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Thread: Xero and Douglas: The Invisible Hand

  1. #1

    Default Xero and Douglas: The Invisible Hand

    Quote Originally Posted by Steven Douglas View Post
    In its simplest form, my logically positive assertion that an economy -- a free market -- does not, nor did it ever, require taxes from human individual Citizens to exist, is true on its face. There is nothing to disagree with on economic grounds (economics can entertain anything at all, giving answers that are strictly economic), so any exception you might take to that must be on moral grounds -- just as your proposal is.
    Having lived in numerous developing countries...I don't think "existing"/"surviving" is really what people are aiming for. If a seed from a coniferous trees falls on a rocky ledge...it might survive as a bonsai for a 1000 years...but nobody would argue that it's really thriving.

    For the most part, we generally do not debate what a tree needs to thrive. But we certainly do debate...vigorously...what humanity needs to thrive. We no longer debate what we need to survive and exist. We have that down pat...given that around 90% of human history consists of hunting and gathering.

    When we transitioned from hunting and gathering to agriculture...we learned that some people have green thumbs. This lead to a division of labor which led to the development of cities. That's when we started to make progress. And ever since then there has always been some form of taxation. People have always given some form of tribute or offerings to their leaders.

    If you argue that we don't need taxes to thrive...then there has to be some economic explanation for this. Same thing if you want to argue that we will thrive even more if we get rid of taxes. (honestly...I'm still a bit unclear on whether you're saying that we should get rid of the government...or whether you're saying that funding it should be completely voluntary.)

    From my perspective...whether we survive or thrive has everything to do with giving people the freedom to apply their unique perspective to their limited resources. This was the point of Bastiat's Parable of the Broken Window. If I force you to give me your limited resources...then I prevent you from using your limited resources in new and innovative ways. On an individual level...the consequences are negligible. If I steal a $1 from you...then the chances that you would have used that $1 to cure cancer are extremely slim. But when 538 congresspeople take more than $3.5 trillion dollars from taxpayers...the consequences are not negligible...they are very very very significant.

    Here's how Bastiat put it...

    If the socialists mean that under extraordinary circumstances, for urgent cases, the state should set aside some resources to assist certain unfortunate people, to help them adjust to changing conditions, we will, of course, agree. This is done now; we desire that it be done better. There is, however, a point on this road that must not be passed; it is the point where governmental foresight would step in to replace individual foresight and thus destroy it. It is quite evident that organized charity would, in this case, do much more permanent harm than temporary good. - Bastiat
    When I trade with you...the bargaining process incorporates both our limited, but unique, perspectives into how our scarce resources are allocated. But when I take from you...it's only my limited, but unique, perspective that determines how both our scarce resources are allocated. But the efficient allocation of scare resources depends on all our partial information, values, priorities, concerns, interests and so on. That's why trading leads to progress while taking hinders progress.

    Taxes are a clear example of taking...rather than trading. My proposal is to combine both elements. People would still be required to pay taxes...but they would have the freedom to decide which public goods they traded their taxes for. Therefore...it wouldn't be 538 congresspeople spending 150 million taxpayer's money in the public sector...it would be 150 million taxpayers spending their own money in the public sector. This would incorporate the unique perspectives of 150 million of our most productive citizens into the distribution of public funds. What would the outcome be of allowing the invisible hand (150 million taxpayers) rather than the visible hand (538 congresspeople) to determine how more than $3.5 trillion dollars were distributed in the public sector?



    Quote Originally Posted by Steven Douglas View Post
    Hardly. You are interested in illustrating how you believe the invisible hand would work if the policy proposal you are advocating (your primary objective) was enacted. The invisible hand is always at work, regardless of any policy proposal. Your proposal is not required to illustrate that, or to help people understand in any general way how the invisible hand works.
    Well...I disagree with most of this...but I'd really like to focus on whether you believe that people need to understand how the invisible hand works in order for them to appreciate the value of whatever it is that you are proposing. In other words...if they don't need to understand economics then what you're proposing is simply based on morality. It's wrong to take people's money and that's that...end of story. On the other hand...if people do need to understand economics then what you're proposing is based on economics. In order for people to appreciate the value of your proposal they have to understand Hayek's partial knowledge and Bastiat's opportunity cost and Smith's invisible hand and Mises' human action...

