I wrote: >If the reason that government gets bigger as taxes become more efficient >is that most people have a downward-sloping demand for government, and >so "buy" more of it as the price gets lower, then it seems paternalistic >of me to keep the price artificially high, just because my demand is less. >I'd like to have a reputation as a neutral economic advisor, who will >advise people on how to get what they want, even if what they want isn't >what I would prefer them to want.
Three people responded. Chris Coyne wrote: >I would argue that you cannot be a neutral economic advisor. As an >economist you are a technician who explains the consequences of various >actions. But you cannot advise the best route to achieve certain ends >without committing yourself to those ends. An economist hired to increase >attendance at sporting events implicity commits himself to the ethical >valuation that increasing attendance is good. It does not relieve the >economist of the responsibility for having made ethical judgements to say >that he has borrowed them from others. Therefore, by increasing >government efficiency you are implicity agreeing to the ends (and likewise >in working to increase sports attendance). Kevin D. Sachs wrote: >Isn't government different from sports (although sports leagues are >cartels, so...)? As governments grow, the "market" for wealth transfers and >hence, rent seeking grow. You can make government internally more >operationally efficient, but if that leads to government growth and >therefore growth in inefficient rent seeking, then allocative efficiency >suffers. As economists, aren't we interested in allocative efficiency >gains? Wei Dai wrote: >Government can get bigger if whoever is in control of the government >forces the rest of the population to pay for it. Even if a majority of >people want bigger government, the losses suffered by the minority can >more than make up for the gains of the majority. ... >Why would you want a reputation for being willing to advise people even >when it's against your self interest, or your analysis of social welfare, >to do so? I mean, I can see why you would want a reputation for always >providing honest advice when you agree to do it, but why would you want to >be known for never turning down a request for advice? >What if a slave owner asked you how to improve the productivity of his >slaves? Would you answer him? As an professional advisor hopeful, I want to pick a simple neutral-but-moral policy about how I give advice and stick to it. I'm not satisfied with just saying things that are true - I also don't want people to fear that I will shut up whenever speaking might hurt some group I favor over others. And the more exceptions and complications my policy has, the harder it is for others to monitor it and check whether I'm following it. So it must be simple. Among the simple neutral-but-moral policies about advice, I've chosen this. On average I think it good and moral to give people more of what they think they want, even when I think they are mistaken about what they want, and even when there are modest, but not enormous, negative externalities from them getting what they want. So even if I believed there were modest negative externalities from smoking, and that people were mistaken in thinking the enjoyment was worth the health risk, I would still give advice about how to lower the cost of cigarettes. Persuasion is the best way to try to overcome their mistakes, and if externalities are modest then the perceived gain to the people who want it should outweigh the harm to others. I apply the same logic to government. If I believe, as I do, that people often overestimate the value they get from government, I should fix that if I can by persuasion. So the issue here comes down to: how large are the net marginal externalities from most people choosing more government when it gets cheaper? The perceived harm within the people who favor more government must be less than the benefit, or they wouldn't favor it. So we're left with estimating how many people don't favor more government, and their perceived harm. And I estimate this group and its harm is too small to tip the balance. Wei asks about the case of advising slave owners about productivity improvements. So how large are any negative externalities on the slaves from improving productivity, versus benefits to both owners and slaves? Without any particular reason to expect them to be enormous, I guess I'd give the advice. Btw, if people could be persuaded, this is the form of government I'd advise them to choose: http://hanson.gmu.edu/futarchy.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030-4444 703-993-2326 FAX: 703-993-2323
