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The Free-Rider Problem

It does not have to be a comparison to the impossible world. For example, the free rider problem of national defense is solved through taxation. Without a strong central government to tax and raise an army to protect from foreign invaders, the market would (arguably) under-provide military service due to the defining features of a public good.

It seems that you are nitpicking the garden example and even that is not a comparison to an impossible world. The idea that we could tax people and redistribute that taxation to people who grow gardens is absurd, but certainly in the realm of possibilities. If we ever enacted such a bill, then we would have an increase supply of gardens, and correcting for the under-provision of the public good.

That's a different understanding of what I have of the problem from what I have read. If not enough people pay for the public goods to begin with, then there's no free-riding, so how could there be a free-rider problem? How do we differentiate when people don't produce certain goods because they are public goods or because they don't want it?
 
This is actually why I support-- in principle at least-- welfare programs. I don't think of it as useless people being paid for nothing, I think of it as useless people being paid to stay out of my way while I'm working. I have problems with current welfare programs because they undermine work ethics and family values, to the extent that I'm afraid they do so intentionally, but the principle of the government taking some of my money to ensure that non-producers can still be consumers does not bother me. It is essential in an industrialized society to keep a certain percentage of the population permanently unemployed-- or non-productively employed-- in order to maintain a functional balance between the demand for labor and the demand for manufactured goods. In general, the better this system channels more talented people into productive employment and less talented people into welfare, the better the system is going to work for everyone-- especially the more talented.



You have to understand, I don't. I don't trust the Congress any better than I trust the invisible hand to sufficiently allocate taxes. The only entity that I trust to allocate taxes in a fashion that is beneficial to society is me. The difference between the Congress and the market isn't a matter of competence so much as it is a matter that-- as relatively powerless as I am-- the Congress is the force that I have more control over. If you offered me the choice between Congress and an agency that I could wield even more control over, I would choose the latter, and so forth between any two possible agencies until I ultimately had the option of choosing myself.

Also, I never concern myself with the "most efficient" allocation of resources any more than I worry about perfection in any other endeavor. I only concern myself with whether the current solution is good enough for right now and whether or not it can be improved upon in the future. Not only is it impossible for the Pareto optimal to ever be achieved, societies and economic systems change too fast for any solution to remain the Pareto optimal for very long. There is always room for improvement, and so as long as we have the capacity to improve something we have a moral imperative to do so.



The problem with economics is that it is effectively a sub-discipline of biology that has deluded itself into thinking it is a sub-discipline of mathematics. A biologist would never theorize that excessive production of white blood cells is harmful, merely because those resources could have been used to build muscles or nerves instead, unless the surplus of white blood cells was damaging in itself. The allocation of resources does not need to be efficient, especially when those resources are abundant, as long as the allocation of resources is sufficient to keep the economic system functioning.




The beautiful thing about using force is that it means you don't need to win the argument. If the government can not ever convince you to allow them to take your money, by all means try to stop them. If you win the fight, you will have proven your point, and if you lose we'll just continue taking your money anyway.

I'm not being flippant here, either. If you are right and it is possible to maintain a functional system of government without coercive taxation, the only way you will ever be able to prove it is by actually doing it-- and you'll never be able to prove the efficacy of non-coercion within a coercive system. I do not agree with you morally or practically, but I would be fascinated to see how your experiment would play out on large enough scale to matter.



No, but if the number of people using the site without paying starts discouraging donors from doing so, the site will be forced to shut down to the detriment of paying and non-paying users alike. That's the essence of the the free rider problem, which is essentially a form of the tragedy of the commons.



It could be argued that this is a good thing, since the 1% essentially have a better understanding of what our society needs to continue functioning and have a larger vested interest in seeing that it does. Not to mention that if paying more taxes gave you a bigger say in how our tax dollars were spent, we would have people generally being far more willing to pay more in taxes. One might even argue that the wealthy are at least somewhat intellectually and morally superior to the poor, since they have managed to avoid the personal failings that are most often responsible for downward mobility and generational poverty.

I wouldn't make this argument myself, given the demonstrable moral myopia of the business and political elite in this country, but there is still some truth to it.



