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  1. #1

    Hazlitt - Public works mean taxes

    I am currently reading Hazlitt's Economics in one lesson. I say reading but what I really mean to do is analyse his arguments. I want to do it chapter by chapter here on the forum.

    The broken window fallacy chapter is pretty self evident so I would like to start with chapter three instead.

    Fore note:
    "A certain amount of public spending is necessary to perform essential government functions. [But] I am here concerned with public works considered as a means of “providing employment” or of "adding wealth" to the community that it would not otherwise have had." - Henry Hazlitt

    The question: Do public work projects like a bridge, provide employment at the expense of employment in the private sector?

    Hazlitt's Answer: It is true that a particular group of bridge workers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most. Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.
    Last edited by mohassan; 11-13-2012 at 09:42 AM.



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  3. #2
    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.

    Also Hazlitt points out a grave concept,

    When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only where bridges must be built, the government spenders begin to ask themselves where bridges can be built.

  4. #3
    Quote Originally Posted by mohassan View Post
    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.
    The recent television miniseries "The Men Who Built America" was very interesting on this point. As I understood it, Andrew Carnegie built the first steel bridge across the Mississippi at St. Louis - the Eads or Keystone bridge - via private funding mostly.

    The series goes on to say elsewhere that JP Morgan actually loaned money to the Federal Gov't at times. Imagine that - private capitalists being worth more than the federal government. Those were the days.
    The bigger government gets, the smaller I wish it was.
    My new motto: More Love, Less Laws

  5. #4
    Quote Originally Posted by mohassan View Post
    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.
    Why not just allow taxpayers to choose which government organizations they give their taxes to? Tax choice...and/or pragmatarianism...would create a market for public goods and allow taxpayers to shop for themselves in the public sector.

    Also, the liberal economist John Quiggin is writing the sequel to Hazlitt's book.

  6. #5
    Quote Originally Posted by Xerographica View Post
    Why not just allow taxpayers to choose which government organizations they give their taxes to? Tax choice...and/or pragmatarianism...would create a market for public goods and allow taxpayers to shop for themselves in the public sector.

    Also, the liberal economist John Quiggin is writing the sequel to Hazlitt's book.
    I believe taxation is theft if done so by force. But I think Hazlitt is not too concerned with the idea of taxation in terms of violating property right, but rather its economic effect. This book is not a philosophical book. But yeah taxation by force is wrong, period.

  7. #6
    Quote Originally Posted by mohassan View Post
    I believe taxation is theft if done so by force. But I think Hazlitt is not too concerned with the idea of taxation in terms of violating property right, but rather its economic effect. This book is not a philosophical book. But yeah taxation by force is wrong, period.
    Sigh. Here I was looking forward to a nice economic discussion...but unfortunately...you would prefer to talk about religion. If you're more interested in religion then why are you reading Hazlitt's book? If you're more interested in religion then what are you doing in the economics category? There's a specific category for people who believe that their moral views are superior to other people's moral views...Political Philosophy.

    The short version...

    I generally prefer consequentialist arguments. I think I understand economics better than I understand moral philosophy, and possibly better than anyone understands moral philosophy. - David Friedman
    The long version...

    I guess the first thing is that it offers arguments which don't require that people already share your religion...using the term "religion" broadly. That as far as I can tell, nobody, whether deontological libertarians or communists or anyone else really has a really convincing argument to show that their moral views are right. Many people believe that they do but I don't think that they do. Ayn Rand, at least, presented an argument. Ayn Rand claimed in effect to have defeated David Hume's is ought problem. Hume argued that you couldn't derive on ought from an is. I have a discussion up on my webpage of the holes in Rand's arguments. As far as I can tell she simply didn't do it. I don't think it can be done as far as I know. So in order to persuade people by a natural rights argument there has to be some reason why they believe in natural rights to start with because you don't have any good arguments to show that they ought to believe it. Whereas my argument...it claims to show...it hopefully shows...that my system would be better in terms of the value that almost everybody already has. So I'm really saying if you regard natural rights to be really important...well look...in my system rights will rarely be violated. If you regard people being happy and being healthy and living long lives...look in my society people will be in effect wealthier than in societies with governments, therefore you should like the results of those things...and so forth and so on. So I think that I have an argument which does depend on convincing people that economics is relevant to human behavior but doesn't depend on convincing them of your particular right and wrong beliefs. - David Friedman
    An older version...

    That which has no existence cannot be destroyed — that which cannot be destroyed cannot require anything to preserve it from destruction. Natural rights is simple nonsense: natural and imprescriptible rights, rhetorical nonsense — nonsense upon stilts. - Jeremy Bentham

  8. #7
    I only pointed out that any form of taxation is wrong, because you brought up "tax choice". You want to see people choose the public programs they want to support. I am sorry, but taxation by force is objectively wrong, simply because it violates the non-aggression principle. Nothing to do with religion.

    What I hoped to discuss in this thread is whether public programs like building bridges, create employment at the expense of employment that might have been created had there been no taxation.
    Last edited by mohassan; 11-13-2012 at 07:53 PM.

