> How can cooperation remain stable when people have unequal wealth? It depends on your explanation for why cooperation can evolve at all. What makes cooperation work, in our paper, is direct reciprocity, which means that we play repeatedly. I can hurt you next round if you hurt me this round, even if you are slightly more wealthy than I am. And, depending on how much I can hurt you next round, this might still be enough to make you cooperate in the present round.
It sounds like you want to cooperate just enough to avoid violence but as little as possible to maximize your wealth. Seems pretty on par with history.
This ignores the fundamental insight of economics that people can cooperate motivated entirely by self interest. Poor person needs food and housing to survive, so they cooperate by working for someone. Rich person needs people to work their factories, so they cooperate by hiring poor people. From this traditional perspective the "common good" is a result of insufficient property rights: if everything is owned by something, then by everyone looking after their private good, everything will be looked after (because all "common good" is somebody's "private good").
It also ignores that redistribution results in less "private good" (GDP) for everyone, because by definition it's taking wealth from people who on average have demonstrated more ability to grow wealth and giving it to people who have demonstrated less ability to grow wealth. Imagine two otherwise identical people, one who's capable of generating 5% returns on his wealth and the other who's capable of generating 2% returns. If they both start with the same endowment, after 100 years the total amount of wealth they've generated will be much greater if they're allowed to keep their own wealth than if the 5% guy's is continuously redistributed to the 2% guy (because every dollar redistributed will earn only 2% return instead of 5%, meaning it's been used to produce less value for society).
More practical example: imagine if after Paypal, Elon Musk's entire wealth had been redistributed to all Americans. Assume generously he had 50 billion (pretty sure he had less than that). 50 billion / 300 million is around $166 per person. So now every person in America is $166 richer, and the world has no Tesla or SpaceX.
That is assuming that the person that owns the wealth is the sole driver for growth of that wealth. Can we stop pretending that being wealthy is empirical evidence that you know how to grow an investment?
It doesn't matter what the driver is, if A over time has continuously demonstrated the ability to achieve higher returns on their wealth than B has, absent other evidence (ceteris parabis) it's reasonable to assume this trend will continue in future. Yes there are some people who got wealthy only through inheritance, but the money they inherited still had to be originally created by someone capable of generating wealth.
"it's reasonable to assume this trend will continue in future." -- except its not, that's why we had the 2008 crisis -- I can generate 20% returns 9/10 years, but on the 10th year I tank the whole world economy with my risky subprime bets.
This completely ignores the fact that below a certain line, B no longer gets to participate as freely as A in the space. A gets to demonstrate higher returns as well as higher losses and still be considered a better option even though in absolute terms they have contributed greater losses than B. "Reasonable to assume, follow the trend" is just so braindead, and basically no better than flipping a coin; if you're are absent of any other evidence, then maybe you shouldn't be using that to segregate the population in to the poors and those-who-know-better.
> This ignores the fundamental insight of economics that people can cooperate motivated entirely by self interest.
How is that a fundamental insight of economics. It's the insight of the smallest group all the way to cities and civilization. Self interest, by definition, motivates cooperation.
> From this traditional perspective the "common good" is a result of insufficient property rights: if everything is owned by something, then by everyone looking after their private good, everything will be looked after (because all "common good" is somebody's "private good").
What you are describing isn't "insufficient property rights", you are describing "insufficient property".
> It also ignores that redistribution results in less "private good" (GDP) for everyone, because by definition it's taking wealth from people who on average have demonstrated more ability to grow wealth and giving it to people who have demonstrated less ability to grow wealth.
Wealth is always "stolen". Behind every great wealth is a great crime. Wealth is generate by theft of assets ( land, oil, resources ) or theft of labor. Bill Gates didn't generate his wealth. His workers generated the wealth, he and the shareholders just siphoned the largest part of it. Look at the fundamental wealth of the US - the land and resources that provides unimaginable amount of wealth. All stolen from the natives.
Wealth = clever robbing the less clever with the protection of the law which they created. And it isn't necessarily a bad thing.
> If they both start with the same endowment
What an ideal world you must live in.
> More practical example: imagine if after Paypal, Elon Musk's entire wealth had been redistributed to all Americans.
Who is even advocating for taking all of anyone's wealth?
> and the world has no Tesla or SpaceX.
Why not? Using your argument, PayPal couldn't exist since Musk didn't have that PayPal money to fund his business.
