Many people would consider fixing pipes a more important project despite the fact that the wealthy contributors could front a lot more cash for their pick.
You're missing the point, which is that the group with a lot more money to start have their voices heard more.
It matters some that their multiplier is different , but in absolute numbers its still more to the program that benefits fewer people. The "utility function" is not accurate because the wealthy's utility starts out with a massive advantage.
So yes, I think it would still be unfair if you switched it given the poor majority genuinely would rather have art than lead free pipes.
The problem is that their voices are counted less due to not starting with money.
But regardless, that would be a silly thing to switch because that's not a situation that ever comes up, while the original framing is a genuine problem in our society right now.
Yes, money has utility. That should be unsurprising to everyone.
This proposal's pairing of hypothetical projects levels the playing field by a factor of 10 versus the starting point. That seems like a pretty good improvement over the purely monetary starting point.
If your objection is that government can't work this way, because some projects need to be done for the benefit of people who literally cannot even contribute so much as a penny, while other projects are optional, then I'll agree with you. It means that this funding mechanism is fundamentally flawed in regards to required projects.
But if you want to augment government spending with private contributions for certain public-private partnership projects, this might be a good way to allocate government matching funds for these optional projects.
You can't treat a lead pipe replacement project as an optional project (the responsible government or utility just has to do it), but if you wanted to trade off funds towards a skate park versus towards an art museum, this process seems better than a straight matching funds percentage process.
Or, if you want to have no partnership projects and use existing government mechanisms exclusively, that also avoids this problem.
The point is that its not socially optimal. The socially optimal solution would optimize global utility, as in it would not be influenced by the starting wealth of each person. If you allow starting wealth to influence things, their needs will be optimized for more at the expense of people who do not.
Yes, that goes against the idea that "money has utility" but the point the article was making was that its not socially optimal anymore not that is regressive compared to whatever other strategy, like straight matching funds. There's no math claim that straight matching funds is optimal either.
I think maybe we're speaking past eachother? Because yea totally I'd rather there be a multiplier based on the # of people than not given either that or a straight match. And your other options sound good too: "always fix non-optional things" and "do things democraticly (so 1 person 1 vote, not 1 dollar)"
But the article is making a very specific point about a claim of QF being mathematically socially optimal that isn't being met.
I think all of these schemes end up failing in environments other than academic papers.
If I was a wealthy person and the calculation was based on share of wealth donated, I’m pretty sure I’d find a way to become a massive employer of temporary labor locally at $100/hr but only for 8 hours, make clear my preference for the art museum or other causes, and that I like to learn about what causes matter to them.
Accordingly, those local workers for whom I like their cause and story of why it matters to them, I’ll match their donations (based on receipts showing their donations) and also setup a series of follow-up paid interviews in the future to learn about their on-going donations to a cause they obviously care so deeply about. They keep about half the money to compensate for their time and to grow their wealth, I get to socialize with some people who support the same causes I do, I no longer have an outsized donation in my name [we wouldn’t want me to have an outsized influence], and together, we can really do great things!
> levels the playing field by a factor of 10 versus the starting point.
Let's say there were only 10 poor people that contributed to the pipes. The total funding would be $10,000 -- a subsidy of $9,000. So 10x multiplier both for the pipes and the art.
Then let's also say that the marginal utility of $100 for a poor person is equivalent to the marginal utility of $1,000,000 for a rich person.
So we have the same number of contributors for each project, but a much higher marginal utility-per-dollar for lead pipes. But the socially optimal funding would be at the point where the marginal utility-per-dollar are equal for both projects (per the Equimarginal Principle).