  9. #8
    Quote Originally Posted by Xerographica View Post
    tax choice
    what an interesting, and completely ridiculous phrase given the context in which you use it.

    choice implies the ability to make ones own decision. you are not promoting a true 'choice', as your options are very fixed and very limited. choice would imply i could pay the taxes, not pay the taxes, pay only a portion, pay the full amount with reservations, or any other number of things of my own volition.

    what you're really promoting is some sort of 'tax preference' in which YOU decided my options ahead of time, and I am forced to agree with one of them.



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  11. #9
    Quote Originally Posted by VBRonPaulFan View Post
    what an interesting, and completely ridiculous phrase given the context in which you use it.
    Actually, the term "tax choice" wasn't my idea...I came up with "pragmatarianism".

    Quote Originally Posted by VBRonPaulFan View Post
    choice implies the ability to make ones own decision. you are not promoting a true 'choice', as your options are very fixed and very limited. choice would imply i could pay the taxes, not pay the taxes, pay only a portion, pay the full amount with reservations, or any other number of things of my own volition.
    Errr...and you're exceptional because...you want more choices? Who doesn't want more choices? Markets work because we have the freedom to reward the organizations that offer new and better options.

    Right now we have a command economy in the public sector. Yet, here you are making the argument that we would have a small selection of crappy options to choose from. Errr...yeah...that's because we have a command economy in the public sector...which is why I'm arguing that we should create a market in the public sector.

    Quote Originally Posted by VBRonPaulFan View Post
    what you're really promoting is some sort of 'tax preference' in which YOU decided my options ahead of time, and I am forced to agree with one of them.
    I'm advocating that we create a market in the public sector. If you don't believe that doing so will have extremely beneficial consequences...then clearly you don't understand how markets work. That's a fundamental problem which pragmatarianism helps to expose.

  12. #10
    Quote Originally Posted by Xerographica View Post
    Markets work because we have the freedom to reward the organizations that offer new and better options...
    ...and to withhold any rewards at all in the aggregate. If the entire market is a stinking pile of rotten value-sucking bull$#@!, that's OK. The free market works because we can exercise another very important market principle called Private Capital Formation (including the all-important SAVINGS); a process whereby we may actually become one of those organizations that offers new and better options to the market.

  13. #11
    Quote Originally Posted by Xerographica View Post
    I came up with "pragmatarianism".
    there is a more common, colloquial term for what you call 'pragmatarianism' - the 'status quo'. you would rather men falter from their principles in the sake of 'doing something' than fighting against the evil of coercion and violence. i have very little faith that your 'pragmatarianism' will take root here.

    Quote Originally Posted by Xerographica View Post
    Yet, here you are making the argument that we would have a small selection of crappy options to choose from. Errr...yeah...that's because we have a command economy in the public sector...which is why I'm arguing that we should create a market in the public sector.
    i have made no such argument. i simply stated the ludicrousness of your claim. if I were to make an argument, it would be that there should be no 'public sector' at all, because the only way it can exist in the first place is through coercion and theft, and truly free markets are devoid of such concepts as much as possible. those things should definitely not be 'baked' into the system fundamentally as a matter of 'that's just the way it is'.

    Quote Originally Posted by Xerographica View Post
    I'm advocating that we create a market in the public sector. If you don't believe that doing so will have extremely beneficial consequences...then clearly you don't understand how markets work. That's a fundamental problem which pragmatarianism helps to expose.
    no, you're advocating the same thing that politicians and people who fundamentally misunderstand markets have been advocating for years. if we steal just a *little* more wealth from this group or that group, to target this pet project or that pet project, the people will benefit tremendously! i didn't buy it when it was said before - i still don't buy it from you. just because i get to target where my stolen wealth goes does not make your system any better. it is like saying things are so much better under your system because now i get to pick which of the toes on my right foot i will have cut off, versus before when one would be cut off arbitrarily by someone elses decision.

  14. #12
    Quote Originally Posted by mohassan View Post
    I am currently reading Hazlitt's Economics in one lesson. I say reading but what I really mean to do is analyse his arguments. I want to do it chapter by chapter here on the forum.
    Awesome idea and a great book. I read it this summer. +rep
    "We do have some differences and our approaches will be different, but that makes him his own person. I mean why should he [Rand] be a clone and do everything and think just exactly as I have. I think it's an opportunity to be independent minded. We are about 99% [the same on issues]." Ron Paul

  15. #13
    Quote Originally Posted by mohassan View Post
    The question: Do public work projects like a bridge, provide employment at the expense of employment in the private sector?

    Hazlitt's Answer: It is true that a particular group of bridge workers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most. Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.

    Effects of taxation and public works originate from a combination of:

    a) money that would have been channeled and circulated elsewhere, and
    b) money that would have been saved, not circulated

    Simplistically speaking, a) money that would have circulated and been channeled elsewhere, answers the original question in the affirmative.

    Following the money:

    Public sector employees are also subject to payment of taxes, and make economic choices, including saving, as well as spending decisions that are going to differ from those who originally paid the taxes that paid their salaries and wages. So while much of that money will remain in the "private sector", that private sector is not an homogenous blob. The private sector is like so many arteries and veins that reach out in all directions, and you can feed one while starving the other.