You have an agenda and you are using obvious extremes and lies to push your agenda. The other side does the same. Instead of being driven by agenda, try to think objectively. Look at the problem from afar.
Extremes in either direction is bad for the individual and society.
>Wealth is always "stolen". Behind every great wealth is a great crime. Wealth is generate by theft of assets ( land, oil, resources ) or theft of labor.
You're making misleading use of language so it's hard to believe you're arguing sincerely. Offering someone compensation for doing something for you is not what most people would consider "theft". You can't just take a word meaning one thing, change its meaning, then assume all the judgements about the old meaning also apply to the new meaning.
> You're making misleading use of language so it's hard to believe you're arguing sincerely.
Misleading? I thought I was being straightforward and honest, hence "stolen".
> Offering someone compensation for doing something for you is not what most people would consider "theft".
It all depends on perspective. Hence "stolen". If you were "compensating" someone "$0.10" for something worth "$1000", a lot of people would consider it "theft".
> You can't just take a word meaning one thing, change its meaning, then assume all the judgements about the old meaning also apply to the new meaning.
But that's not what I did. The reason why I wrote "stolen" is that this is complex issue that isn't black or white. The only people who think so are agenda driven opportunists. Slaves were compensated with housing and food, I'd consider it "theft".
As I said, you have an agenda and your agenda drives you thinking. Not rationality. That's the problem. As I recommended before: "Look at the problem from afar."
> Wealth is always "stolen". Behind every great wealth is a great crime.
> You have an agenda and you are using obvious extremes and lies to push your agenda. The other side does the same. Instead of being driven by agenda, try to think objectively. Look at the problem from afar.
>Wealth is always "stolen". Behind every great wealth is a great crime.
No, my last boss started with absolutely nothing after escaping the genocides in Cambodia with his family and built his company and wealth through work.
>Bill Gates didn't generate his wealth. His workers generated the wealth, he and the shareholders just siphoned the largest part of it.
I struggle back and forth with my views on this. You're not wrong, but it ignores the fact that without the capital provided by the company, there'd be no workers to generate wealth. As sad as it is, a group of independent workers isn't going to generate as much wealth as an organized company.
I though about this a lot as I worked. In a couple hours of work, I would bring in anywhere from $10,000-$20,000 for the company. My wage was far lower. But in the end, it would be impossible for me to do this without the couple million dollars worth of machines and computers I used. I could run my own shop, but I'd need customers, I would be doing a significantly lower volume of jobs and would be probably lucky to bring that much in after a few months. My expenses would be lower, I'd have to do everything by hand, but my ability generate wealth would be almost non-existent for years and years.
>cooperation dynamics too complex to model realistically. “We want to distill the essence or the logic of this problem, make it as simple as possible, and then understand this very simple model
So you're taking a high (100s-1000s) dimensional problem and projecting it onto a 2-10 dimensional space where your conclusions are based on a form of clustering which itself is purely dependent upon your (probably ideologically driven) assumptions. In such drastic oversimplifications it is extremely east to paint whatever picture you want, even unintentionally.
>So if it’s the case that only the two of us are playing and you get 99 percent of the initial endowment, then we will never get cooperation started. Simply because of the fact that you already have 99 percent of the wealth, right? You have zero incentive to cooperate with me, because there is very little you could gain from me
Case in point. Those evil fat cats simply hoard stolen money and don't interact with greater society in any other way, right? Nevermind driving social policy, producing jobs, and building indirect relationships where large and small actors do benefit from cooperation. Those evil tech CEOs wouldn't have any cash if there wasn't incentive for the poor exploited proletariat to spend their money on goods and services, and offer their time to provide the same.
This study also ignores that competent individuals can be highly socially mobile in modern Western societies, even from vastly unequal starting conditions. It further ignores that most of us aren't competing with the 1%. The pitting of one 99%er against one 1%er is totally removed from reality.
I don't understand how anyone can take modern economics seriously.
> So you're taking a high (100s-1000s) dimensional problem and projecting it onto a 2-10 dimensional space where your conclusions are based on a form of clustering which itself is purely dependent upon your (probably ideologically driven) assumptions. In such drastic oversimplifications it is extremely east to paint whatever picture you want, even unintentionally.