Why? Why should anyone be allowed to vote, for that matter? Remember, every dime of unearned wealth and unaccountable power that the extremely wealthy and the multinational corporations have in this country was either given to them or enabled by the very same government that we the people elected time and time again. If we are going to vote consistently for less and less democracy, what is the point of trying to preserve it?


I think you fail to understand what the study of economics is about: it's about the efficient allocation of limited resources. If the resources is unlimited, then we could do whatever we want, no constraints. The assumption within Economics is that if your body produces more white blood cells, then it's using resources that could be used to produced other kinds of cells. So the question for Economists is: which is the most efficient use of these resources?

Your criticism is similar to criticising philosophy for engaging in language and metaphorical questions - that is the aim of the subject.

Biology BTW employs Mathematics as well.
 
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Don't get me wrong. I'm not at all saying it's possible to maintain a functional government without coercive taxation. I believe government is required, and taxes are required to support it. I am only pointing out that this free rider problem is nothing more than an economic argument to justify government intervention. My preference is to allow producers and consumers to determine what to produce and in what quantities.

Why is government required in your opinion then?
 
You failed. This forum is a private good, provided to all comers, that asks people freely assist.

They asked for a free-rider example, he provided one. This forum is to a large extent a non-rival goods, and have been set up to be mostly non-exclusive - so it's very close to a public goods.
 
It's when people's concerns lead them to provide these public goods for people who don't care enough about these goods that the free-rider problem arise. Instead of claiming people don't understand the "Invisible Hand" why don't you try understanding the implications of your own theory first?

The implications of my theory? Pragmatarianism would result in the efficient allocation of public goods. Why are you under the impression that I do not understand the implications of my theory?
 
Primarily to protect individuals from aggression, theft, breach of contract, and fraud.

Why not let individuals purchase these services themselves from private providers?
 
Mr. Viktyr Korimir...on the other hand...if you've got 10 kidneys...? Really? How can we realistically communicate if you live in left field? What is the definition of economics? It is the study of scarcity. You really don't have 10 kidneys. I mean...I'm pretty sure you don't have 10 kidneys. ... With that fact in mind would you mind making an intellectually honest attempt at evaluating pragmatarianism?

My having ten kidneys is no less unrealistic and no less intellectually honest than you comparing less than one-third of my weekly wages to fully one-half of my standard complement of two irreplaceable kidneys. I've already given my honest opinion on why I don't support pragmatarianism and why I do not think that it is a viable substitute for even our critically flawed democratic system of governance. Between the two of us, I am the one being more rational and pragmatic-- I'm willing to accept that any fiscal policy in which the government fulfills its financial obligations reliably is good enough for now and that attempting to improve upon it is a luxury. You are attempting to replace a system that works-- admittedly, works badly-- with a system that has never been tried and for which there is no compelling evidence that it will work. That is not a pragmatic approach to fiscal policy, regardless of what you call it.
 
Viktyr Korimir, how well would it work if donors to the NRA and donors to PETA were forced to pool their donations and elect representatives to split the pool between the two organizations?
 
Viktyr Korimir, how well would it work if donors to the NRA and donors to PETA were forced to pool their donations and elect representatives to split the pool between the two organizations?

Isn't that pretty much how it works now? If it is-- like you seem to be implying-- then the answer is "well enough". How would allowing the NRA and PETA to write their own laws work better?
 
The implications of my theory? Pragmatarianism would result in the efficient allocation of public goods. Why are you under the impression that I do not understand the implications of my theory?

Because of what you write. How do you define and measure "the efficient allocation of public goods"? How does Pragmatarianism lead to "the efficient allocation of public goods"?
 
That's an interesting idea. How would that work?

Same as with other services. Some people sell it, some people buy it. Like firms that provide security guard services and people who hire security guards.
 
Same as with other services. Some people sell it, some people buy it. Like firms that provide security guard services and people who hire security guards.

As long as such a system can effectively protect people from aggression, theft, breach of contract, and fraud, then maybe I could get on board.

Under such a system, what would government do then?
 
