Just how important are prices anyways?
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A few definitions/descriptions...
Efficient allocation: Each resource has a nearly infinite amount of uses. Each use provides a different amount of value. For example, you can use your car to safely go from point A to point B...or can use your car to ram other cars. Most people, thank goodness, derive more value from the first use. Resources are efficiently allocated when they are put to their most valuable uses.
Market economy (no prices): Every organization would be a non-profit, but you could choose which non-profits you give your money to.
Consumer sovereignty: Individuals decide for themselves which uses of their limited resources they value most. Consumers are sovereign in market economies but not in planned economies.
Opportunity cost: One use of a limited resource requires the sacrifice of alternative uses. For example, you could give a dollar to a homeless shelter or to an animal shelter. You are neither homeless...nor an animal...therefore you're not going to be served by either organization. You do, however, value both of their services. But because you can't spend the same dollar twice, you'll have to sacrifice one of the organizations. Therefore, whichever organization you give your dollar to will reveal which use of your dollar you value most...at that specific point in time.
My answer to the survey...A-0, B-7.5, C-8. From my perspective, there's a huge disparity in the allocative efficiency between planned economies and market economies...and little, if any, of that has to do with prices. It simply has to do with the fact that in a planned economy people's preferences are either assumed, or disregarded. As a result, how society's limited resources are used (the supply) does not reflect the actual demand for goods/services. When individuals do not have the freedom to decide which uses of their limited resources they value most...it's a given that resources will not be put to their most valuable uses.
However, I believe that most/all free-market economists give more weight to the importance of prices than I do. So in theory, the greater the distance between B and C on the allocative efficiency scale, the more weight a person gives to the importance of prices. So their answer might look something like this...A-0, B-3, C-8.
For example, let's consider some passages from the free-market economist Ludwig von Mises...
QuoteThe entrepreneur in a capitalist society depends upon the market and upon the consumers. He has to obey the orders which the consumers transmit to him by their buying or failure to buy, and the mandate with which they have charged him can be revoked at any hour. Every entrepreneur and every owner of means of production must daily justify his social function through subservience to the wants of the consumers.
QuoteWithin the market society each serves all his fellow citizens and each is served by them. It is a system of mutual exchange of services and commodities, a mutual giving and receiving. In that endless rotating mechanism the entrepreneurs and capitalists are the servants of the consumers. The consumers are the masters, to whose whims the entrepreneurs and the capitalists must adjust their investments and methods of production. The market chooses the entrepreneurs and the capitalists, and removes them as soon as they prove failures. The market is a democracy in which every penny gives a right to vote and where voting is repeated every day.
QuoteTo be in business, to depend directly on the approval or disapproval of one's actions by the consumers, to woo the patronage of the buyers, and to earn profit if one succeeds in satisfying them better than one's competitors do is, from the point of view of officialdom's ideology, selfish and shameful. Only those on the government's payroll are rated as unselfish and noble.
QuoteWhat vitiates entirely the socialists economic critique of capitalism is their failure to grasp the sovereignty of the consumers in the market economy.
Clearly Mises believed that consumer sovereignty is essential. But did he believe that it was more important than prices?
QuoteEach individual, in buying or not buying and in selling or not selling, contributes his share to the formation of the market prices. But the larger the market is, the smaller is the weight of each individuals contribution. Thus the structure of market prices appears to the individual as a datum to which he must adjust his own conduct.
QuoteEconomic calculation can only take place by means of money prices established in the market for production goods in a society resting on private property in the means of production.
QuoteWhere there is no market, there is no price system, and where there is no price system there can be no economic calculation.
QuoteEconomic calculation makes it possible for business to adjust production to the demands of the consumers.
For Mises, economic calculation depends on prices...so without prices...it would be impossible for organizations to effectively meet the demands of consumers. So it doesn't seem unreasonable to argue that from Mises' perspective, consumer sovereignty would be of little use in a system without prices. However, as far as I know, he never specifically discussed a market system without prices.
From my perspective, if individuals are free to choose the most valuable uses of their limited resources...then I don't quite grasp how it would be possible for resources to be inefficiently allocated.
Clearly it matches my preferences for there to be more discussion on the topic! I look forward to seeing your survey answers. Please note that filling out the survey won't cost you a dime...but there will be an opportunity cost. The question is whether filling out the survey will provide you with more value than the alternative uses of your limited time. Only you know the answer to this question...which is why market economies create value while planned economies destroy value.
I don't think anyone knows how economics works. I still remember my economics teacher telling us to remember one thing in his class if we forget everything else. The government controls the economy, not prices, not wages, and not unions. If John Fordes Nash lost money with stocks then anyone else is just lucky or doing inside trading. At my work when the big crash came I was the only one that came out ahead with my stocks when I refused to listen to the experts and sell when they said we should. My older son was mad as hell at me for telling him not to sell and lost over a million---he's very glad he listen to me now. :) Solitary
Capitalism isn't about efficient allocation of resources. If you want efficient allocation of resources you need a dictatorship. It's not about economics, it's about the fact that the majority of the people in a capitalist nation don't care about efficient allocation of resources, they care about allocation of resources to THEM, and they'll work against any plan that isn't aimed toward that end.
Economics doesn't work in a vacuum, but you keep treating it as if it did.
Where is this utopian dictatorship with an efficient allocation of resources?
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Quote from: "Fidel_Castronaut"[ Image (//http://i0.kym-cdn.com/photos/images/newsfeed/000/198/459/downloader.php) ]
QuoteIf you want efficient allocation of resources you need a dictatorship.
Was that for me?
Quote from: "Colanth"Capitalism isn't about efficient allocation of resources. If you want efficient allocation of resources you need a dictatorship. It's not about economics, it's about the fact that the majority of the people in a capitalist nation don't care about efficient allocation of resources.
While working my way through college, I worked a couple of years at what was once the largest pine lumber mill in the world. I pulled veneer off the green chain in the plywood division. During those years, they continually ran the chain faster and faster, and as a point of pride, most all of the workers worked harder and harder to get all the stuff off the chain and sorted into the proper piles.
But the faster it went, the more waste there was. More and more useable veneer would end up going over the end and into the "hog" as it was called, where everything became wood chips burned as waste in things called teepee burners.
That was my first insight into part of what people call "economics" in corporate America (corporate anyplace, probably). As you point out, efficiency is not the major objective. It's about maximizing profit. The faster the chain went, the more inefficient the process was, but at the same time, there was increased output, and hence, more profit for the owners.
This was 50 years ago, when the Western United States was a cornucopia of timber, most of which was on public lands. The US government was selling the timber at a contrived price far below cost. In effect, the lumber industry was buying raw materials at a price lower than the cost of producing it, with the government subsidizing the production of raw material through tax dollars.
The bottom line is that the timber industry had little incentive to be efficient, not until the end when the resource and the subsidies began to dry up, and our mill, along with most of the newer more efficient mills simply folded up and left the communities high and dry wallowing in seas of clear cuts and unemployment. But the mill owners simply moved on with millions of dollars in their pockets looking for other investments. The joke was rumored that they are now buying diamond mines in Africa.
The government controlled that economy, in this case, a glorious boom turned bust in resource extraction. They do the same thing in the mining industry. It's much the same with the recent boom/bust in housing. These are examples of what you have described as a government controlled economy.
Quote from: "billhilly"Quote from: "Fidel_Castronaut"[ Image (//http://i0.kym-cdn.com/photos/images/newsfeed/000/198/459/downloader.php) ]
QuoteIf you want efficient allocation of resources you need a dictatorship.
Was that for me?
My image? No it was to the OP...I always read your stuff billhilly ;)
Well then, that was a total and complete misunderstanding on my part. I mistook your 'didn't read' as something else entirely. Makes much more sense now that I get it. Imagine that ;)
Quote from: "billhilly"Where is this utopian dictatorship with an efficient allocation of resources?
In the minds of people who have a problem understanding reality.
Quote from: "Xerographica"Efficient allocation: Each resource has a nearly infinite amount of uses. Each use provides a different amount of value.
What's this 'value' you speak of?
Quote from: "Xerographica"For example, you can use your car to safely go from point A to point B...or can use your car to ram other cars.
Indeed. In poorly administered countries the option to ram your cheap car into an expensive one, and rob the hapless victim afterwards, is the best option in terms of ROI for the perpetrator.
Quote from: "Xerographica"Most people, thank [s:1x5ga153]goodness[/s:1x5ga153] law and order, derive more value from the first use.
Fify. Do you really believe people act out of 'goodness'? Do you ever watch the fucking news?
Quote from: "Xerographica"Resources are efficiently allocated when they are put to their most valuable uses.
Value for whom? Let's say I could take all your money in 10 seconds, without consequenses. That would be great value for me right? And it may well be that I will be spending it in a way that benefits the economy more that it would if you would be spending it.
I'm also curious about your views on clientilism. Greek style.
Quote from: "Colanth"Capitalism isn't about efficient allocation of resources. If you want efficient allocation of resources you need a dictatorship.
Quote from: "Colanth"Quote from: "billhilly"Where is this utopian dictatorship with an efficient allocation of resources?
In the minds of people who have a problem understanding reality.
I'm happy to see you acknowledge that.
Quote from: "Bibliofagus"What's this 'value' you speak of?
You spend x amount of time on this forum. The more time you spend on this forum, the less time you'll be able to spend on other things. You don't randomly allocate your time. You allocate your time according to the amount of benefit/enjoyment/utility/value you derive from each particular use of your time.
Therefore, you maximize the amount of value you derive from your limited resources simply because you have the freedom to put your limited resources, in this case time, to their most valuable uses. It's the same thing with money.
Quote from: "Bibliofagus"Indeed. In poorly administered countries the option to ram your cheap car into an expensive one, and rob the hapless victim afterwards, is the best option in terms of ROI for the perpetrator.
Destroying value destroys options.
Quote from: "Bibliofagus"Fify. Do you really believe people act out of 'goodness'? Do you ever watch the fucking news?
Right, because the news really highlights how much goodness there is in the world.
Quote from: "Bibliofagus"Value for whom? Let's say I could take all your money in 10 seconds, without consequenses. That would be great value for me right? And it may well be that I will be spending it in a way that benefits the economy more that it would if you would be spending it.
It would be great immediate value. Same thing if China was able to successfully invade the US and take all our resources. Same thing if aliens attacked our planet and took all our resources.
But having resources isn't the source of prosperity and progress. It's how they are used. And coming up with different uses of society's limited resources is a function of different perspectives. If you and I had the same exact perspective, then we wouldn't be able to see any different uses of society's limited resources. But because we have different perspectives, we're going to be able to see different uses of society's limited resources.
So progress/prosperity depends on trading rather than taking. Unfortunately, we, as a society, haven't figured this out yet. Because if we did grasp this concept, then we'd allow taxpayers to choose where their taxes go. We'd allow them to decide for themselves which public uses of their tax dollars they value most. And our prosperity/progress would greatly increase.
Quote from: "Xerographica"Quote from: "Bibliofagus"What's this 'value' you speak of?
You spend x amount of time on this forum. The more time you spend on this forum, the less time you'll be able to spend on other things. You don't randomly allocate your time. You allocate your time according to the amount of benefit/enjoyment/utility/value you derive from each particular use of your time.
So you can't have a general allocation of resources, since resources have different values for different people. Each person allocates the resources as he values them.
Of course this means that there's no allocation of any resource to "the people", so anything that requires the government to allocate resources doesn't happen.
That means no roads, so nothing can get done. (Try eating when there's no way to get food to the store you want to buy it from.)
It also means no military, so unless you force the entire world to play along, a little country with a few hundred soldiers could overrun the US.
But it would satisfy someone's infantile idea of an "efficient economy".
Quote from: "Colanth"Of course this means that there's no allocation of any resource to "the people", so anything that requires the government to allocate resources doesn't happen.
If every organization was a non-profit...we could still have a congress and we could still have the IRS. Congress would determine what percentage of your income you had to spend on collective goods...defense, roads, education, healthcare...and the IRS would be responsible for ensuring compliance.
So if you were worried about the free-rider problem...then you'd be more than welcome to donate some of your money to congress and the IRS. The amount of money they received would reflect the collective concern for chip clips.
As I tried to explain to you before...the free-rider problem is the definitive, theoretical, justification for the public sector. I don't think it's an unreasonable justification. What I do think is unreasonable is the idea that government planners can somehow "divine" the preferences of millions of unique individuals. But none of this is really controversial...
QuoteNevertheless, the classic solution to the problem of underprovision of public goods has been government funding - through compulsory taxation - and government production of the good or service in question. Although this may substantially alleviate the problem of numerous free-riders that refuse to pay for the benefits they receive, it should be noted that the policy process does not provide any very plausible method for determining what the optimal or best level of provision of a public good actually is. When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponents of such devices tend to concede that public goods will still most likely be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy (//http://books.google.com/books?hl=en&lr=&id=SLRFLlIrqLsC)
The free-rider problem is a reasonable justification for forcing people to chip in to pay for collective goods. Sure. No problem. But as this passage points out...if taxpayers can't shop for themselves...if they can't decide whether they value x or y more...then it's likely that the government will undersupply or oversupply public goods.
Therefore, the solution is simply to allow taxpayers to choose where their taxes go. This will reveal their true priorities. Because voting really does not...
QuoteWhen you vote, the chance that you tip the outcome is near 0%, so you might as well just scream about your identity. When you move, in contrast, the chance that you tip the outcome is near 100%, so you'd better consider cost and convenience. - Bryan Caplan, Expressive Voting, Emigration, and Alsace-Lorraine (//http://econlog.econlib.org/archives/2013/08/expressing_voti.html)
A=0
B= doesn't even make sense. You cannot have a market or an economy without prices. Prices are associated with opportunity cost. If you have no opportunity cost, then you do not have scarcity. If you do not have scarcity, you don't have the need to trade or economize.
C=8.5 and only cause we're human.
Quote from: "Bibliofagus"...In poorly administered countries the option to ram your cheap car into an expensive one, and rob the hapless victim afterwards, is the best option in terms of ROI for the perpetrator.
Actually, in poorly administered countries (like Russia) the best option is to pretend to get hit by someone's car and sue their insurance. If you hit someone and rob them, you could get serious prison time (if caught, and no doubt there would be a substantial effort).
QuoteFify. Do you really believe people act out of 'goodness'? Do you ever watch the fucking news?
YES! I believe in the goodness of people. Evil is brought about by one thing: scarcity. A society that is prosperous is also one that will be generous. People like Bill Gates give a shit ton of money to charity every year.
QuoteLet's say I could take all your money in 10 seconds, without consequenses. That would be great value for me right? And it may well be that I will be spending it in a way that benefits the economy more that it would if you would be spending it.
WITHOUT CONSEQUENCES? What world do you live in where you can change the world and yet somehow not? If you take all of my money the inherent consequence is that I have no money, and you have a very little bit more. If you're talking about legal consequences, then you might consider people's unwillingness to be around you when I tell them about what a fucking douche you are. Maybe, I might plan to attack you back and take everything you have. There is
NO SUCH THING AS NO CONSEQUENCES!Quote from: "Colanth"Of course this means that there's no allocation of any resource to "the people", so anything that requires the government to allocate resources doesn't happen.
That means no roads, so nothing can get done. (Try eating when there's no way to get food to the store you want to buy it from.)
WHAT? Where would you send your tax dollars if you could control them? I'd wager it'd look something like 20% to city, 40% to county, 30%to state, 10% to federal.
Who builds the roads!? The counties or the state! More of my money would go to the government bodies that fund the damned roads. If we allowed people to control where their tax dollars went they'd spend it like they would anything else; what brings them the most value? Who would contest a small tax to fund the governments if you could control where those dollars went? If the roads are fine the people might shift their tax dollars to schools, parks, law enforcement, or libraries.
I don't think you've thought this all the way through.
QuoteIt also means no military, so unless you force the entire world to play along, a little country with a few hundred soldiers could overrun the US.
Right! You obviously know absolutely nothing about my country. In my small town of around 6,000 people I'd bet at least 70% own at least a shot gun (I've got a few guns myself). A few hundred soldiers couldn't take my city unless they were in mechs.
To me, the idea of people controlling their tax dollars is probably the best god damned idea I've ever heard. Possible, too with today's technology. Without having to worry about funding and the ability to meet and discuss in video chat online, Federal legislative positions would be a part time job...mostly because there wouldn't be any money in it.
QuoteYES! I believe in the goodness of people. Evil is brought about by one thing: scarcity. A society that is prosperous is also one that will be generous. People like Bill Gates give a shit ton of money to charity every year.
Walmart, on the other hand, pays their employees so little that even with a fulltime job you can only survive if you get government assistance. And it's not like they have too little money to go around. Scarcity doesn't bring out evil. Greed does. And the greedy are also the ones who are best equipped to get rich and make others suffer for it.
QuoteWHAT? Where would you send your tax dollars if you could control them? I'd wager it'd look something like 20% to city, 40% to county, 30%to state, 10% to federal.
Who builds the roads!? The counties or the state! More of my money would go to the government bodies that fund the damned roads. If we allowed people to control where their tax dollars went they'd spend it like they would anything else; what brings them the most value? Who would contest a small tax to fund the governments if you could control where those dollars went? If the roads are fine the people might shift their tax dollars to schools, parks, law enforcement, or libraries.
I don't think you've thought this all the way through.
You, and the other 90% of the people at the bottom of society, only have about 20% of the actual wealth. The remaining top 10% have the other 80%. What you would give your taxes to is close to irrelevant. The only thing that really matters is what the rich would give their taxes to, because they are the ones that actually impact things.
And they of course have no reason at all to fund things like public education (dumb people spend more money and their own kids can go to private school), a social safety net (it doesn't benefit them), public healthcare (you can just fly abroad if you have a medical problem) etc.
Even if the bottom 90% of the country would put all their assets together to try and support these 3 things (which is just stuff I can name off the top of my hat that would suffer) they would still not be able to generate enough money to keep them at their current levels.
