Personal choice and sacrificial contributions

Main article: Economic systems

Let’s say I have two similar products in front of me on a store shelf. One is locally produced and the other made in China. The locally produced one costs 3 times as much. I pick the one made in China even though I’m told to buy the locally produced item. This is much like buy American campaigns or calls to boycott products for some ideological reason.

In all these cases the individual is asked to make a sacrifice for the common good. However, no one else has made any apparent sacrifices up until this point. The locally produced item and the Chinese one are both sitting side by side on the store shelf. The individual is supposed to make the correct social choice in the face of an attractively priced alternative. This is another variant on the tragedy of the commons.

In order to avoid this and make the correct social choice, we have to create the right incentives for individuals. This could be as simple as adding a tariff to imported goods to make them more expensive, closing our market outright to imports, etc. These are difficult choices, however, and are usually hard to implement especially when society has been educated on free trade ideology for so long.

A ratings-based society, however, has an easier time of this. We can create a value system which favors local production and reward people through ratings for choosing accordingly. Free choice is maintained without heavy handed state intervention but we are recognized for making the right one.

The trouble is whenever someone makes a sacrifice for the greater good, the reputational reward they might get seems to be disproportionately small compare to what they did. I don’t expect alot for buying a more expensive local product. But more should be done for wounded war veterans who have trouble obtaining medical care when they get home, not to mention finding a job that will take their disability into account. Laborers who work in dangerous or unhealthy conditions (eg coal mines) face the same problem. Our current informal social reputation system comes up short in situations like these.

Our ratings system will be able to recognize special sacrifices appropriately by providing an appropriate multiplier on contributions. For example, if a regular job-like contribution is rated 1, a sacrificial contribution might be rated 10. Our ratings scale, which we’ve assumed goes from 0-1 linearly might thus require a logarithmic scale to account for special contributions and, conversely, especially detrimental behavior (ie crime).