This misrepresents the scientific process the researchers have undertaken - they did not proceed by simply drawing conclusions from observations of a (high-dimensional) system. Instead, they took a simple model of reality, constrained the parameters to those they believe capture the dynamics (the endowment structure), and then validated that constrained model using observations. Their assumptions are embedded in the model structure and parameter constraints.
It's not a scientific process if they can't make testable predictions. I'm a quant, and anyone in this field will quickly realise it's super easy to build all kind of fancy models that look perfect when looking at the past but fail completely at predicting the future. Predictions that haven't been tested and survived falsification are no more scientific than astrology.
Their testable prediction is "no matter how the Public Good game looks exactly, it’s always the case that if endowments are too unequal, you’ll never get cooperation", quoted from the article. They themselves tested that prediction with experiments, but other are of course free to replicate them.
>This study also ignores that competent individuals can be highly socially mobile in modern Western societies, even from vastly unequal starting conditions.
How can I get competent if I am poor? It is possible but I need some luck and a lot more work then someone with more money. In my case around 20 years ago in Romania my family did not had money for things like private teaching lessons, books or a computer where my colleagues that were not rich just middle class had those and had more opportunities. At least we had free higher education and I could study math and later go into computers.
I don't deny that you started from a disadvantage. And because our time is finite it strongly affects your ultimate probabilistic outcome. However those with the right mix of ability and character are able to better their lot, and the growth is potentially exponential, especially if maintained over generations.
Imagine how much better your lot as a poor person immediately becomes if you spend months or years saving for your first computer. Now you have internet access and somewhere to learn and maybe program. Just an example.
You did it, didn't you? So did my family, who came to the U.S. with nothing and is now comfortable upper middle class.
Wealth inequality alone is an inappropriate metric for social conditions when even your poor can afford smartphones.
Yes, but I would disagree with the idea that inequality is fine because the poor have a non zero chance to success with a lot more work then the rich, yes is great that cast systems are not a thing in most countries but because the current way is better then the horrible cast system is not enough.
> So you're taking a high (100s-1000s) dimensional problem and projecting it onto a 2-10 dimensional space where your conclusions are based on a form of clustering which itself is purely dependent upon your (probably ideologically driven) assumptions. In such drastic oversimplifications it is extremely east to paint whatever picture you want, even unintentionally.
It's possible there are only a few main dimensions which matter for showing the majority of the benefit, with the error being negligible. For example, in computer graphics, to solve the rendering equation you're sampling an infinite dimensional space (all paths a photon might take), but you can do it with one dimension (direct bounces from light->surface->camera + deterministic shadow) and the error is almost negligible depending on the application, because most photons get absorbed after the first bounce.
> Case in point. Those evil fat cats simply hoard stolen money and don't interact with greater society in any other way, right? Nevermind driving social policy, producing jobs, and building indirect relationships where large and small actors do benefit from cooperation. Those evil tech CEOs wouldn't have any cash if there wasn't incentive for the poor exploited proletariat to spend their money on goods and services, and offer their time to provide the same.
Perhaps these effects are negligible? If you consider the worst case with one person hoarding all the money, it certainly would be unless he distributed it equally through the means you mention.
I'm not disagreeing with you however, you could be right. It's hard to tell without a large number of empirical studies to be done. The gain from such a change could be worth it, or the effects might be negligible.
It's possible there are only a few main dimensions, but the article doesn't describe anything in particular Hilbe did to evaluate that possibility. We can't accept any model we're presented with just because it's possible that it's correct.
In fact, I'd argue there are obvious reasons to be skeptical of this particular reduction. In the game, fantastically rich people never contributed to the public pot; in real life, most fantastically rich people toss piles of money at public goods like hospitals, schools, and charities.
They (on aggregate) freely give away much less than they would've been forced to under higher taxation, however. Which is an extremely significant difference for the economy as a whole.
And then there's the question of what they give to. Hospitals, schools and charities are great, but what about less glamorous targets like public works maintenance, which often is the first thing to be cut when government coffers run dry?
Modelling is not just a matter of removing irrelevant detail. It is also about identifying and isolating the different dynamical systems that are at play so that we can build an intuition for how a complex system behaves.
Even if the factors that you are describing are important to the overall outcome, it may still be useful to explore a model with those factors removed.
> In the game, fantastically rich people never contributed to the public pot; in real life, most fantastically rich people toss piles of money at public goods like hospitals, schools, and charities.