Quote from: "Plu"Walmart, on the other hand, pays their employees so little that even with a fulltime job you can only survive if you get government assistance. And it's not like they have too little money to go around. Scarcity doesn't bring out evil. Greed does. And the greedy are also the ones who are best equipped to get rich and make others suffer for it.
The reason why Wal*Mart can get away with low wages is because the economy is so shit it's the only option some people have, and scraps is better than starving. If the economy were doing well wages would increase because of competition among companies. Costco pays it's employees considerably well.
QuoteYou, and the other 90% of the people at the bottom of society, only have about 20% of the actual wealth. The remaining top 10% have the other 80%. What you would give your taxes to is close to irrelevant. The only thing that really matters is what the rich would give their taxes to, because they are the ones that actually impact things.
And they of course have no reason at all to fund things like public education (dumb people spend more money and their own kids can go to private school), a social safety net (it doesn't benefit them), public healthcare (you can just fly abroad if you have a medical problem) etc.
Even if the bottom 90% of the country would put all their assets together to try and support these 3 things (which is just stuff I can name off the top of my hat that would suffer) they would still not be able to generate enough money to keep them at their current levels.
The only reason those top 10% have so much of the wealth is because they've been able to get the government to steal it from us in the form of taxes and inflation. A lot of these rich people are still rich only because of the bail outs and Benny's quantative destruction of the value of the dollar.
What would you suggest? We tax ourselves into prosperity? That's like slitting your wrists cause you caught a cold.
QuoteThe reason why Wal*Mart can get away with low wages is because the economy is so shit it's the only option some people have, and scraps is better than starving. If the economy were doing well wages would increase because of competition among companies. Costco pays it's employees considerably well.
The reason they will continue to be able to get away with it is because more and more jobs get replaced with machines, the overall population is soaring, and so there simply aren't and never again will be enough jobs to force companies into competition over labor.
QuoteThe only reason those top 10% have so much of the wealth is because they've been able to get the government to steal it from us in the form of taxes and inflation. A lot of these rich people are still rich only because of the bail outs and Benny's quantative destruction of the value of the dollar.
Yes, that's probably a major part of it. But going even closer to the totally free, capitalist market isn't going to fix it. If you look at the world, living conditions for everyone are best in countries that go further into the socialist side of things (but not going too far with it, either) not closer to the free market. The more free a market, the more money will concentrate with the wealthy, because that's what realitistically happens with an economy at our current level of technology combined with capitalism.
QuoteWhat would you suggest?
Me? Not much. I'm not an economist. I can, at best, give reason why really naieve ideas wouldn't work and see what arguments are presented to deal with my situations. Unsurprisingly with this guy, the arguments are just repeating the exact same story over and over again and hoping that we'll forget the list of potential issues with this system we keep presenting.
QuoteWe tax ourselves into prosperity?
Some of the countries with the highest tax rates in the world are also considered the best to live in. Tax is just money the government needs to operate, their usefulness depends entirely on how you use them. You currently live in an economy where the rich decide indirectly where the taxes go through bribing, and that's generating a shitty place to live. I'm not sure advocating a system where the rich can decide openly and freely where all the taxes go would really improve anything.
Also, don't forget that while it might be shitty government that got the rich people rich, if you switch systems now, they will
still be rich. Any changes to the economic and political model will need to be applied to current reality, not a fictional starting point.
Quote from: "The Whit"A=0
B= doesn't even make sense. You cannot have a market or an economy without prices. Prices are associated with opportunity cost. If you have no opportunity cost, then you do not have scarcity. If you do not have scarcity, you don't have the need to trade or economize.
A market is simply when you have demand, supply and choice. This forum right here is a market. There's demand...it matches our preferences to talk with random atheists...supply...100s and 100s of threads on various topics...and choice...it's up to you which topics you spend your scarce time on. And if, as a consumer, you don't find any topics that match your preferences, then it's easier enough to become an entrepreneur and start your own thread. If people choose to forego the other threads and spend their limited time on your thread, then you've given them a better option.
Can resources be efficiently allocated in this market right here? Sure, people are free to spend their limited time on the threads that provide them with the most value. Therefore, we don't need prices for resources to be efficiently allocated.
Do prices make it easy for you to know whether a product/good will provide you with the most value? Let's see if we can figure it out.
Two for-profit bakeries. They both sell the same exact type of bread. But one bakery sells it cheaper. So you buy the cheaper bread. In doing so, you're giving the baker more influence over how society's limited resources are used. The result is that we get more value from society's scarce resources.
Two non-profit bakeries. Is each owner going to use society's scarce resources exactly the same way? If so, then it doesn't matter who you give your money to and get your bread from. If not, then you give your money to whichever baker is making "better" bread. In doing so, you're giving the better baker more influence over how society's limited resources are used. The result is that we get more value from society's scarce resources.
Let's say that in a market economy without prices/profit, a young Thom Yorke worked in a bakery. But he also had a band on the side and a website where people could make donations. So he would receive money (positive feedback) for two different activities...baking and singing. He would be using society's scarce resources in two different ways. He'd be hedging his bets. Clearly though he would start to receive far more money (positive feedback) for his music making than for his bread making. So he'd dedicate his time to making music rather than bread. The result is that we get more value from society's scarce resources.
Quote from: "The Whit"To me, the idea of people controlling their tax dollars is probably the best god damned idea I've ever heard. Possible, too with today's technology. Without having to worry about funding and the ability to meet and discuss in video chat online, Federal legislative positions would be a part time job...mostly because there wouldn't be any money in it.
Nice! If you get a chance check out the facebook page....tax choice (//https://www.facebook.com/ourtaxes)...and the FAQ (//http://pragmatarianism.blogspot.com/2013/08/frequently-asked-questions-faq.html).
Quote from: "The Whit"Quote from: "Bibliofagus"...In poorly administered countries the option to ram your cheap car into an expensive one, and rob the hapless victim afterwards, is the best option in terms of ROI for the perpetrator.
Actually, in poorly administered countries (like Russia) the best option is to pretend to get hit by someone's car and sue their insurance. If you hit someone and rob them, you could get serious prison time (if caught, and no doubt there would be a substantial effort).
First of all: Way to miss the point dude. I was referring to what 'value' actually means in the lawless context this 'tax choice' is propagating.
Secondly: You ever heard of bribes? They are quite the rage in Russia.
Quote from: "The Whit"Quote from: "Bibliofagus"Fify. Do you really believe people act out of 'goodness'? Do you ever watch the fucking news?
YES! I believe in the goodness of people. Evil is brought about by one thing: scarcity. A society that is prosperous is also one that will be generous. People like Bill Gates give a shit ton of money to charity every year.
Lolz. That's so naive it's actually cute. Kim Jung Il must also give half of his money to charity... Rich people never ever commit crime. Because... Bill Gates does what he does...
Sure thing dude.
Quote from: "The Whit"Quote from: "Bibliofagus"Let's say I could take all your money in 10 seconds, without consequenses. That would be great value for me right? And it may well be that I will be spending it in a way that benefits the economy more that it would if you would be spending it.
WITHOUT CONSEQUENCES? What world do you live in where you can change the world and yet somehow not? If you take all of my money the inherent consequence is that I have no money, and you have a very little bit more. If you're talking about legal consequences, then you might consider people's unwillingness to be around you when I tell them about what a fucking douche you are. Maybe, I might plan to attack you back and take everything you have. There is NO SUCH THING AS NO CONSEQUENCES!
I'm sorry. I didn't realise you live in a world/country where all crime is being instantly solved, where every perp is known and punished.
I'm alas unfamiliar with any such places.
Quote from: "Xerographica"Quote from: "Bibliofagus"What's this 'value' you speak of?
You spend x amount of time on this forum. The more time you spend on this forum, the less time you'll be able to spend on other things. You don't randomly allocate your time. You allocate your time according to the amount of benefit/enjoyment/utility/value you derive from each particular use of your time.
Therefore, you maximize the amount of value you derive from your limited resources simply because you have the freedom to put your limited resources, in this case time, to their most valuable uses. It's the same thing with money.
Quote from: "Bibliofagus"Value for whom? Let's say I could take all your money in 10 seconds, without consequenses. That would be great value for me right? And it may well be that I will be spending it in a way that benefits the economy more that it would if you would be spending it.
It would be great immediate value.
Glad you recognise that.
There appears to be a gulf between what is best the best value for society, and what is the best value for the individual.
How are you going to solve this?
What are your thoughts on clientlism?
Oh holy shit, here we go!
Quote from: "Bibliofagus"First of all: Way to miss the point dude. I was referring to what 'value' actually means in the lawless context this 'tax choice' is propagating.
Secondly: You ever heard of bribes? They are quite the rage in Russia.
Bribes are quite the rage in the US as well. The only reason rich people bribe politicians is because their government is set up in a way that would reward them for doing so. If you take the budget out of the hands of the politicians then you take away the power to redistribute government tax dollars into their businesses. The only reason why rich people bribe politicians is because it has a positive return. Some corporation can give someone on a certain board a couple hundred grand in campaign funds and improve their chances of landing contracts that are worth millions.
QuoteLolz. That's so naive it's actually cute. Kim Jung Il must also give half of his money to charity... Rich people never ever commit crime. Because... Bill Gates does what he does...
Sure thing dude.
There's difference between a maniacal dictator and a guy who made billions from a product that is partly responsible for advancing our society. Your argument is invalid. Money does not make people criminals.
QuoteI'm sorry. I didn't realise you live in a world/country where all crime is being instantly solved, where every perp is known and punished.
I'm alas unfamiliar with any such places.
I'm not even going to waste my time...
Quote from: "Xerographica"Two for-profit bakeries. They both sell the same exact type of bread. But one bakery sells it cheaper. So you buy the cheaper bread. In doing so, you're giving the baker more influence over how society's limited resources are used. The result is that we get more value from society's scarce resources.
That's right.
QuoteTwo non-profit bakeries. Is each owner going to use society's scarce resources exactly the same way? If so, then it doesn't matter who you give your money to and get your bread from. If not, then you give your money to whichever baker is making "better" bread. In doing so, you're giving the better baker more influence over how society's limited resources are used. The result is that we get more value from society's scarce resources.
Both of those bakeries may be non-profit, but I'm still deciding based on market price vs personal value. With these non-profit bakeries, how do they expand business?
QuoteLet's say that in a market economy without prices/profit (We've already determined that prices do not go away), a young Thom Yorke worked in a bakery. But he also had a band on the side and a website where people could make donations. So he would receive money (positive feedback) for two different activities...baking and singing. He would be using society's scarce resources in two different ways. He'd be hedging his bets. Clearly though he would start to receive far more money (positive feedback) for his music making than for his bread making. So he'd dedicate his time to making music rather than bread. The result is that we get more value from society's scarce resources.
What you're describing is the price/profit system. Thom is going to switch from baking bread to playing music because there's more money in it.
Quote from: "Plu"The reason they will continue to be able to get away with it is because more and more jobs get replaced with machines, the overall population is soaring, and so there simply aren't and never again will be enough jobs to force companies into competition over labor.
Bro, do you even think? What you're telling me is that you'd rather throw out all the machines Goodyear uses to make it's tires and have them hire people to do it by hand? Like the price of tires wouldn't go through the roof (as if it isn't already there) and quality of those tires would decline immensely because humans are inherently less accurate and efficient than the machines Goodyear replaced those workers with.
QuoteYes, that's probably a major part of it. But going even closer to the totally free, capitalist market isn't going to fix it. If you look at the world, living conditions for everyone are best in countries that go further into the socialist side of things (but not going too far with it, either) not closer to the free market. The more free a market, the more money will concentrate with the wealthy, because that's what realitistically happens with an economy at our current level of technology combined with capitalism.
You obviously know very little to nothing about economics. The more free a market, the more free it's people...ALL of it's people. The more a free market, the larger the middle class. What the US has right now is not free-market capitalism. It's crony capitalism. There's a HUGE difference.
QuoteSome of the countries with the highest tax rates in the world are also considered the best to live in. Tax is just money the government needs to operate, their usefulness depends entirely on how you use them. You currently live in an economy where the rich decide indirectly where the taxes go through bribing, and that's generating a shitty place to live. I'm not sure advocating a system where the rich can decide openly and freely where all the taxes go would really improve anything.
Literally, WTF are you talking about?
QuoteAlso, don't forget that while it might be shitty government that got the rich people rich, if you switch systems now, they will still be rich. Any changes to the economic and political model will need to be applied to current reality, not a fictional starting point.
No shit, Sherlock. The rich would still be rich, but they wouldn't be stealing their wealth from me.
I don't have an inherent problem with people being rich. If you provide a service or product that adds value to society then I don't really give a shit. In an honest, free economy, those dollars would have been voluntarily given up in exchange for the product. FFS look at Mark Zuckerberg. A couple years ago he was another college kid. Now he's a billionaire and facebook has always been free.
QuoteBro, do you even think? What you're telling me is that you'd rather throw out all the machines Goodyear uses to make it's tires and have them hire people to do it by hand? Like the price of tires wouldn't go through the roof (as if it isn't already there) and quality of those tires would decline immensely because humans are inherently less accurate and efficient than the machines Goodyear replaced those workers with.
Assume less. I said nothing that even resembles this, anywhere. You're just imagining all sorts of things I might think. If you want to know what I think, ask me.
QuoteYou obviously know very little to nothing about economics. The more free a market, the more free it's people...ALL of it's people. The more a free market, the larger the middle class. What the US has right now is not free-market capitalism. It's crony capitalism. There's a HUGE difference.
The only totally free markets I know of are in countries that are caught in perpetual civil war. Doesn't sound all that good to me. When you look at the list of countries considered the best to live in, there's a clear relation between "healthy mix of capitalism and socialism" and getting a good score. If you make a market completely free, big business will rape you up the ass ten times worse than they do now, and there'll be nothing you can do about it. The only thing protecting you now is government rules that disallow all manner of capitalist practices (monopolies, for one) that would completely suck you dry.
QuoteLiterally, WTF are you talking about?
A system where people can decide where to put their taxes means that 10% of people can decide where 80% of the taxes are allocated. Do you think that they'll suddenly change from bribing politicians to being nice for society? They'll just continue doing what they're doing now: making sure all those taxes come back in profit for the company, rest of society be damned.
QuoteI don't have an inherent problem with people being rich. If you provide a service or product that adds value to society then I don't really give a shit. In an honest, free economy, those dollars would have been voluntarily given up in exchange for the product. FFS look at Mark Zuckerberg. A couple years ago he was another college kid. Now he's a billionaire and facebook has always been free.
I don't have an inherent problem with people being rich either, but I do have a problem with people fucking over the rest of society so they can add some more numbers to their bank account. And that's usually what rich people do; for many of them it's how they became rich in the first place. When you run a multi-billion dollar business and all your personal is on government aid to survive
and you try to influence them into voting that very government aid away so the company makes more money, something is wrong.
Giving those people even more influence by directly allowing them to contribute nothing to social security and put all the money into more subsidies for their company is not going to end well. Think about how many public services you enjoy that are of no benefit to rich people. Most of those things will go away when free tax choice is introduced, because the people that benefit from them cannot afford to sustain all of them.
(As to facebook being free... that's only because facebook sells all your information to companies for marketing purposes. If we're going to talk economics, facebook comes at the cost of your privacy I guess.)
Quote from: "The Whit"Both of those bakeries may be non-profit, but I'm still deciding based on market price vs personal value. With these non-profit bakeries, how do they expand business?
Well...how does any non-profit organization increase its revenue? They try and provide more value for more people. If they make a mistake...if they provide less value...then they'll lose revenue...
QuoteFor this is the salient point: private organizations, whether for-profit or non-profit, perform or lose their customers or their donors. When a private entity fails to deliver on its promise, or actually causes harm, it is held liable for the failure and pays the damages. When government fails, it gets a bigger budget and even more power. - Mary L. G. Theroux, Public and Private Responses to Katrina (//http://www.independent.org/newsroom/article.asp?id=1589)
If a non-profit bakery failed to perform then they would lose donors.
QuoteCharitable organizations are better than government as a source of aid. First, it is easier for donors to hold charitable organizations accountable than it is for taxpayers to hold government accountable. A failed government program can go on forever. An ineffective charity has a more difficult time obtaining funding. - Arnold Kling, Libertarianism and Poverty (//http://www.cato.org/pub_display.php?pub_id=6433)
An ineffective non-profit bakery would have a more difficult time obtaining donations.
QuoteAnother interesting finding of our analysis is that charitable fund-raising is highly profitable, with over $5 raised per dollar spent on fund-raising. While this number may strike economists used to profit maximization as somewhat high, it is perfectly in line with ideals of best practices promulgated by the charity watchdog groups and fund-raising professionals, as we show below. - James Andreoni and A. Abigail Payne, Is Crowding Out Due Entirely to Fundraising?
A non-profit bakery would be able to engage in fundraising/advertising if it wanted to increase its revenue.
QuoteThe producer whose product turns out to have the combination of features that are closest to what the consumers really want may be no wiser than his competitors. Yet he can grow rich while his competitors who guessed wrong go bankrupt. But the larger result is that society as a whole gets more benefit from its limited resources by having them directed toward where those resources produce the kind of output that millions of people want, instead of producing things that they don't want. - Thomas Sowell, Basic Economics 4th Ed: A Common Sense Guide to the Economy (//http://books.google.com/books?id=hQX6-P0N2nUC)
The non-profit bakery will gain revenue if it provides consumers with bread that that has the combination of features that are closest to what the consumers really want.
QuoteThe government should not help to save Chrysler, of course not. This is a private enterprise system. It's often described as a profit system but that's a misleading label. It's a profit and loss system. And the loss part is even more important than the profit because it's what gets rid of badly managed, poorly operated companies. When Chrysler loses money...it's got to do something. When Amtrak loses money it goes to congress and gets a bigger appropriation. - Milton Friedman
Unlike with our current government organizations, a non-profit bakery would lose revenue if it was badly managed and poorly operated.
