Put this post together with the other essays and you will have all the basics to understand libertarian marxism, utopias and the economics of approaching Zion.

But first:

  • The tragedy of the commons
  • Governments as a negotiation proxy
  • You get what you pay for

The tragedy of the commons is short hand for an historical event, a rule, and a wider implication.

The historical event came about in England when people started raising flocks of sheep on the common (or public or free access) pastures.  Soon everyone was exploiting the commons and they were ruined.

The rule derived from the event was that any open access/free to access resource that can be exploited for gain will be overused.  Anyone who conserves just leaves more for the overusers to get, and what you don’t get now, someone else will grab.  Fishing grounds get overfished if you can sell the extra, open fields are overgrazed, Great Auks, Passenger Pigeons and Buffalo get slaughtered.

The principal is that any activity where an individual gets the benefit and society pays the price will get overused by some individuals at the expense of society.  There will be abuse unless there is regulation.

Government as a negotiation proxy.  The “lawyers as economists” is an inside joke.  Governments are often a proxy for a large group of their citizens in negotiating with individuals who are exploiting the commons, especially with “externalities” (an externality is when one person gets the benefit, the cost is exported — think of pollution, or someone smoking indoors, or a guy dumping his sewer straight into the stream the next guy drinks out of). A number of legal theorists have posited that governments are necessary, people will group together to negotiate in such circumstances.

People do group together to set rules and negotiate.  The way they do it is called government, something that seems obvious to economists 😉

Much opposition to government is legitimate.  But most public opposition is funded by people who (a) want to get around safeguards requiring that they provide complete information to a market or (b) people who want to exploit a commons either by strip mining it faster than anyone else or using it to dump their negative externalities.

You get what you pay for.  You get more of what you pay for too.  You get people with incentive to make what you are paying for what they are selling.

Ok, that is a way of expressing the rule that people maximize self interest — and depending on how you frame things, you will get maximizations.

You may think you are paying to support women without husbands, but you will get women without husbands if you focus welfare in that way.  You may think you are supporting peanuts, but you will get West Texas peanut farms that only farm subsidy payments.  You may think you are giving executives incentives, but you may find that you are only twisting your company around to justify their bonuses.

The way this twists around is the bane of many social systems, centralized economies (measure productivity by pounds of nails produced, the Soviet factory turns out few nails the size of rail road spikes.  Measure it by the number of nails, you get finishing nails as stout as needles).

Any utopia has to accommodate the economic forces in the essays I’ve shared.  Since Zion is a utopia, you might wonder how it deals with the economic issues, or how it seems to (and why so many utopias flounder).

Next time.

Economics:  The tragedy of the commons, lawyers as economists and other realities