It's easy to make an argument that this is negligible, and far more experienced people can make this argument quite well. The money should trickle down, but I think it might help if we had more wealth to trickle down in the first place.
Many contribute to charities do this to avoid taxes, I've had first-hand experience with this type of "charity". The people who actually want to help tend to want to pay taxes, in my experience.
So who is really donating to the charity ultimately?
I'm not saying these benevolent people don't exist, it's just that if you distributed all of Bezos's wealth to each person individually it would only be ~1000 per person once or less, a meager stimulus package. How is that wealth going to trickle down fast enough to have any meaningful effect? Money tends to accumulate towards those who value it the most, but perhaps more wealth could be accumulated if more of it could flow through the system without being trapped only in the wealthy hands.
It could be a win-win, or a win-lose, but it's not a lose for the rich at all if they can now select from a much larger workforce--charity money rarely reaches those that need it most. Just like how many homeless on the street aren't in a desperate situation, and those that are probably can't monopolize those good street corners.
Ultimately there's a feedback loop between supply and demand--any incentive to increase either helps the majority.
I don't mean to be flippant, but I agree easy to make broad arguments about how society in general ought to work. Those arguments just don't have much to do with, and aren't particularly supported by, this game theorist's analysis of how inequality affected the game he experimented with.
I honestly may have been unclear, so I apologize. It's directly related--these are the extra dimensions not accounted for in the criticism of this game theorist's analysis, which supposedly affect the outcome.
So if you can refute my argument, you can easily say that this criticism of this game theorist's analysis is valid, but as I said, my experience does not lie in this field at all, so you probably won't find any difficulty in doing so. It's just pretty obvious to me given my mathematical background that this criticism is meaningless without an understanding of the reasoning behind how the dimensionality was reduced. My point is just that such arguments are easy to make and probably easy to prove as well.
In any case, it leaves room for increasingly complex models to disagree with the results of this one.
> We can't accept any model we're presented with just because it's possible that it's correct.
I agree with this completely, but it doesn't refute this particular reduction of complexity either, which is the point of my post. I may have been too verbose.
You are entirely correct in that the crux of the issue is determining which of the initial dimensions are most responsible for the effect you are trying to explain.
The trouble is that the the very nature of the subjects of soft sciences is such that it isn't possible (or at least practical) to perform any kind of rigorous principle component or sensitivity analysis. The result is that dimensional reduction intrinsic to the vast majority of studies in economics, psychology, and the like is built purely on institutional bias, subject to fads and dogma. People essentially build careers around how effectively they can peddle their particular flavor of bullshit - this isn't physics or chemistry or engineering where there is a minimally ambiguous answer. We don't have the tooling (or arguably the right institutional culture) to study soft sciences with rigor and that's dangerous because the academic establishment influences social and political policy with comparatively little self awareness of it's vulnerability to bias.
> Those evil fat cats simply hoard stolen money and don't interact with greater society in any other way, right? Nevermind driving social policy, producing jobs, and building indirect relationships where large and small actors do benefit from cooperation.
The fact that fat cats drive social policy is the largest problem, since they have always driven social policy only towards their own interests. Job creation can happen without capitalists (look at large co-ops, like the Spanish Mondragon).
Also, note that this article is on the fringes of modern economics. Most modern economics absolutely supports the fat cats and their preferred models.
>It further ignores that most of us aren't competing with the 1%. The pitting of one 99%er against one 1%er is totally removed from reality.
Except it is not. The lower class in Chile recently burned subway stations down over a five cent raise in fares. It was the last straw for those people. This is a country that has the good economic growth, but a system designed to funnel any new wealth to the 1%, and high wealth inequality. https://www.bbc.com/news/world-latin-america-50123494
so are you a believer in non-modern economics (whatever that means)? because i'm getting a sense from your post that you to some extent ascribe to what seem to be some shades of economics e.g. capital offers jobs, capital trickles down to labor, etc.
if i'm right, where would you draw that line, between modern and non-modern economics?
The fact people feel so strongly about this article, taking it as an apparent threat or attack, goes a long way to proving the intractability of the problem.
What an arrogant narrow minded ideology this researcher has "If you just use your money to, I don’t know, buy the tenth car for your garage, that will only stay in your garage. [...] there are just way more effective ways of enhancing the public good than being, in layman’s terms, “economically productive.”"