QuoteIt's the stockholders of Exxon who ultimately are buying it. If they don't like what Exxon is doing with their money, they have a perfectly good alternative...they can sell the stock. And as the stock went down, if the stockholders didn't like it, they would pay somebody to change the policy which Exxon is following. We have a far greater degree of control over what Exxon does than we have over what a lot of our government corporations do. - Milton Friedman
Every person who made a donation to a non-profit bakery would be an investor...and if they didn't like what the bakery was doing with their money...they could invest their money elsewhere.
Quote from: "The Whit"What you're describing is the price/profit system. Thom is going to switch from baking bread to playing music because there's more money in it.
Right, I'm describing a system of price/profit...but in the broad sense. As Thoreau said, "The price of anything is the amount of life you exchange for it." If what you gain is greater than what you give up, then you've profited. If it isn't, then you've suffered a loss. As an atheist I think it's tis tasty to quote the Bible...
QuoteFor what shall it profit a man, if he shall gain the whole world, and lose his own soul? -Mark 8:36
But the system that I describe won't have prices/profit in the narrow sense. You wouldn't walk into a non-profit bakery and see price tags attached to their baked goods. But maybe you'd see an obnoxiously large real time digital fundraising progress bar? And if they were too aggressive in their efforts to get your donations, if they beat you over the head for your money and made your shopping experience very unpleasant...then you would just go to a non-profit bakery that was more refined in their approach to solicit your support. Maybe after they scanned your selections they would place an info sheet in your bag which thanked you for choosing them and provided you information on their fundraising status. Perhaps the sheet would provide some space to advertise/thank their biggest donors. This would allow you to support the people who supported your favorite non-profits.
If you're interested in the topic...check out my blog entry...Civic Crowdfunding - Encouraging Participation (//http://pragmatarianism.blogspot.com/2012/12/civic-crowdfunding-encouraging.html).
Quote from: "Plu"A system where people can decide where to put their taxes means that 10% of people can decide where 80% of the taxes are allocated. Do you think that they'll suddenly change from bribing politicians to being nice for society? They'll just continue doing what they're doing now: making sure all those taxes come back in profit for the company, rest of society be damned.
Here's a hardcore liberal making the argument that the success of a business depends on public goods...
QuoteI hear all this, you know, "Well, this is class warfare, this is whatever."—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along. - Elizabeth Warren
I have absolutely no problem with the argument that public goods are essential inputs. My argument is that it's ridiculously idiotic to believe that Elizabeth Warren knows how much of each input a business owner needs to successfully operate his business.
There are millions and millions of business owners and only 300 congresspeople. We don't have these meddling middlemen because it's economically logical...we have them because nearly a 1000 years ago some barons doubted the belief that kings had divine authority. Now it's time for the next step in our political/economic evolution. It's time for you to doubt the belief that congress has divine authority. Congress is not omniscient...they can't have more information than millions and millions of business owners. In order for highly decentralized information to be put to use, we need consumers to be free to use their own money to communicate their concerns and circumstances...and we need producers to be free to take that information and utilize society's limited resources accordingly. It's a highly dynamic process that you participate in and benefit from every day but you take it entirely for granted.
And if you want to try and guess what government organizations the wealthy would donate their tax dollars to....then why not just look at what types of public goods they currently donate their money to...
QuoteIt is well known that wealthy donors give to different causes than low income donors – more to education, hospitals and the arts, less to religion. - Yair Listokin and David Schizer, I Like to Pay Taxes: Lessons of Philanthropy for Tax and Spending Policy (//http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2137044)
According to your description, I don't see any between option b and c.
Quote from: "Bibliofagus"Glad you recognise that.
There appears to be a gulf between what is best the best value for society, and what is the best value for the individual.
How are you going to solve this?
In order to determine best value...we can either rely on actions...or we can rely on words. Actions are spending/sacrifice/exchanging/trading. How much you're personally willing to sacrifice for something reveals how much you value it.
Words are voting...surveys...hypothetical situations. People simply tell us what they value. For example, people say they want a war on drugs and then congress guesses how much people value a war on drugs. But how accurately can congress guess the true values of millions of unique individuals? If you want to argue that their guesses are more accurate than our own actions...then there's really no need to allow people to shop for themselves. In fact, we're destroying value by allowing people to shop for themselves. Congress should simply decide how much of every single good/service should be supplied.
But the truth of the matter is, congress cannot accurately guess the true values of millions and millions of unique individuals in unique circumstances. Therefore there's a huge gap between people's true values and the guesses of congress. The result is that value is destroyed. We end up with far more drug war and not enough healthcare. We end up with far more war on terror and not enough education.
So if we want to know exactly how much society truly values each and every public good...then we should give people the freedom to act. Taxpayers should have the freedom to shop for themselves in the public sector. They should have the freedom to decide for themselves how much they are personally willing to sacrifice for the public goods that they want more of.
Quote from: "Bibliofagus"What are your thoughts on clientlism?
What are your thoughts on euergetism?
Some have more power, control and influence than others...
QuoteIn a market regime, some are made richer and some made poorer; in a command structure, some have greater authority and some less. It is equally clear that, in an all-market regime, wealth constitutes authority, and that, in an all-command structure, authority results in wealth. Also true, but perhaps less plain, is the fact that in mixed systems like ours people will use their distributional advantage in one medium to overcome their distributional disadvantage in the other by 'altering' or 'corrupting' that other medium. The use of money to influence or 'corrupt' those in authority is easy enough to understand, whether through bribes or campaign contributions.- Guido Calabresi
In a pragmatarian system, could you "corrupt" those in authority? Imagine you're in charge of the EPA. An extremely wealthy business owner offers to give your organization a shit ton of his tax dollars if you bend the rules for him. Are you going to do it? Maybe you won't get caught? Maybe nobody would notice?
Except, the fact of the matter is that you have millions of environmentalists giving their tax dollars to your organization. They see, know and value exactly what you are doing with their money. They can see and know because your organization is 100% transparent. It's 100% transparent because they know and you know that corporations will want to influence you against the environment. So if you want the trust of environmentalists...then you're going to have to be 100% transparent.
But how much influence/power/control should the EPA have over how society's limited resources are used? It's gotta be up to the taxpayers to decide. Because allowing congress to decide adds an opaque layer that obscures the process by which influence/power/control is distributed.
Not that I'd want to get rid of congress though. People shouldn't have to shop for public goods anymore than they should have to shop for any goods. If they want to give their portion of the power to congress then power to them. In fact, I think they should be able to give their taxes to specific congresspeople. I'd love to know exactly how much power/control/influence society truly believes that each and every congressperson should have. Can you guess which congressperson would receive the most money? Can you guess which congressperson would receive the least money?
Jumping back to the EPA, assuming every country implemented pragmatarianism...can you guess which country would give it's own EPA the largest percentage of its revenue? Would environmentalists be motivated to vote with their feet and move to this country that has so many citizens that place such a high priority on protecting the environment?
Again, actions speak louder than words...
QuoteWhen you vote, the chance that you tip the outcome is near 0%, so you might as well just scream about your identity. When you move, in contrast, the chance that you tip the outcome is near 100%, so you'd better consider cost and convenience. - Bryan Caplan, Expressive Voting, Emigration, and Alsace-Lorraine (//http://econlog.econlib.org/archives/2013/08/expressing_voti.html)
QuoteThere are, however, several other considerations that are sometimes mentioned in the context of revealed preference that do suggest a systematic and predictable bias in the divergence between actions and words (and by extrapolation between market and electoral preference), and these considerations are of more interest in the current setting. - Geoffrey Brennan, Loren Lomasky, Democracy and Decision (//http://books.google.com/books?id=I3mal2inJQgC)
QuoteAs was noted in Chapter 3, expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market. A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom. - Geoffrey Brennan, Loren Lomasky, Democracy and Decision (//http://books.google.com/books?id=I3mal2inJQgC)
QuoteFurthermore, social scientists know that there is often a big gulf between consumers' answers to surveys questions and what they actually do when confronted with real choices involving real prices and the immediate circumstances of consumption. - Richard B. McKenzie, Bound to Be Free (//http://books.google.com/books?id=dHI2I5m0sZ0C)
Quote from: "The Whit"According to your description, I don't see any between option b and c.
Here's the difference between B and C...
B = The bakery does not have price tags. You put the baked goods in your basket, have your items scanned for inventory purposes and leave the bakery without paying. If you valued how the bakery was using society's limited resources, then at anytime you could go to their website, consider the alternative uses of your money (opportunity cost) and make a donation of any amount.
C = The bakery has price tags. You look at the prices and consider the alternative uses of your money (opportunity cost). If you decide the baked goods are worth the money, then you'd put them in your basket, go to the check out and pay for them.
If you don't see any difference between B and C, then price tags aren't really necessary. Go spread the word to the members of NationStates (//http://forum.nationstates.net/viewtopic.php?f=20&t=257914).
Quote from: "Xerographica"Quote from: "Bibliofagus"Glad you recognise that.
There appears to be a gulf between what is best the best value for society, and what is the best value for the individual.
How are you going to solve this?
In order to determine best value...we can either rely on actions.
[/quote]The actions of individuals - society doesn't act. How do you propose that we ensure that individuals act for the best value for society, not for the best value for themselves, when the apparent best values are different (even though the non-apparent best values - which most individuals are totally unaware of - are the same)?
IOW, how can we make sure that John, who doesn't own a car, contributes to road maintenance? In his view, that's a waste of his tax money. He - as an individual - doesn't need well-maintained roads. When he starves to death, because the delivery trucks couldn't deliver food to the store he shops at, it's too late for him to change his mind.
When that problem repeats millions of times the nation crumbles and no one has to worry about taxes or efficiency, because a non-functioning system operates at 0% efficiency.
Quote from: "Xerographica"Quote from: "The Whit"According to your description, I don't see any between option b and c.
Here's the difference between B and C...
B = The bakery does not have price tags. You put the baked goods in your basket, have your items scanned for inventory purposes and leave the bakery without paying. If you valued how the bakery was using society's limited resources, then at anytime you could go to their website, consider the alternative uses of your money (opportunity cost) and make a donation of any amount.
C = The bakery has price tags. You look at the prices and consider the alternative uses of your money (opportunity cost). If you decide the baked goods are worth the money, then you'd put them in your basket, go to the check out and pay for them.
The difference you're missing is that C works in all cases. Not perfectly, not most efficiently, but well. (And it's been working for about 4,000 years now.) B doesn't work with human beings. Human beings don't think "is the bakery using society's limited resources well?", they think "does the bakery have bread, and can I get enough of it?" When the bakery fails, because they got no donations, their former customers go to another bakery and repeat the process. When society fails, and it will under plan B, people will kill each other for the remaining resources.
That's what you Utopian types never consider - how things actually work. In theory, theory and practice are the same. In practice, they're not.
Option B is actually being experimented with as we speak on the internet, with things like music and software that are free but accept donations. Unsurpisingly, these people have to rely on the generosity of a handful of people while most of the world just uses their stuff for free.
With internet piracy it's the same thing, except there it's even been done against the owner's will.
Most big companies don't seem interested in the model.
Quote from: "Xerographica"Quote from: "Bibliofagus"Glad you recognise that.
There appears to be a gulf between what is best the best value for society, and what is the best value for the individual.
How are you going to solve this?
In order to determine best value...we can either rely on actions...or we can rely on words. Actions are spending/sacrifice/exchanging/trading. How much you're personally willing to sacrifice for something reveals how much you value it.
Words are voting...surveys...hypothetical situations. People simply tell us what they value. For example, people say they want a war on drugs and then congress guesses how much people value a war on drugs. But how accurately can congress guess the true values of millions of unique individuals? If you want to argue that their guesses are more accurate than our own actions...then there's really no need to allow people to shop for themselves. In fact, we're destroying value by allowing people to shop for themselves. Congress should simply decide how much of every single good/service should be supplied.
But the truth of the matter is, congress cannot accurately guess the true values of millions and millions of unique individuals in unique circumstances. Therefore there's a huge gap between people's true values and the guesses of congress. The result is that value is destroyed. We end up with far more drug war and not enough healthcare. We end up with far more war on terror and not enough education.
So if we want to know exactly how much society truly values each and every public good...then we should give people the freedom to act. Taxpayers should have the freedom to shop for themselves in the public sector. They should have the freedom to decide for themselves how much they are personally willing to sacrifice for the public goods that they want more of.
First of all: You didn't adress my question. It's about how short term individual value often is at odds with longer term value for society.
Secondly: 'Read my lips: No more taxes'... sound familiar? It's one of Bush jr.'s broken promises. It's what partly cost him re-election.
Now I have no trouble at all to think of a company that made some promises they didn't deliver.... So I'm unclear about the actual difference you refer to. Do you live in a country where advertisements are illegal?
Quote from: "Bibliofagus"Quote from: "Xerographica"Quote from: "Bibliofagus"Glad you recognise that.
There appears to be a gulf between what is best the best value for society, and what is the best value for the individual.
How are you going to solve this?
In order to determine best value...we can either rely on actions...or we can rely on words. Actions are spending/sacrifice/exchanging/trading. How much you're personally willing to sacrifice for something reveals how much you value it.
Words are voting...surveys...hypothetical situations. People simply tell us what they value. For example, people say they want a war on drugs and then congress guesses how much people value a war on drugs. But how accurately can congress guess the true values of millions of unique individuals? If you want to argue that their guesses are more accurate than our own actions...then there's really no need to allow people to shop for themselves. In fact, we're destroying value by allowing people to shop for themselves. Congress should simply decide how much of every single good/service should be supplied.
But the truth of the matter is, congress cannot accurately guess the true values of millions and millions of unique individuals in unique circumstances. Therefore there's a huge gap between people's true values and the guesses of congress. The result is that value is destroyed. We end up with far more drug war and not enough healthcare. We end up with far more war on terror and not enough education.
So if we want to know exactly how much society truly values each and every public good...then we should give people the freedom to act. Taxpayers should have the freedom to shop for themselves in the public sector. They should have the freedom to decide for themselves how much they are personally willing to sacrifice for the public goods that they want more of.
First of all: You didn't adress my question. It's about how short term individual value often is at odds with longer term value for society.
Secondly: 'Read my lips: No more taxes'... sound familiar? It's one of Bush jr.'s broken promises. It's what partly cost him re-election.
Now I have no trouble at all to think of a company that made some promises they didn't deliver.... So I'm unclear about the actual difference you refer to. Do you live in a country where advertisements are illegal?
If a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
Are you talking about "Dubya's" career as governor of Texas or President? Because he got re-elected to both.
Oops. That should be Bush sr.
You gunna answer my question?
QuoteIf a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
Quote from: "The Whit"If a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
It's in the best interests of each individual to not waste resources (including money and effort) for someone else's benefit. It's in the best interest of the society as a whole to spend resources on common goals, including some that won't benefit all the individuals.
Quote from: "Colanth"Quote from: "The Whit"It's in the best interests of each individual to not waste resources (including money and effort) for someone else's benefit.
Really? That's how you look at it? Helping other people is "waste"?
QuoteIf a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
Imagine my interest was the torture and slaughter of others in my society. It's not hard to see how it can be against society's interests to let everyone pursue their own.
There's no problems with letting everyone pursue their own interests as long as those interests don't involve interfering with other people trying to do the same. Pretty much all the time, they do, and a bit of regulation is needed to fix that.
Quote from: "Plu"Imagine my interest was the torture and slaughter of others in my society.
Then I'd imagine it would be in my and everyone else's interests to stop you wouldn't it?
And that would then be against my interests again. You asked how it was against society's interests for every individual to pursue their own interests. This is why. Some people's interest are in the disruption and destruction of society.
The destruction of society is obviously against the interests of society, but it can easily be a personal interest of any of its members.
When it's you vs society who do you think is going to win? When a town hunts you down for murder, what do you do?
Quote from: "Plu"And that would then be against my interests again. You asked how it was against society's interests for every individual to pursue their own interests. This is why. Some people's interest are in the disruption and destruction of society.
The destruction of society is obviously against the interests of society, but it can easily be a personal interest of any of its members.
Therefore, it's in the interests of society to have 100% of our resources allocated to the war on terror?
What you fail to grasp is that willingness to pay is the only way to gauge the intensity of people's preferences. Without this information it's impossible to provide the optimal supply of any good/service.
Quote from: "The Whit"When it's you vs society who do you think is going to win? When a town hunts you down for murder, what do you do?
I do not understand the relevance of these questions. You asked "how could" and I answered "like this", and now there's all these pointless questions coming like you're somehow trying to make my answer turn out wrong or something.
Personal interest can be against the interest of society. Period. What that means and whether it's a good or a bad thing or what we should do with the knowledge is a different discussion, but that doesn't change the fact that it's true.
Quote from: "The Whit"You gunna answer my question?
QuoteIf a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
If a car is an airplane, how could it not fly?
Quote from: "Plu"Quote from: "The Whit"When it's you vs society who do you think is going to win? When a town hunts you down for murder, what do you do?
I do not understand the relevance of these questions.
Yeah because anyone can just decide to kill another person and nobody gives a shit. That's the point I'm trying to make. If it is in your self interest to kill people for pleasure, it's in everyone else's interest to not allow you to do that (self-preservation). So, bad boys, bad boys whatcha gonna do? Whatcha gonna do when they come for you?
QuoteYou asked "how could" and I answered "like this"
no you didn't, you just assumed the maniacal murderer was the only person who's self interest matters and assumed he'd get to kill everyone cause it's apparently not in people's interest to preserve their own life. Riiiiiiiggght.....
Quoteand now there's all these pointless questions coming like you're somehow trying to make my answer turn out wrong or something.
Please. You don't even have an answer.
QuotePersonal interest can be against the interest of society. Period.
Keyword:
can. And that's why I carry a gun. What are you going to do if some deranged lunatic tries to kill you with a gun? Call the cops? Say, "stop!" Threaten to use pepper spray? Scream like a little girl? Play dead?
My answer is easy, I shoot the fuck back.
QuoteWhat that means and whether it's a good or a bad thing or what we should do with the knowledge is a different discussion, but that doesn't change the fact that it's true.
It's not the standard. 99.8% of society broke no laws today. Your argument should be refuted by simply looking in the mirror. If you think you need the government to act like a nice person then maybe you should be thrown into the mental hospital next to the guy who needs god to do the same.
