system. However, it would do nothing to address the underlying philosophical issue of self-governance.

Let us assume your hypothetical world came into existence. Furthermore, let us suppose that fully 50% of the population chose not to allocate their tax payments to a single government entity. Under the concept of your system, what does this suggest? Does half of the population abhor government entirely or do they simply disagree with all current manifestations? Does it matter? What if it was only 25% of the population; must the minority submit to the will of the majority? Regardless of which portion of the population desires a central government to intercede in their lives, how can one justify the despotic control over those who desire freedom?

The fact is, whether a person is required to remit 50% or 5% of his income to fund the government, this payment is coerced and cannot be construed as voluntary compliance or implicit consent for said government. If a service is truly valuable for a person he will voluntarily pay for its benefit. Taxes are necessary to pay for government largesse, corruption, and enslavement of the populace.

TNAR, what if 50% of taxpayers didn't value any option in the public sector? You're looking at it all wrong. I can guarantee that 100% of taxpayers are going to want better options in the public sector...just like 100% of consumers want better options in the private sector. Who doesn't want better options?

So consider the factors...

1. 100% of taxpayers will want better options

2. taxpayers will be able to choose how they spend their taxes

3. 100% of government organizations are going to want more revenue

What do you get when you put these three things together? What is the result? Do we end up with fewer options? Does the variety of options decrease?

Once we implement pragmatarianism...the government will be like putty in the hands of taxpayers. Why? Because taxpayers will incentivize government organizations to do better things with society's limited resources.

Right now you're attacking pragmatarianism by describing the supply of public goods on the first day of pragmatarianism. This is why I said that your view is shortsighted. You have to understand and look at the market process over time. What happens to the supply of goods over time?

It shouldn't be that difficult to predict the general result. This is because there have been several instances where countries have transitioned from command economies to mixed economies. What happened when they created markets in their countries?

In 1978 when Deng Xiaoping created a market in China...how would you have described the supply of goods on the very first day? Would you say it was optimal? Would you say that there was a wide variety of goods to choose from? Of course not...it was only the first day. So would you point to the variety, quality and quantity of goods on the first day to criticize the decision to create a market in China? Of course not...yet that's exactly what you're doing here.

"Oh, pragmatarianism isn't that great because 50% of taxpayers wouldn't find any public goods that they wanted to spend their taxes on." You're going to blame the crappy supply of public goods on pragmatarianism? Really?

A crappy supply of public goods is the logical consequence of allowing 500 people to choose how an entire country's taxes are spent. A small variety and quantity of poor quality goods is the logical consequence of command economies. Yet this is what you are using as an argument AGAINST creating a market in the public sector.

You're using the symptom of the disease to argue against the cure.

When we create a market in the public sector...the supply of public goods won't perfectly match taxpayers' preferences the next day...or the next week...or the next year. But the trend in the supply of public goods will be towards the preferences of taxpayers. How could it not be when they are the ones choosing how to spend their taxes?

Why spend your taxes on public craps when you could spend your taxes on public oks? Why spend your taxes on public oks when you can spend your taxes on public goods? Why spend your taxes on public goods when you can spend your taxes on public greats? Why spend your taxes on public greats when you can spend your taxes on public awesomes?

We won't have public awesomes on the first day that pragmatarianism is implemented. Yes, this is true. But if we don't implement pragmatarianism then we'll never have public awesomes.

Xerographica said:

So consider the factors...

1. 100% of taxpayers will want better options
2. taxpayers will be able to choose how they spend their taxes
3. 100% of government organizations are going to want more revenue

What do you get when you put these three things together? What is the result? Do we end up with fewer options? Does the variety of options decrease?

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Joe Citizen has an income of $30,000. Joe has the following order of preference for goods:

1) Food
2) House improvements
3) Vacation
4) Swimming pool
5) Government services

Unfortunately, he only has enough money to purchase items one through three with a little left over to save towards number four. Being forced to pay taxes, regardless of the ability to choose which agencies it goes towards, skews his personal preference for goods. Now instead of being able to afford items one through three, he must move item five to the top and now can only afford items one, two, and five. The new coerced list is as follows:

1) Government services
2) Food
3) House improvements
4) Vacation
5) Swimming pool

He is worse off because of mandatory expenditure of funds to areas which he does not value as highly as others. What you are suggesting we do is break item one into subsections. While this would certainly create more efficient and effective services in many cases, it does nothing to address the fact that coerced payments artificially skew individual orders of preference.

Xerographica said:

Right now you're attacking pragmatarianism by describing the supply of public goods on the first day of pragmatarianism. This is why I said that your view is shortsighted. You have to understand and look at the market process over time. What happens to the supply of goods over time?

