Matt

A few comments

1. The efficient is the equitable. There is no trade-off nor dichotomy. Why is theft, aka redistribution, equitable?
2. The optimal level of theft equals zero. Please explain why theft, aka redistribution, can ever be optimal? And why this theft is a valid role of government? A government is actually instituted to act as our protector, not as a thug doing us over as you support.

You state that there is no theory that justifies zero redistribution. Well, Ayn Rand explicated one that you are no doubt aware of in her book Atlas Shrugged. I happen to think she did a fine job. The economist Ludwig von Mises also further developed the theory of the Austrian School of Economics advocating zero theft. Therefore, the Libertarianz party, unlike the parties that you clearly support, are advocating a budget which is not just moral, but grounded on sound economic theory.

Julian

It’s unfortunate some Marxists haven’t done an alternative budget to provide another effort as comedic as the libertarians.

While Rand’s theory in Atlas Shrugged does provide an argument I can’t help but wonder whether there’s one in L Ron Hubbard’s Battlefield Earth that could also be examined.

@Julian: re-read Mises on wertfreiheit: value-free science.

@Eric: BTW, when I say that Von Mises was wrong in asserting economics to be “value-free,” I’m supported in that by George Reisman, a student of both Rand and Von Mises.

But you don’t have to die wondering why he argued that, because the crux of his argument is online at his website, from Chapter 1, section 6, of his book.

Julian is quite right to point out that Matt’s very definition of economics used here (i.e., “Economic theory tells us how resources are allocated, that is all”) is itself rife with value judgements, whether Matt chooses to recognise that or not.

The passage from Reisman, below, gives meaning to Julian’s point, and also concisely addresses the point of what precise values economics should uphold .

“Nevertheless, one philosophical question that must be briefly addressed here is the assertion that [economic] science and value should be kept separate and distinct—an assertion that is often made by advocates of socialism and interventionism when they are confronted with the advocacy of capitalism…

“The notion that science and value should be divorced is utterly contradictory. It itself expresses a value judgment in its very utterance. And it is not only self-contradictory, but contradictory of the most cherished principles of science as well. Science itself is built on a foundation of values that all scientists are logically obliged to defend: values such as reason, observation, truth, honesty, integrity, and the freedom of inquiry. In the absence of such values, there could be no science. The leading historical illustration of the truth of these propositions is the case of Galileo and the moral outrage which all lovers of science and truth must feel against those who sought to silence him.

“It is nonsense to argue that science should be divorced from values. No one who makes this demand has ever been able consistently to practice it. What it is proper to say is that science should be divorced from mere emotion—that it must always be solidly grounded in observation and deduction. Irrational emotion should not be confused with dedication to values, however.

“The basis of the value of capitalism is ultimately the same as the basis of the value of science, namely, human life and human reason. Capitalism is the social system necessary to the well-being and survival of human beings and to their life as rational beings. It is also necessary to the pursuit of science—to the pursuit of truth without fear of the initiation of physical force. These are all demonstrable propositions. The advocacy of capitalism by economists, therefore, should be no more remarkable, and no more grounds for objection, than the advocacy of health by medical doctors.”
- George Reisman, Capitalism, pg. 36

Question two for you Matt, after you clarify your contradiction given in my above post. I ask this next question because of my belief that you, and I suspect the average mainstream economist working in New Zealand, ‘thinking’ you can work as an economist in a moral vacuum is a primary impediment for my pursuit of happiness, that happiness being directly proportional to the individual freedom I have to live my life according to my goals and desires, so long as I am initiating force on no other.

Thankfully, I know that pursuant to objective reality the following scenario is false, but assuming your ‘methodolgy’ led you to falsely discover that ‘sound economic theory’ dictated the greatest good for the greatest number of people was served by a tyrant such as Stalin – let’s call him the omniscient allocator – enslaving completely a minority, or even just the single individual, to the good of the ‘greatest number of people’ – let’s call them the mob – so that individual’s freedom was surfeit and thus expendable, do you still feel it is not your job as an economist to make a value judgement about the consequent policy you would be recommending through this blog, and, Ayn help us, your job? Are you finally going to call this ‘right’ or ‘wrong’?

Personally, I think you had better start thinking about what is important, about the pursuit of happiness, your happiness, and start voting in the next election accordingly. Until you do so, as with everyone like yourself, you’re the most dangerous man in New Zealand.

@Matt: In fact, saying “redistribution” at all–i.e., implying all property is available to be taken away–is already a massive value judgement, isn’ t it.

So is economics a value-free science?

No. It’s not.

I thought I would add my two cents worth, I apologize if my comments are repeating previous ones made I have only skim-read the above comments.

First off I think the role of private charity is an important point to make when talking about optimal redistribution, as some of the slack will be picked up by private charities. Of course there is a free-rider problm when it comes to private charity that will make redistribution sub-optimal compared to a rawlsian type social contract, however I don’t believe there is any reason to view this as inherently less optimal than the level of redistribution chosen by the democratic process which won’t reflect the rawls social contract since people already know their postion in the world. So as you say the libertarianz assume that the optimal level of govt enforced redistribution is zero, I agree it is unlkely to be optimal from a social contract sense but from a ‘best available option’ sense it may well be (and my idealogical leanings would suggest it is, but of course there is plenty of room for debate).

Secondly, (and this is a bit of a pet peeve of mine) is that all the talk of social contracts when talking about national policies seems to implicitly assume only people within that nation count and also all citizens don’t care about non-citizens. If we put equal weight on every person in the world then the optimal level of redistribution within NZ is probably zero and any redistribution would be taking from NZers and giving to overseas. I don’t believe the libertarianz budget had any foreign aid in it, however it could well be the case that the efficiency advances from their budget could increase the amount of private charity that goes to, say, African causes and in my social welfare function where every person in the world is given equal weight, then this is closer to the optimal level of redistribution. Of course there is debate as to what the appropriate weight for non-citizens should be if we are going to use a social contract framework for national policy, but it irritates me that it is so often implicitly assumed to be zero.

So basically I believe there is adequate reason to believe the optimal level of government redistribution (given feasible options) within NZ could quite likely be zero, without even having to touch a ‘taxation is theft’ argument.