Seriously. This is not rocket science or anything.
You ask:
QuoteIf a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
I state:
I can act against the best interest of society, by randomly trying to destroy it, for whatever reason I come up with.
I also state:
Randomly trying to destroy society can, for whatever reason I can conjure up, be perceived by me as "in my best interests". Maybe I think it'll send me to heaven or whatever.
Thus, this answers you question: how can it be against society's interests for every individual to pursue their own interests? Simply when a member of society feels it is in their best interest to disrupt and destroy society.
The only way this does not answer your question is if you define it as impossible for something to go against society's interests, or if you define society as something that has no interests. In which case it's a non-question, because it's impossible by definition. The moment you define "society's interests", you can do something that goes against it. And
obviously if I randomly start shooting people, they'll start shooting back. You know what that is? Me acting against society's interests, and society acting in its own interests by trying to remove me from it. But that doesn't change the fact that it still answers your question.
Trying to claim that by shooting back, I'm somehow not disrupting society is like claiming I cannot possibly murder someone if you give me a gun because you'll shoot me back. So what? I'll still kill someone, even if it kills me right back. I'm still going against society's interests, even if it's just for a short time. It only proves that it's possible, which is
all you asked.
If you want different answers, you'll have to ask a different question. But, for the sake of it, I'll answer this one:
QuoteThat's the point I'm trying to make. If it is in your self interest to kill people for pleasure, it's in everyone else's interest to not allow you to do that (self-preservation). So, bad boys, bad boys whatcha gonna do? Whatcha gonna do when they come for you?
Obviously I'll get shot, which I perceive as being in my best interest because it's the way to heaven, and society will be severely disrupted over all the deaths that were generated by an invidual acting in his own interests. Which shows that it's not in society's best interest to have all its members acting in their best interest, because some people have really weird ideas about what's in their best interest.
You only need one example to show an absolute statement wrong. Look at any recent mass-shooting, and you'll see an example of why it's in society's interest to limit its people in their ability to pursue their interests.
Quote from: "Xerographica"When individuals do not have the freedom to decide which uses of their limited resources they value most...it's a given that resources will not be put to their most valuable uses.
This rests on the premise that a given individual knows the optimal way to distribute their resources.
When an individual allocates resources, they usually lack the knowledge to make the optimal choice and will instead base their decision on other factors.
Quote from: "Jason78"This rests on the premise that a given individual knows the optimal way to distribute their resources.
When an individual allocates resources, they usually lack the knowledge to make the optimal choice and will instead base their decision on other factors.
People make mistakes...and they lose their resources to people who made more informed guesses....
QuoteThe producer whose product turns out to have the combination of features that are closest to what the consumers really want may be no wiser than his competitors. Yet he can grow rich while his competitors who guessed wrong go bankrupt. But the larger result is that society as a whole gets more benefit from its limited resources by having them directed toward where those resources produce the kind of output that millions of people want, instead of producing things that they don't want. - Thomas Sowell, Basic Economics 4th Ed: A Common Sense Guide to the Economy (//http://books.google.com/books?id=hQX6-P0N2nUC)
If you make a mistake...you suffer losses. If you suffer losses...then you'll know that you made a mistake. If you make a good choice...you enjoy gains. If you enjoy gains...then you'll know that you made a good choice.
Some people are better at using society's limited resources than other people. And these are the people who we give our money to when we go shopping. And because they are better at using society's limited resources...we will all enjoy incredible gains by allowing them to choose for themselves (via their tax dollars)...which public goods (resources) they need more of in order to more efficiently produce all the things that we are willing to pay for.
There are days I really, really wish I too could live in that easy and naïeve world and be completely oblivious to my own ignorance :(
I guess ignorance really is bliss.
Quote from: "Plu"Seriously. This is not rocket science or anything.
You ask:
QuoteIf a society is just a bunch of people living together, how is it against the society's interests for every individual to pursue their own interests?
I state:
I can act against the best interest of society, by randomly trying to destroy it, for whatever reason I come up with.
I also state:
Randomly trying to destroy society can, for whatever reason I can conjure up, be perceived by me as "in my best interests". Maybe I think it'll send me to heaven or whatever.
Thus, this answers you question: how can it be against society's interests for every individual to pursue their own interests? Simply when a member of society feels it is in their best interest to disrupt and destroy society.
The only way this does not answer your question is if you define it as impossible for something to go against society's interests, or if you define society as something that has no interests. In which case it's a non-question, because it's impossible by definition. The moment you define "society's interests", you can do something that goes against it. And obviously if I randomly start shooting people, they'll start shooting back. You know what that is? Me acting against society's interests, and society acting in its own interests by trying to remove me from it.
DING DING DING! WE GOT OURSELVES A WINNER!
That's what I was looking for. If society kills you, you can't act against society's interests. Problem solved. Society goes on, just like it has after any tragedy.
But that doesn't change the fact that it still answers your question.
You're still not getting my point.
Trying to claim that by shooting back, I'm somehow not disrupting society is like claiming I cannot possibly murder someone if you give me a gun because you'll shoot me back. So what? I'll still kill someone, even if it kills me right back. I'm still going against society's interests, even if it's just for a short time. It only proves that it's possible, which is all you asked.
But what about the other 99.8% of people whose self interests are in line with their society? Don't they have any say?
If you want different answers, you'll have to ask a different question. But, for the sake of it, I'll answer this one:
QuoteThat's the point I'm trying to make. If it is in your self interest to kill people for pleasure, it's in everyone else's interest to not allow you to do that (self-preservation). So, bad boys, bad boys whatcha gonna do? Whatcha gonna do when they come for you?
Obviously I'll get shot, which I perceive as being in my best interest because it's the way to heaven, and society will be severely disrupted over all the deaths that were generated by an invidual acting in his own interests. Which shows that it's not in society's best interest to have all its members acting in their best interest, because some people have really weird ideas about what's in their best interest.
So we should talk about what people perceive as their self-interest and why, right?
You only need one example to show an absolute statement wrong. Look at any recent mass-shooting, and you'll see an example of why it's in society's interest to limit its people in their ability to pursue their interests.
It's in our best interests to limit people's ability to pursue destructive interests. If I want to take my car out on an old dirt road on my property and drift the living fuck out of it without wearing a seat belt, who has a problem with it? No one? Because it effects no one? But I certainly wouldn't advocate drifting through a residential neighborhood because the potential consequences could fall on someone who is completely uninvolved in your decision. It's not in society's best interests to limit everyone's ability to pursue their interests, only those that might adversely effect others.
It's still in society's best interests to have a society because the VAST MAJORITY benefit from that society, even if a few people go nuts. It's in that society's self interest to limit the amount of people who go nuts, and allowing it's members to defend themselves if necessary (but that's getting into another topic that's already open).
Quote from: "Jason78"Quote from: "Xerographica"When individuals do not have the freedom to decide which uses of their limited resources they value most...it's a given that resources will not be put to their most valuable uses.
This rests on the premise that a given individual knows the optimal way to distribute their resources.
When an individual allocates resources, they usually lack the knowledge to make the optimal choice and will instead base their decision on other factors.
Then I take it you're advocating education, since that is the factor that determines whether or not someone uses a resource correctly?
Quote from: "Plu"There are days I really, really wish I too could live in that easy and naïeve world and be completely oblivious to my own ignorance :(
I guess ignorance really is bliss.
I'd say you're already living in dreamland. You certainly don't live in the same universe as the rest of us.
So basically, your question was just not relevant to what you meant. You meant to say "It is in society's interest to limit people in their ability to engage in activities that are destructive towards society."
This is, of course, completely different from your actual question, but at least we figured out what you really mean.
Now that you actually posted your point, it's not that hard to follow.
QuoteI'd say you're already living in dreamland. You certainly don't live in the same universe as the rest of us.
I've had people say I live in a utopia, because they called things that are considered pretty normal here "some sort of utopic society". But I'm really glad to not live in the US, yeah. Still in the same universe but far enough away that I can look at the shit that goes down there and just shake my head and ignore it. Don't underestimate how far behind the US is in many areas compares to some other places in the world. You've probably been taught the US is #1, but that hasn't been true in most fields for a long time.
Quote from: "Plu"So basically, your question was just not relevant to what you meant. You meant to say "It is in society's interest to limit people in their ability to engage in activities that are destructive towards society."
That's not what I meant to say, that was implied. I was trying to get you to recognize that.
QuoteI've had people say I live in a utopia, because they called things that are considered pretty normal here "some sort of utopic society". But I'm really glad to not live in the US, yeah. Still in the same universe but far enough away that I can look at the shit that goes down there and just shake my head and ignore it. Don't underestimate how far behind the US is in many areas compares to some other places in the world. You've probably been taught the US is #1, but that hasn't been true in most fields for a long time.
I'm a realist. I know this, man. We're far from #1. Our society is in shambles, but it's
NOT because people are "too free".
QuoteThat's not what I meant to say, that was implied. I was trying to get you to recognize that.
If you want someone to recognize something, especially on an internet messaging board when dealing with people from different cultures who don't share your primary language, it's usually better to just say what you mean instead of implying things. :)
QuoteI'm a realist. I know this, man. We're far from #1. Our society is in shambles, but it's NOT because people are "too free".
I don't think it's because your people aren't free enough, either. Mostly it seems to be because people are interested in having the simplest life possible, with as little thinking as they can get away with. But then most people in my country suffer from the exact same problem.
Quote from: "Plu"If you want someone to recognize something, especially on an internet messaging board when dealing with people from different cultures who don't share your primary language, it's usually better to just say what you mean instead of implying things. :)
This is going to spill over into the subject in another thread, but I can't answer this without bringing it up.
It was implied in that if a society is a large group of people co-existing for mutual benefit, then it is in every individual's self interest to abide by the rules of that society and prevent actions that are destructive to that ends. The fact that one person decides to act contrary to society's rules is not a death sentence for that society. His single will only matters as far as he can carry it out. If that means he walks into a gun store, shoots one person, and then gits lit the fuck up then he was only able to enforce that over one person. Shitty for them, but what if he walks into a theater where the legal carry of guns is prohibited? Suddenly, he has the power to do as he wishes uncontested killing dozens of people and injuring many more. Society is a self-correcting mechanism--because it is in every individual's self interest to keep benefiting from society--but it requires that the people have the ability to correct the problem. When the problem is a maniac in a theater with a rifle, there's only one way to stop him; equal or more force.
If you want to prevent people from going nuts in a theater then you have to look for the cause of their will to commit murder, and address
that. Mental health is a key issue. I don't think anyone would contest that Adam Lanza or James Holmes were in their right minds when they did what they did.
QuoteI don't think it's because your people aren't free enough, either. Mostly it seems to be because people are interested in having the simplest life possible, with as little thinking as they can get away with. But then most people in my country suffer from the exact same problem.
I agree here. So how would you deal with this problem?
QuoteSo how would you deal with this problem?
I have no answers to this question that would not make the holocaust look like a papercut in comparison, I'm afraid.
Fact: all these problems with plutocracy would be solved if it were legal to work with private currencies.
You're going to have to explain that one. I don't see how having a private currency is going to fix anything. Only how it's going to make a lot of stuff really complicated.
Quote from: "Plu"QuoteSo how would you deal with this problem?
I have no answers to this question that would not make the holocaust look like a papercut in comparison, I'm afraid.
I think I do, and it's called getting the government the hell out of the way. To get back on topic, the price system is what a society uses to interpret supply and demand over a certain use of resources. Based on that information (profit generated) people can judge whether or not to expand/restrict production or invest money into research and development to improve the product.
Competition among suppliers forces the price down by increasing supply. This in turn forces these companies to strive for the lowest cost of production to maximize profits. That drives up demand for ingenuity and problem solving skills, which translates to more jobs. As the companies fight over the resource of human capital in employees, the price of that resource (wages) increases.
When there is more money being paid out to the working force, there is more money to be spent on product, which means more money for the workers and more expansion for the companies. More expansion in turn leads to more jobs, and the mechanism feeds itself. More and more money is being used in the economy because more people have money, and this is the trail to prosperity. This, I maintain, leads to increases in altruism as more people do not have to conserve their resources to survive and those excess resources can be used to help those in need.
The non-profit economy wouldn't work because there is a complete lack of certainty. Bakers don't know how much bread they're going to be able to buy next time. How do the employees know they're going to get paid? How does the manager know he's going to be able to pay them? If it's voluntary work, where do these people get their money to live?
It's a nice thought, but in reality a market based on non-profit organizations seeking donations for their contribution to society is not going to do very well.
Quote from: "The Whit"Quote from: "Colanth"Quote from: "The Whit"It's in the best interests of each individual to not waste resources (including money and effort) for someone else's benefit.
Really? That's how you look at it? Helping other people is "waste"?
That's how most people look at it. The poor can't afford to spend money on anything but subsistence, and the rich get rich by not spending money that doesn't directly benefit them.
Quote from: "Colanth"Quote from: "The Whit"Really? That's how you look at it? Helping other people is "waste"?
That's how most people look at it. The poor can't afford to spend money on anything but subsistence, and the rich get rich by not spending money that doesn't directly benefit them.
Wrong.
http://www.looktothestars.org/celebrity/bill-gates (http://www.looktothestars.org/celebrity/bill-gates)
http://www.huffingtonpost.com/tag/warre ... tt-charity (http://www.huffingtonpost.com/tag/warren-buffett-charity)
http://www.looktothestars.org/celebrity/jay-z (http://www.looktothestars.org/celebrity/jay-z)
http://www.looktothestars.org/celebrity/oprah (http://www.looktothestars.org/celebrity/oprah)
http://www.looktothestars.org/celebrity/angelina-jolie (http://www.looktothestars.org/celebrity/angelina-jolie)
Have you ever watched an episode of Oprah? She's given everyone in her audience a god damned car, and gave away a total of 570 cars during the 25 seasons it was on air, not that I watched (although I did Youtube Tom Cruise going nuts).
A few nice people don't define the 3 million who work the other way. When was the last time Mitt Romney gave cars away to poor people he didn't know? Or Dick Cheney? (For every wealthy person you can name who gives to the poor, I can name 25 who make people poor.)
Quote from: "The Whit"Quote from: "Plu"QuoteSo how would you deal with this problem?
I have no answers to this question that would not make the holocaust look like a papercut in comparison, I'm afraid.
I think I do, and it's called getting the government the hell out of the way. To get back on topic, the price system is what a society uses to interpret supply and demand over a certain use of resources. Based on that information (profit generated) people can judge whether or not to expand/restrict production or invest money into research and development to improve the product.
Competition among suppliers forces the price down by increasing supply. This in turn forces these companies to strive for the lowest cost of production to maximize profits. That drives up demand for ingenuity and problem solving skills, which translates to more jobs. As the companies fight over the resource of human capital in employees, the price of that resource (wages) increases.
When there is more money being paid out to the working force, there is more money to be spent on product, which means more money for the workers and more expansion for the companies. More expansion in turn leads to more jobs, and the mechanism feeds itself. More and more money is being used in the economy because more people have money, and this is the trail to prosperity. This, I maintain, leads to increases in altruism as more people do not have to conserve their resources to survive and those excess resources can be used to help those in need.
The non-profit economy wouldn't work because there is a complete lack of certainty. Bakers don't know how much bread they're going to be able to buy next time. How do the employees know they're going to get paid? How does the manager know he's going to be able to pay them? If it's voluntary work, where do these people get their money to live?
It's a nice thought, but in reality a market based on non-profit organizations seeking donations for their contribution to society is not going to do very well.
It's all cool in theory (just like all the other systems of government and economics) but this is not how it would go in practice. In practice, when you are supplying a vital good that is very expensive to produce, it is in your interest to find all the other people who are rich enough to produce that good and then set the price together. Because it's a vital good, people have little choice but to buy anyway, and because it's expensive to produce new businesses cannot really pop up to compete with you.
In addition, the drive for ingenuity and problem solving skills no longer translates into more jobs. It translates into more jobs for highly trained, skill and intelligent people but it
decreases the overall number of jobs, because ingenuity means replacing people with machines.
And finally, in their competition to drive down production, people will be paid less and less. Even with a minimum wage system in place, big companies find loopholes in the law to still pay people so little they cannot subsist on a full-time salary. Without government, that too will only get worse.
Capitalism is great when everyone plays by the rules, but nobody ever plays by the rules. There is much more money to be made in cheating the system and circumventing the supply/demand chain. Artificial demand, researching breakthroughs and then locking them away from the public, vendor locking, price gouging, monopoly positions, all these things will happen in an attempt to abuse the market and make more money. And they are not in favor of the consumer at all.
But the system you propose, where the government doesn't get involved and pure capitalism is allowed to do its thing has actually been used a lot. Read up on the European Industrial Revolution. It was
not a good time to be a worker, and with the advances in machinery and computers it would go over even worse today, considering how many people there are and how few you need anymore.
Quote from: "Colanth"A few nice people don't define the 3 million
The opposite is true as well. 25 is a long way from 3 million.
Quote from: "Jason78"Quote from: "Xerographica"When individuals do not have the freedom to decide which uses of their limited resources they value most...it's a given that resources will not be put to their most valuable uses.
This rests on the premise that a given individual knows the optimal way to distribute their resources.
When an individual allocates resources, they usually lack the knowledge to make the optimal choice and will instead base their decision on other factors.
Then I take it you're advocating education, since that is the factor that determines whether or not someone uses a resource correctly?
No actually. I'm not. The level of education required for someone to allocate resources in an optimal way is beyond the ability of most people.
Given two purchasing choices, I as a consumer know next to nothing about the supply chain leading up to the point of sale. And that's assuming that I want to make the optimal choice and not the most convenient choice or the most economical one.
I think it would be important to keep in mind that these models of capitalism are pretty old and were never made to deal with a whole bunch of situations that occur in modern day but that were never even thought of back when they were built.
Quote from: "The Whit"The non-profit economy wouldn't work because there is a complete lack of certainty. Bakers don't know how much bread they're going to be able to buy next time. How do the employees know they're going to get paid? How does the manager know he's going to be able to pay them? If it's voluntary work, where do these people get their money to live?
