Wednesday, November 15, 2017

Mark Rosenman: Why 'Crowdfunding' Government Is A Bad Idea

In March 2015, Mark Rosenman penned an article for the Philanthropy News Digest "Why 'Crowdfunding' Government Is A Bad Idea."

Mr. Rosenman is looking at the debate under our present system in which voluntary contributions to government programs crowd out philanthropic spending. This is a legitimate concern under our current system of involuntary taxation and voluntary philanthropy. Voluntary contributions to government in excess of involuntarily collected taxes do crowd out philanthropic efforts, so we agree with Mr. Rosenman that crowd funding government is a bad idea, but only when involuntary taxes are already being collected.

Instead, all government revenue should be collected voluntarily. Voluntarily crowd funding all government programs will increase the available funding for philanthropic efforts. In addition, nongovernmental organizations could then partially supplement, or entirely replace, government programs when citizens decide that the private sector provides those services more efficiently. Those efficiencies would then result in greater individual spending on consumption, investment, philanthropy, or government.
Mr. Rosenman makes the argument that "funding for important public initiatives and programs ought not to depend on the whims of individual donors and foundations." Mr. Rosenman's fear is that "it will make it much more difficult in the long run for government to adequately support and advance the broad-based efforts necessary to improve our social, political, and economic institutions."

We disagree with the argument that citizens don't know what's best for them and that citizens can't see the bigger picture when choosing what to fund. That's exactly what citizens can do that politicians can't: consider the utility of every dollar spent.

Citizens should listen to the opinions of experts, examine the budgets for potential government programs themselves, and then contribute to only the programs that they choose to. It is theft to involuntarily take a citizen's money to support government programs that they would not voluntarily support.

When every citizen has a chance to review the proposed government budgets and make voluntary contributions to only those programs that they support, then that is truly a government of the people, by the people, for the people. Allowing this process to continue will be self-correcting: Citizens will see the effects of their funding on social, political, and economic institutions, and then each citizen can individually decide whether those programs require more or less funding. Those individual decisions will aggregate.

The free market will decide the budgets of future government programs at exactly the level of funding that the citizens want to provide. 

To answer Mr. Rosenman's questions:

"Do we really trust people's personal motivations and sometimes impulsive altruism to substitute for government in prioritizing problems and aggregating resources to address those problems over the long haul?"

"Do we really want to substitute the fickleness of individual altruism for what is in fact a shared obligation?"

Yes and yes. We believe in the free market.