Thursday, July 26, 2007

Energy Distribution Mechanisms

The sun bathes the surface of the earth in warm, delicious energy. Structures form to better store and utilize this energy. And so it is that cells came about. New structures form from these smaller structures, smaller components making larger ones. And so it is that these cells arrange themselves in patterns conducive to energy storage and utilization, an organism. One obstacle to the growth of larger patterns is the dispersal of energy throughout them. If too many cells in a large organism go without sustenance, the entire system becomes threatened with collapse. Cells dealing with one another on a one-to-one basis is insufficient to create effective energy distribution mechanisms; capillaries are too thin to carry nutrients across so many cells. Very quickly organisms learned to designate special cells to create energy dispersal conduits, or veins and arteries...

If I want a paintbrush, I go out and buy one. If I want some food, I go out and buy some. If I want to go to a concert, I buy a ticket and go. I pay for the good or service, and the business I patronize provides me with it. It is a simple transaction, involving two free agents engaging in mutually beneficial economic activity undisturbed by coercion. No one else need be involved monetarily. Making the customer behind me in line fork over some money to pay for my food or my paintbrush would be unthinkable.

The same can be said for taxes. Why should I have to pay taxes for roads when I don't drive that often? Why should I pay taxes for public education when I don't have any kids? Why should I dole out my money for some grieving hospital patient? Let them pay their own way. They are the ones making the transactions. It seems horrible and wrong that someone would have me pay for goods and services that benefit them and not me.

But is it for their exclusive benefit? I may not need to drive a car to the shop to buy my paintbrush, but the paintbrush itself required someone to drive it to the shop. Paying taxes on it reflects the cost of the use of the road in moving the product to me. I may not utilize the roads directly, but I do require them to be there. I benefit from roads even though I don't use them.

In such a case, I would be one out of the three grey circles in the diagram below. I am removed from the direct use of the road, but by the path of benefit from the road to the art shop to me, the customer, I benefit by it. Notice the gradient of benefit.
Suppose some teacher gets sick and requires medical attention. Suppose also that their meager salary is not nearly enough to cover the costs of this care. We might just shrug our shoulders and say "oh well, sucks to be her". And then the next day the kids come home from school having not learned a thing. The babysitter/substitute teacher was unfamiliar with the children and did not work with them well. Unsatisfied with school, the children run a muck at home, becoming less and less educated as the weeks go buy. The poor teacher is on her last leg, more than ever unable to afford the necessary medical treatment. Suppose that to help keep their kids from being little hooligans, the parents of the children each pitch in a little to help pay for the teacher's medical bills. The cost divided amongst them amounts to very little per family. Each family benefits by having their children calm and knowledgeable. And not just the families, but the businesses and organizations that will be using the fresh monkey minds to (hopefully!) benefit society years from when their teacher got sick. In the diagram below, these benefiters make use of the medical service the teacher received as well as the indoctrination services the latter provided, both of which can be represented by the green square.

These ripples of benefit affect society as a whole. Many such matters do. Simple transactions in the marketplace cannot factor these other benefits into account; it would be a logistical nightmare to calculate how much others separated by degrees benefit from a direct transaction between two agents.

But let's suppose that we were keen on making economic transactions more "fair". Our current situation with taxes paying for roads would have to be abandoned. Instead, we have to introduce some way for those who use the roads - and no one else - to pay for them. One such way would be for motorists to subscribe to some sort of service plan. A service plan may have different restrictions given location, time of day, particular quality of the road, etc. Competing companies would also exist, dividing up roads as turf. How such plans would be derived and enforced is difficult to surmise. It would certainly be unfair for one person to have to pay full price for a service they rarely use, so maybe something more indicative of actual use should be introduced. Toll roads offer the best answer, because the distance and path a motorist travels determines how much they ought to pay. But to ensure a proper assessment of use, tolls would have to be installed at just about every intersection. Of course, hiring people to man hundreds of toll booths is out of the question, and the traffic jams would be dreadful. Something like a little tag system would work, though. A receiver mounted on the stop sign or traffic light that tallies the tagged vehicle passing beneath/beside it. The bill comes in the mail.