    We call contentment or satisfaction that state of a human being which does not and cannot result in any action. Acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness. A man perfectly content with the state of his affairs would have no incentive to change things. He would have neither wishes nor desires; he would be perfectly happy. He would not act; he would simply live free from care.
    It's really obvious that many many people feel uneasiness regarding how congress spends their taxes. But the large majority have absolutely no problem with the fact that they have to pay taxes. They just take issue with what their taxes are being spent on.

    In a pragmatarian system...taxpayers would still have the option to give their taxes to congress. What percentage of taxpayers would give their taxes to congress? According to Mises' human action...if a taxpayer chooses to give their taxes to congress...then this would indicate that they were satisfied with how congress was spending their money. They would feel more unease at the thought of directly allocating their own taxes. If a taxpayer chooses to directly allocate their taxes themselves...then this would indicate that they were not satisfied with how congress was spending their money. They would feel more unease at the thought of congress spending their taxes.

    Freedom is all about options...I'm arguing that taxpayers be given the option to give their taxes to congress or directly allocate their taxes themselves. The choices they make in their attempt to decrease their uneasiness will have significant benefits because it will incorporate their unique perspectives into how scarce resources are distributed in the public sector.

    Here's how simple it is...assuming you want to eliminate forcing people to pay taxes...

    1. We implement a pragmatarian system
    2. You give taxpayers a good reason to feel uneasy at the thought of congress spending their money
    3. You give taxpayers a good reason to feel uneasy at the thought of giving their taxes to the IRS
    Result: Taxes would be 100% voluntary
    Last edited by Xerographica; 09-25-2012 at 05:43 PM.



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  3. #2

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    Quote Originally Posted by Xerographica View Post
    Having lived in numerous developing countries...I don't think "existing"/"surviving" is really what people are aiming for.
    Having also lived in numerous developing countries, I don't think "people" is descriptive of anything at all. You're painting with an awfully broad brush. "People" are not an homogenous blob.

    If a seed from a coniferous trees falls on a rocky ledge...it might survive as a bonsai for a 1000 years...but nobody would argue that it's really thriving.
    I could certainly argue that it might be thriving. Bonsai are like cacti in a desert. Shallow seas disappeared over millions of years and they adapted. Those cacti and bonsai now have different requirements than their ancestors, and so long as those requirements are met, they do indeed thrive. Try doing a cactus "a favor" by transplanting it into a lush green forest with plenty of rainfall.

    For the most part, we generally do not debate what a tree needs to thrive. But we certainly do debate...vigorously...what humanity needs to thrive.
    And it's a bullshit debate, as flawed as any debate about art or taste. The minimum requirements for the average human being to continue living (exist, survive), while it will vary from person to person, really is finite, to the point where it should not be seriously even debated. There is no minimum requirement, however, for "thriving". Thriving has nothing whatsoever to do with mortal needs. It is an entirely subjective term, like "success"; one man's thriving could be another man's barely holding his head above water.

    When we transitioned from hunting and gathering to agriculture...we learned that some people have green thumbs. This lead to a division of labor which led to the development of cities. That's when we started to make progress.
    What does "progress" mean? Expanded population with greater resource requirements for greater numbers of people multiplying? Surviving? Even thriving by someone's subjective definition? No free pass on that word.

    And ever since then there has always been some form of taxation. People have always given some form of tribute or offerings to their leaders.
    Appeal to Tradition fallacy, as well as a complete non-sequitur. Division of labor is not a consequence of taxation. Taxation is a consequence of opportunism, which can be triggered by private progress, and can help or hurt the same. And the fact that taxation has plagued humans throughout history, (not "some form of tribute or offerings" - did you REALLY say that? Taxation is TRIBUTE? OFFERINGS?!), "people have always" is the fallacious Appeal to Tradition.

    If you argue that we don't need taxes to thrive...then there has to be some economic explanation for this.
    That is Shifting The Burden, while arguing from your own premise, as if you had indeed established a causal link between taxation and "people" (you didn't specify which people) thriving. You still have your work cut out for you there, with some explaining to do. Correlation does not equal causation.

    As first principles, I am not even arguing about "thriving". That shit is a bonus -- extra credit that goes to proven survivors (public and private). I don't accept the premise that everyone is in that position by default, or that their "aim" is not merely to survive, or exist. I wouldn't be so arrogant, or oblivious to reality, as to presume that we are all past that, and onto the subject of "thriving".

    We don't have to look to developing countries to know that "thriving" (growing, expanding, or having a surplus over and above basic needs) is a future luxury fantasy to many who are struggling to simply survive -- right here in the US.