You can afford the tenth car because you already contributed to the common good to earn that money! If you're supposed to also spend your money enhancing the public good then it's not really your money so how are you rewarded for the work you do?
The researcher is not expressing ideology, but rather making a point about the issues of using productivity to assess public good.
His point is that by buying your tenth car you will contribute to productivity, but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
It is even more obvious in the extreme case: if a population of N people produced N cars, the total public good of every person having one would (I hope you would agree) be higher than the total public good of one person having all of them for their own use. However, in both cases the productivity is the same.
Thus, whilst productivity is a useful measure, it does not account for everything we might be interested in when considering the effectiveness of our economies.
> His point is that by buying your tenth car you will contribute to productivity, but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
How does he know that? That isn't an obvious thing at all. I know a bloke who owns 5 cars; his family has 5 people in it. They are a very productive family and they get a lot done for the public good as a family with those cars. The quoted example only works because the premise is that the money is going to be wasted and then the conclusion is that the money is being wasted. A weak example.
I can guarantee all investment is done by wealthy people; poor people can't invest by virtue of having no money. Practically all investment is done by the middle- and upper- classes. It isn't really possible to make a pithy point about this sort of thing because there needs to be discussion of things like investment outcomes; some subjects can't be simplified. "Public Good" isn't an instant thing, it takes place over time.
I thought it was clear (though obviously not) from the example that it was an idealised case, where "ownership" was referring to exclusive use. Your counter-example does not fit that simplified model - you are effectively describing a case where there is one car per person. The premise is not that "wasting money is wasteful", but rather that unequal distribution of resources is wasteful.
It is not the case that all investment is done by wealthy people - large amounts of investment is carried out and directed by governments. Indeed, my understanding is that, if one properly accounts for failed enterprises, there is no significant evidence for greater efficiency in private markets than public ones, both in terms of time-averaged economic growth, and in terms of generating large technological improvements.
> but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
But the point is that any (however small) value for the person who earned it is justified, while whatever value it might have for other people is irrelevant, since it's not theirs.
In the same way you could argue that buying a car in the first world is immoral because buying it for someone else in the third world would provide them with higher value.
Earned wealth is not public wealth, unless we live in communist utopia where nobody earns or owns anything.
What does “earned” mean when we are the inheritors of 100s of trillions of years of brutal, ruthless, evolutionary work done by those who came before us?
We are able to at best apply a light touch to the tiller of the massive, complex ship into which we were born that we cannot claim any credit for making. Indeed, no one can.
This doesn’t mean we shouldn’t credit people for making good choices, but the idea that every penny we get we completely deserve is certainly not an established fact. It is at best an opinion, and a poorly justified one at that.
There is no morality involved. The assertion is only that's it's more _productive_ to distribute resources this way. Productivity might be a multiplier but can not be innately good itself.
Well, that is a philosophical question. You could’ve used a bus a saved 1000 kids in Africa or you could’ve bought a car and let them die.
Same applies for people in another state or even city. We don’t want to pay for someone’s else cancer treatment.
We just don’t think about it and most of us just don’t care. I did care more when I was younger, but rose glasses tend to fall when you grow up.
I now leaning towards capitalism when I will treat you as bad as the law allows me and extract as much money is possible as it is a fair game.
What does any of that have to do with "corporate" America? When the Eastern Bloc still existed, people there also bought stuff for themselves when they could afford it, instead of buying more stuff for people starving in Africa, where goods would have been "more productive".
I don’t enjoy it.that is how the game is played.
You either an object of politics (and by politics I mean much more than just government) or you a subject.
Here is interesting read for you: Dictator’s handbook. Helped me to finally put the puzzle together.
> Well, that is a philosophical question. You could’ve used a bus a saved 1000 kids in Africa or you could’ve bought a car and let them die. Same applies for people in another state or even city. We don’t want to pay for someone’s else cancer treatment.
> We just don’t think about it and most of us just don’t care. I did care more when I was younger, but rose glasses tend to fall when you grow up. I now leaning towards capitalism when I will treat you as bad as the law allows me and extract as much money is possible as it is a fair game.
> Welcome to corporate America.
Why is it that kids in Africa are going to die but not kids in the U.S.? How has such an incredible disparity in wealth come to be? Isn't the incentive structure of private capital ownership a pretty big part in this?