    Example: Public sector employees are given a discount opportunity not enjoyed by the private sector (e.g., military commissary, or a store located closest to the bridge itself). Now you've not only channeled funds into the public sector, you've continued to re-channel much of that same money out of the local economy. Even if tax funds are re-channeled within the private sector in a way that provides employment--it will be at the expense of employment in other areas of that same private sector.

    Another effect of private sector siphoning through taxation is localized price inflation within certain areas of the private sector. The taxpayer that buys food does not necessarily buy more or less food as a result of a tax. Absent a local work project, the ratio of demand to supply for certain commonly used goods and services (e.g., BREAD) would be smaller (fewer dollars chasing n specific goods). This dynamic is changed by the addition of more buyers of like goods and services that might not otherwise have existed had a local make-work project not existed. So while the increased demand is seen as a windfall for the local grocer or baker, the population overall will suffer a shortfall, as the local price of goods and services are bid upward through greater artificial demand.

    In other words, you're not just paying people to work on a bridge--you are also giving them the means to bid against you for like goods in the market.
    Last edited by Steven Douglas; 11-13-2012 at 08:50 PM.

  16. #14
    Quote Originally Posted by Steven Douglas View Post
    This dynamic is changed by the addition of more buyers of like goods and services that might not otherwise have existed had a local make-work project not existed. So while the increased demand is seen as a windfall for the local grocer or baker, the population overall will suffer a shortfall, as the local price of goods and services are bid upward through greater artificial demand.

    In other words, you're not just paying people to work on a bridge--you are also giving them the means to bid against you for like goods in the market.
    Did I understand you here correctly.

    Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?

    But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?

    Do you mean artificial demand because public programs were not perhaps the choice of the consumers?

    Sorry if I didnt understand you.

  17. #15
    Quote Originally Posted by mohassan View Post
    Did I understand you here correctly.

    Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?

    But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?

    Do you mean artificial demand because public programs were not perhaps the choice of the consumers?
    Yes, that last sentence, choice being the operative word. Anything funded by forced extraction (mandatory taxes) is a fundamental shift of one thing at the expense of another (even if private capital formation alone), and therefore an artificial market distortion.

    It doesn't matter if there was some choice in allocation so long as "ZERO ALLOCATION TO ANYTHING" is not offered as a choice, and likewise, whether or not the fruits of a forced extraction are deemed valuable by anyone at all is wholly irrelevant to the fact that a fundamental SHIFT has occurred, and by force within the economy (as one thing is artificially mandated at the expense of others). This shift would not have otherwise occurred in the absence of that force.

    If the private sector builds a bridge, similar dynamics could occur, but only with 100% willing participants on the finance/demand side, so no artificial distortion. All of that occurs in a free market that is fair game to any and all willing participants, supply and demand side.

    Also, no assumptions are made with regard to the number of people working, or even where they came from. If I own a large private firm, and set up shop and put locals to work, I might also end up bringing new locals into the local economy. I might import all the labor, and put no locals to work. Whatever the case, my objective is only to offer goods or services at a profit, not to provide employment to anyone, which is wholly incidental. I may well cause competition to suffer, and I might even cause commonly used goods and services to be bid up before it is corrected with more competition for the supply of those goods and services. None of that matters, because as long as I am responsible for all the funding, all of the risks and rewards are mine, and the effects on various people's economies, beneficial or adverse, are mine to bestow or inflict, as the case may be, as a matter of right.

    In the case of a work project, like a bridge, the element of choice (from whatever portion of the market would have made different choices, had the option to abstain been present) is DESTROYED--at the expense of something else that will not exist as capital in some other form.
    Last edited by Steven Douglas; 11-13-2012 at 11:11 PM.

  18. #16
    Either the free market, left alone, would also have invested in this selfsame enterprise, or it would not. If it would have, then the economy suffers, at the very least, from the “take” going to the intermediary bureaucracy. If not, and this is almost certain, then it follows immediately that the expenditure on E is a distortion of private utility on the market—that some other expenditure would have brought greater monetary returns. - Murray Rothbard

    What, then, is the productive contribution of government? Since the value of government is not gauged on the market, and the payments to the government are not voluntary, it is impossible to estimate. It is impossible to know how much would be paid in to the government were it purely voluntary, or indeed, whether one central government in each geographical area would exist at all. Since, then, the only thing we do know is that the tax-and-spend process diverts income and resources from what they would have been doing in the “private sector,” we must conclude that the government’s productive contribution to the economy is precisely zero. Furthermore, even if it be objected that governmental services are worth something, it would have to be noted that we are again suffering from the error pointed out by Bastiat: a sole emphasis on what is seen, to the neglect of what is not seen. We may see the government’s hydroelectric dam in operation; we do not see the things that private individuals would have done with the money—whether buying consumers’ goods or investing in producers’ goods—but which they were compelled to forgo. In fact, since private consumers would have done something else, something more desired, and therefore from their point of view more productive, with the money, we can be sure that the loss in productivity incurred by the government’s tax and spending is greater than whatever productivity it has contributed. In short, strictly, the government’s productivity is not simply zero, but negative, for it has imposed a loss in productivity upon society. - Murray Rothbard



