A Token of Your Appreciation

Leigh Caldwell has an interesting reconciliation of Arrow’s Impossibility Theorem, and also takes a swipe at my contention about initiatives (not quoted):

So what I propose is a points system. We each get 100 tokens to allocate to different policies. Each of these policies has a price, and we choose which ones matter to us.

How is the price set? By the tokens of those willing to bid against it. If I pay 50 to stop Trident being renewed, you need to pay at least 51 to get it.

Of course these things bring financial costs too, and if Trident is approved then about £3 billion a year in taxes will have to be found to pay for it. These are intrinsic parts of the policies, so you can’t bid for Trident without also being willing to accept the cost of it. If you’ve spent all your tokens on Trident, you may find that someone else’s tokens get to decide whose income tax is going to pay for it.

Being the electoral reductionist[1] that I am, I’ll sign on with one major caveat: An explicit guarantee that the tokens would not be banned from being redeemable in (legal tender) cash. The monetary base of the tokens would be fixed (endogenous) and grow at a predictable rate (population). The value of a token would be determined by the market exchange rate (like flexible exchange rate regimes today), and tokens would be able to find their way to their most valued use.

Sure, it’s “unfair”, as poor people will have a much greater incentive to give up their tokens for cash, and rich people (or pools of people) visa versa — but unless you’re willing to admit that the poor are absolute fools; in a transparent market with low transaction costs, they would still be able to give up their tokens for a basket of policies that suit their preferences fairly closely (like say, a progressive selling their tokens to the Center for American Progress). But *gasp* does that mean corporations would be able to vote? Absolutely. Their effectiveness only limited to their ability to generate sufficient enough interest in their platform to entice people to sell their tokens.

Thus poor people would get both cash for their vote, and the relative security of knowing that their interests would still be represented at some level. Pareto efficiency for everyone!

Of course, this is completely compatible with futarchy, a concept I also admire.
[1]Meaning I would like to see a reduction in the amount of real voting that gets done. You may think this is at odds with my enthusiasm about Swiss referenda…but I don’t stand behind that very strongly, I just really hate Kurt Andersen.


3 thoughts on “A Token of Your Appreciation

  1. I’d argue that it’s more of a Pareto improvement than Pareto efficiency for everyone, but still problematic in terms of coordination among interest groups (which to my mind is inescapable regardless of the political system). Clearly worthwhile, though.

  2. Thanks for the comment. I am not sure if I’ve seen (or can remember) your point about initiatives – can you remind me?

    The concept of selling one’s tokens/votes was one I decided not to deal with. Introducing that kind of question into a voting system just confuses people.

    It also raises risks which need further analysis. For comparison, how much would you charge to sell me the right to submit bids on your behalf on any eBay auction? And a more subtle question: how much would you charge (if I paid you today) for the right to bid on your behalf on any eBay auction in 2025?

  3. This sounds exactly like a Borda count. It’s been too long since I’ve looked at the literature to have a coherent view on this, but the AEA chose approval voting and I assume they made that choice intelligently.

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