    Same thing if you want to argue that we will thrive even more if we get rid of taxes. (honestly...I'm still a bit unclear on whether you're saying that we should get rid of the government...or whether you're saying that funding it should be completely voluntary.)
    Once again, you missed it, even though I was abundantly clear both times. It is not a question of taxes or no taxes, but rather for whom the tax bell tolls.

    THINK ABOUT SOMETHING: If you are driving a pickup truck on the freeway, and you see a sign that says, "ALL TRUCKS MUST EXIT", you're a smart enough fellow to know that doesn't apply to you, right? Most people would know that it refers to large commercial trucks. Not even large Ryder and U-Hauls need to stop.

    Now let's apply that same thing to the world, and taxes, as I envision it:

    1. Are you a corporation (foreign or domestic)?
      Pull over and pay the duties and fees imposed by the state, and obey their every regulation.
    2. Are you a foreigner, or something other than a free and natural Citizen, engaged in any commerce here?
      Pull over and pay the duties and fees imposed by the state, and obey their every regulation.
    3. Are you a Free and Natural Citizen engaged in any activity as a matter of unalienable right?
      Keep driving. You are one of the sovereigns of the country, and the sign does not apply to you.

    You are arguing everything from the premise that suggests that "taxpayers" are a) all-inclusive, and b) should give allocation power to all paying entities (WITHOUT DISTINCTION!). PROBLEM: What if 90% of "taxpayers" were foreigners?

    You're essentially trying to apply a loose version of the free market principle of Voting With Your Wallet to what is tantamount to a form of political power. But you are also assuming that all taxpayers have rights. If the leaders of Apple Computers don't like the military, they can refuse to fund it. They can allocate nothing to defense, and instead direct all their taxes to the Department of Baby Seals Protection instead. In the future, I might be able to allocate funds to a federal agency entitled The Department of Shrines In My Honor.

    From my perspective...whether we survive or thrive has everything to do with giving people the freedom to apply their unique perspective to their limited resources.
    Oh, I agree. Actual people (individual Citizens) should be pretty much unlimited in that respect. Which is why I believe they alone should not be compelled to forfeit their limited resources, as they are then offered a pseudo-choice of how, generally, the-funds-that-are-no-longer-theirs are to be spent. If they aren't paying, that only leaves us with conditionally privileged entities, with no unalienable rights to exist and compete on our soil. And they get no say whatsoever. Congress really can control those purse strings as far as I am concerned.

    Taxes are a clear example of taking...rather than trading. My proposal is to combine both elements. People would still be required to pay taxes...but they would have the freedom to decide which public goods they traded their taxes for.
    I like my proposal better. Firstly, tax every non-Citizen entity (with no choices offered to them, because they are only "trading" for the conditional privilege to exist and compete among us), and secondly, STOP TAKING from the rest, because no economy requires a direct tax on individuals.

    Then, your Deng Xiaoping vs. Mao Zedong economy becomes a bullshit fantasy -- one that requires that you argue from the assumption that Citizens are "taxpayers" by default, and that all "taxpayers" are reasoned to have political power, and limited freedom of choice in terms of generalized allocations.

    Well...I disagree with most of this...but I'd really like to focus on whether you believe that people need to understand how the invisible hand works in order for them to appreciate the value of whatever it is that you are proposing. In other words...if they don't need to understand economics then what you're proposing is simply based on morality. It's wrong to take people's money and that's that...end of story.
    Nah, we could argue it that way, of course, but it's not necessary at all. You can just easily understand the economics of the invisible hand whether or not people, as opposed to other market entities, pay any taxes whatsoever. It is ONLY YOUR PROPOSAL, not the invisible hand, that requires that all people be presumed to be taxpayers by default.

    It's really obvious that many many people feel uneasiness regarding how congress spends their taxes. But the large majority have absolutely no problem with the fact that they have to pay taxes. They just take issue with what their taxes are being spent on.
    Sounds good on paper, but if taxes really were funding all of today's government spending, a shutdown and revolution would have occurred already, and we would not be where we are today. The large majority have no idea that taxes are the least contributors in today's economy, that both commerce and government are funding today's Wonderful World of Waste on ever-expanding deficits with money created out of a vacuum that dilutes the currency, all via FUTURE PROMISES FOR FUTURE OTHER PEOPLE TO PAY. Get rid of that and you would see a different economy altogether, including different operations by the invisible hand that exists in ALL economies, and under ALL political regimes.