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  20. #17
    Furthermore, even if it be objected that governmental services are worth something, it would have to be noted that we are again suffering from the error pointed out by Bastiat: a sole emphasis on what is seen, to the neglect of what is not seen. We may see the government’s hydroelectric dam in operation; we do not see the things that private individuals would have done with the money—whether buying consumers’ goods or investing in producers’ goods—but which they were compelled to forgo. - Murray Rothbard
    This really hits the nail on the head. People obviously DO argue that governmental services are worth something. Yet, the error pointed out by Bastiat...in his essay on The Seen vs the Unseen...is fundamentally important for people to understand.

    Unfortunately, Rothbard never considered...or at least he didn't mention...the idea of allowing taxpayers to choose which government organizations they gave their taxes to. Therefore...he went around arguing that we should just throw the baby out with the bath water. Well...that's how his argument sounds to the large majority of people.

    That's why tax choice is so important. It can help us get our foot in the door. We're not making the argument that we should get rid of the government services that the large majority of people value...we're arguing that they should have the freedom to use their taxes to support whichever government organizations they value most.

  21. #18
    Quote Originally Posted by Wesker1982 View Post
    Either the free market, left alone, would also have invested in this selfsame enterprise, or it would not. If it would have, then the economy suffers, at the very least, from the “take” going to the intermediary bureaucracy. If not, and this is almost certain, then it follows immediately that the expenditure on E is a distortion of private utility on the market—that some other expenditure would have brought greater monetary returns. - Murray Rothbard
    You would look for cases where the market wouldn't build it even though the market would greatly benefit. If the market would build it anyway then its not a public good. Rothbard is basically begging the question here.

    Command economies can get things done in a hurry. This is why business are for the most part organised as command enterprises. They may not be as efficient as co-ops and partnerships or collectives, but they make it with speed and precision.

    Examples above of Carnegie building bridges, these are examples of exceptional concentration of wealth, and then command forces building things that a more normal market wouldn't build.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't a thing
    Prostitution is legal
    We have a constitutional right to refuse any type of medical care

  22. #19
    http://host.madison.com/business/epi...a4bcf887a.htmlThis Woman payed for a couple of bridges ramps and roads on a freeway to access her campus.
    Quote Originally Posted by BuddyRey View Post
    Do you think it's a coincidence that the most cherished standard of the Ron Paul campaign was a sign highlighting the word "love" inside the word "revolution"? A revolution not based on love is a revolution doomed to failure. So, at the risk of sounding corny, I just wanted to let you know that, wherever you stand on any of these hot-button issues, and even if we might have exchanged bitter words or harsh sentiments in the past, I love each and every one of you - no exceptions!

    "When goods do not cross borders, soldiers will." Frederic Bastiat

    Peace.

  23. #20
    Compared to the current tax system, positive. Can't wait till we get to "Thr Curse of Machinery". By the way mohassan you have started some great threads in the short time you've been here.
    Quote Originally Posted by BuddyRey View Post
    Do you think it's a coincidence that the most cherished standard of the Ron Paul campaign was a sign highlighting the word "love" inside the word "revolution"? A revolution not based on love is a revolution doomed to failure. So, at the risk of sounding corny, I just wanted to let you know that, wherever you stand on any of these hot-button issues, and even if we might have exchanged bitter words or harsh sentiments in the past, I love each and every one of you - no exceptions!

    "When goods do not cross borders, soldiers will." Frederic Bastiat

    Peace.

  24. #21

    LL Something is amiss if you can't fully include Conservatism into your circle jerk. While the republican form of conservatism may hold some free economic similarities to Libertarianism. The republican form of conservatism's social mandate mates with progressivism. They may have different agendas, but their solutions are the same. People calling themselves liberal, idea of Freedom of Choice is the choices they choose to allow. I see little difference between liberals, fascist, communist, socialist, and progressives. You included Anarchism, but left out Totalitarianism. Why because nobody calls themself a totalitarianist? Anarchism is as fanciful as Totalitarianism. It can not exist. At the very least An-caps have Principles that follow to a conclusion. By the way where does Pragmatarianism fit in the circle jerk? I don't see it. To paraphrase Dr. Paul at some point Economic Freedom became divorced of Social Freedom. Perhaps in prehistory the value of Dundar's number averaged to 150 people. Perhaps the perfect size of governance. Society expanded from this small number through markets, perhaps free ones and aggression of the controlling type. The elegance of the Free Market evolved from the social interaction of Humanity. Likewise the desire to control and manipulate others derives itself from our inherent inhumanity. Think of it as the good and evil on your shoulders. You think the solution is to inject the market into government. If markets are the answer would they have already done so naturally? A merger of Markets and government already exist, only its government that has injected itself into the market. They are both part of our humanity, but they are not alike, they are opposites. I guess anything can make sense when viewed in a bubble.
    Quote Originally Posted by BuddyRey View Post
    Do you think it's a coincidence that the most cherished standard of the Ron Paul campaign was a sign highlighting the word "love" inside the word "revolution"? A revolution not based on love is a revolution doomed to failure. So, at the risk of sounding corny, I just wanted to let you know that, wherever you stand on any of these hot-button issues, and even if we might have exchanged bitter words or harsh sentiments in the past, I love each and every one of you - no exceptions!

