it’s important to recognize that the basic economic premise of government is that people’s voluntary sacrifice to the common good will be less than their valuation of the common good…

sacrifice < valuation

I think this is true for every voluntary transaction — the difference between sacrifice and valuation is the consumer surplus :-) But indeed, for some people it is arguable that their actual contribution to the government’s coffers is higher than their valuation of what they get in return and therefore would sacrifice voluntarily. Then again, there would be a cost to them of reducing their contribution to below their valuation: they’d probably have to pay for private protection, build walls around their properties etc. — so there is a value to a stable society as well, beyond the services the state provides. :-)

Similarly I think that the voluntary higher contribution some people pay for fairtrade or organic produce represents an intangible value. This is similar to what happens when donating money (or indeed goods or even time) to a good cause: some people call it altruism, but I think it is no less self-interested than any other transaction. People do this because they get something in return (see Does Altruism exist? for my thoughts on this).

Are you an anarcho-capitalist? I’m certainly not.

But your implied question: would people voluntarily pay the amount of taxes they pay now? is a good one, and one to which I would definitely also answer no. I (think I) understand human behaviour well enough to have concluded that anarcho-capitalism would not lead to a stable society.

If you genuinely believe though, as I do, that people’s sacrifices should equal their valuations

I don’t believe that at all. I think everyone looks for a bargain, and so buyers seek to maximize their consumer surplus, while sellers seek to maximize their producer surplus. I am not really in the business of telling people what they should do (other than when I see that what they do is misaligned with what they want to achieve, of course :-) — I stick to observing and understanding behaviour.

What’s my valuation of your story based on? It’s largely based on my perception of your story’s relatively scarcity.

This is a fascinating insight, that I had not really considered, I am ashamed to admit. Thanks for raising it! My focus on behaviour has led me to see that there are other currencies than money which people seem to pursue — in the case of Medium: followers, views, reads, recommendations and comments, and in the case of Twitter, followers as well, likes, retweets, replies, mentions, quotes etc. This is for many the motivation to do what they do on these social media.

But I had not considered that the absence of price as a signal for scarcity is really an issue. And I totally agree with you that the sacrifice people make is the best signal they can give as to the value of what they get in return. This is an important (and vastly underestimated) feature in human behaviour, especially in organizations, as well.

Now following the pragmatarianism tag! :-)

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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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