Pragmatarianism -- *The FINAL Thread* (A Refutation)
by, 04-13-2012 at 11:45 PM (3719 Views)
[QUOTE=helmuth_hubener;4355035]So, this has gone on long enough I suppose. I don't know that it's really worth my time to think about Pragmatarianism, much less argue against it, but Rothbard condescended to address Georgism, and am I better than he? So let's at last look closer at Pragmatarianism.
Pragmatarianism: A Closer Look
At least one element has been notably missing in the Pragmatarian's discussions of his proposal, and that is rigor. Careful, rigorous, line-upon-line thought, designed to get at the definite truth of things. That element which he has scorned I will undertake to embrace.
Our buddy Bastiat, has given us a key. He says the bad economist looks only at the obvious -- that which can be perceived immediately. Looks only at the first effects, ignores all further consequences.
Pragmatarianism is the proposal that taxpayers earmark their taxes to go to certain purposes. The taxpayer still must pay the same amount of taxes; that does not change. But he directs what programs the money is spent on (probably by filling out some sort of form) and his directions must be obeyed.
In this case, what is the obvious? Choice > non-choice. Inject choice into a situation and that will be better than the situation without choice. And that's as deep as the Pragmatarian ever cares to dig. Choice is good; choice is freedom. Non-choice is bad; non-choice is central-planning. Choice lets everyone take their own perspectives into account and weigh their opportunity costs and exercise consumer sovereignty and leverage decentralized knowledge and in short bring every economic buzzword the Pragmatarian knows of into action to create the most optimal and efficient outcome possible.
Are there any less obvious things to consider? Any secondary or tertiary effects? Any other considerations?
Let's go back and consider why choice is economically beneficial at all. What happens in a transaction on a free market? Party A meets with Party B and together they agree to swap goods because A values B's goods more than his own goods which he gives up for them, and B vice versa. We know that they are both better off, because if they were not they would not have made the swap in the first place, since the transaction is voluntary. Because both A and B have been left free to make whatever transactions they like, we know that whatever transactions take place are ones which improve the well-being of all involved. No one would intentionally and voluntarily choose to make a transaction which is detrimental to their interests, any more than they would choose to engage in any action detrimental to them. Thus, giving free choice free reign leads inevitably to economic benefit.
What is happening in a Pragmatarian transaction? We can immediately see several stark differences between a Pragmatarian transaction and a free market transaction as described above. In a free market transaction, the terms are guaranteed to be favorable to both parties, because the terms are completely open-ended -- they need not be anything in particular, because ultimately, the transaction need not even take place! If the transaction does take place, we know that it was favorable to both parties, for both parties have complete control over what they agree to, and a final unappealable veto over the whole business. Every factor is open to negotiation: the type of goods purchased, the number of goods, from whom one is purchasing them, the price paid for them, the reversibility and other terms of the exchange, etc. The Pragmatarian transaction is very different indeed.
In a Pragmatarian transaction, Party A is the taxpayer, Party B is the state.
Type of Goods Purchased
Party A determines what type of goods he is going to acquire (by earmarking his tax dollars to go to certain programs), and Party B has no say in the matter. Also, through legal tender laws requiring taxes to be paid in legal tender, Party B determines what type of goods he is going to acquire, and Party A has no say in that matter. This is in contrast to the free market transaction, wherein both parties mutually decide what type of goods will change hands. In a Pragmatarian transaction, both decide unilaterally what type of goods they want, and force the other party to provide it to them, whether they like it or not.
Number of Goods Purchased
While Party A, the taxpayer, determines via earmarking what type of goods he will purchase, he does not determine the quantity of those goods he will receive. That is determined unilaterally by Party B; Party A has no say in it. That is, "A" may say: I wish to put $1,000 of my taxes towards building a new road, but he cannot determine just how much road he is going to get for $1,000 -- that will be up to the State. He is not purchasing "twenty feet of road" as he would purchase twenty gallons of milk or 20 square feet of factory space; he is purchasing "as much road as $1,000 will get me," and just how much that is is left wholly up to the discretion of Party B. This is quite important, since the quantity of goods is usually a major factor in the decision-making processes of economic actors. While twenty pounds of butter for $5 may be a good deal, a teaspoon of butter for $5 may not be such an attractive offer, and the actor may choose to forgo the latter exchange while they would have jumped at the former. Removing quantities from consideration makes it a very different situation for calculation. Instead of "20 lbs. butter" or "1 tsp. butter," all that is available to the consumer is "butter," just "butter" -- take it or leave it. Pure, platonic butter, as a concept, not as finite units.
From Whom Goods are Purchased
In a Pragmatarian transaction Party A has no choice as to who will be his trading partner. In a free market transaction, even if one party seems to have a stronger bargaining position, to have the upper hand, so to speak, his power is mitigated by the fact that others can provide the good he is offering, and most often they are providing it at that very time. A is not bound to trade with B and only B, he can go to C instead. This introduces the factor of competition, a factor which famously plays a very large role in the market. Few would call a system without free competition a free market system.
So, in a Pragmatarian transaction, there is one vendor: the state. A will be making his purchase from B. That is the end of the story. That is how it will be. There is no C. Thus, B occupies an overwhelmingly and disproportionately strong position in the transaction. There are no alternative vendors, neither extant nor which could theoretically arise, to mitigate his power in the least. B has a coercively-maintained monopoly over the market. This transaction's lopsided power disparity means that its terms will likely not be very favorable to A, and will be very favorable to B. The powerful monopolist, B, is likely to benefit quite a bit from such a transaction, while the hamstrung and weak A is not likely to benefit very much, if at all.
Also because of this lack of choice in trading partners, the forces of free competition will be non-existent, forces which are so successful in driving forward innovation, efficiency, and progress of all kinds. The Pragmatarian will contest this, claiming that competition does exist, between the various agencies or divisions of the state. The road division will compete with the police division, each attempting to gain the consumer dollar. This is a contrived and very partial form of competition, though, and one without the power of true, full, and free competition. Free competition means first and foremost: free entry. In the artificial quasi-competition of Pragmatarianism, each division of the state is a monopoly kingdom, with absolute hegemony over its domain. No one else can come in and start offering to provide roads or police services. Such a new upstart would be bopped on the head and his venture razed to the ground. No, this is a kind of mercantilism, each division with a clearly defined and static domain, and that is its "turf," which it owns forever and no one can come in and compete with it on its "turf." This is a stagnant and artificial "market," and very much in contrast to the dynamic, open, ever-changing market of free entry and thus free competition.