    "When goods do not cross borders, soldiers will." Frederic Bastiat

    Peace.

  25. #22
    Quote Originally Posted by Henry Rogue View Post
    LL Something is amiss if you can't fully include Conservatism into your circle jerk. While the republican form of conservatism may hold some free economic similarities to Libertarianism. The republican form of conservatism's social mandate mates with progressivism. They may have different agendas, but their solutions are the same. People calling themselves liberal, idea of Freedom of Choice is the choices they choose to allow. I see little difference between liberals, fascist, communist, socialist, and progressives. You included Anarchism, but left out Totalitarianism. Why because nobody calls themself a totalitarianist? Anarchism is as fanciful as Totalitarianism. It can not exist. At the very least An-caps have Principles that follow to a conclusion. By the way where does Pragmatarianism fit in the circle jerk? I don't see it.
    Concepts such as conservatism or liberalism are simply "shortcuts" we use. The technical term is heuristic. But if taxpayers were allowed to directly allocate their taxes...do you think they would be concerned about spending their taxes according to popular stereotypes? For example...if you and I happened to be grocery shopping at the same time...then what are the chances we'd purchase exactly the same items?

    That's why pragmatarianism doesn't fit into the circle jerk...it's a completely different paradigm. It doesn't offer an answer regarding what the government should or shouldn't do...it offers a means of finding an answer. We'd shop for ourselves in the public sector and all our spending decisions would reveal the proper scope of government.

    Quote Originally Posted by Henry Rogue View Post
    To paraphrase Dr. Paul at some point Economic Freedom became divorced of Social Freedom. Perhaps in prehistory the value of Dundar's number averaged to 150 people. Perhaps the perfect size of governance. Society expanded from this small number through markets, perhaps free ones and aggression of the controlling type. The elegance of the Free Market evolved from the social interaction of Humanity. Likewise the desire to control and manipulate others derives itself from our inherent inhumanity. Think of it as the good and evil on your shoulders. You think the solution is to inject the market into government. If markets are the answer would they have already done so naturally?
    But modern economic theory is...well...modern. Adam Smith is primarily responsible for introducing the idea of the invisible hand. And the idea of introducing the invisible hand to the government is extremely new. This...here...us...is the market. We decide whether we inject the market into the government. If we decide to do so then it will be accomplished via democratic means. Is that considered naturally?

    Quote Originally Posted by Henry Rogue View Post
    A merger of Markets and government already exist, only its government that has injected itself into the market. They are both part of our humanity, but they are not alike, they are opposites. I guess anything can make sense when viewed in a bubble.
    Pragmatarianism is simply a more effective way of guiding the government. Directly allocating your taxes would be optional. Why would people choose this option? They would do so if they believed that our government was guiding the country in the "wrong" direction.

  26. #23
    Quote Originally Posted by Xerographica View Post
    Concepts such as conservatism or liberalism are simply "shortcuts" we use. The technical term is heuristic. But if taxpayers were allowed to directly allocate their taxes...do you think they would be concerned about spending their taxes according to popular stereotypes? For example...if you and I happened to be grocery shopping at the same time...then what are the chances we'd purchase exactly the same items?
    That's why pragmatarianism doesn't fit into the circle jerk...it's a completely different paradigm. It doesn't offer an answer regarding what the government should or shouldn't do...it offers a means of finding an answer. We'd shop for ourselves in the public sector and all our spending decisions would reveal the proper scope of government.
    But modern economic theory is...well...modern. Adam Smith is primarily responsible for introducing the idea of the invisible hand. And the idea of introducing the invisible hand to the government is extremely new. This...here...us...is the market. We decide whether we inject the market into the government. If we decide to do so then it will be accomplished via democratic means. Is that considered naturally?
    Pragmatarianism is simply a more effective way of guiding the government. Directly allocating your taxes would be optional. Why would people choose this option? They would do so if they believed that our government was guiding the country in the "wrong" direction.
    You're good, I can see you have been doing this for a long time. The study of economics is a new endeavor of mine, which is obvious to you. I was trying to put a lot of things in that post in a short time, so it looked like rambling even to me. When you get right down to it economics is a social interaction between two to all people. That is determined by human behavior, for a lack of a better word. Am I wrong? Now we have this other interaction between an authority group and a subordinate group which is also determined by human behavior by both groups. With your grasp of economics you are confident of the market. Are you equally confident of your understanding of the authoritative/subordinate interaction? You can't say the same behaviors apply or it would already act as a market and there would be no need for Pragmatarianism. Now on a personal level its obvious to me that you do not view taxes as theft nor believe in a necessity to reduce them. Only to make them more efficient. It's surprising you allocate time to RPF a Forum named after a Man who has a sign on his desk that states "Don't steal the government hates competition." You maybe surprised that there are a lot of Constitutionalist and Libertarians, small government people on this forum who don't think income tax is necessary and some don't believe a police force is necessary and they have the history of the United States as proof. I think you would have great luck on a republican forum. However i have learned some things, so post away.
    Quote Originally Posted by BuddyRey View Post
    Do you think it's a coincidence that the most cherished standard of the Ron Paul campaign was a sign highlighting the word "love" inside the word "revolution"? A revolution not based on love is a revolution doomed to failure. So, at the risk of sounding corny, I just wanted to let you know that, wherever you stand on any of these hot-button issues, and even if we might have exchanged bitter words or harsh sentiments in the past, I love each and every one of you - no exceptions!

