The Durk Pearson & Sandy Shaw®
Life Extension NewsTM
Volume 12 No. 6 • October 2009


He that hath eyes to see and ears to hear may convince himself that no mortal can keep a secret. If his lips are silent, he chatters with his fingertips, betrayal oozes out of him at every pore.
— Sigmund Freud, 1905

Critique: "Using Neural Measures of Economic
Value to Solve the Public Goods Free-Rider
Problem"

The economics paper of the above title was published in the 23 October 2009 Science. The authors proposed that if only the government had complete information by knowing what everybody’s actual evaluation of their benefit from public goods was, then the government would be able to calculate the socially optimal level of the public good to produce and then tax group members in proportion to the benefits that they receive in order to finance the cost of the good. In this way, the group’s net benefit would be maximized and every individual’s benefit would be greater than the cost he or she has to pay. An economic game, where subjects made decisions regarding their valuation of various abstract public goods while being evaluated by fMRI, made it possible to detect truthful from nontruthful reporting of how much participants “really” valued the public goods.

There are a number of problems with this approach, including the following:

  1. People might not want to allow the government to scan their brains to determine their “true” valuation of public goods.

  2. Even for people who did agree to undergo testing to reveal their “true” valuations, the test would reveal a mere snapshot of those evaluations. Anytime after taking the test, new data or new personal circumstances could change that “true” valuation to a different one. Hence, even if the government had complete information of everybody’s true value of a public good at moment 1, at moment 2 they would be in the dark again.

  3. You cannot trust the government when it tells you that a public good will cost a certain amount of money. In fact, in order for this test to be symmetrical, government officials should be required to take fMRI scans so that you can see if they are lying about the cost of public goods. But even that is not good enough since any particular government official, even if truthful, cannot know everything that affects costs or how costs will change even in the near-term. She/he might tell you everything they know about costs at moment 1, but what does that tell you about moment 2?

  4. There are a great many so-called public goods for which the two of us have a true negative value (i.e., to us they are public bads). A good example is the FDA, where we have spent hundreds of thousands of dollars of our own money to try to stop just their production of censorship, a purported public good. Hence, we would need to be paid hundreds of thousands of dollars if our benefits are to exceed the costs we incurred in the case of FDA censorship alone. Is the government going to send us a check?

In short, we don’t think this concept solves anything. We welcome other comments. Please send them to us c/o Life Enhancement Products.

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