What do you think of Murray Rothbard? At first I didn't think very highly of him, but that changed when I read "Toward a Reconstruction of Utility and Welfare Economics" (1956) and "The Myth of Neutral Taxation" (1981). Basically, the only problem with government is that it doesn't know our valuations of public goods.
Rothbard said that, if there was a button that would abolish the government, he would press it until his thumb blistered. He really hated the government.
Would you push the button? I wouldn't. I don't hate the government. It would be easy to fix it simply by giving taxpayers the freedom to choose where their taxes go.
For many years I have advocated for "pragmatarianism". People have two main objections…
1. taxpayers are uninformed
2. wealthy taxpayers would have too much influence
At some point I realized that taxpayers are basically subscribers, so I started arguing that Netflix subscribers should be free to divide their subscription dollars between nature shows and horror movies.
Did anybody object that Netflix subscribers are uninformed? Nope. Did anybody object that some subscribers would have too much influence? Nope. Instead, people objected that Netflix already knows its subscribers' preferences because… view/votes.
So the real problem is the widespread perception that markets aren't needed to reveal our valuations. The solution? Honest Cash!
HC is a market… how we divide our dollars between #econ posts and #art posts reveals how we want society's resources to be divided between them. In theory this will help everybody understand just how useful markets truly are, and then taxpayers will be free to divide their tax dollars between defense and education.
We will have a market in the public sector and we will also have a market in the private sector. These two markets will be very different though. The market in the public sector won't have any prices. You could spend any amount of your tax dollars on defense. Since everybody is different, people would spend different amounts of money on defense. It wouldn't be one-price-fits-all.
Essentially, consumers are going to be more honest with producers of public goods than with producers of private goods. Public producers are going to make more accurately informed decisions than private producers, so taxpayers are going to want to spend more and more money in the public sector. The private sector would shrink and shrink until it was completely gone.
The tax rate would be 100%, but we would be able to choose where our taxes go.
Do you think this outcome is realistic?
Consider this thought experiment. Here on HC I can't spend my money on my own posts. The same is true over at Cent. In neither market do I have the opportunity to divide my money among my posts. I have no choice but to hide my valuations of my posts. In this regard I'm essentially being forced to lie to other consumers and producers.
All else being equal, what would happen if HC gives us the opportunity to spend our money on our own posts? We would be more honest with each other, so HC producers would make better informed decisions, and the result would be a more valuable supply of posts. Naturally we would want to spend more money here than at Cent.
In this post I said that it would be very beneficial to be able to easily find someone's most valuable post. I posted the story on Twitter and Craig Talbert replied…
“Is it beneficial to be able to find and see a creator’s most valuable creation?” I think yes, but just one yes. Not the When Harry Met Sally “Yes! Very yes! So so so so so yes!!!!”
Hahahaha… *awkward*. Not sure if you saw the movie, but Sally pretends to have a very loud orgasm in a restaurant. After she is finished a lady sitting at another table tells the waitress… "I'll have what she's having." This lady would of course be very disappointed with the dish. It really wouldn't be orgasmic.
When consumers pretend that something is better or worse than it truly is, then this misleads other consumers and producers. No society truly benefits when its members bark up the wrong trees and go on wild goose chases.
The goodness of a market depends on its honesty. The more honest a market is, the more valuable its supply will be.
Right now Honest Cash is far more honest than Reddit. But this really doesn't say much, because everybody on Reddit is super dishonest. They don't have the opportunity to reveal their valuations. Here on HC we do have the opportunity to reveal our valuations, except when it comes to our own content.
Rothbard was super right about the importance of our valuations, but he was super wrong about the solution.