It's a nice thought, but in reality a market based on non-profit organizations seeking donations for their contribution to society is not going to do very well.
A. Some uses of society's limited resources are more valuable than other uses
B. A valuable use to one person might be a valueless use to another person
C. The goal is to maximize the value we derive from society's limited resources
D. Therefore, people have to be free to choose for themselves who they give their positive feedback (money) to.
The goal is not certainty for producers...or for employees...the goal is to provide the most value for consumers. If an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery. This is creative destruction. Resources are freed up for more valuable uses....simply because consumers are free to choose which uses of their limited resources they value most.
Quote from: "Xerographica"The goal is not certainty for producers...or for employees...the goal is to provide the most value for consumers. If an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery. This is creative destruction. Resources are freed up for more valuable uses....simply because consumers are free to choose which uses of their limited resources they value most.
what if that bread is 10 times the price of one from an older bakery?
This assumes people will buy the highest quality regardless of price. Is that what you are saying?
Also the goal for employees, in most cases, is different then the goal of producers.
Quote from: "Plu"It's all cool in theory (just like all the other systems of government and economics)
No. Marxism is doomed to ultimate failure by a flaw in it's basic philosophy. It turns the entire society into the tragedy of the commons.
but this is not how it would go in practice.
Your evidence for this?
In practice, when you are supplying a vital good that is very expensive to produce, it is in your interest to find all the other people who are rich enough to produce that good and then set the price together. Because it's a vital good, people have little choice but to buy anyway, and because it's expensive to produce new businesses cannot really pop up to compete with you.
That's a cool hypothesis (I won't say theory, because that's not backed by any facts). In reality that doesn't work that way. I'll give you an example. I remember when flat screen TVs first came out and 60" TVs were selling for over $5,000 a unit. Care to take a guess as to why? Because there's two ways to maximize profit, increasing profit margins or increasing product sold. This is why places like Costco thrive. Even if they lower prices, more people will be able to buy it, and your profits go up. So, now I can buy a flat screen 60" for $900. Better still, the TVs on the market today use less than half the electricity and have MUCH improved picture clarity. So, not only has the price gone down, but quality has improved. So, suck it. Capitalism, bitch.
In addition, the drive for ingenuity and problem solving skills no longer translates into more jobs. It translates into more jobs for highly trained, skill and intelligent people but it decreases the overall number of jobs, because ingenuity means replacing people with machines.
I'm drowning in a sea of non-though. Just because one job is "lost" to a machine doesn't mean that person gets kicked out to the street where they starve to death because all they can do is stamp sheet metal. If your job could be done faster, safer, and more accurately by a machine why the hell wouldn't you want a machine doing it? That frees human capital available to expand the economy. In order for that to happen there needs to be jobs readily available, and government regulations, wage controls, and high taxes are preventing that.
And finally, in their competition to drive down production, people will be paid less and less. Even with a minimum wage system in place, big companies find loopholes in the law to still pay people so little they cannot subsist on a full-time salary. Without government, that too will only get worse.
I don't know who's ass you pulled this shit out of but you need to put it back.
https://www.youtube.com/watch?v=siW0YAAfX6I (https://www.youtube.com/watch?v=siW0YAAfX6I)
Capitalism is great when everyone plays by the rules, but nobody ever plays by the rules. There is much more money to be made in cheating the system and circumventing the supply/demand chain.
[ Image (//https://i.chzbgr.com/maxW500/2144674560/h463EF486/) ]
Artificial demand, researching breakthroughs and then locking them away from the public, vendor locking, price gouging, monopoly positions, all these things will happen in an attempt to abuse the market and make more money. And they are not in favor of the consumer at all.
Y'all motherfuckers need Friedman.
https://www.youtube.com/watch?v=xNc-xhH8kkk (https://www.youtube.com/watch?v=xNc-xhH8kkk)
But the system you propose, where the government doesn't get involved and pure capitalism is allowed to do its thing has actually been used a lot. Read up on the European Industrial Revolution. It was not a good time to be a worker, and with the advances in machinery and computers it would go over even worse today, considering how many people there are and how few you need anymore.
I don't think anyone would argue that the industrial jobs were pretty shitty back then, but there were no better industrial jobs at that time. Industrialism was in it's infancy, and of course it's not going to be optimal. When you were young and just learning how to talk you made a shit ton of mistakes. Did your parents drown you just because you couldn't form complete sentences when you were 6 months old? Obviously not. We didn't have child labor laws back then, but those kids would have still been working on farms for 10+ hours a day helping their family put food on the table. Yes the beginning was dirty and foul but no more than you when you were crawling around the house shitting yourself and drooling on everything. You've out grown that and so has industrialism. The newly industrializing countries need our help so they don't have to go through that like Europe and America did. Just because it was our past doesn't mean it's our future.
Quote from: "Jason78"Quote from: "The Whit"Then I take it you're advocating education, since that is the factor that determines whether or not someone uses a resource correctly?
No actually. I'm not. The level of education required for someone to allocate resources in an optimal way is beyond the ability of most people.
Given two purchasing choices, I as a consumer know next to nothing about the supply chain leading up to the point of sale.
You don't HAVE to for the system to work!
And that's assuming that I want to make the optimal choice and not the most convenient choice or the most economical one.
Whats the difference?
Quote from: "Plu"I think it would be important to keep in mind that these models of capitalism are pretty old and were never made to deal with a whole bunch of situations that occur in modern day but that were never even thought of back when they were built.
It still works. In fact, we have what we have today because it works. Evolution has been working for some 3 billion years and never could have for-seen the kind of complexity life we have around today. So I guess we need the government to control what genes get passed on because evolution can't possibly work in today's environment. AM-I-RIGHT?
Quote from: "Xerographica"The goal is not certainty for producers...or for employees...the goal is to provide the most value for consumers. If an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery. This is creative destruction. Resources are freed up for more valuable uses....simply because consumers are free to choose which uses of their limited resources they value most.
What you've described here is what the price system in a free market does. What you're arguing for in a no-price economy is akin to saying my car will be more fuel efficient if I remove the motor. It's true, but unless you plan on strapping some horses or oxen to it Oregon Trail style that car ain't taking you very far very fast.
QuoteYour evidence for this?
Comparing the quality of life in the US with the quality of life in other countries. All the ones at the top (and I mean
all of them) are a strong mix of socialism and capitalism. The US with its heavy capitalism scores much lower.
QuoteI'm drowning in a sea of non-though. Just because one job is "lost" to a machine doesn't mean that person gets kicked out to the street where they starve to death because all they can do is stamp sheet metal. If your job could be done faster, safer, and more accurately by a machine why the hell wouldn't you want a machine doing it? That frees human capital available to expand the economy. In order for that to happen there needs to be jobs readily available, and government regulations, wage controls, and high taxes are preventing that.
Jobs doing
what? You seem to think that there's an infinite supply of jobs, but that's simply not the case. At some point, there is simply nothing left to do, and what needs to be done is done by machines more and more.
QuoteIt still works. In fact, we have what we have today because it works. Evolution has been working for some 3 billion years and never could have for-seen the kind of complexity life we have around today. So I guess we need the government to control what genes get passed on because evolution can't possibly work in today's environment. AM-I-RIGHT?
The human genome is being polluted like crazy, actually. But it's not nice to talk about that, I guess. Some sort of political taboo.
Quote from: "Plu"Comparing the quality of life in the US with the quality of life in other countries. All the ones at the top (and I mean all of them) are a strong mix of socialism and capitalism. The US with its heavy capitalism scores much lower.
If you think America has "heavy capitalism" you either don't know capitalism or you don't know America. What we have here is a mutant form of capitalism called "crony capitalism" where the government has too much power and all the greedy rich fucks steal from everyone with their votes. Free-market capitalism, what you would refer to as "heavy capitalism" requires a government that is incapable of dicking around with the price mechanism.
Jobs doing what? You seem to think that there's an infinite supply of jobs, but that's simply not the case. At some point, there is simply nothing left to do, and what needs to be done is done by machines more and more.
There aren't an infinite amount of jobs, yes, but there are jobs that will exist in the future that do not today just like there are jobs today that there were not around in the past.
The human genome is being polluted like crazy, actually. But it's not nice to talk about that, I guess. Some sort of political taboo.
It's being polluted because of ignorance. Evolution only gave us a brain, it's up to us to put it to use.
Quote from: "surly74"Quote from: "Xerographica"The goal is not certainty for producers...or for employees...the goal is to provide the most value for consumers. If an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery. This is creative destruction. Resources are freed up for more valuable uses....simply because consumers are free to choose which uses of their limited resources they value most.
what if that bread is 10 times the price of one from an older bakery?
This assumes people will buy the highest quality regardless of price. Is that what you are saying?
Let's say that the innovative baker added saffron to his recipe. Let's also say that there's a relatively small supply of saffron but a relatively large demand for it. So in the current system the innovative baker would have to charge a high price for his bread because one of the inputs was expensive. But in the non-profit system there would simply be a small supply of better bread. And given that it's better...more people would give their money to the innovative baker...and the innovative baker would give more money to the saffron farmers...which would allow them to get more land to grow more saffron. This would increase the supply of saffron which would increase the supply of better bread. More better bread increases the amount of value that we, as a society, derive from our limited resources.
Therefore, we don't need prices to determine the efficient allocation of scarce resources. All that's needed is consumer sovereignty. Consumers have to have the freedom to decide for themselves who they give their money to.
Quote from: "The Whit"What you've described here is what the price system in a free market does. What you're arguing for in a no-price economy is akin to saying my car will be more fuel efficient if I remove the motor. It's true, but unless you plan on strapping some horses or oxen to it Oregon Trail style that car ain't taking you very far very fast.
How are prices the motor of the economy? The economy would simply stop if we got rid of price tags? I'm pretty sure that's not true.
As long as there's scarcity...and as long as there's consumer sovereignty...then the economy would run.
In order for the economy to stop...or breakdown...there has to be wholesale misallocation of society's limited resources. This is what happens with command/planned economies. But it's logically impossible for this to happen with consumer sovereignty because consumers will always want the most bang for their buck. They wouldn't give their money to producers that waste/squander society's limited resources. They wouldn't give their money to producers that use society's limited resources to produce things that they don't need/want/value. They'd give their money to the people who were using society's limited resources to produce the most value.
Better bakers would end up with more influence over how society's limited resources were used...same thing with better engineers, authors, doctors, scientists and so on.
QuoteThere aren't an infinite amount of jobs, yes, but there are jobs that will exist in the future that do not today just like there are jobs today that there were not around in the past.
But not enough of them to put everyone to work. There will always be some jobs, but there won't be enough. And especially in the "not very complicated" category are we losing them, which leaves us with millions of people who aren't smart enough for the jobs that we have left.
And it's in the interest of capitalism to keep other people dumb, too. So that's not going to help either.
Quote from: "The Whit"Quote from: "Colanth"A few nice people don't define the 3 million
The opposite is true as well.
The vast majority of large businesses cheat the system as far and as long as they can get away with it.
Quote from: "Xerographica"A. Some uses of society's limited resources are more valuable than other uses
B. A valuable use to one person might be a valueless use to another person
C. The goal is to maximize the value we derive from society's limited resources
D. Therefore, people have to be free to choose for themselves who they give their positive feedback (money) to.
That will maximize the value to each individual, not to society as a whole.
QuoteThe goal is not certainty for producers...or for employees...the goal is to provide the most value for consumers.
Roads are almost valueless in the eyes of each consumer so with your plan we wouldn't have roads - meaning that there's be no modern civilization. Which is of very LOW value to the individual AND society. But it's what you get when the only choices are what immediately benefits the individual.
Which is why letting the individual consumer directly determine where society goes is a terrible plan.
QuoteIf an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery.
That's so simplistic, it's ludicrous. How is ANY bakery going to get what it needs to produce product when no one invests in truck factories, because they don't personally need large trucks?
Your plan works fine for a small village-based agricultural society - which we haven't seen in centuries.
Quote from: "The Whit"I'll give you an example. I remember when flat screen TVs first came out and 60" TVs were selling for over $5,000 a unit. Care to take a guess as to why? Because there's two ways to maximize profit, increasing profit margins or increasing product sold. This is why places like Costco thrive. Even if they lower prices, more people will be able to buy it, and your profits go up. So, now I can buy a flat screen 60" for $900.[/color]
Why? Not because your economic model works - but because it doesn't.
The reason large flatscreen TVs are so cheap now is because Walmart forced a vendor to produce cheap ones. (Walmart pretty much pays what it wants for product. The vendor's only choice is to sell to Walmart or to not sell to Walmart.) Other vendors had to follow suit or go out of business, even though that meant slashing profits for quite a while.
Walmart also doesn't do what's best for customers - it pays employees so little that their own employees couldn't afford to shop at Walmart without government help - which we all pay for.
That's how your economic model "works".
Quote from: "Plu"QuoteIt still works. In fact, we have what we have today because it works. Evolution has been working for some 3 billion years and never could have for-seen the kind of complexity life we have around today. So I guess we need the government to control what genes get passed on because evolution can't possibly work in today's environment. AM-I-RIGHT?
The human genome is being polluted like crazy, actually. But it's not nice to talk about that, I guess. Some sort of political taboo.
Evolution is a very poor model for what we should do. Almost all evolutionary changes fail. In fact, evolution could be said to work by failing. Is that what we actually want? Most people starving to death, or killing each other over scraps, just so the "fittest" can survive?
Anyone in favor of that needs softer walls in his room.
Quote from: "Xerographica"Let's say that the innovative baker added saffron to his recipe. Let's also say that there's a relatively small supply of saffron but a relatively large demand for it. So in the current system the innovative baker would have to charge a high price for his bread because one of the inputs was expensive. But in the non-profit system there would simply be a small supply of better bread. And given that it's better...more people would give their money to the innovative baker.
Not really. The pattern that works - and it's been proven to work more and more - is that people want cheap and flash, not quality. If people wanted quality regardless of price, we'd be seeing $5,000 refrigerators that lasted for decades. Instead, we see $1,000 refrigerators that last for a few years, but have new innovations (that no one really needs). The same goes for just about any other product. If it's "new and improved" (that's saying that the old version wasn't that good), it sells. If the price is reduced, it sells more.
When is the last time you saw an ad for a product that said that even though it cost a lot more than anyone else's equivalent, it was a better widget, so you should buy it?
In theory your model sounds great, but in practice, marketers learned that it doesn't work back in Hammurabi's time.
Quote from: "Xerographica"because consumers will always want the most bang for their buck.
And that's been proved - by centuries of selling - to be the cheapest product regardless of quality or efficiency of allocation. Not only can you sell crap to the public, you can sell crap that kills them, and they'll keep buying it if the government doesn't stop you from selling it. (And companies do just that, if the cost of settling lawsuits is less than the cost of selling a safer product.)
People don't care about efficiency; "bang for the buck", for most people, means the most flash for the least price. Your baker makes more money if he puts fancy swirls on the crust, but uses flour that's 20% sawdust so he can keep his prices down. (And the other baker puts him out of business by using USED sawdust, so he can underprice his competitor.)
Quote from: "Xerographica"How are prices the motor of the economy? The economy would simply stop if we got rid of price tags? I'm pretty sure that's not true.
Pretty sure? Pretty sure you need to do more research.
As long as there's scarcity...and as long as there's consumer sovereignty...then the economy would run.
If you don't have scarcity it doesn't matter, there's no need to economize. But given that there is a limited amount of atoms in the universe, there will always be limit to the resources we have. The subject is consumer sovereignty and we do not disagree there.
In order for the economy to stop...or breakdown...there has to be wholesale misallocation of society's limited resources. This is what happens with command/planned economies.
And neither of us are arguing for that.
But it's logically impossible for this to happen with consumer sovereignty because consumers will always want the most bang for their buck. They wouldn't give their money to producers that waste/squander society's limited resources.
Agree and agree.
They wouldn't give their money to producers that use society's limited resources to produce things that they don't need/want/value. They'd give their money to the people who were using society's limited resources to produce the most value.
agree and agree again. Hey, you're on a roll!
Better bakers would end up with more influence over how society's limited resources were used...same thing with better engineers, authors, doctors, scientists and so on.
And agreed again!
But...we don't agree on
everything. Let's get to that.
Quote from: "Xerographica"Let's say that the innovative baker added saffron to his recipe. Let's also say that there's a relatively small supply of saffron but a relatively large demand for it. So in the current system the innovative baker would have to charge a high price for his bread because one of the inputs was expensive.
So far so good.
But in the non-profit system there would simply be a small supply of better bread.
Wait...wait, what? This would be the same with an economy with prices as well.
And given that it's better...more people would give their money to the innovative baker
Same as in the price market system...
...and the innovative baker would give more money to the saffron farmers
Again, same as in the price market system...
...which would allow them to get more land to grow more saffron. This would increase the supply of saffron which would increase the supply of better bread. More better bread increases the amount of value that we, as a society, derive from our limited resources.
All of this works in the price market system. So what are you trying to say?
Therefore, we don't need prices to determine the efficient allocation of scarce resources.
Technically, you're correct. We don't need prices to efficiently allocate resources, but prices are the best way to do that.
All that's needed is consumer sovereignty.
All your arguing for here is a free market.
Consumers have to have the freedom to decide for themselves who they give their money to.
And I completely agree with that point.
What we disagree on is how well your suggestion is going to work. Let's think about it. You really think our ENTIRE ECONOMY can run on an honor system? You've got the general theory down, but if you think we'd be better off with completely non-profit vendors you're delusional. The only reason why non-profits survive is because for-profits do well enough to share their earnings.
Your non-profit (misguided) hypothesis completely ignores the purpose of money in the first place. Money is supposed to be used for trade. Without money all you have is bartering. What you're suggesting is even worse, because as a seller I don't know how much product to produce or if I'm even going to get paid. This goes all the way down the line to the wheat and saffron farmers. I seriously doubt this system could support our economy for more than six months before everything ground to a halt, or people started bartering, OR they re-instituted the price system because all that other shit is retarded.