    In a pragmatarian system...taxpayers would still have the option to give their taxes to congress.
    STILL HAVE THE OPTION TO GIVE? What a nasty, disingenuous way of putting it. "Still" have the "option to give" indeed. Is that really what you see now -- millions of taxpayers, all having the "option to give"?
    Last edited by Steven Douglas; 09-25-2012 at 08:25 PM.

  4. #3

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    Having also lived in numerous developing countries, I don't think "people" is descriptive of anything at all. You're painting with an awfully broad brush. "People" are not an homogenous blob.
    Well...yeah...we don't all need iPhones to thrive. Would anybody make that argument though? Thriving...wherever you are...and whoever you are...depends on opportunities and opportunities depend on giving people the freedom to choose how they use their limited resources. I don't need to be a pilot to thrive...but I have that option because the Wright Brothers had the freedom to apply their unique perspectives to their limited resources.

    I could certainly argue that it might be thriving. Bonsai are like cacti in a desert. Shallow seas disappeared over millions of years and they adapted. Those cacti and bonsai now have different requirements than their ancestors, and so long as those requirements are met, they do indeed thrive. Try doing a cactus "a favor" by transplanting it into a lush green forest with plenty of rainfall.
    Actually, a bonsai isn't a type of plant...it's just how trees respond to severely limiting their root growth. If you take a bonsai out of its pot and plant it in the ground...then it will turn into a regular sized tree. Also, there are several genera of cactus that do live in rainforests. Trees and cactus don't have the ability to choose what they want to be when they grow up...but we do. Before the Wright Brothers invented planes...kids didn't have the option to grow up to be pilots.

    What does "progress" mean? Expanded population with greater resource requirements for greater numbers of people multiplying? Surviving? Even thriving by someone's subjective definition? No free pass on that word.
    Progress is simply how well people can realize their full potential. Abraham Maslow referred to it as self-actualization...and the Army refers to it as being all you can be. As John Holbo said, "I’d be perfect for a lot of way cool jobs that don’t happen to exist." Again, by no means am I saying that we'd be making progress if we could all be rocket scientists. The goal is having the widest variety of options to choose from. That's really all freedom is.

    Appeal to Tradition fallacy, as well as a complete non-sequitur. Division of labor is not a consequence of taxation. Taxation is a consequence of opportunism, which can be triggered by private progress, and can help or hurt the same. And the fact that taxation has plagued humans throughout history, (not "some form of tribute or offerings" - did you REALLY say that? Taxation is TRIBUTE? OFFERINGS?!), "people have always" is the fallacious Appeal to Tradition.
    It might have been an appeal to tradition fallacy...if I was actually trying to justify taxation. But I'm really not trying to justify taxation. All I know is that it's been around since the beginning of civilization...and I would really be overestimating my intelligence if I were to claim with any sort of certainty that it is not necessary. For all I know it could simply be a vestigial trait. And no...I did not say that the division of labor was a consequence of taxation...I said that discovering that some people had green thumbs resulted in the division of labor.

    That is Shifting The Burden, while arguing from your own premise, as if you had indeed established a causal link between taxation and "people" (you didn't specify which people) thriving. You still have your work cut out for you there, with some explaining to do. Correlation does not equal causation.
    Woah, you're way off the mark if you think I'm trying to say that taxation and thriving are positively correlated. I don't know if taxes are necessary...but because I understand how the invisible hand works...it's completely unnecessary for me to try and guess at something that's impossible for anybody to truly know. The only thing I know is that 150 million taxpayers can distribute their taxes in the public sector far more efficiently than 538 congresspeople can.

    So...no...I'm not trying to shift the burden...I'm simply trying to understand why you want to get rid of taxes for citizens. So far you haven't mentioned a single thing about positive consequences. Why do you think that we should get rid of taxes for citizens? Again, if you're not considering the consequences...then you're simply making a moral argument...which is the realm of religion...not economics.

    I like my proposal better. Firstly, tax every non-Citizen entity (with no choices offered to them, because they are only "trading" for the conditional privilege to exist and compete among us), and secondly, STOP TAKING from the rest, because no economy requires a direct tax on individuals.