    "When goods do not cross borders, soldiers will." Frederic Bastiat

    Peace.

  27. #24
    Quote Originally Posted by Henry Rogue View Post
    When you get right down to it economics is a social interaction between two to all people. That is determined by human behavior, for a lack of a better word. Am I wrong?
    Right...and by far and large it's rational. If I ask you to paypal me $100...then I'd be willing to bet $90 that you'd want to know why you should do so. Therefore, people engage in trade when the exchange makes sense to both parties. And they continue to trade if it turns out that the exchange was mutually beneficial.

    Right now you and I are engaging in trade. You're giving me your time/perspective and I'm giving you my time/perspective. Therefore, we can use economics to understand people's behavior in this thread. Some people found value in exchanging their perspectives/time with me...while others did not. When people have the freedom to choose who they exchange with...we maximize value.

    Quote Originally Posted by Henry Rogue View Post
    Now we have this other interaction between an authority group and a subordinate group which is also determined by human behavior by both groups. With your grasp of economics you are confident of the market. Are you equally confident of your understanding of the authoritative/subordinate interaction?
    If you notice that your child doesn't look both ways before crossing the street...you'll behave authoritatively in order to modify your child's behavior. But if you behave too authoritatively then you'll stifle your child's individuality. And if you see a parent beating their kid in a store? Do you step in and behave authoritatively?

    Democracy provides all of us the opportunity to step in and behave authoritatively. But we should never allow politics to answer economic questions. If voters want drugs to be illegal...then so be it. I disagree but maybe I'm wrong. How much money should be spent on the drug war? That's an economic question which is why it can only be accurately answered by each and every taxpayer considering the opportunity costs.

    Quote Originally Posted by Henry Rogue View Post
    You can't say the same behaviors apply or it would already act as a market and there would be no need for Pragmatarianism.
    A lot of people want to get money out of politics. So given that there's already plenty of money in politics...it should be self-evident that many of the same behaviors apply. My argument is that if you take money out of politics...then how can politicians truly gauge people's priorities? Economics is all about putting your money where your mouth is. Therefore, as a pragmatarian...my argument is that taxpayers should be able to put their taxes where their mouths are. This is how we can help ensure that society's limited resources are being used for maximum benefit.

    Quote Originally Posted by Henry Rogue View Post
    Now on a personal level its obvious to me that you do not view taxes as theft nor believe in a necessity to reduce them. Only to make them more efficient. It's surprising you allocate time to RPF a Forum named after a Man who has a sign on his desk that states "Don't steal the government hates competition." You maybe surprised that there are a lot of Constitutionalist and Libertarians, small government people on this forum who don't think income tax is necessary and some don't believe a police force is necessary and they have the history of the United States as proof. I think you would have great luck on a republican forum. However i have learned some things, so post away.
    Ron Paul attracts vulgar libertarians like none other. But libertarian economics is the foundation of pragmatarianism. And it's not like there are a lot of libertarian forums to choose from...so beggars can't be choosers. So I do my part to try and help vulgar libertarians learn the economic arguments for libertarianism. Most don't respond so well...as you can tell from my reputation.