Quote from: "Plu"But not enough of them to put everyone to work. There will always be some jobs, but there won't be enough. And especially in the "not very complicated" category are we losing them, which leaves us with millions of people who aren't smart enough for the jobs that we have left.
The only reason why there isn't enough jobs is because government taxes and regulations make it stupid difficult for small businesses to hire.
And it's in the interest of capitalism to keep other people dumb, too. So that's not going to help either.
AHAHAHAHAHAHAHAHAH! Now I KNOW you don't know jack about capitalism.
Quote from: "Colanth"The vast majority of large businesses cheat the system as far and as long as they can get away with it.
The system they cheat isn't capitalism, it's the government.
Quote from: "Colanth"That will maximize the value to each individual, not to society as a whole.
And who decides what is best for a society if it isn't that society?
Roads are almost valueless in the eyes of each consumer so with your plan we wouldn't have roads - meaning that there's be no modern civilization.
Really? I find I don't much like travelling down shit roads full of pot holes and I don't imagine many other people do either. Given that a road is the means by which everyone gets to where they need to go, when the roads did start falling apart from lack of funds I'd bet my left nut road maintenance gets the money it needs.
Which is of very LOW value to the individual AND society. But it's what you get when the only choices are what immediately benefits the individual.
Which is why letting the individual consumer directly determine where society goes is a terrible plan.
Right, because central planning is so much better the U.S.S.R and China are Utopia, heaven on Ear-- ...wait, what? The U.S.S.R. went under and China is privatizing it's economy? What universe do you live in?
QuoteIf an entrepreneur starts a bakery that produces bread that's far better than anything available on the market...then consumers will shift their financial support from the old bakeries to the new bakery.
That's so simplistic, it's ludicrous. How is ANY bakery going to get what it needs to produce product when no one invests in truck factories, because they don't personally need large trucks?
Businesses need large trucks. The more product you can ship at once the lower your total shipping costs, in turn lowing your market price and increasing your competitiveness on the market. It wouldn't work under his system, but it does work.
Quote from: "The Whit"I'll give you an example. I remember when flat screen TVs first came out and 60" TVs were selling for over $5,000 a unit. Care to take a guess as to why? Because there's two ways to maximize profit, increasing profit margins or increasing product sold. This is why places like Costco thrive. Even if they lower prices, more people will be able to buy it, and your profits go up. So, now I can buy a flat screen 60" for $900.[/color]
Why? Not because your economic model works - but because it doesn't.
And your evidence for this assertion is?
The reason large flatscreen TVs are so cheap now is because Walmart forced a vendor to produce cheap ones. (Walmart pretty much pays what it wants for product. The vendor's only choice is to sell to Walmart or to not sell to Walmart.) Other vendors had to follow suit or go out of business, even though that meant slashing profits for quite a while.
Right, because Walmart is the only store that sells TVs. Target, Best Buy, Sears, and friggin ebay don't also sell TVs? Get real.
Walmart also doesn't do what's best for customers - it pays employees so little that their own employees couldn't afford to shop at Walmart without government help - which we all pay for.
Odd, because Walmart can't afford to profit like it does without government help....which we all pay for.
Evolution is a very poor model for what we should do. Almost all evolutionary changes fail.
And? Thomas Edison failed 10,000 times before he finally got the light bulb right. Like one fucking failure is enough reason to go, "Fuck this shit! I'm going home!"
In fact, evolution could be said to work by failing.
The fuck are you talking about?
Is that what we actually want? Most people starving to death, or killing each other over scraps, just so the "fittest" can survive?
It's not the "fittest" survive asshat, it's whatever is successful at passing it's genes on to the next generation. I would SERIOUSLY suggest you watch this:
http://www.youtube.com/watch?v=x6rgWzYRXiI (http://www.youtube.com/watch?v=x6rgWzYRXiI)
Anyone in favor of that needs softer walls in his room.
You need books...and reading...and thoughts...
The pattern that works - and it's been proven to work more and more - is that people want cheap and flash, not quality.
That's because the economy is so shit right now that's all people can afford.
If people wanted quality regardless of price, we'd be seeing $5,000 refrigerators that lasted for decades.
If price wasn't a factor, why wouldn't I? If I could afford to spen 5 grand of a fridge tha worked for decades why wouldn't I? That sounds like a great idea.
Instead, we see $1,000 refrigerators that last for a few years, but have new innovations
My grandparents just had to replace the fridge in their fifth wheel after 12 years. Other than that I don't remember the last time I saw a fridge go out. I remember having a fridge that was from 1955 or some shit (it was ancient) and that thing worked to the day we unplugged it and took it to the dump.
(that no one really needs).
And who exactly are you to tell others what they do and do not need?
The same goes for just about any other product. If it's "new and improved" (that's saying that the old version wasn't that good), it sells. If the price is reduced, it sells more.
Right, because the Bugatti Veyron is shit, the Veyron GS is shit, the Veyron SS is shit, but the SuperVeyron is not shit because it's the latest and greatest...when it, too, will be shit?
When is the last time you saw an ad for a product that said that even though it cost a lot more than anyone else's equivalent, it was a better widget, so you should buy it?
Ferrari, BMW, Mercedes-Benz, Aston Martin, Lamborghini, Porsche, Bently, Maserati, Ducati, Harley Davidson, P-S-MOTHERFUCKING-3 (WHICH, by the way, went to market at a price that was lower than the cost of production so Sony actually lost money with every unit sold). Had enough examples?
Quote from: "Xerographica"because consumers will always want the most bang for their buck.
And that's been proved - by centuries of selling - to be the cheapest product regardless of quality or efficiency of allocation.
Efficiency of allocation has influence on prices. Someone who is cutting a field by hand is not going to be able to cut as much as someone using a modern harvester. That person is going to have to sell their harvest at a much higher price per unit to cover his living expenses, and probably won't anyway because people will be buying Mr. Harvester Machine's shit.
Not only can you sell crap to the public, you can sell crap that kills them, and they'll keep buying it if the government doesn't stop you from selling it.
If they want it. And let's be real, the government can only stop you from selling something at gunpoint.
(And companies do just that, if the cost of settling lawsuits is less than the cost of selling a safer product.)
Because they've bought out all the politicians involved.
People don't care about efficiency; "bang for the buck", for most people, means the most flash for the least price.
http://www.merriam-webster.com/dictionary/efficiency (http://www.merriam-webster.com/dictionary/efficiency)
Now I want you to think real hard about how much of an idiot you sound like.
Your baker makes more money if he puts fancy swirls on the crust, but uses flour that's 20% sawdust so he can keep his prices down.
If you don't like it, don't fucking shop there.
(And the other baker puts him out of business by using USED sawdust, so he can underprice his competitor.)
And Panera Bread gets all the business...
Quote from: "The Whit"And I completely agree with that point.
What we disagree on is how well your suggestion is going to work. Let's think about it. You really think our ENTIRE ECONOMY can run on an honor system? You've got the general theory down, but if you think we'd be better off with completely non-profit vendors you're delusional. The only reason why non-profits survive is because for-profits do well enough to share their earnings.
Non-profits survive because enough people donate enough money to keep them alive. Are there any non-profits that haven't survived? Sure, any non-profit that doesn't receive enough money to stay alive...won't stay alive.
Let's consider Greenpeace. It has 2.9 million members and in 2008 it received around $270 million dollars. Are you going to argue that $270 million isn't the optimal amount of funding? Only for-profit organizations can receive an optimal amount of revenue? All the non-profits are receiving the wrong amounts of funding simply because they are non-profits? Resources are inefficiently allocated in the private sector because of the existence of non-profit organizations?
Before somebody buys a burger they evaluate the alternative uses of their money. Therefore, we know that McDonald's receives the optimal amount of funding. Before somebody donates to Greenpeace...they do not consider the alternative uses of their money? They just pick a random amount of money to donate? Therefore, we don't know that Greenpeace is receiving the optimal amount of funding?
People want the most bang for their buck in the for-profit sector...but as soon as they walk into the non-profit sector...they become exceedingly willing to intentionally throw their money away? Suddenly they are made of money?
If I go along with your argument that prices are necessary to determine the optimal amount of funding that an organization should receive...then I've got to conclude that non-profits are not receiving the optimal amount of funding. Then I've also got to conclude that, if we implemented pragmatarianism...then the dept of defense would not receive the optimal amount of funding. I've also got to conclude that I'm incapable of knowing the optimal amount of time that I should spend discussing this topic with you.
Or, you can go along with my argument that prices aren't necessary to determine the optimal amount of funding that an organization/endeavor/activity should receive....
QuoteFirst, economics is all about individuals. That is because economics is all about choice. We can't have everything, so we have to choose which things are most important to us: would we prefer a new car, for example, or a summer holiday? To go out with friends, or to relax at home? Invariably, we have to give up one thing (an amount of money or time and effort, say) to get another (such as a new pair of shoes or a tidy garden). These are economic decisions – even when no money is involved. They are questions of how we juggle scarce resources (cars, holidays, company, leisure, money, time, effort) to best satisfy our many wants. They are what economics is all about. - Eamonn Butler, Austrian Economics (//http://www.adamsmith.org/sites/default/files/resources/austrian-primer-text_2.pdf)
In other words, the efficient allocation of resources is all about opportunity cost. As long as consumers can evaluate the alternative uses of their resources...then a bakery will receive the optimal amount of funding regardless of whether it's for-profit or non-profit.
Quote from: "Xerographica"Non-profits survive because enough people donate enough money to keep them alive. Are there any non-profits that haven't survived? Sure, any non-profit that doesn't receive enough money to stay alive...won't stay alive.
I'm not arguing against that.
Let's consider Greenpeace. It has 2.9 million members and in 2008 it received around $270 million dollars. Are you going to argue that $270 million isn't the optimal amount of funding? Only for-profit organizations can receive an optimal amount of revenue? All the non-profits are receiving the wrong amounts of funding simply because they are non-profits? Resources are inefficiently allocated in the private sector because of the existence of non-profit organizations?
No. No. No. And no again.
Before somebody buys a burger they evaluate the alternative uses of their money. Therefore, we know that McDonald's receives the optimal amount of funding.
IMO it receives way TOO MUCH funding, but that's not the point.
Before somebody donates to Greenpeace...they do not consider the alternative uses of their money? They just pick a random amount of money to donate? Therefore, we don't know that Greenpeace is receiving the optimal amount of funding?
Again, not what I'm arguing. Ugh, did you even comprehend what I posted?
People want the most bang for their buck in the for-profit sector...but as soon as they walk into the non-profit sector...they become exceedingly willing to intentionally throw their money away? Suddenly they are made of money?
Ah, almost, but not quite. You're 95% there but you're COMPLETELY ignoring the role of prices. Prices are our single most effective tool in interpreting supply and demand, which allows us to make predictions. Those predictions will tell us what to do with production (increase, decrease, or maintain). Do you REALLY THINK a non-profit oil company is going to make it on donations? If you can't get oil, then our entire system collapses. Do you really think everyone is going to go to work just hoping they'll get enough donations to live off of? Would it matter? If I had no money I could still do whatever I wanted without donating anything. Do I need to work if I don't have to pay for the stuff I need to live?
As far as consumer sovereignty is concerned you're absolutely correct, but the price system plays a MAJOR role in the economy.
If I go along with your argument that prices are necessary to determine the optimal amount of funding that an organization should receive PER UNIT...then I've got to conclude that non-profits are possibly not receiving the optimal amount of funding.
You throw around this "optimal funding" like it's a real thing. Optimal to whom?
Then I've also got to conclude that, if we implemented pragmatarianism...then the dept of defense would not receive the optimal amount of funding.
Again, who defines what is "optimal"? Besides that, during peacetime yes the defense department would receive little funding but during a war (like WW2) I'm sure the people would have little problem funding the military. Of course this only works in a system where your government can't just print money until it's worth less than toilet paper.
I've also got to conclude that I'm incapable of knowing the optimal amount of time that I should spend discussing this topic with you.
If you don't know how much time you should be spending on a forum arguing with someone you don't know then how in the flying monkey fuck are you going to determine the "optimal" fucking anything?
Or, you can go along with my argument that prices aren't necessary to determine the optimal amount of funding that an organization/endeavor/activity should receive....
There you're wrong because the price system arose to do EXACTLY THAT!
QuoteFirst, economics is all about individuals. That is because economics is all about choice. We can't have everything, so we have to choose which things are most important to us: would we prefer a new car, for example, or a summer holiday? To go out with friends, or to relax at home? Invariably, we have to give up one thing (an amount of money or time and effort, say) to get another (such as a new pair of shoes or a tidy garden). These are economic decisions – even when no money is involved. They are questions of how we juggle scarce resources (cars, holidays, company, leisure, money, time, effort) to best satisfy our many wants. They are what economics is all about. - Eamonn Butler, Austrian Economics (//http://www.adamsmith.org/sites/default/files/resources/austrian-primer-text_2.pdf)
In other words, the efficient allocation of resources is all about opportunity cost. As long as consumers can evaluate the alternative uses of their resources...then a bakery will receive the optimal amount of funding regardless of whether it's for-profit or non-profit.
There is absolutely NOTHING in that quote that says anything about the price system being useless.
Quote from: "The Whit"You need books...and reading...and thoughts...
Oh, I thought we were having an intelligent conversation. Seems that I'll have to find someone intelligent to have one with.
Quote from: "The Whit"You throw around this "optimal funding" like it's a real thing. Optimal to whom?
It's the amount of funding that provides the maximum value to society. The optimal funding for garlic farmers will allow them to produce just enough garlic to meet the demand for garlic. Obviously everybody does not demand the same exact amounts of garlic...which is why the only way we can determine "optimal funding" is by allowing consumers to shop for themselves.
The "problem" is that there are certain goods that you can benefit from without having to contribute to...aka "public goods"..."collective consumption goods". Therefore, people will have the incentive to free-ride off of other's contributions. This could arguably result in shortages of public goods. This is the definitive theoretical justification for the public sector. And Paul Samuelson is the Nobel Prize winning liberal economist who gets the credit for it.
This is important enough that it bears repeating. Paul Samuelson is the guy who provided the definitive economic defense for the existence of the government. Plenty of moral arguments have been put forth...but Samuelson provided the definitive consequential argument for the public sector. Without his argument...the government would only have tradition, history and superstition/God for its justification.
So if you want to go after the government...it behooves you to understand Paul Samuelson's argument. Going after anything else would simply be a perfect example of failing to strike the root. In other words, it's an exercise in futility to fail to attack the strongest arguments for the existence of government.
In his paper he starts off by acknowledging the few people who have studied the "theory of optimal public expenditure"...
QuoteExcept for Sax, Wicksell, Lindahl, Musgrave, and Bowen, economists have rather neglected the theory of optimal public expenditure, spending most of their energy on the theory of taxation. - Paul A. Samuelson, The Pure Theory of Public Expenditure (//http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/sampub.pdf)
The "optimal public expenditure" would simply be for the supply of public goods to be determined by the demand for public goods. Unfortunately, because of the free-rider problem, if taxes were optional then people would have incentive to "lie" about how much they valued public goods...
QuoteHowever no decentralized pricing system can serve to determine optimally these levels of collective consumption. Other kinds of "voting" or "signalling" would have to be tried. But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. I must emphasize this: taxing according to a benefit theory of taxation can not at all solve the computational problem in the decentralized manner possible for the first category of "private" goods to which the ordinary market pricing applies and which do not have the "external effects" basic to the very notion of collective consumption goods. - Paul A. Samuelson, The Pure Theory of Public Expenditure (//http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/sampub.pdf)
The "minor" detail that Samuelson missed was that if taxpayers had to pay taxes anyways, then they would have absolutely no incentive to give "false signals". Therefore, the solution to the preference/demand revelation problem is to simply allow taxpayers to choose where their taxes go.
Given that repetition is the key to learning...and given the importance of understanding the economic justification for government...here are more passages that discuss the concept of "optimal funding"...