I just took kids in Africa as an example of humans who are very far away and struggling. I find it unacceptable when people say that they respect human life, but what they actually respect is a life of their neighbor. If we say that human life has no cost we should be investing in saving more lives over lives of someone who lives close by.
And yes, the structure has everything to do with it.
> I just took kids in Africa as an example of humans who are very far away and struggling. I find it unacceptable when people say that they respect human life, but what they actually respect is a life of their neighbor. If we say that human life has no cost we should be investing in saving more lives over lives of someone who lives close by.
> And yes, the structure has everything to do with it.
So, why are those humans over there struggling while the humans over here are not? What lead to this? The humans in the U.S. used to be very poor. How did they grow so rich?
This is one of the most ideological interviews I have ever read with an economist. Economists are unusually unaware of ideology, this is extraordinary: conducts limited research with limited applications (i.e. how people behave in lab conditions under unequal endowments), makes sweeping conclusions about tangentially related areas, makes sweeping conclusions about unrelated areas (most of the questions are unrelated to his research), and most of what he says just appears to totally random ideological musings about who adds value in society (this isn't even a question that economics can answer).
You see this from economists who fail out of physics close to 100% of the time. They don't really understand anything about the private sector, they understand even less about the economy (they just want to do things that they enjoy rather than produce things for others), and they often have these very strong feelings about capitalism...without really having any evidence for these views (or any awareness of the trade-offs...again, this is the kind of thing you don't learn in physics/math class).
You are entitled to your opinion, of course, but unfortunately this process is how our understanding of the world has increased so rapidly over the past several hundred years - laboriously proposing new models, often from intuitions we have derived from observations, and then trying to test those models by obtaining experimental evidence. If things bear out then we put more effort in, and conduct more thorough research. There are many instances of poor practice within that framework, but the process _as a whole_ has worked pretty well so far, and what is discussed here is pretty standard.
As for the Nautilus post itself, it is just an interview with someone who works in the field, not a rigorous scientific document, and they are free (surely?) to express their views about whatever they and the interviewer wish to discuss.
To your later points - I don't know what "understanding the private sector" or "understanding the economy" mean to you, but I would suggest that the person in question does have _some_ understanding of the economy (at least), inasmuch as they have contributed to a formalised understanding of the dynamics of the economy as we (humanity) currently understand them. I'm not entirely sure what else you want - perfect predictions or go home?
Frankly it just sounds like you disagreed with what they said, but, as I already mentioned, you are as entitled to your opinion (as they are to theirs).
> I don't know what "understanding the private sector" or "understanding the economy" mean to you
It means the object of scorn does not share certain assumptions about the underlying purpose of economics. To be roughly as unfairly sweeping as the gp, you get that a lot from Chicago school types.
The study of economics is conducted by a large number of people (many thousands), with (apparently, at least) diverse views. I am interested in your answers to these questions:
1. Do you believe that all economists are engaged in distributing propaganda, or just some?
2. To what end is the propaganda distributed (or maybe on whose behalf)?
3. Are other academic fields similarly concerned with distributing propaganda?
So, I'm not saying that all academia is a front for aliens.
I'm saying that the narrative produced from the status quo in economics has been, for almost all of my life, very conducive to the interests of the powerful.
Do other fields have people doing that? Of course. The petroleum industry has been able to pay for people to push their agenda. That's a thing that happens.
There are some historical, political, and material reasons for the state of economics and academia in general.
Lots of academia is literally just job training for corporations, so don't front like it's above the fray. Even genuine, and valuable, research gets prioritized over less research that isn't as valuable in the private sector. So, again, I'm not the one saying that academia has a problem. Lot's of academics have said these things.
Also, from an argumentative perspective it always seems like economics starts from something like a thought experiment and then go on to use the results of that "experiment" as a evidence in its own right.
Yes, Einstein used thought experiments, but he used known physics as the starting point. I hear economic arguments that start with a premise that isn't a settled thing like "lets assume that we are hunter gatherers on the savanna and you have some beads and I have an arrowhead." It's not based on a measurement that other people have made and agree on. It's not even based on an archaeological dig where the bones of two people were found.
I realize that isn't what actually goes into a phd thesis. Its economics used as a force of nature that bothers me. It's inevitable. Maybe I'm just calling economics the pseudo-ish stuff that I get presented as a layman. Maybe every economics school in every university has a healthy group of people who are critical of basic assumptions. I hope so.
