Skip to main content

The Public Good


There exists a game by which the famed economist Paul Samuelson, with support from fellow economist Amartya Sen, contends that the self-interested economic man is revealed to be a rational fool. The game here is one in which eight participants individually enter a room with five one-dollar bills — that is, each individual holds in his or her possession five one-dollar bills. 

Let us suspend for a moment, and in doing so indulge the position of imprudent economists, any curiosity regarding the source of these five-dollar windfalls to conveniently afford the game the convenient assumption that some form of recognized labor, or sacrifice, enabled their acquisition and their utility as money.

The participants are then informed that their anonymous donations to the envelope of “public good” will be doubled then distributed evenly amongst the participants. 

The prediction in this game, as forecasted by the aforementioned economists, is that the individual, facing an 80% loss on his individual dollar contribution if no other participant joins him, will merely forego the donation. In total, the principal prediction is that nobody will contribute. 

Despite this forecast’s accuracy with any given test group, this experiment hardly bears any semblance to the way in which the “public good” is carried out in practice, let alone the way in which the purchasing power of money is created and multiplied. 

This game grossly overstates the value of the so-called “public good” by simply assuming that the headline objective is sufficient grounds for it to be so. Is it at all possible that the alternative investment, or the deferred investment in the form of present savings, may eventually further the “public good” by market transactions not explicitly carrying the “public good” title? 

This game falls devastatingly short in explaining the means by which the investment would multiply, let alone the way by which money empowers interests and actively incentivizes and orchestates the mechanics of the market, by which individuals coordinate directly and indirectly in the fulfillment of their own respective agendas, the total expression of which forms the only up-to-date and accurate expression of the so-called “public good.” 

If nothing else, the outcomes derived from this game highlight the propensity of human beings to be attitudinally risk-averse with their money. Ultimately, this game promises an infinite multiplication of monetary value if only the participants will overcome the statistical biases which impede the realization of their advanced collective good. 

If this were self-evidently the case that the “public good” here were so calculated and tested an investment, how might privatization of this good sterilize its fruits? Might this game then evolve to permit self-interested and privy investors to buy a real stake in this supposed gold mine? As it turns out, players in this game demonstrate a decreased willingness to contribute as they repeat the game, dropping from the usual 50% to near zero. 

One crucial spin, however, on the same experiment weighs considerably on the direction of outcomes. After ten rounds of play, the subjects are informed that they will participate again for another ten rounds with the same cast of players. 

With a more sophisticated understanding of the game and with a more intense sensitivity to the ramifications of their individual actions and their attending influences on the group, the individuals became more willing to contribute. 

These individuals essentially become what is known as conditional cooperators, actors who are willing to cooperate if a critical mass of others have already committed. 

Short of demonstrating the folly of human action, this experiment brilliantly exposes a gaping hole in the precepts of socialist, communist or generally statist leanings: governance is most powerful, responsive and cooperative at the most local level.   

Comments

Popular posts from this blog

Into the Wild: An Economics Lesson

The Keynesian mantra, in its implications, has its roots in destruction rather than truth: “In the long run, we’re all dead.” If this is your guiding principle, we are destined to differ on matters of principle and timeline. While it is true that our fates intersect in death, that does not mean that we ought to condemn our heirs to that view: the view that our work on this planet ought only to serve ourselves, and that we ought only to bear in mind the consequences within our own lifetimes.  The Keynesians, of course, prefer their outlook, as it serves their interests; it has the further benefit of appealing to other selfish people who have little interest in the future to which they'll ultimately condemn their heirs. After all, they'll be long gone by then. So, in the Keynesian view, the longterm prospects for the common currency, social stability, and personal liberty are not just irrelevant but inconvenient. In their view, regardless of the consequences, those in charge tod

Death by Socialism

This title is available for purchase on Amazon ,  Lulu , and Barnes & Noble .

There's Always Another Tax: The Tragedy of the Public Park

In the San Francisco Bay Area, many residents work tirelessly throughout the year to pay tens of thousands of dollars in annual property taxes. In addition to this, they are charged an extra 10 percent on all expenses through local sales taxes. It doesn't stop there. In addition to their massive federal tax bill, the busy state of California capitalizes on the opportunity to seize another 10 percent through their own sizable state income taxes. But guess what! It doesn't stop there. No, no, no, no.  In California, there's always another tax. After all of these taxes, which have all the while been reported to cover every nook and cranny of the utopian vision, the Bay Area resident is left to face yet an additional tax at the grocery store, this time on soda. The visionaries within government, and those who champion its warmhearted intentions, label this one the "soda tax," which unbelievably includes Gatorade, the preferred beverage of athletes