QuoteHow, then, are demand functions revealed? It would be disingenuous, to say the least, in an exercise whose object is to discover how demand is revealed, to assume that, ex ante, centers of power know the preferences of consuming households. We must then begin our analysis of the forces that motivate citizens to reveal their preferences by focusing on a fundamental information problem. I therefore assume that as a consequence of imperfect information concerning the preferences of citizens, centers of power will provide, except by accident, goods and services in quantities that will be either larger or smaller than the quantities desired by consuming households at the taxprices they confront, and I show that these departures from optimality inflict utility loses on these households. - Albert Breton, Competitive Governments: An Economic Theory of Politics and Public Finance (//http://books.google.com/books?id=o0XNlQCub1cC)
QuoteOn the other hand, with non-marketed goods the question of what is optimal is inescapable and, in the absence of reliable data about individual welfare, potentially intractable. One solution to the problem of preference or welfare revelation might then be privatization, where feasible. This would solve the preference revelation problem, since individuals would then have incentives to make choices according to their underlying preferences. Simultaneously it would solve the allocation problem, since again individuals would then have incentives to make choices according to their underlying preferences. - Alistair Munro, Bounded Rationality and Public Policy: A Perspective from Behavioural Economics (//http://books.google.com/books?id=eDjUmK_IQiIC&pg=PA106&dq=%22preference+revelation%22+optimal+provision&hl=en&sa=X&ei=xeQIUYrzI8raigLQ-oC4BA&ved=0CKwBEOgBMBQ#v=onepage&q=%22preference%20revelation%22%20optimal%20provision&f=false)
QuoteThe government has to provide social goods. However, it is not possible for the government to provide social goods in optimum quantities because of the problem of preference revelation or the free rider problem. - Ghosh & Ghosh, Economics Of The Public Sector (//http://books.google.com/books?id=jbRzAOf_-FYC)
QuotePareto-optimal provision clearly also requires full knowledge of individual preference functions by the central planning agency. The preference-revelation problems involved in practice are a familiar theme in the modern public goods literature. - John G. Head, Public Goods and Multi-Level Government (//http://books.google.com/books?id=sGr9jjXdyNgC&pg=PA23&dq=%22preference+revelation%22+optimal+provision&hl=en&sa=X&ei=xeQIUYrzI8raigLQ-oC4BA&ved=0CEgQ6AEwBA#v=onepage&q=%22preference%20revelation%22%20optimal%20provision&f=true)
QuoteBut the Samuelson condition involves individual marginal rates of substitution. In order for the set of Pareto-optimal allocations to be known, it is necessary for each consumer to tell the government what his marginal rate of substitution is. But it may be in an individual's interest to give false information about his utility function. This is what has become known as the preference revelation problem. - John McMillan, The Free-Rider Problem: A Survey (//http://onlinelibrary.wiley.com/doi/10.1111/j.1475-4932.1979.tb02209.x/pdf)
QuoteThus, provided consumers honestly report their marginal rates of substitution, public good supply will converge on the Pareto-optimum over time. - John McMillan, The Free-Rider Problem: A Survey (//http://onlinelibrary.wiley.com/doi/10.1111/j.1475-4932.1979.tb02209.x/pdf)
QuoteTwo major problems with government provision of public goods, as discussed in the previous chapter, are the problems of preference revelation and preference aggregation: it is difficult to design democratic institutions that cause individuals to honestly reveal their preferences for public goods, and it is also difficult to aggregate individual preferences into a social decision. As a result, governments are often unable to deliver the optimal level of public goods in practice. - Jonathan Gruber, Public Finance and Public Policy (//http://books.google.com/books?id=0nwbDqaxSToC)
QuoteGovernment production of a public good has a main advantage, because a government can impose taxes and fees to pay for the public good. Still, the main problem of deciding the optimal level of public good production remains. To determine it, the government would need to know its citizens' preferences. However, as we have previously argued, since exclusion is not possible, nothing forces citizens to reveal their true preferences. Furthermore, citizens are not willing to reveal their willingness to pay for the public good if the actual payment they will be assessed depends in some way on their reported willingness to pay. - Laura Razzolini, Public Goods (//http://books.google.com/books?id=YUVMr-aFYwYC)
QuoteOne cause of inefficiency in the provision of collective goods is familiar from the theoretical writings in welfare economics and public finance, but rarely mentioned in the PPB or cost-benefit literature. That is the difficulty of getting consumers to reveal their preferences concerning a collective good or externality, and preferences must of course be known to determine how much it is optimal to provide. - Mancur Olson, Evaluating Performance in the Public Sector (//http://www.nber.org/chapters/c3618.pdf)
QuoteThe central problem is of revelation of preferences. How can we make the public reveal its preferences between public and private goods and among public goods? The Samuelson fiction of pure nonexcludable goods is just that. There are few goods like that, and the allocation of public funds for them is often the least difficult problem. Most public goods are excludable and have externalities but are genuinely beneficial to many people. They are also rivalrous in the sense that one has to choose among them as well as determine the quantity and quality of the provision of the chosen. There is a choice problem and a budget problem. Even for goods such as national security, there can be differences among citzens and their representatives about the optimal level of provision. - Meghnad Desai, Providing Global Public Goods (//http://books.google.com/books?hl=en&lr=&id=4XxbYM8UMtwC&oi=fnd&pg=PA63&dq=samuelson+preference+revelation&ots=6MOaOgtG0F&sig=d_h_e_chvtGOHpEFM51aAVEn7VU#v=onepage&q=samuelson%20preference%20revelation&f=true)
QuoteIt is also assumed that a free rider problem exists or that individuals can only be excluded at some positive cost. Loehr and Sandler (1978) consider the issue of a 'forced rider' in which people 'are forced to consume, whether they like them or not', a range of public goods, for example defence. They further comment that 'it is entirely possible that the welfare of some individuals might fall when a marginal unit of the public good is provided' (p. 27). The Pareto optimality conditions would have to allow for subsidies for these individuals to ensure that the marginal utility of tax price rations for all individuals are equal. - Paddy McNutt, The Economics of Public Choice (//http://books.google.com/books?id=IJfqpvbrpawC&pg=PA247&lpg=PA247&dq=forced+rider+problem&source=bl&ots=CccRL1FWl6&sig=oQj26CdDtIHr08YGeeZ9QYKDDPI&hl=en&sa=X&ei=cY0bUYHQMIzFiwKa4IGoBQ&ved=0CNEBEOgBMBM#v=onepage&q=forced%20rider%20problem&f=false)
QuoteNevertheless, the classic solution to the problem of underprovision of public goods has been government funding - through compulsory taxation - and government production of the good or service in question. Although this may substantially alleviate the problem of numerous free-riders that refuse to pay for the benefits they receive, it should be noted that the policy process does not provide any very plausible method for determining what the optimal or best level of provision of a public good actually is. When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponents of such devices tend to concede that public goods will still most likely be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy (//http://books.google.com/books?hl=en&lr=&id=SLRFLlIrqLsC)
QuoteDetermining the efficient level of public goods requires knowing consumer preferences. That knowledge is often assumed as given in theoretical models of optimal provision, but obtaining it is a major challenge when it comes to actual policy. - Richard A. Musgrave, Peggy Musgrave, Providing Global Public Goods (//http://books.google.com/books?hl=en&lr=&id=4XxbYM8UMtwC&oi=fnd&pg=PR12&dq=samuelson+preference+revelation&ots=6MOaOgtG0F&sig=T93KP7ATsMLFUE8ZcD180R2YMpQ#v=onepage&q=samuelson%20preference%20revelation&f=false)
QuoteOnce we recognize the importance of the private nature of information, a number of significant implications follow. Two are of particular relevance in the present context. First, the attainment of an allocation that is known to satisfy Samuelson's optimality conditions requires that information about individual's valuations be elicited. - Richard Cornes and Todd Sandler, Are Public Goods Myths? (//http://jtp.sagepub.com/content/6/3/369)
Quote[Malkin and Wildavsky] (1991:366-7), for example, find it a flaw in free rider theory that 'everybody places the same value on goods'. MW also cite the case of the pacifist to whom expenditures on weapons are a liability, and the anarchist who considers police protection and courts a bad. Samuelson (1955: fn. 1, 1969: 108) had already answered this point. Tanzi (1972) raises the issue of 'forced riders' in which consumers have a negative marginal valuation. In the case of forced riders, those individuals with a negative valuation should pay a negative tax (i.e. receive a subsidy) if a Pareto-optimal allocation is to be achieved. If exclusion, or avoidance, is possible, then forced rider considerations disappear. - Richard Cornes and Todd Sandler, Are Public Goods Myths? (//http://jtp.sagepub.com/content/6/3/369)
QuoteIn his celebrated article, Tiebout (1956) specified a model in which "voting with the feet" for the various public good packages, as represented by the different communities, circumvents the preference-revelation problem and, in so doing, achieves a Pareto-optimal allocation. Hence, a decentralized decision process can reach allocative efficiency for local public goods. - Richard Cornes, Todd Sandler, The Theory of Externalities, Public Goods, and Club Goods (//http://books.google.com/books?id=sN1ktBy2F14C)
QuoteThe problem of providing public goods optimally could, as we saw at the beginning of the chapter, be easily solved if we just knew people's preferences for public goods. We would then simply add up individual demand and find where the aggregate demand for public goods crosses the marginal cost of providing such goods. - Thomas Nechyba, Microeconomics: An Intuitive Approach (//http://books.google.com/books?id=zsV-cHg96RsC)
QuoteVoting and other democratic procedures can help to produce information about the demand for public goods, but these processes are unlikely to work as well at providing the optimal amounts of public goods as do markets at providing the optimal amounts of private goods. Thus, we have more confidence that the optimal amount of toothpaste is purchased every year ($2.3 billion worth in recent years) than the optimal amount of defense spending ($549 billion) or the optimal amount of asteroid deflection (close to $0). In some cases, we could get too much of the public good with many people being forced riders and in other cases we could get too little of the public good. - Tyler Cowen, Alex Tabarrok, Modern Principles of Economics (//http://books.google.com/books?id=BdnxxpsF2pMC)
QuoteBecause most public goods and services are financed through a process of taxation involving no choice, optimal levels of expenditure are difficult to establish. The provision of public goods can be easily over-financed or under-financed. Public officials and professionals may have higher preferences for some public goods than the citizens they serve. Thus they may allocate more tax monies to these services than the citizens being served would allocate if they had an effective voice in the process. Under-financing can occur where many of the beneficiaries of a public good are not included in the collective consumption units financing the good. Thus they do not help to finance the provision of that good even though they would be willing to help pay their fair share. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices (//http://sobek.colorado.edu/~mciverj/Ostrom-PG&PC.PDF)
QuoteAHAHAHAHAHAHAHAHAH! Now I KNOW you don't know jack about capitalism.
Such brilliant arguments to show the faults in my position. I can do nothing but accepts your superior debating skills and amend my position =D>
Quote from: "Colanth"Quote from: "The Whit"You need books...and reading...and thoughts...
Oh, I thought we were having an intelligent conversation. Seems that I'll have to find someone intelligent to have one with.
That was in response to this:
Quote from: "Colanth"Is that what we actually want? Most people starving to death, or killing each other over scraps, just so the "fittest" can survive? Anyone in favor of that needs softer walls in his room.
You took my comment about evolution and assumed I wanted a society based on natural selection, which missed my point by
miles.
Our society has evolved in the manner it has to overcome natural selection, and we have succeeded. I'm not saying we need to apply natural selection to society, but to the products in the market place.
The point I was trying to make is that evolution has produced countless products that have become ever more complex and capable without the mind of designer. Evolution works by the proliferation of adaptations that provide benefit. Bad adaptations are not likely to make it, but just because there are a few bad adaptations does not mean evolution doesn't work at all. If evolution can produce such diversity and efficient solutions to problems without a mind behind it, imagine how much better the system would be with an intelligent mind to remove "junk DNA" from the products they produce.
But in order to do that the market needs consumer freedom and a price system the government isn't fucking with.
And picking one snide remark (that was a response to your snide remark) out of that entire post just goes to show you don't have a position.
Quote from: "Xerographica"Quote from: "The Whit"You throw around this "optimal funding" like it's a real thing. Optimal to whom?
The optimal funding for garlic farmers will allow them to produce just enough garlic to meet the demand for garlic. Obviously everybody does not demand the same exact amounts of garlic...which is why the only way we can determine "optimal funding" is by allowing consumers to shop for themselves.
WOULD YOU GET OFF THE CONSUMER FREEDOM SHIT? I know what the fuck you're talking about, and I agree with that point. What you're missing is the role the price system plays in telling the market what it needs to do next!
I'm not even going to respond to the rest of your post because that hasn't got jack to do with what I was talking about.
I'm going to try this one more time and I want you to read this
carefully. If everything is run on donations, then money has no value and the market place is completely blind to the needs of consumers and supply chains will collapse. The reason money exists is to streamline trading. Before people had to barter and in that system you might not always have something that the other person wants, in which case you're pretty much screwed. Money is the standard trading medium. Money represents all resources because it can be
traded for any resource, meaning that money is always in demand. The supply of money determines the values of the currency and it's trading power.
What you're suggesting
isn't even trade. As a baker, I bake bread for the market and consumers just come and take what they want at no cost. I then have to HOPE they donate enough money to me to stay alive? But wait, why would I need that money anyway? What would I do with it? Donate to flour producers who are producing flour in hopes of getting enough donations? What's to prevent me from taking the flour and not donating money to them? Are they or are they not going to give me flour? If they do, money is literally meaningless because I can get what I want without it. If they don't give me flour then you're arguing for the price system.
Quote from: "Plu"QuoteAHAHAHAHAHAHAHAHAH! Now I KNOW you don't know jack about capitalism.
Such brilliant arguments to show the faults in my position. I can do nothing but accepts your superior debating skills and amend my position =D>
Let's see what that quote was a response to, shall we?
Quote from: "Plu"And it's in the interest of capitalism to keep other people dumb, too. So that's not going to help either.
Now, I stand by my position that anyone who would utter such nonsense doesn't know a damned thing about capitalism.
Capitalism is a system that affords individual freedom in the marketplace. Yes, businesses are trying to get as much profit as possible but consumers are also trying to get as much value for every dollar. Competition among producers means that consumers can take their money elsewhere if they don't think they're getting the best bang for their buck. That means that producers have to provide enough value to convince consumers to hand over their cash in trade for their product. Even though everyone is working on their own self interest, they provide increasingly valuable products at lower prices.
Of course there will be companies that try to fool consumers, but that's where education comes in. The more educated someone is the less gullible they are and the less likely they are to waste their resources on product that does not serve them or being conned. We already see this correlation in religion, and that was posted about here:
viewtopic.php?f=14&t=2023 (http://atheistforums.com/viewtopic.php?f=14&t=2023)
Now before you go off on how that's not how capitalism works cuz USA, USA, USA, high unemployment, evil rich people, ect., ect., let's look at capitalism in the USA. The United States has strayed away from true free market capitalism to crony capitalism. In the USA, the government has the power to give out money to industries in subsidies. Where does the government get that money? That's right, taxes. Can I choose not to pay taxes? No, that's the point. Taxes are taken by force. So when a company can get money from the government it is circumventing consumer choice, and becomes partially immune to market demands. This in turn throws off the rest of the market by sending bad signals to the rest of the market, and eventually you get something like the housing crash of 2007. Eventually the economy in the US will collapse almost completely (I probably won't be posting for a while that happens if I still live in this country).
I'll use Colanth for example. He stated:
QuoteWhen was the last time Mitt Romney gave cars away to poor people he didn't know? Or Dick Cheney?
Now, think about it. What do those two do? Where do they work? They've both been in the government for over 30 years, and the government is who should save us from these people? HA! That's like asking a shark to save you from rip tide.
Capitalism only works correctly when there isn't a way to go around the wishes of the consumer. The USA does not have free market capitalism, it has crony capitalism where profits are private and risk is public. No society can go on in this manner.
I must be retarded but I never realised that Cheney and Romney derived most of their income directly from working for the government.
Quote from: "Bibliofagus"I must be retarded but I never realised that Cheney and Romney derived most of their income directly from working for the government.
Where did Halliburton get so many billions of dollars?
Quote from: "The Whit"Quote from: "Bibliofagus"I must be retarded but I never realised that Cheney and Romney derived most of their income directly from working for the government.
Where did Halliburton get so many billions of dollars?
From your government probably. So... assuming you already knew the answer to your question before you asked it: What's your point?
Quote from: "Bibliofagus"Quote from: "The Whit"Quote from: "Bibliofagus"I must be retarded but I never realised that Cheney and Romney derived most of their income directly from working for the government.
Where did Halliburton get so many billions of dollars?
From your government probably. So... assuming you already knew the answer to your question before you asked it: What's your point?
This is taken from Wikipedia (http://en.wikipedia.org/wiki/Halliburton (http://en.wikipedia.org/wiki/Halliburton)), but this info is easily verifiable:
QuoteHalliburton has become the object of several controversies involving the 2003 Iraq War and the company's ties to former U.S. Vice President Dick Cheney. Cheney retired from the company during the 2000 U.S. presidential election campaign with a severance package worth $36 million. As of 2004, he had received $398,548 in deferred compensation from Halliburton while Vice President. Cheney was chairman and CEO of Halliburton Company from 1995 to 2000 and has received stock options from Halliburton.
Is it starting to make sense as to how this con system works now?
I know that governments buy stuff in the private sector, and I suspect that decisionmakers in the government are likely to buy at least - slightly - skewed towards the people who they actually talk to and who are more likely to to be of future use.
Do you think this is different in the private sector? Really? What is your point? I'd hate to strawman you.
Quote from: "Bibliofagus"I know that governments buy stuff in the private sector, and I suspect that decisionmakers in the government are likely to buy at least - slightly - skewed towards the people who they actually talk to and who are more likely to to be of future use.
Do you think this is different in the private sector? Really? What is your point? I'd hate to strawman you.
A guy leaves a company with a $36 million dollar severance package plus stock options and becomes the VICE PRESIDENT of the country. Three years later said country is at war and the VP's old company is getting all the best deals and making BILLIONS of dollars hand over fist. That's
SLIGHTLY SKEWED!?The difference in the private sector is that I, and everyone else, have the choice to give or not give you my money regardless of what you do. Halliburton didn't make it's billions on the free market by producing goods for consumers, it made billions by getting handouts from the people it knew in the government. Those billions of dollars were not freely handed over, but taken from the people by the government through force--or the threat of it (try not paying taxes and see how far you get).
QuoteCapitalism is a system that affords individual freedom in the marketplace. Yes, businesses are trying to get as much profit as possible but consumers are also trying to get as much value for every dollar. Competition among producers means that consumers can take their money elsewhere if they don't think they're getting the best bang for their buck. That means that producers have to provide enough value to convince consumers to hand over their cash in trade for their product. Even though everyone is working on their own self interest, they provide increasingly valuable products at lower prices.
Of course there will be companies that try to fool consumers, but that's where education comes in. The more educated someone is the less gullible they are and the less likely they are to waste their resources on product that does not serve them or being conned. We already see this correlation in religion, and that was posted about here:
Right. So how is it not in the interest of the producers to keep the people buying their stuff as dumb as possible? The dumber they are, the easier to con. The easier to con, the more profit is to be made.
Value is incredibly subjective. Look at religion indeed; it makes billions of dollars off of keeping people uninformed and ignorant, and it's every bit in their interest to keep people stupid so they can keep raking in the big bucks.
There's a whole field around "spreading bullshit and hoping people are dumb enough to buy it", it's called marketing and it's their goal to get people to buy your shit, any way they can. It's not at all in the marketing departments interest to be honest about what a product does; it's in their interest to lie through their teeth as long as they sell.
So who's going to educate people in a free market society? It's certainly not going to be the corporations, they prefer anyone not working a high-level job for them stupid. It's not going to be some education company, because I don't think one of those has
ever been profitable, or even affordable, that's why so much of our tax money goes to education.
There's nothing education does that provides profit to a company that cannot be achieved by spreading more lies and misinformation. The catholic church is the ultimate proof of that; they've been deceiving people into giving their money for no return for over 2000 years and no amount of education has been able to stop them.