    Then, your Deng Xiaoping vs. Mao Zedong economy becomes a bullshit fantasy -- one that requires that you argue from the assumption that Citizens are "taxpayers" by default, and that all "taxpayers" are reasoned to have political power, and limited freedom of choice in terms of generalized allocations.
    This is just a description of your proposal...which I now understand. What I'm interested in is why you are advocating your proposal. Will it lead to more human flourishing? If so...exactly how will it lead to more human flourishing? I understand how liberty leads to flourishing...but based on my understanding of this process...there's absolutely no need to get rid of taxes for citizens. You, on the other hand, do seem to believe that we need to get rid of taxes. That's why I want to hear your explanation of how giving people the freedom to choose how they spend their money will lead to human flourishing. Well...assuming that you're not simply making a moral argument...which I haven't been able to establish because you have yet to put forth a consequentialist argument.

    Nah, we could argue it that way, of course, but it's not necessary at all. You can just easily understand the economics of the invisible hand whether or not people, as opposed to other market entities, pay any taxes whatsoever. It is ONLY YOUR PROPOSAL, not the invisible hand, that requires that all people be presumed to be taxpayers by default.
    People primarily reject my proposal because they don't understand economics. In other words...they don't understand how the invisible hand works. They say that if we allowed taxpayers to choose how their taxes were allocated then everything important would be underfunded and everything unimportant would be overfunded. So let me ask you again...do people need to understand how the invisible hand works in order to appreciate the value of your proposal? They either do...or they don't. If they don't then you're arguing from the basis of morality. If they do...then you're arguing from the basis of economics. But if you're arguing from the basis of economics...and people don't need to understand economics in order to see the value of your argument...then why hasn't your proposal already been implemented?
    Last edited by Xerographica; 09-26-2012 at 08:11 AM.

  5. #4

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    Quote Originally Posted by Xerographica View Post
    Well...yeah...we don't all need iPhones to thrive. Would anybody make that argument though? Thriving...wherever you are...and whoever you are...depends on opportunities and opportunities depend on giving people the freedom to choose how they use their limited resources. I don't need to be a pilot to thrive...but I have that option because the Wright Brothers had the freedom to apply their unique perspectives to their limited resources.
    No argument there, and we are squarely in the realm of private resources, supply and demand side.

    And no...I did not say that the division of labor was a consequence of taxation...I said that discovering that some people had green thumbs resulted in the division of labor.

    Woah, you're way off the mark if you think I'm trying to say that taxation and thriving are positively correlated.
    You went from divisions of labor to development of cities to progress, followed immediately with a non-sequitur that implied correlation, all within a single paragraph, to wit:

    ...division of labor...which led to the development of cities. That's when we started to make progress. And ever since then there has always been some form of taxation.
    I don't know if taxes are necessary...but because I understand how the invisible hand works...it's completely unnecessary for me to try and guess at something that's impossible for anybody to truly know. The only thing I know is that 150 million taxpayers can distribute their taxes in the public sector far more efficiently than 538 congresspeople can.
    Note the emphases in bold. And note, once again, that your proposal implies that "taxpayers" means individual citizens. You are not making any distinctions.

    And for the record, I actually agreed with your proposal, in principle, at one time - just not with the rationale that you are using. It is not that distribution would be more efficient, because I don't believe that at all. My argument was strictly political (just as your proposal is). Congress, with our corrupt two party dominated system, can never say that we have taxation with representation, as it does not ever represent the actual political interests of ALL its taxpaying citizens, many of whom would never once have agreed on an individual level with ANY of the limited choices given to them. For many, the public sector choices are like one of those "would you rather" games (e.g., "Would you rather blow shit up in the Middle East or waste billions so that tenured professors can earn $170K a year?). Those aren't choices.

    What we have now is a tyranny of a simple winner-take-all majority, with NO systemic mechanism for enfranchisement of the losers. My political argument was to take away the winner-take-all aspect away from the Congressional control of purse strings, and allow 150 million citizens generalized control over funding allocations. But that is strictly political, not economic. The actual economic rationale of your proposal is not on solid economic footing for a number of reasons.

    Look at the public sector as you would any industry:

    1) In a free market, people can actually choose to abstain from demand of a given industry altogether. There are people who, to this day, manage to thrive (by their reckoning only) without a single subsidy to myriad private industries. That's the invisible hand at work, as the choices not made are also done in self-interest. And they too can be every bit as beneficial and important to the market as the choices that are made -- including the choice to hoard -- not spend at all.

    What you have amounts to a multiple choice, with no option for "None of the above". So you have violated a free market principle when you left in a guarantee of public sector funding, the only pseudo-choice being who in the public sector (or who is connected to that branch by extension), will benefit.