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  29. #25
    Quote Originally Posted by Xerographica View Post
    Right...and by far and large it's rational. If I ask you to paypal me $100...then I'd be willing to bet $90 that you'd want to know why you should do so. Therefore, people engage in trade when the exchange makes sense to both parties. And they continue to trade if it turns out that the exchange was mutually beneficial.
    Right now you and I are engaging in trade. You're giving me your time/perspective and I'm giving you my time/perspective. Therefore, we can use economics to understand people's behavior in this thread. Some people found value in exchanging their perspectives/time with me...while others did not. When people have the freedom to choose who they exchange with...we maximize value.
    If you notice that your child doesn't look both ways before crossing the street...you'll behave authoritatively in order to modify your child's behavior. But if you behave too authoritatively then you'll stifle your child's individuality. And if you see a parent beating their kid in a store? Do you step in and behave authoritatively?
    Democracy provides all of us the opportunity to step in and behave authoritatively. But we should never allow politics to answer economic questions. If voters want drugs to be illegal...then so be it. I disagree but maybe I'm wrong. How much money should be spent on the drug war? That's an economic question which is why it can only be accurately answered by each and every taxpayer considering the opportunity costs.
    A lot of people want to get money out of politics. So given that there's already plenty of money in politics...it should be self-evident that many of the same behaviors apply. My argument is that if you take money out of politics...then how can politicians truly gauge people's priorities? Economics is all about putting your money where your mouth is. Therefore, as a pragmatarian...my argument is that taxpayers should be able to put their taxes where their mouths are. This is how we can help ensure that society's limited resources are being used for maximum benefit.
    Ron Paul attracts vulgar libertarians like none other. But libertarian economics is the foundation of pragmatarianism. And it's not like there are a lot of libertarian forums to choose from...so beggars can't be choosers. So I do my part to try and help vulgar libertarians learn the economic arguments for libertarianism. Most don't respond so well...as you can tell from my reputation.
    I need more time to respond to this post. I hope you're not banned before I get a chance to respond. Interesting you should mention democracy, let's see if i take the bait.
    Quote Originally Posted by BuddyRey View Post
    Do you think it's a coincidence that the most cherished standard of the Ron Paul campaign was a sign highlighting the word "love" inside the word "revolution"? A revolution not based on love is a revolution doomed to failure. So, at the risk of sounding corny, I just wanted to let you know that, wherever you stand on any of these hot-button issues, and even if we might have exchanged bitter words or harsh sentiments in the past, I love each and every one of you - no exceptions!

    "When goods do not cross borders, soldiers will." Frederic Bastiat

    Peace.

  30. #26
    RE: Tax Choice; The market is not merely consumers (taxpayers) making choices. Producers are also free to make choices.

    Does this system allow govt. agencies the option to redirect their efforts to some other more profitable end?

    What if an individual chooses to offer the same product or service as the govt., will he be free to compete for tax dollars?

    If this system works as Xerographica thinks it might, then how is it distinguishable from the free market?

    My point is that govt. is precisely that which excludes the free market.

    Tax choice is merely a smokescreen, much like "Red Team" vs. "Blue Team" in elections.

  31. #27
    Quote Originally Posted by Len Larson View Post
    RE: Tax Choice; The market is not merely consumers (taxpayers) making choices. Producers are also free to make choices.
    Of course!

    Quote Originally Posted by Len Larson View Post
    Does this system allow govt. agencies the option to redirect their efforts to some other more profitable end?
    Govt agencies can spend their revenue however they like. If they spend their revenue in a way that benefits taxpayers...then taxpayers will give them more taxes. If they spend their revenue in a way that does not benefit taxpayers...then taxpayers will give them less taxes. Without this essential feedback mechanism...how can we ensure that govt agencies are not wasting our society's limited resources?

    Quote Originally Posted by Len Larson View Post
    What if an individual chooses to offer the same product or service as the govt., will he be free to compete for tax dollars?
    Let's say that you put on some tights and a cape. And then you go flying around defending the country from all threats...would taxpayers choose to give as much taxes to the Dept of Defense?

    It is, of course, not desirable that anything should be done by funds derived from compulsory taxation, which is already sufficiently well done by individual liberality. - J.S. Mill
    What is "sufficiently" well done by individual liberty? I can't answer that question for the entire country...that's not how economics works. Economics would work if we gave each and every taxpayer the freedom to withhold their taxes from any government organizations. That's how we can truly discover exactly what is being "sufficiently" well done by the private sector.

    Quote Originally Posted by Len Larson View Post
    If this system works as Xerographica thinks it might, then how is it distinguishable from the free market?
    The market is simply a method of determining how society's limited resources should be used. It's a highly effective method which is why libertarians see value in shrinking the size of the public sector. However, I don't believe that our efforts to shrink the size of the public sector have been effective. That's why I advocate creating a market for public goods.

    Quote Originally Posted by Len Larson View Post
    My point is that govt. is precisely that which excludes the free market.
    Our country has a mixed economy...we have a market economy in the private sector and a command economy in the public sector. What would happen if we had a market economy in the public sector? How could the consequences not be awesome?

    Quote Originally Posted by Len Larson View Post
    Tax choice is merely a smokescreen, much like "Red Team" vs. "Blue Team" in elections.
    But what would happen to the "red team" vs "blue team" concept if we implemented pragmatarianism? Clearly there's no equivalent "team" concept in the private sector. I don't need to be on a team to go to the grocery store and purchase the private goods that I want/need/value. So the whole "team" concept would go right out the door in a pragmatarian system.
    Last edited by Xerographica; 11-16-2012 at 06:05 PM.

  32. #28
    Responding in reverse order:

    Red vs Blue is cited to evoke the phony competition between the political parties. Stated differently, you want to stir up Ford vs. Chevy sentiment while prohibiting Toyota imports. Your tax choice merely sets up a fake market to entertain taxpayers and keep real competitors out.

    The difference between Market vs. Command economy is precisely the distinction. Slapping a "New Improved with Real Competition" label on the public sector does not imbue it with the qualities of the free market. Price calculation is still impossible and rational decisions cannot be made.

    The public sector cannot be reduced by political means such as you are advocating. Informing and educating the public is the only path that leads to a free market for ALL goods and services.

