(been a bit busy — still am, but I fancy some procrastination :-)

I think there is a fundamental principle that either holds, or doesn’t, and which then determines what an appropriate governance mechanism for a society should be: should everybody have an equal right and ability to influence government (or not).

If the answer is — no, they should not, then any number of criteria could be used to allocate the stake in determining policy, and none are a priori superior to others. You could say that taller, or heavier people, or those with more cattle, or many children would have more votes than shorter, lighter, cattle-less or childless people. Maybe the number of votes you’d have would be determined by the first letter of your name — Al and Anna would get one, Koen and Karen would get 10, and Zebedee and Zoe would get a whopping 26. Or indeed the more money you have, the bigger your stake in society.

If the answer is yes — everyone should have the same stake, but you also want people to make variable sacrifices according to how strongly they feel about a particular issue, then you somehow need to ensure that those who have objectively more to sacrifice do not overshadow those who have less. What I mean is that someone with savings of $100 may be willing to use it all to buy more votes, whereas someone with savings of $100 million could spend 1000 times more and not make a dent in their savings — it would not be a subjective sacrifice at all.

I also think we need to distinguish between the willingness to pay to have a certain policy implemented, and the actual opportunity cost of a policy being implemented. Say the town hall needs to be repainted, and there are two options: paint it white or paint it black. White and black paint cost the same, so there is no economic difference between the two, and it really is about the preferences of the citizens. In contrast, imagine there is a proposal to ban cars from the town centre. If it got adopted, then the streets will be nice for pedestrians, but shops will suffer as their customers will no longer be able to drive into town. Here it would make sense to get those who vote in favour of the ban to pay for the economic cost borne by the traders in the town. Unlike the painting of the town hall, this has nothing to do per se with pragmatarianism, but simply with internalizing the externality — those who benefit from the measure pay those who suffer.

Some coworkers are trying to decide which restaurant to eat at. Should they vote on it? I wouldn’t recommend it but they are welcome to knock themselves out.

What should they do instead? I can think of a few alternative approaches than a democratic vote, but ultimately if the condition is that they all go to the same place, I think it’s hard to escape either some form of democracy, or authoritarianism.

When I give my money to Frank in exchange for his artichokes… I am helping to give him the right of way.

You do, but you do so within the rules of the society in which you both reside. You don’t give him right of way to enter your home and steal your stuff. It seems to me to be important to separate economic power and political or legal power. For sure, if you and everyone else buys Frank’s artichokes, he will get immensely rich and will be able to buy everything there is for sale. Good for him. But it won’t (and IMV shouldn’t) buy him the right to slap random people in the face, get a policy adopted to incarcerate people with Polish ancestry, or ban teaching — irrespective of the amount of money he has.

It seems like the case that you haven’t quite figured out whether these productivity rankings should be respected or disrespected.

Frank has a large amount of economic power, compared to the economic power of you or me, and so can ensure some resources are allocated according to his wishes. This is a consequence of the market, and long may it last.

When you want to start with equal shares in a common good (ie roads)… then it seems like you disrespect the rankings.

Not at all. Frank, with all his money, is free to buy the stake of Joe, who has none, and who is happy to sell it. This is precisely how the market works: allocate the scarce resource from those who value it least to those who value it most. You do that by enabling trade. There is no fundamental difference in the actual allocation of the scarce resource between (a) a system in which there is road pricing and the fee is paid into the government coffers, and (b) one in which there is road capacity trading between the owners and the users of the stakes. Frank can buy his right of way in either situation. The difference is in what happens with the fee.

How much brainpower is that? It’s a lot of brainpower. Are you truly willing to disrespect the producer rankings that are the result of all that brainpower?

No — and I am not sure what makes you think I am.

Is abortion policy relevant to Frank’s ability to grow artichokes? Who am I to make this decision for Frank? Who am I to decide which policies are and are not relevant to Frank’s ability to grow artichokes? I’m not Frank. I can never be Frank. I can never walk a mile in his shoes. So I’m loathe to try and decide for him whether or not some policy is relevant to his ability to grow artichokes.

Of course. The problem I see is this: it would be perfectly OK for Frank to use his wealth to buy the right to impose his view on abortion, but who is selling it? This is why the road rationing system in which everyone starts with an equal stake, and then trades according to their preferences is superior to one in which there is only buying and no selling. Joe may not have much money, but he is dead against Frank driving his artichoke truck on the road, and so he is capable of expressing that aversion by pricing his stake in the road capacity accordingly. And it is perfectly possible that they come to a mutually acceptable trade.

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Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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