Isn't that pretty much how it works now? If it is-- like you seem to be implying-- then the answer is "well enough". How would allowing the NRA and PETA to write their own laws work better?

Do you really genuinely think that all the donors to non-profit organizations have to pool their donations and elect representatives to divide the pool between the various non-profit organizations? That's not how the non-profit sector works...that's how the public sector works.

How well do you think it would work if you and I had to pool all our income together and purchase exactly the same set of private goods and services?

Why do you think it works "well enough" for taxpayers to purchase public goods that they do not value? You wouldn't want to purchase private goods that you do not value...and you wouldn't want to donate to non-profit organizations that you did not value...so why do you think it's perfectly ok to force everybody to purchase public goods that they do not value?
 
Because of what you write. How do you define and measure "the efficient allocation of public goods"? How does Pragmatarianism lead to "the efficient allocation of public goods"?

Allocative inefficiency...it's like if the Grinch snuck into your house and randomly switched all the labels on your family's Christmas presents. It would be like giving your kidney to somebody that doesn't need it.

Pragmatarianism would lead to the efficient allocation of public goods because taxpayers would be forced to consider the opportunity costs of their tax allocation decisions. Economics is the study of scarcity...and opportunity costs are essential to help ensure the efficient allocation of scarce resources.
 
Why do you think it works "well enough" for taxpayers to purchase public goods that they do not value?

Because they keep doing it. They keep earning their paychecks and they keep paying their taxes.
 
Because they keep doing it. They keep earning their paychecks and they keep paying their taxes.

We shouldn't allow taxpayers to directly allocate their taxes...because they keep giving their taxes to the IRS?
 
We shouldn't allow taxpayers to directly allocate their taxes...because they keep giving their taxes to the IRS?

Exactly. The system works. It should not be replaced, all at once, with a system that might work-- and which has serious theoretical flaws.
 
As long as such a system can effectively protect people from aggression, theft, breach of contract, and fraud, then maybe I could get on board.

Why can't such a system work without the government?

Under such a system, what would government do then?

According to you: nothing. But I'm wondering why you think you need the government for those services in the first place.
 
Allocative inefficiency...it's like if the Grinch snuck into your house and randomly switched all the labels on your family's Christmas presents. It would be like giving your kidney to somebody that doesn't need it.

If you can't come up with real examples of inefficiency, other than the Grinch and Christmas, you are just demonstrating that you don't understand what's you're preaching very well.


Pragmatarianism would lead to the efficient allocation of public goods because taxpayers would be forced to consider the opportunity costs of their tax allocation decisions. Economics is the study of scarcity...and opportunity costs are essential to help ensure the efficient allocation of scarce resources.

And that means nothing without a proper definition of "allocation efficiency" and how to define it.
 
Why can't such a system work without the government?
I'm not sure, actually. Do you think that people could arrange to protect their property, adjudicate disputes, and defend their territory without government? The only reason I think it can't work is because I am not aware of any such societies ever existing. How would this all be accomplished without government.

According to you: nothing. But I'm wondering why you think you need the government for those services in the first place.
I guess nobody's ever explained satisfactorily how, in the absence of government, people could provide police, courts, and a military for themselves. If you have any ideas, I'm willing to listen, however.
 
If you can't come up with real examples of inefficiency, other than the Grinch and Christmas, you are just demonstrating that you don't understand what's you're preaching very well.

Sorry...I shouldn't have assumed you'd be able to easily see how this applies to democrats complaining about too much defense spending and republicans complaining about too much welfare spending.

And that means nothing without a proper definition of "allocation efficiency" and how to define it.

If you had trouble understanding my definition then all you had to do was look on Wikipedia...allocative efficiency.
 
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I'm not sure, actually. Do you think that people could arrange to protect their property, adjudicate disputes, and defend their territory without government? The only reason I think it can't work is because I am not aware of any such societies ever existing. How would this all be accomplished without government.


I guess nobody's ever explained satisfactorily how, in the absence of government, people could provide police, courts, and a military for themselves. If you have any ideas, I'm willing to listen, however.

Check out my challenge to Stefan Molyneux.
 
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