If you are an economist and I offended you, then please accept my apology. That wasn't my intention, really.
I'm not an economist, but my understanding is that some, or even a lot, of contemporary graduate-level economics is indeed like you describe, but also that there is a lot that isn't, and that the field itself is very diverse. It seemed like you were writing off everyone because of the sins of the currently dominant strand, which felt unfair.
>You can afford the tenth car because you already contributed to the common good to earn that money
You don't need to "contribute to the common good to earn that money", in fact you can actively undermine it (exploit monopoly, form a cartel, rent-seek and hog resources, buy political influence, fool people with BS ads and sponsored "research" to buy your shit, pollute and in general ignore all kinds of toxic externalities from your products, and so on...
You can definitely do bad things to earn money. But a doctor, an engineer, etc, would've already contributed to the common good even if they buy a tenth car that sits in their garage. So simply buying a tenth car that sits in your garage (and employs the people building the car) isn't in itself a bad thing or an indication that you're not contributing to the common good.
In a free society, someone can spend their money on an extra toy if they want. Nothing wrong with that. It's a strange expectation to impose on others this notion of "spending only on the common good." It's not black and white what the common good is, and that is why an educated free market is a good proxy or mechanism for figuring that out.
The laissez-faire line is that the common good happens spontaneously if you allow some people to buy ten cars. Because that's "freedom".
No matter that homelessness is rising, life expectancy is falling, debt is increasing to catastrophic levels, the planet's ecology is becoming increasingly hostile to life (ask the Australians...) - and counter-evidence is piling up on all sides.
The suggestion that aggressively acquisitive small-minded personal selfishness ought to be the one true motivator of a healthy economy should be obvious laugh-out-loud nonsense to anyone capable of rational thought.
And yet, mysteriously, it's not just taken seriously, it's elevated to a near-mystical principle of omniscient collective market wisdom. (With the caveat here that markets need to be "educated" - an interesting thing to define.)
"educated" is pretty vague. For instance, some people think that a 75% tax rate on high income is reasonable. The "market" doesn't have the right answer on what the right tax rate should be, and how everyone should contribute to the common good. This (and many parameters that already restrict the mythical free market) should be decided by the society.
Besides, someone can earn money only if they live in a country that gave them the opportunity to do so. If the hypothetical doctor was born in the jungle somewhere, it's unlikely that he or she would have been able to make any money. In that sense, it's hard to argue that a high-tax rate is confiscatory, and I don't find it outrageous if they can only afford 5 cars instead of 10, if that can give more people access to health care.
That isn't the argument though. The original comment was saying that buying a tenth car is somehow inherently immoral, which it isn't.
If I've earned the money I have honestly, it isn't anyone else's business what I do with it. Buy an 100th car or light it on fire. Anyone who wants to tell me what to do with my money (that I've earned and paid all the taxes on) can take a long walk off a short pier.
It is when you buy your 10th million car and the environment is devastated. Whether that or a million people with ten extra cars each the outcome is negative for all. So society does have some say in wealth inequality and spending of those with a much larger impact on everyone.
>But a doctor, an engineer, etc, would've already contributed to the common good even if they buy a tenth car that sits in their garage.
Not so sure. For one, doctors can't usually afford a "tenth car".
But assuming they could, or going for the medical industry at large, they are probably a net monetary loss to society, adding the costs of BS needless operations, being wined and dined by the big pharma to push BS drugs, the opioid overperscription-crisis, and of course, overcharging 3x-10x for the same treatment compared to Western Europe. Net monetary loss in the sense that you could get the same services for much much less, and not of course in the sense that you don't get better health compared to not having doctors.
Same for engineers. People making great contributions -- the transistor, new building techniques, cars, etc, sure. People making BS time-sucking social apps (who seem to get the most money) are also a net loss, if not for anything else, for the huge loss of productivity (e.g. employees slacking on social media) and personal development (people wasting hours on end on social media on dopamine feedback loops).
>In a free society, someone can spend their money on an extra toy if they want. Nothing wrong with that.
Beyond some degree there's "something" wrong with that.