    2) People would not, as you put it, be "trading" for services from the public sector. That is because there are no property rights involved, as there would be in a direct trade in the private sector. So it's a "Free Market-ish" only, with political power inherent in the amount of taxes paid; the more you pay in taxes, the more "votes" you have, as you are only "voting" for which of the many generalized divisions of the public sector (each in the aggregate), will be enlarged as they receive more funding.

    It's still a redistribution of wealth, even though on the surface it could be a mechanism for stopping outright cannibalism. (e.g., if someone does not support the welfare state, they can opt for their funding to go to defense only). And while it would promote some kind of competition between agencies in the public sector, it still does not account for those who would not support anything the state is "offering in trade".

    So...no...I'm not trying to shift the burden...I'm simply trying to understand why you want to get rid of taxes for citizens. So far you haven't mentioned a single thing about positive consequences. Why do you think that we should get rid of taxes for citizens? Again, if you're not considering the consequences...then you're simply making a moral argument...which is the realm of religion...not economics.
    You have not heard a moral argument from me, and are presuming to establish one on my part as a default. But what you fail to see is that by merely invoking the words "positive consequences" you are squarely in the realm of the morality of economics yourself. The very word positive, since you are talking about it in relation to impacts on human beings, is not value neutral. You are speaking as both an economist AND a policy maker. Economists (ostensibly, as many flatter themselves) regard NOTHING in terms of benefit to human beings. Only 'economic' value. They are just crunching numbers, with macro-economists crunching them only in the aggregate. It is the policy makers who decide whether those numbers equate to a "positive consequence" for human beings.

    The economics arguments for eliminating taxes on individual Citizens are many, the first of which is the automatic checks and balances that would occur from truly free market competition.

    Walmart vs. Mom & Pop's Corner Store

    Large publicly traded entities directly compete with individuals in the market. They are already possessed of extreme advantages, both natural and artificial. On the natural side, they have sheer size, and often much greater efficiency, as well as capitalization that allows them greater access and superior negotiating positions. All good for consumers (at least to begin with, on the surface, so long as their competition remains viable).

    On the artificial side there are also extreme advantages for large artificial competing entities. Aside from naturally superior lobbying positions, where they are more prone to receive tax breaks and outright subsidies (and even bailouts if they are large enough to be politically noticeable), they also have superior advantages that come from the fiat monetary regime itself. Because they are more credit-worthy, they have greater access to new fiat currency, and at interest prices that are made available ONLY to the larger and more credit worthy.

    Individuals and small private concerns that rely on currency holdings, have had their Privately Accumulated Capital (read=savings) continuously taxed out of existence. THEIR SAVINGS AND WAGES are taxed for the very purpose, among others, of providing liquidity to the banks that provide capital primarily to the larger and more credit-worthy. In other words, the wealth of 150 million citizens (among others), without regard to their status as so-called "taxpayers", is siphoned away so that Walmart can have superior access to cheap debt money used to compete with them! That is a serious distortion of a market that is anything but perfectly competitive and free for that reason alone. That distortion can be removed on economic grounds alone. There is no reason to grant that artificial consequence, intended or not.

    This is just a description of your proposal...which I now understand. What I'm interested in is why you are advocating your proposal. Will it lead to more human flourishing? If so...exactly how will it lead to more human flourishing?
    Exactly in this way:

    Individual Citizens keep ALL their wealth, which means it is available to the private sector -- the ONLY sector of the economy that actually creates wealth -- as individuals see fit.

    Since the state would have NO source of revenue from its Citizens, and no option to shift any burdens onto them, it would have to rely on funds from conditionally privileged entities only. It would no longer have a "captive" audience from which it could extract revenues by force. Capital flight would suddenly be of far more GRAVE CONCERN to states. It is not now. The state already knows that even if large corporations flee to other, more tax-friendly jurisdictions (even other countries), the state can still BILK its "captive" citizenry, as it shifts tax burdens onto them. Corporations can go off-shore, but people generally tend to stay put. If individual Citizens were not a revenue option, the state would be forced into a balancing act that is very much like the free market. Now it is "trading" for the "conditional privilege" of competing amongst us -- the actual sovereign owners of the state. Suddenly the revenue-maximizing state would have to wax very creative, to do everything in its power to make sure that privileged entities had good economic reasons to stay.

