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Wednesday, October 30, 2013

Kickstarter's magic

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In a world teeming with state interventions every where one looks, it is amazing to see how the free market continues its march unabated towards creative solutions treading through the heavily canopied forest of government growth.  Much like the lowly conifer trying to find uncharted territory where it will not be usurped by the preeminence of angiosperms, the market is always looking for room to flourish into a healthy retreat far away from the intermingled gov't branches which block out the sun of opportunity.

Along comes a company called Kickstarter, Inc.  To describe its primary function I will briefly summarize it.  Anyone with an idea - entrepreneurial in nature - can apply for a spot in its website by following its guidelines.  This enables the individual to formulate a page describing the purpose of their creation or project and providing detailed information on it.  People who visit the site are free to look at any of these postings and donate or 'back' a specific project that is to their liking or if they see it as a potential success.  Each project usually offers several layers or categories of backers, from the lowest dollar amount to the highest.  Depending upon the level of donation by a backer, the project owner provides certain incentives as a thank you.  These incentives may range from a simple written appreciation of your support, one of its products to be shipped to you upon launch or even perhaps a stake in the project.  Once meeting a certain goal of a particular 'funding amount' the entrepreneur is tasked with putting his plan into motion.  Here, he or she is responsible for maintaining timely updates about its progress to backers.  In a nutshell, this is Kickstarter.

As great as the service that this website offers is, imagine for a moment how this could be applied in a grander scale.  In a society sans central planning, without the involuntary redistribution of money (see taxation) to be allocated for specific projects which must go through loads of bureaucratic filters (see gov't) before it reaches the planning table and is actually put into action, I see the aforementioned as a modern voluntary alternative.

Nowadays, money must be "raised" through taxes and apportioned for a specific budget catered for a particular district in order to see a bridge be built, or a road re-paved.  The process offered by Kickstarter would effectively end these boondoggles that end up costing much more than forecasted leaving taxpayers on the hook for even more money.

Sticking to the subject of bridges, instead of them going 'nowhere' as most make-work programs seem to do; bridges would indeed be built based upon the demand of that particular locale.  A specific budget would be set aside that must be met prior to construction taking place.  Should enough be raised to meet this goal by backers that reside within the surrounding areas, the bridge would be built based upon pure market demand and not artificially and arbitrarily by a congressman or senator looking to be re-elected by 'creating [temporary] jobs' within the local economy.  Money would not be wasted ex-ante and backers would only be charged if the amount necessary was achieved, otherwise the quantity donated by each individual would be returned.  Likewise, the project could be proposed once more with a smaller budget that may find a more willing audience that would be more likely to help fund it.  Such trial and error is the essence of market function, proposals that are not within the needs of a community would certainly be met with failure and those within the right scope would be rewarded with success.

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