I would have thought this is what economists call a "collective action problem" that illustrates the necessity of taxation to finance public projects.
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Silly Me
17 Feb 2008 02:58 pm
Comments (38)
A collective action problem. Sort of like the problem of providing health care without a mandate.
Or having a mandate without an enforcement mechanism.
Surprisingly enough people don't seem to have found her argument very convincing. You think your commenters hate you... things could be much worse.
So it's agreed that you need to use force to have socialism, right? With only the threat of violence you can build your utopia?
Right sign me up for that.
Yup, socialism requires force to back it up. Unlike all of those successful societies that don’t require any form taxation or a legal system backed up by the threat of force.
Obama wants to subsidize people's insurance and also require insurance companies to cover anyone who asks for insurance, even if there is a preexisting medical condition.
So why would somebody buy insurance at all? They could simply wait until they fell ill and then apply for insurance, thus avoiding paying any premiums before that. Insurance companies would then have to charge more for people who did buy insurance.
You know, I tried reading Megan for a while, but she keeps coming up with things like this, and continually thinking about why someone is wrong just gets old eventually.
I just wanted to make sure you weren't under any delusions that your socialism was chosen freely.
I teach just a little very basic econ theory to my Property law students, and this ain't a passing grade.
What happens when the majority choses a policy you don't like? For example invading another country? Is socialism justified then? Should I just ignore your objections, DJ, when I tax you in kind the rest of your life?
One requirement for being a so-called "conservative economist" is apparently to go into a small room by yourself and repeat: "There is no such thing as a public good" until you believe it's true...
Maybe that's what Megan McArdle was doing while she wasn't getting a degree in economics.
Yeah, that's some deep shit, Pointer. I've never heard that from some theoretical libertarian whose deep convictions have him voting the most aggressively militaristic and authoritarian of the property parties before.
Paul Campos, are you referring to Yglesias or McArdle? I assume McArdle.
I think McArdle's main problem is that she doesn't consider the low probability of any $1 contribution to the voluntary fund being pivotal in getting the project accomplished, or in adding a useful increment to the project. Commenters on her site emphasize the fairness issue ("why should I contribute if nobody else is?") but I think that's only of secondary importance.
Ah, 'collective action'. This is the sort of banter which will make Yglesias's book launch party so much fun.
Ed,
My philosophy is coherent. Meaning I don't vote. Why would I waste my time on something so utterly worthless. And for those who claim my position and then vote whichever way you insinuate, then I would say that they are hiding behind a false facade.
Sincerely,
I've never heard of Megan McArdle, but that is a stunningly stupid post.
Nbt,
McArdle. I wasn't aware of her work until a couple of weeks ago, when somebody pointed me to a post she made about how poor people have too much food.
She appears to be a real idiot, which raises the question of why the Atlantic is engaging in the sort of wingnut welfare one expects to find at right-wing think tanks and the like.
How many college republicans signed up for the "Draft Me, I Support the War" initiative?
How many nativists give the cashier at the supermarket an extra $10 when they by a head of lettuce subsidized by illegal migrant workers?
How many members of the Cato or Rand Institute do you think waive the mortgage tax deduction subsidy every year?
I mean, come on.
Since when did an MBA make a person an economist? Megan Mcardle is not an economist, and posts like this one prove it.
It is pretty hilarious that Megan's angle is "econ," but that she is so bad at it. But of course, what is really the case, is that she has libertarian(ish) committments and is reasonably good at cloaking them in econ 101 language. It is convincing if you haven't taken econ 201.
Megan is no idiot. She does cling to the cliffs of ideological libertarianism from time to time, but that doesn't make her an idiot. Libertarians aren't dumb, just wildly optimistic.
Megan Mcardle is not an economist, and posts like this one prove it.
Everytime I read her, I'm reminded of this Richard Feynman anecdote where he taught himself Chinese (paraphrased):
He didn't really teach himself Chinese; he just listened to Chinese and taught himself to mimic the sounds and timing of Chinese speech. So he would spit out this gobbledygook that, if you didn't know Chinese, sounded genuine. Finally, his peers started to catch on, and a visiting professor who had spent several years teaching in China was brought in and introduced to Feynman. The professor said "Hello, Professor Feynman. How are you doing?" in Chinese, and Feynman gamely responded with his gobbledygook. The visiting professor sadly turned to Feynman's colleagues and said, "I knew this would happen. He speaks Mandarin and I only know Cantonese."That about sums up the way Megan speaks 'economist'.
..econ 201 or ANY political economy
Richard Pointer writes:
"My philosophy is coherent. Meaning I don't vote."
Sounds like a win-win situation, I guess?