    Meanwhile, there are no artificial DISadvantages heaped onto any individual. Citizens who are not taxed at all are not only free to spend their limited resources as they see fit, but they are now have the advantage of being able to compete with entities that possess ZERO artificial advantages, despite their already natural advantages. The best the state can do for privileged entities at that point is not tax or burden them at all. But that is not in the state's interest, and ONLY because those are the state's sole revenue sources -- no more individuals to shift the burden onto. People, now free and immune from artificial fettering, are no longer held up or used as human shields, because they are no longer conflated with the conditionally privileged entities who once had the entire deck, natural and artificial, stacked completely in their favor.

    That is just a part of the economic consequentialist, not moralist, argument.

    People primarily reject my proposal because they don't understand economics. In other words...they don't understand how the invisible hand works. They say that if we allowed taxpayers to choose how their taxes were allocated then everything important would be underfunded and everything unimportant would be overfunded. So let me ask you again...do people need to understand how the invisible hand works in order to appreciate the value of your proposal? They either do...or they don't.
    All Adam Smith's invisible hand really says is that self-interest and profit-maximizing behavior by individuals is beneficial for society on the whole, regardless of any altruistic motives lacking on the parts of those acting individually. Thus, the invisible hand needs no appeal to "the greater good", or "the betterment of society" by anyone, and does not need to be understood by anyone except economists.

    "Hello there, self-interested individual! I know that some people are labeling your self-interest as greed, but even if that was true, did you know that even that is beneficial on the whole?"

    That's like trying to congratulate any lifeform for simply being what it is, and doing what was in its nature already, which make it part of the circle of life on Earth. You can use that as an appeal to policy makers (I do in my proposal), but the average person is simply going to LIVE IT. They don't have to understand the invisible hand. THEY ARE THE INVISIBLE HAND!

    But if you're arguing from the basis of economics...and people don't need to understand economics in order to see the value of your argument...then why hasn't your proposal already been implemented?
    Major logical fallacy, and a hypocritical projection at that. You assume that people need to understand economics to see the value of your argument. I could argue that your argument is not economically sound, and is only pseudo-economics, as it borrows loosely from economics, while treating the state as a profit maximizing, multi-departmental firm, with aggregate demand that is already presumed and guaranteed.

    As for why it hasn't been implemented: Nobody else has even thought of it yet, to my knowledge. I have never even read my proposal or the arguments behind it anywhere else. Only snippets and slices, as matters of principle, but never on the whole as it reads with my proposal, and the arguments for it, as an actual aim. And for that matter, why wasn't slavery abolished prior to its abolishment? Why do we not have a sound currency now? Why was the Constitution itself implemented, while many parts of it no longer in effect? Why aren't they (re)implemented?
    Last edited by Steven Douglas; 09-26-2012 at 03:10 PM.

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    When I first Google searched for the idea of allowing taxpayers to directly allocate their taxes...I didn't find anything. It wasn't until later that I found that many other people had considered the idea. I created a list here...Choose Where Your Taxes Go. There's so much information on the web that it's really hard to find an idea using the description of a concept as the search terms.

    Not sure if you'll agree with this...but from my perspective...economics is based on the idea that actions speak louder than words. With that in mind...why not post your proposal on the Debate Politics forum? I'd be really interested in hearing how the general population would respond to it. Surely I shouldn't have to try and persuade you to promote your own idea?

    Personally, I've promoted the heck out of pragmatarianism. By far the most common objection has to do with some aspect of the coordination problem. Here are 77 responses along those lines...Unglamorous but Important Things.

    What does my proposal change? Very very little. The tax rate would be exactly the same (at least initially)...the scope of government would be exactly the same (at least initially)...congress wouldn't do anything differently. My proposal is ALL about ceteris paribus. The only thing it changes is that taxpayers would have the option to directly allocate their taxes. That's it. Yet, people overwhelming reject it because they fear that important public goods would be underfunded while less important public goods would have an "embarrassment" of funds.

    As a programmer I spend a lot of time trying to debug code. When there's a glitch that prevents a program from operating as it should...I have to try and isolate exactly where oh where in a gazillion lines of code the bug might be. Many times I end up removing entire sections of the code and rerunning the program to see if that's where the problem might be.

    It's the same thing with libertarianism. It's been around for a long long long time...but something is preventing it from being implemented. Where's the bug in the code? So I took out arguments about lowering the tax rate and I took out arguments regarding the definition of a public good. What's left? All that's left is the difference between 538 congresspeople spending money they did not earn and 150 million taxpayers spending their own taxes. In other words...all that's left is the invisible hand. That's where the bug is. People's failure to understand how the invisible hand works is what is preventing libertarianism from being more widely accepted.