What a fair, equitable, and profitable way to manage a road system! The invasion of privacy and the entire bureaucratic apparatus would make these toll companies seem awfully like the taxing state. But, in the end, those who use the road directly are the ones who pay for it directly.

There are certainly cases where engaging in one-on-one transactions is superior to being taxed. The paintbrush and food examples take into account my own personal preference for food and paintbrushes. No way, no how could taxes ever consider these things. Besides, not everyone benefits to a significant degree by what I paint or what I eat (only by the fact that I do - just enough to stay alive!).

But in the process of providing me with a paintbrush or food, several other transactions take place. Any number of beneficial (green square) and detrimental (red square) effects may have rippled across society through the course of my desires coming to me.

There is an important point to make at this juncture that describes our current mode of resource distribution. Americans and other citizens of "first world" countries benefit greatly by having cheap goods manufactured in China or "third world" countries made available to them. Those who make the goods themselves are often not the ones that receive the greatest benefit - often quite the opposite. From our end, things look like a green square, but on their end, it's a red square.

The smoke from these factories is related to that new plastic gadget for sale:

When McDonald's has its 39 cent hamburgers special, this is what it means:

The awful business going on in China and other places is hidden from western consumers behind an attractive price. In the same way that money distorts and hides benefit, it shields us from ever knowing the detriment.

So, some quick rhetorical questions. Do we come out ahead, as a species, as the humanity organism, when we make commodities in this way? Is there another way to fabricate and disperse consumer items, one that maximizes benefit and minimizes detriment? Is our current mode of energy distribution equipped to meet such a goal?

Centralization and Concentration

If we are to include ripples of benefit in determining the price of certain goods and services, what criteria should be used? What specific kinds of goods and services should be provided?

Oddly enough, the structure of national governments in many parts of the world shows us the answer:

1) Communication
2) Transportation
3) Energy
4) Education
5) Health

Several items could be added, but I think the idea is conveyed. What we would like to include is those goods and services that provide an enormous, ubiquitous, and lasting benefit to society. The 5 items listed above can be considered organs. As the humanity organism evolves, it will refine and hone how it deals with its needs, more specifically, how it uses its organs.

Taxes and state services, even if well-meaning, can often create tumors rather than efficient and useful organs. Tasks become mired down in bureaucracy, overhead, and miscommunication. Services must be homogeneous and so become bland, washed-out, and mediocre. This leads to citizen disgruntlement.

We seek a way out, and one that allows us to choose where our money goes. The only other mechanism that we know of is the market. The market, if it was a superior mechanism for distributing these 5 important goods and services, would already be doing it. The reason why it is not is because these things are often not profitable or feasible, as discussed previously.

In the cases where profitable industries develop to meet the needs of the organism, to remain afloat and robust, they must ever seek expansion and market domination.
The organ grows large and unwieldy, developing along lines of control and hierarchy, granting those at the top the greatest benefit, and leaving the detriment for those removed from the decision-making process. Someone at the top shapes the entire operation to be as profitable as possible, regardless of the value output. The organ more and more resembles a tumor. Tasks become mired down in bureaucracy, overhead, and miscommunication. Services must be homogeneous and profitable and so become bland, washed-out, and mediocre.

This problem is present in both tax-based and market-based entities; it has more to do with the size and organizational structure of the operation rather than the method of acquiring funds. Ideally, tax-based services should be small operations, because they can more effectively deal with the customers they serve, just as with small businesses.
The total area of the market is better filled with small circles rather than large circles. (My dinky diagram may not show this). Centralized, hierarchical services would, by their very nature, become bloated and fat-ridden, bringing waste and corruption in their wake.

This would happen because of the nature of hierarchy and control. Power structures are used to gather more power. A radical move away from
centralized power and control without the loss of distributive benefits from taxes would be greater citizen participation, especially in regards to taxes:

Half of the political machinery would be rendered superfluous (as if it weren't already). Citizens, as consumers of not-for-profit services, would get a say in how much of their money went where. This allows the humanity organism to develop along lines useful to it as an entity, not as competing tumors desiring mindless growth.

Once again, this was a jumble of ideas. Much can be filled in to connect the ideas more succinctly, and much more can be said of them in general. In the interest of time and to avoid confusion, I have kept it as is. Suggestions, comments and clarifications are certainly welcome; I just hope it makes sense.


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