Oh jesus christ. Collective action problems are fairly limited: national defense, maybe. But once you get beyond that one, there aren't many. Look at Ronald Coase on LIghthouses.
These other functions are not collective action problems. They're just welfare programs.
Oh jesus christ. Collective action problems are fairly limited: national defense, maybe. But once you get beyond that one, there aren't many. Look at Ronald Coase on LIghthouses.
These other functions are not collective action problems. They're just welfare programs.
Anyone who brings up Coase means they know about economics as well as McArdle. Coase assumes distinct property rights, perfect information and zero transaction costs. Yes in such an imaginary world libertarian dreams do come true!
I guess this is what happens when the right mistakes political talking points for actual theory. And I suppose there's something to be learned about this.
Eg. "They just want to raise your taxes".
I'd be pretty surprised if anyone was in favour of raising taxes for the sake of raising taxes. Instead, a more accurate description would be "They want to provide 'x' service (or improve existing service), but they will have to raise your taxes to pay for it". Of course then the debate isn't over raise taxes vs. don't raise taxes, but between better service + raised taxes vs. don't raise taxes. I simply don't understand why the left isn't more willing to engage this second framing of the argument, because people generally prefer more/better services and do not like the status quo.
At the end of the day, this explains the fallacy of McArdle's point. People don't want to pay more taxes for the sake of paying more taxes. They will tolerate more taxes in return for more/better services. Voluntarily paying money into some fund will certainly cost you more, but it won't get you more/better services, which is why most people don't do it.
The fact that someone pays Megan McCardle to write this sort of thing makes me wonder if we've gone astray with the whole free market thing. Surely there was smarter stuff in Pravda.
neocommunist:
You may find this interesting (from THE EX-CONS. By: Robin, Corey, Lingua Franca: The Review of Academic Life, 10513310, Feb2001, Vol. 11, Issue 1):
...At the end of our interview, I ask Buckley to imagine a younger version of himself, an aspiring political enfant terrible graduating from college in 2000, bringing to today's political world the same insurgent spirit that Buckley brought to his. What kind of politics would this youthful Buckley embrace? "I'd be a socialist," he replies. "A Mike Harrington socialist." He pauses. "I'd even say a communist."
Can he really imagine a young communist Bill Buckley? He concedes that it's difficult. The original Bill Buckley had the benefit of the Soviet Union as an enemy; without its equivalent, his doppelganger would confront a more complicated task. "This new Buckley would have to point to other things," he says. Buckley runs down a laundry list of left causes--global poverty, death from AIDS. But even he seems suddenly overwhelmed by the project of (in typical Buckleyese) "conjoining all of that into an arresting afflatus." Daunted by the challenge of thinking outside the free market, Buckley pauses, then finally says, "I'll leave that to you."
Oh jesus christ. Collective action problems are fairly limited: national defense, maybe. But once you get beyond that one, there aren't many. Look at Ronald Coase on LIghthouses.
And unless you were a brain-dead moron or blindingly ideological, it would be evident to you that state revenue collection is another.
But there are plenty of problems that are better solved through government involvement due to some collective action aspect - even if private solutions could exist.
Overcoming the collective action problem is what happened in 'Napolean Dynamite' that got Pedro elected.
I really don't see the problem with voting for a tax raise for everyone. People aren't naturally Communist so there is an upper limit. In Sweden, which is very tax-tolerant, taxes were at 70% of GDP at one point*. But then, even tax-happy Swedes had had enough. Since then, taxes have been lower. Note, no economic catastrophe or the like happened.
*) Counting absolutely all taxes, including VAT. At the same time, America was at about 40%.
Paul Campos asks why the Atlantic is employing McArdle. My take on this is that the Atlantic strives to have writers with varying political ideologie, but, because the magazine is aimed at adults, also strives to avoid the shout-and-spout that passes for discourse nowadays. They have a slot designated "libertarian" and they have to go out and find someone to fill this slot. For all that McArdle is so justly an object of derision, we ought not reject the possibility that she is as good as it gets.
This raises the question of what slot Andrew Sullivan is filling. I'm stumped there.
Megan regularly posts stuff on "economics" that demonstrates she could barely pass a 101 class.
Herb - Re "Libertarians aren't dumb, just wildly optimistic."
Not so much optimistic as pessimistic about government action. (Assuming they are libertarian for consequentialist reasons, which I think Megan is, some people become libertarians for moral reasons instead)
Comments closed March 02, 2008.
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Heads in the Sand
Yup. Voluntarism doesn't work with public projects, which includes (see post below) international collective security arrangements.
Posted by otto | February 17, 2008 3:17 PM