    Determining "sufficiently well done", in the absence of prices, is the playground of statists everywhere.

    I just got my cape back from the cleaners, so let's use a more concrete example. Suppose Underwriter Laboratories decides to make a move on the FDA. Do you really think the lobbyists and politicians would sit still while one of their own was run out of "business"?

    This is merely a reprise of the "good government" argument that has been used to befuddle voters for decades. Everything will be OK if only the right people (taxpayers in this case) make the decisions. Again this completely misses the total lack of any price information.

    It seems to me that you are so enamored of this idea (besotted really), that you simply are not thinking clearly. I could just as convincingly argue that if up was down, then we all could fly. The intersection of Market and Command is null no matter how awesome the consequences.
    Last edited by Len Larson; 11-16-2012 at 10:41 PM.

  33. #29
    Quote Originally Posted by Len Larson View Post
    Responding in reverse order:

    Red vs Blue is cited to evoke the phony competition between the political parties. Stated differently, you want to stir up Ford vs. Chevy sentiment while prohibiting Toyota imports. Your tax choice merely sets up a fake market to entertain taxpayers and keep real competitors out.
    If the superior producers are in the private sector...then won't taxpayers realize this and want to keep their money out of the public sector?

    Quote Originally Posted by Len Larson View Post
    The difference between Market vs. Command economy is precisely the distinction. Slapping a "New Improved with Real Competition" label on the public sector does not imbue it with the qualities of the free market. Price calculation is still impossible and rational decisions cannot be made.
    Yup...there wouldn't be literal price tags on public goods. Then again...did you make a rational decision to respond to my post? If you did...then how did you do so? How about this...if I asked you to paypal me $500...would you be able to make a rational decision?

    Markets work because of the opportunity cost concept. The 10 minutes that you spend writing a response to this post cannot be spent doing other things that are important to you. The $10 you spend on a movie can't be spent on a sandwich. The $100 you donate to the Red Cross can't also be donated to the World Wildlife Fund. The $500 in taxes that you spend on public healthcare can't also be spent on public education.

    The trade-offs we have to make reveal our priorities...this helps to ensure that limited resources are put to their most productive/valuable uses.

    Quote Originally Posted by Len Larson View Post
    The public sector cannot be reduced by political means such as you are advocating. Informing and educating the public is the only path that leads to a free market for ALL goods and services.
    Yup yup...that's what I'm doing here. I'm sacrificing my other priorities to help you, and whoever else reads this, to learn about the opportunity cost concept.

    Quote Originally Posted by Len Larson View Post
    Determining "sufficiently well done", in the absence of prices, is the playground of statists everywhere.
    "The price of anything is the amount of life you exchange for it." - Henry David Thoreau

    Quote Originally Posted by Len Larson View Post
    I just got my cape back from the cleaners, so let's use a more concrete example. Suppose Underwriter Laboratories decides to make a move on the FDA. Do you really think the lobbyists and politicians would sit still while one of their own was run out of "business"?
    Paying taxes would be optional...so taxpayers could just give their taxes to congress. Do you think taxpayers would want the option to give their taxes to specific congresspeople? Maybe? If so...then politicians would be fighting each other for money. Would the FDA fight for money? Who knows? Some things are easy sales...and other things not so much.

    Quote Originally Posted by Len Larson View Post
    This is merely a reprise of the "good government" argument that has been used to befuddle voters for decades. Everything will be OK if only the right people (taxpayers in this case) make the decisions. Again this completely misses the total lack of any price information.
    Why shouldn't taxpayers be making the decisions? They are the ones who sacrificed to earn their money.

    Quote Originally Posted by Len Larson View Post
    It seems to me that you are so enamored of this idea (besotted really), that you simply are not thinking clearly. I could just as convincingly argue that if up was down, then we all could fly. The intersection of Market and Command is null no matter how awesome the consequences.
    I am besotted with the idea! We'd be giving taxpayers the option to directly allocate their taxes. Each and every single one of them would decide whether congress can spend their taxes better than they can. What do you think will happen?

  34. #30
    Thanks for taking the time to educate me and others here.
    Perhaps you could comment on this passage found at Mises: http://mises.org/rothbard/myth.pdf

    Quote Originally Posted by Rothbard
    Much the same thing has happened to the noble concept of neutral taxation. The idea that taxation, and therefore government's fiscal operation, should be neutral to the market—should not disturb the operations of the market nor divert it from its free course—is a noble but impossible one. As we have seen here, taxation can never be neutral to the market, and the impossibility of this dream is rooted in the very nature of taxation and government. Neutral taxation is merely a chimera. It is perhaps because of this impossibility that this concept, in the hands of the modern public-choice theorists and others, has so quickly become yet another device for ratifying the status quo of State power.

    We are forced, then, to the realization of crucial points from which free- market economists seem to have been fleeing as from the very plague. That neutral taxation is an oxymoron; that the free market and taxation are inherently incompatible; and therefore either the goal of neutrality must be forsaken, or else we must abandon the institution of taxation itself.



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