Anyone that got that from my comment, I have a reading comprehension course to sell them. To quote myself:
"But assuming they could, or going for the medical industry at large, they are probably a net monetary loss to society, adding the costs of BS needless operations, being wined and dined by the big pharma to push BS drugs, the opioid overperscription-crisis, and of course, overcharging 3x-10x for the same treatment compared to Western Europe. Net monetary loss in the sense that you could get the same services for much much less, and not of course in the sense that you don't get better health compared to not having doctors"
i was going to respond with something like this but people who post like what you responded to willfully ignore such obvious things (because they are obvious after all). they argue that they're exceptions according to free market theology, or they argue that it's still ethical in some way, or they perform some other sort of acrobatics.
> You can afford the tenth car because you already contributed to the common good to earn that money!
I'm not trying to offend you, but the notion that your compensation is necessarily proportional to your contribution to public good is terribly naive.
Surely you can agree that there are an endless number of unscrupulous ways to acquire money that don't contribute to public good, in fact, the opposite is often true. Take a corrupt public official, for instance, their contribution towards society is usually many times inversely proportional to their compensation.
I earn $100,000 a year writing god awful code for a doomed software company. Am I contributing more to the public good than the restaurant worker who cooks my food, the guy who changes my car's oil, or the guy who hauls all of my garbage away?
You may not be, but it seems that your employer is already doomed and they won't be around for long unless they do something to contribute to society. That's generally what happens to those that don't contribute: doomed to fail in the long-run.
It doesn't really matter; the system works by everyone working for their benefit; and history consistently shows that it works better than alternates such as communism, where some powerful dude decides what's good for everyone (and will shoot you if you don't enthusiastically agree 100%)
So yeah, you make decent living by writing awful code, good for you. If you think you don't deserve it, feel free to overtip your waiter. The alternatives are much much worse.
Aren't you describing a dictatorship? In communism, the state owns things, but the state can be the people; i.e. democratic communism. Isn't communism just the absence of private property? (that is, everything is public property)
Not only that, but it isn't like the money just disappears when you buy that car.
What if I buy my 10th car, and the guy I bought it from goes out and donates that money to charity or whatever the author thinks is a moral use of money? From the public's perspective, the money still goes to enhancing the public good - the only difference is that there is now a car stored in my garage instead of some other fellows.
The whole point is that that is not a minor difference. That same personal car, for that same money, would be much more useful if it was someone's first car instead of 10th. The money given for the car is the same either way, but the real utility that the car brings is not.
I don't think anyone is arguing that the value to society is the same in both circumstances. But unless you want some kind of authoritarian state, it isn't your business what someone else does with their money. Assuming they didn't break the law to get it and they paid whatever taxes they owed on it, they can do anything they want with it, including setting it on fire.
Well, in particular, setting it on fire is actually against the law, on safety and environmental reasons. The same environmental reasons will probably have to apply in the near future for over-consumption in general.
But that is all a different matter. The relevant discussion is not about trying to prevent people from spending their money for useless things. It is about the relationship between economic value and actual utility. Any transaction for a car seems to produce the same economic value, but can have vastly different social utility. Therefore, arguments that certain behaviors should be accepted because they produce economic value which must have social utility are wrong. So perhaps it does make sense to tax the rich, even though GDP or other economic value measurements will go down, because social utility will not go down proportionally.
and therefore, the price you're willing to pay for the 10th car is probably a lot lower than the price someone else may be willing to pay for their first.
The price you are willing to pay should be equal to your utility of the object.
regardless of how the buyer feels about the cost, if they buy something that of low utility to them, then they are making irrational economic choices. But since the money is theirs, i cannot interfer 'cept to tell them they are wasting their money on useless items.
But people with a lot of money tend to spend it quite "wisely" (a survivor-ship bias, since a fool and their money is soon parted).
If you have a billion dollars, there is nothing irrational about spending 100k on a car you don't really need. Those 100k have barely any utility for you, so it doesn't matter that the car also has barely any utility.
Look deeper than the money, at the relationships and realities it facilitates. Somewhere a factory worker traded time with their kids to work on that car, all so it could sit in a garage to satisfy some alienated rich guy's ego? At some point it's just waste and sacrifice.
> Somewhere a factory worker traded time with their kids to work on that car...
The factory worker most likely doesn't care about the car. They traded time with their kids for a paycheck, to be spent on those same kids or whatever else the worker desired. Even, potentially, a trophy car they don't intend to drive.
If that car doesn't get sold then there is less work for the factory, less demand for factory workers, and fewer paychecks.
It sounds like you want to cooperate just enough to avoid violence but as little as possible to maximize your wealth. Seems pretty on par with history.