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Let us look at it from this perspective then. Suppose Joe Citizen must allocate his $10,000 tax bill at the beginning of the fiscal year and he decides that the following is his order of preference for generic goods:

1) Stable legal environment
2) Sound economic policy
3) Safe neighborhood
4) Dependable power supply
5) Cheap energy

How can he convert these desires into government payments? Perhaps he doesn’t like the public court system and prefers arbitration. How can he affect this change by simply withholding money? How can he make it known that monopolistic money supplies and banking institutions are not desirable to him?

In other words, if he must check a box next to the agency and fill in a number, how are his choices manifested? Without competition, it is not possible. If, on the other hand, you suggested that his tax payment could go to competing private companies providing similar services, then I would be all for this plan.

TNAR said:

How can he make it known that monopolistic money supplies and banking institutions are not desirable to him?

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It's called "tax choice". If Joe isn't a fan of fiat money then he simply wouldn't give any taxes to the Dept of Treasury.

So you tell me exactly how much money the Dept of Treasury would receive if taxpayers could choose where their taxes go. Let me guess...you don't know the amount. Well...you aren't the only one. Nobody knows what the actual demand for public goods truly is.

Again, nobody knows what the actual demand for public goods truly is. Do you think it matters that we don't know what the demand for war truly is? Maybe? Perhaps?

And do I really need to explain to you how new options are created? I guess. Basically it's this thing called "alertness"...and "insight" and "foresight"...

An entrepreneur sees what others have overlooked. With enough eyeballs...all bugs are shallow. Markets work because there are a lot of eyeballs. So when we create a market in the public sector...any unmet demand for public goods will be met sooner rather than later.

Xerographica said:

If Joe isn't a fan of fiat money then he simply wouldn't give any taxes to the Dept of Treasury.

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What if Joe isn't a fan of any government services? Is he still required to pay taxes? If so, he still has no choice and is hampered by the system. If not, then why have a government at all?

TNAR said:

Joe Citizen has an income of $30,000. Joe has the following order of preference for goods:

1) Food
2) House improvements
3) Vacation
4) Swimming pool
5) Government services

Unfortunately, he only has enough money to purchase items one through three with a little left over to save towards number four. Being forced to pay taxes, regardless of the ability to choose which agencies it goes towards, skews his personal preference for goods. Now instead of being able to afford items one through three, he must move item five to the top and now can only afford items one, two, and five. The new coerced list is as follows:

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Except that a person that makes 30k without having the taxes off the top would bring in about 35-40 k in the year, especially if the employer side tax on your income was going to the employee directly.

Also , this person might only opt to use road service, emergency serice access, and school service for his / her kids... so the tax bill for this person would be much lower allowing them to buy more from the list of desired items.

1) Stable legal environment
2) Sound economic policy
3) Safe neighborhood
4) Dependable power supply
5) Cheap energy

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Stable legal environment is a requirement on the social contract, but the tax element would be funded through lawsuits, and fines paid.

Sound policy, our current system does not guarantee sound economic policy.

Safe streets could even be achieved without a dedicated police... but fines make police services a self funding group... If not what I pointed out earlier, that people opt into emergency services.

Power grids can be both public or private... electric utilities operate as a private company, they only make money by keeping the grid stable.

Finally, it's not a task of government to provide CHEAP energy.

How can he convert these desires into government payments? Perhaps he doesn’t like the public court system and prefers arbitration. How can he affect this change by simply withholding money? How can he make it known that monopolistic money supplies and banking institutions are not desirable to him?

In other words, if he must check a box next to the agency and fill in a number, how are his choices manifested? Without competition, it is not possible. If, on the other hand, you suggested that his tax payment could go to competing private companies providing similar services, then I would be all for this plan.

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Don't get me wrong, this type of fascistic system would generate an absolute hell of a system.

I would support a means of introducing competition into government services, for example having competing DMV's would reduce costs and improve efficiency.
It would be easy to get carried away with this though.

BmanMcfly said:

Except that a person that makes 30k without having the taxes off the top would bring in about 35-40 k in the year, especially if the employer side tax on your income was going to the employee directly.

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This was essentially my argument. It appears to me that Xerographica is arguing for choice of where tax money should be allocated, not choice in how much taxes to pay. A tax payment of 10% on income is still the coerced remittance of 10% to the government, regardless of being able to choose which part of the government to give it to. Granted, this would be better than the current system (as I suggested earlier), but it does nothing to address the underlying problems with coerced government taxation in the first place. It is the coerced nature of the payment coupled with the monopolistic capacity of the agencies which is at fault with governments the world over.