    Of course...maybe I'm wrong? Maybe you've found a way to get around helping people understand how the invisible hand works? There's certainly more than one way to skin a cat. That's why it would be great if you could share your idea on the Debate Politics forum.

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    Does anyone else find it rather funny to discover that I am very willing to click on the link when Steven replies yet I do not care when Xerographica makes his entrance? Am I alone?

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    Quote Originally Posted by Travlyr View Post
    Does anyone else find it rather funny to discover that I am very willing to click on the link when Steven replies yet I do not care when Xerographica makes his entrance? Am I alone?
    I think it goes back to the supreme court decision... studious vs. studious.

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    This is probably my all time favorite quote from you...

    Quote Originally Posted by Travlyr View Post
    The invisible hand ONLY works with real money.
    Is the invisible hand working right now?

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    Quote Originally Posted by Xerographica View Post
    This is probably my all time favorite quote from you...

    Is the invisible hand working right now?
    Not correctly. The invisible hand only works correctly with real money. That's the whole point. Since we are using monopoly money, then all markets are distorted. Your entire theory is based on allocation of fiat money that can be created out of nothing which has zero to do with production of goods or services.
    Last edited by Travlyr; 09-28-2012 at 08:59 AM.

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    I can't wait for Adam Smith's FIST to smash this nearly unfathomably unsustainable/distorted economy to bits so we can start fresh. I just finished Peter Schiff's The Real Crash book and he made a interesting remark in regards to Nixon's "temporary" decision to close the gold window. Tis' true it will be temporary. Of course it won't be the prolonged "temporary" The State truly sought, but rather a true temporary that all debt-based purely fiat currencies tend to take.

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    Quote Originally Posted by Travlyr View Post
    Does anyone else find it rather funny to discover that I am very willing to click on the link when Steven replies yet I do not care when Xerographica makes his entrance? Am I alone?
    No, the only reason I read these threads is to watch Steven destroy his arguments. It's entertaining.

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    Quote Originally Posted by VoluntaryAmerican View Post
    No, the only reason I read these threads is to watch Steven destroy his arguments. It's entertaining.
    My argument is that 150 million taxpayers could allocate their taxes far more efficiently than 538 congresspeople could. Can you please quote exactly where Steven destroyed my argument?

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    Quote Originally Posted by Travlyr View Post
    Not correctly. The invisible hand only works correctly with real money. That's the whole point. Since we are using monopoly money, then all markets are distorted. Your entire theory is based on allocation of fiat money that can be created out of nothing which has zero to do with production of goods or services.
    If your money isn't real...then can I have all of it?

  15. #14

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    Quote Originally Posted by Xerographica View Post
    If your money isn't real...then can I have all of it?
    Actually most of my money is real. You can't have my real money, but you are welcome to all my fake money. However, I'm not going to deliver it to you.
    Last edited by Travlyr; 09-28-2012 at 02:31 PM.

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    Quote Originally Posted by Travlyr View Post
    Actually most of my money is real. You can't have my real money, but you are welcome to all my fake money. However, I'm not going to deliver it to you.
    Can you send it to me via paypal?

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    Quote Originally Posted by Xerographica View Post
    Can you send it to me via paypal?
    Indeed I can. Shipping and handling must, however, be paid in real money. I don't have very much fake money at the moment but I can get more. How much do you want?
    Last edited by Travlyr; 09-28-2012 at 05:17 PM.

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    Quote Originally Posted by Travlyr View Post
    Indeed I can. Shipping and handling must, however, be paid in real money. I don't have very much fake money at the moment but I can get more. How much do you want?
    Shipping and handling? It doesn't cost anything to send money vial paypal.

  19. #18

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    Quote Originally Posted by Xerographica View Post
    Shipping and handling? It doesn't cost anything to send money vial paypal.
    True enough. Shipping is virtually free through PayPal. However, handling charges will be paid, up front, in real money or else you don't get my fake money. How much fake money do you want and I will calculate the handling charges.

  20. #19

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    Quote Originally Posted by Travlyr View Post
    True enough. Shipping is virtually free through PayPal. However, handling charges will be paid, up front, in real money or else you don't get my fake money. How much fake money do you want and I will calculate the handling charges.
    Hmmm...how much would it cost me for you to send me $1000 via paypal?





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