One of my favorite conversations asks whether individuals acting alone, in their own interests, will create a stronger social fabric than individuals, or governments, acting out of welfare or charity.

Sort of a Wisdom of the Crowds/Libertarian Mashup.

Hungary has a tax law called the "1% law" (written by a fantastic woman I met during the expansion of CBI in CEE). This law allows ordinary citizens to direct 1% of their income any place they like -- health care, social security, nonprofits. While the US tax system does allow individuals to direct a portion of their income to charity, and incentivizes us doing so by decreasing our taxable income based on donations, it never the less limits the end destination to those organizations classified as nonprofit organizations -- 501(c) 3 classified by the US government.

The Omidyar Network and Google are suggesting that this severely curtails people's opportunities to do good. Isn't ebay contributing to our social fabric by building trust and unleasing people's potential? Aren't green energies just as good for the economy and production as they are for the environment? Increasingly, for profits are showing the power to create tremendous good and, if ordinary citizens, wanted to support those efforts the way we support nonprofits, with the incentives to boot, shouldn't we be able?

So what about a system that enables us to direct a portion of our income where ever we, as individuals, see fit? Lets imagine we don't have a welfare state and it was with this system that we needed to fund the social systems we deemed relevant. The assumption is that we would each operate in our own self interest. I, for example would investing in health care, my own retirement, and education. I'm sure a number of other people of my income and age bracket would do the same. Others would invest in programs to accommodate child care and nutrition programs.

Would the spread of these interests result in each initiative getting the support it needs? By sheer buying power, my friends point out, the top of the pyramid would have more to invest than the bottom. So a system where all votes were equal vs. straight taxable income allocation might in fact enable people to cover their own needs.

If you could see where others were investing would this create more efficient allocation of each dollar? Would it decrease or increase the free rider problem? This type of market would inevitably be more efficient, and probably enable the cream of service providers to rise. Largely better than the government's existing system for determining which intiatives get the pork.

Would there still be some need for government protection? How about in defense -- an area that would most likely languish far from the top of immediate direct and personal needs? Would individuals americans be comfortable with a military power not unlike the Polish in WWII?

Its food for thought.