Unless you think that the Catholic Church is an amazing example of how companies should work, a totally free market is not what you want. Because like it or not, they are a company, and they are amazingly succesful, and that's in a large part because of capitalist values.
Quote from: "Plu"Value is incredibly subjective.
Yup, and is the basis behind the demolition of rational choice theory as a useable and workable theoretical paradigm.
This is economics 101, as is Webber's axiological rationality. Haven't seen it discussed even once on this thread either until you hinted at it, Plu.
Quote from: "The Whit"Quote from: "Bibliofagus"I know that governments buy stuff in the private sector, and I suspect that decisionmakers in the government are likely to buy at least - slightly - skewed towards the people who they actually talk to and who are more likely to to be of future use.
Do you think this is different in the private sector? Really? What is your point? I'd hate to strawman you.
A guy leaves a company with a $36 million dollar severance package plus stock options and becomes the VICE PRESIDENT of the country. Three years later said country is at war and the VP's old company is getting all the best deals and making BILLIONS of dollars hand over fist. That's SLIGHTLY SKEWED!?
Have fun reading what you want to read dude.
I clearly said that I believe that buying decisions done by government representatives are -at least- slightly skewed. Do I need explain how what Cheney did fits into that? Really?
Maybe you could answer my question instead:
Do you think this is different in the private sector? Really? What is your point? I'd hate to strawman you.
Quote from: "The Whit"The difference in the private sector is that I, and everyone else, have the choice to give or not give you my money regardless of what you do.
Really? You actually check all the companies Coca cola does business with before buying a coke? And for your coffee as well, and your meat, and your insurance, and your pension, and the school you send your kids to, etc etc. Making sure they do not reap to much profit off of doing business with the people who actually give you what you want?
Really?
Quote from: "The Whit"Halliburton didn't make it's billions on the free market by producing goods for consumers, it made billions by getting handouts from the people it knew in the government.
And if the government wouldn't have had any money to spend they'd just all roll over and die or something? What the hell is your point? Somebody got to rich by doing a fucking deal with somebody with too much power? Do you REALLY believe this does not happen in the private sector? I mean really?
Quote from: "The Whit"Those billions of dollars were not freely handed over, but taken from the people by the government through force--or the threat of it (try not paying taxes and see how far you get).
I keep fucking forgetting that Americans believe they do not live in a democracy. Sorry.
Quote from: "Plu"Right. So how is it not in the interest of the producers to keep the people buying their stuff as dumb as possible? The dumber they are, the easier to con. The easier to con, the more profit is to be made.
I see you didn't comprehend what I said, so I'll repeat it for you and maybe it will get though this time:
Of course there will be companies that try to fool consumers, but that's where education comes in. The more educated someone is the less gullible they are and the less likely they are to waste their resources on product that does not serve them or being conned.
QuoteValue is incredibly subjective.
Yes.
QuoteLook at religion indeed; it makes billions of dollars off of keeping people uninformed and ignorant, and it's every bit in their interest to keep people stupid so they can keep raking in the big bucks.
Again, it is in the best interests of the people to be educated.
QuoteThere's a whole field around "spreading bullshit and hoping people are dumb enough to buy it", it's called marketing and it's their goal to get people to buy your shit, any way they can. It's not at all in the marketing departments interest to be honest about what a product does; it's in their interest to lie through their teeth as long as they sell.
There's this thing called false advertising, and companies can be held liable for doing this. For fuck's sake Subway was just sued for selling foot-longs that were actually 11". You're never going to get rid of people who are going to con others, the best you can do is educate yourself to identify their bullshit. Obviously, when you watch a commercial for a Big Mac you damn well know that burger doesn't look the way it does in the commercial.
QuoteSo who's going to educate people in a free market society?
Uh, schools?
QuoteIt's certainly not going to be the corporations, they prefer anyone not working a high-level job for them stupid. It's not going to be some education company, because I don't think one of those has ever been profitable, or even affordable, that's why so much of our tax money goes to education.
So certain? Education is commodity the same as any other. If there is demand, there will be supply. Like all things, initially the price will be very high and few people will be able to afford it. But those high prices are going to attract a lot of vendors who will eventually have to undercut their competition to increase business, and eventually it becomes affordable to the masses. The exact same thing as in the TV example, just that colleges have been around for hundreds of years and have been affordable to lay people for quite some time now. The reason why colleges are getting so much more expensive right now is a mix of unemployed people trying to re-educate themselves in hopes of getting a better career and the easy to get government funds that are sending them there. The increase in demand and money to pay for it drives up the price of education, just like the prices of houses were driven up by the federally backed funds provided by Freddy Mac and Fanny Mae.
QuoteThere's nothing education does that provides profit to a company that cannot be achieved by spreading more lies and misinformation.
I want you to think about that statement really hard.
QuoteThe catholic church is the ultimate proof of that; they've been deceiving people into giving their money for no return for over 2000 years and no amount of education has been able to stop them.
The only way the catholic church can see it's product is to the gullible, since it doesn't even have a tangible product besides racism and misogyny. In the age of information--brought about by education and the freedom of information made possible by products of said education--has been a disaster for religion. The Church of England alone is losing 2,000 regular members
per week. Catholicism is still doing well but it's a far cry from what it was in the middle ages when it had complete control. The only way to fight these institutions is through education.
QuoteUnless you think that the Catholic Church is an amazing example of how companies should work, a totally free market is not what you want. Because like it or not, they are a company, and they are amazingly succesful, and that's in a large part because of capitalist values.
Wrong. Capitalist values are what has given rise to catholicism's competitors. Namely, the 30,000+ other denominations of christianity. Granted, none of them are any better but that just goes to show how in need of quality education this country is. The future does look good though. The younger generations are far less religious and the less people waste their money on useless shit like religion the more money people can spend on shit they could actually put to good use, like a new car or rent or charity that actually helps people.
@Fidel_Castronaut Elaborate it you would. I'm not seeing the connection.
Quote from: "Bibliofagus"Have fun reading what you want to read dude.
I clearly said that I believe that buying decisions done by government representatives are -at least- slightly skewed. Do I need explain how what Cheney did fits into that? Really?
Poe's law. Sorry. I was being sarcastic. Dick Cheney is one of the biggest examples of corporate-government fraud you could think of...besides AIG.
QuoteReally? You actually check all the companies Coca cola does business with before buying a coke?
No. I don't hardly ever buy soda, unless I plan on pouring whiskey in it. That shit is horrendously sugar filled and partially responsible for the obesity problem.
QuoteAnd for your coffee as well nope, and your meat nope, and your insurance nope, and your pensionI would hope so, it's your retirement, and the school you send your kids to, etc etc.
QuoteMaking sure they do not reap to much profit off of doing business with the people who actually give you what you want?[/color]
What? Be more specific please.
QuoteAnd if the government wouldn't have had any money to spend they'd just all roll over and die or something?
No. They'd have to compete for my business like everyone else by trying to convince me that what they've got is worth more to me than my money.
QuoteWhat the hell is your point? Somebody got to rich by doing a fucking deal with somebody with too much power? Do you REALLY believe this does not happen in the private sector? I mean really?
No, it doesn't happen in the private sector because no company has the power to take your money at gun point and give it to whoever the hell it wants.
QuoteI keep fucking forgetting that Americans believe they do not live in a democracy. Sorry.
Actually, most Americans think they DO live in a democracy but they, and you, are wrong. The United States is a republic--there's a difference.
QuoteThere's this thing called false advertising, and companies can be held liable for doing this.
So you
are in favor of the government meddling with the free market, then? Otherwise, where would false advertising laws come from? They're clearly anti-capitalist.
QuoteThe exact same thing as in the TV example, just that colleges have been around for hundreds of years and have been affordable to lay people for quite some time now.
I don't know about the US, but where I live a college education minus the government subsidising costs over 50.000 euros on tuition alone, something that really isn't affordable to most of society.
Let alone being able to afford basic level education for your children, which is probably also close to free right now. I wonder how many kids will go to gradeschool if it's $10.000 a year.
The primary factor that is driving mass education is (and always has been) the government sporting the bill so that every child can go to school. You can't rely on the free market to educate children. You can just barely rely on them to run universities, where there is sometimes enough of a pay-off to be worth the investment but only if the child already had 15 years of basic education to be prepared for it for free.
Back when education wasn't a government subsidies requirement for every person, most people didn't go to school. They were taught their parent's job and they knew how to do only that. Even now, with most people having 12+ years of education, most in the US are still religious and still don't know enough. No free market is going to improve that, because no parent (except the super wealthy) can afford to pay for their child to go to grade school, then high school, then college/university. Let alone for multiple children.
If you want education for the people, you need free education available for everyone. The free market doesn't give anything for free. Only the free market and the government staying out of things won't work.
Quote from: "Plu"So you are in favor of the government meddling with the free market, then? Otherwise, where would false advertising laws come from? They're clearly anti-capitalist.
Isn't bearing false witness one of the ten commandments? If even religion, which couldn't even get slavery and rape right, could get THAT RIGHT how is it that you can't?
QuoteI don't know about the US, but where I live a college education minus the government subsidising costs over 50.000 euros on tuition alone, something that really isn't affordable to most of society.
So you're agreeing with me that public money only inflates prices? The people of my parent's generation paid their way through college flipping burgers for $1.50 an hour. You need a job and Financial Aid now just to even consider it.
Let's look at the info, shall we?
http://www.npr.org/blogs/money/2012/08/ ... 2-graphics (http://www.npr.org/blogs/money/2012/08/08/158419870/paying-for-college-financial-aid-in-america-in-2-graphics)
http://www.statista.com/statistics/1839 ... titutions/ (http://www.statista.com/statistics/183995/us-college-enrollment-and-projections-in-public-and-private-institutions/)
So federal funds makes funding for college easier to get, lowering the relative cost of education, artificially increasing demand. As a result prices increase to attract the resources required to keep up with demand. This in turn requires more federal funding to maintain the increased demand which then further inflates prices, and your solution to this cost problem is MORE PUBLIC MONEY?
QuoteLet alone being able to afford basic level education for your children, which is probably also close to free right now. I wonder how many kids will go to gradeschool if it's $10.000 a year.
There is no such thing as a free lunch. It may not cost you but it cost
someone. If we keep on this inflationary spiral it will cost 10 grand or more just to get your kid lunch for a day.
QuoteThe primary factor that is driving mass education is (and always has been) the government sporting the bill so that every child can go to school.
Yes, but saying the government sports the bill only practically means those who pay taxes sport the bill.
Not that I am in the least saying that poor children shouldn't receive the same education benefits as any other. On the contrary I believe it is in our greatest interest to educate every child to the fullest extent. Education is an investment, and one that has the highest returns.
QuoteYou can't rely on the free market to educate children. You can just barely rely on them to run universities, where there is sometimes enough of a pay-off to be worth the investment but only if the child already had 15 years of basic education to be prepared for it for free.
Again, nothing is free and it wouldn't be "higher education" if you didn't have to have an education to begin with.
QuoteBack when education wasn't a government subsidies requirement for every person, most people didn't go to school.
Not all careers require a college education. Then again, the K-12 schooling my grandparents got was of much higher quality than that which I received.
QuoteThey were taught their parent's job and they knew how to do only that.
Really?
QuoteEven now, with most people having 12+ years of education, most in the US are still religious and still don't know enough.
Part of a failure of education brought about by pubic education policy.
QuoteNo free market is going to improve that, because no parent (except the super wealthy) can afford to pay for their child to go to grade school, then high school, then college/university. Let alone for multiple children.
Does everyone need to go to college immediately after high school? Does everyone need their parents to pay for college? The only people who don't pay for their child's education are those who do not pay taxes the benefit education, and even those who do not have children attending school pay for these children to go to school through their taxes as it should be. Education is an investment in the future, and if we don't invest in the future we won't have one.
QuoteIf you want education for the people, you need free education available for everyone. The free market doesn't give anything for free. Only the free market and the government staying out of things won't work.
ONLY the free market doesn't give anything for free?
Nothing is
free.
Quote from: "The Whit"I'm going to try this one more time and I want you to read this carefully. If everything is run on donations, then money has no value and the market place is completely blind to the needs of consumers and supply chains will collapse.
Money would lose value because there wouldn't be price tags on bread? Money doesn't have value because there are price tags on bread...it has value because you had to sacrifice your life to earn it.
Quote from: "The Whit"The reason money exists is to streamline trading. Before people had to barter and in that system you might not always have something that the other person wants, in which case you're pretty much screwed. Money is the standard trading medium. Money represents all resources because it can be traded for any resource, meaning that money is always in demand. The supply of money determines the values of the currency and it's trading power.
Why are you trying to explain the importance and function of money when I never said anything about getting rid of money?
Quote from: "The Whit"What you're suggesting isn't even trade. As a baker, I bake bread for the market and consumers just come and take what they want at no cost. I then have to HOPE they donate enough money to me to stay alive? But wait, why would I need that money anyway? What would I do with it? Donate to flour producers who are producing flour in hopes of getting enough donations? What's to prevent me from taking the flour and not donating money to them? Are they or are they not going to give me flour? If they do, money is literally meaningless because I can get what I want without it. If they don't give me flour then you're arguing for the price system.
If you can get enough bread without ever having to donate any money to your local bakery then what's the problem? If you can't get enough bread to match your demand...then is this problem bigger than your other problems? How many other problems do you have? If a shortage of bread is your only problem then clearly the system I described is superior to the current one.
If a shortage of bread is your biggest problem then you'd give your money to the bakery. If a shortage of bread was not your biggest problem then you'd give your money to whichever organization was helping you tackle your biggest problem.
What else are you going to do with your money? Give it to organizations which are doing absolutely nothing to help you tackle your problems? If you want to support the organizations which are helping you the most...then it would behoove you to earn money. If you didn't want to earn money...if you didn't want any influence...then all the influence will be shifted to those that do want to support the organizations that support them. And the allocation of resources would reflect their preferences rather than yours.
QuoteIsn't bearing false witness one of the ten commandments? If even religion, which couldn't even get slavery and rape right, could get THAT RIGHT how is it that you can't?
Explain how morals are even relevant to free market capitalism?
QuoteSo you're agreeing with me that public money only inflates prices?
I have no idea, honestly.
QuoteThe people of my parent's generation paid their way through college flipping burgers for $1.50 an hour. You need a job and Financial Aid now just to even consider it.
The people of my grandparents generation could buy a loaf of bread for $0.10, and I pay $2.00, but I'm still a lot richer than they are. Part of the reason you could once flip burgers and pay for college is also that minimum wages, relatively speaking, used to be higher. Also, you
can still make it through college flipping burgers, it's just a really shitty life while you're doing it.
(Also I have no idea what the quality comparison is between education then and now. Especially on the level of sciences and computers we have come a
long way in the last 30 years.)
QuoteOn the contrary I believe it is in our greatest interest to educate every child to the fullest extent. Education is an investment, and one that has the highest returns.
So am I, but then it's not in my interest to make the most money possible, so it doesn't bother me when people are smarter.
QuotePart of a failure of education brought about by pubic education policy.
US education policy, yeah. Dutch one seems to be doing reasonably well. (Although it's also suffering from the economic crisis, mostly caused by the banks it seems.)
QuoteReally?
I was referring to a period from before the US existed. But yeah, really.
QuoteONLY the free market doesn't give anything for free? Nothing is free.
Depending on your definition of the word "free". All things cost resources, but some things are paid for, and available to, everyone in a society, regardless of how many resources they happen to have. They are free from the point of "personal resources needed to acquire them".
Did anyone see the movie Elysium? It's got one of those new young actors, either Matt Damon or Ben Aflec or whatever. The premise is a future society where the wealthy people live on a satellite of earth andiit's really cool there, no sickness genteel society and it's beautifu.NeMeanwhile, back on earth billions of people live in a globalwide gehto of ppoverty, sickness and despair. In the end the hero breaks into Elysium and reboots the mainframe computer that runs everything and reprograms it to make it serve all the people of earth the same as it does for the few really wealthy people of Elysium.The mmovie focused on health care and even though every home (on Elysium) seemed to have a bed you could lay on and get anything from cancer, third degree burns or broken bones fixed, they also had a bunch of ships with robots and medical beds sitting in the wings. As soon as the computer was reprogrammed the ships take off for earth and start treating the general population.
It was beautiful to watch and I recommend the movie, but as I commented to my friend, I'm tired of movies that pretend that limited resources can be used to fulfill a virtually unlimited demand.
As far as the original question goes, I'd give the planned economy more than a zero, maybe a three. I don't understand what a planed economy without prices is. I don't buy the "it's where all companies are nonprofit". I thought maybe a barter economy which I'd rank just above the planned economy, say a four. Free market with prices I'd say a seven or eight. I would love us to take health care out of the freemarket, for pprofit though.
Elysium was deliberately made that way.
//http://thinkprogress.org/alyssa/2013/08/12/2450871/elysium-health-care/
Quote from: "The Whit"Quote from: "Bibliofagus"Have fun reading what you want to read dude.
I clearly said that I believe that buying decisions done by government representatives are -at least- slightly skewed. Do I need explain how what Cheney did fits into that? Really?
Poe's law. Sorry. I was being sarcastic. Dick Cheney is one of the biggest examples of corporate-government fraud you could think of...besides AIG.
We are in agreement about Cheney. Most of what Cheney did however is standard practise in the private sector. Most of the outrage stems from the fact that most people want their elected officials to be better than that. They are not.
The big difference is that we expect better behaviour of our governments than we do of the private sector. Why is that bad?
Quote from: "The Whit"QuoteReally? You actually check all the companies Coca cola does business with before buying a coke?
No. I don't hardly ever buy soda, unless I plan on pouring whiskey in it. That shit is horrendously sugar filled and partially responsible for the obesity problem.
Okay... let me rephrase:
Really? You actually check all the companies your brand of whiskey does business with before buying a bottle?
Quote from: "The Whit"What? Be more specific please.
You appear to be butthurt about the fact that some government officials are making more money than you think they should. So I was assuming you would apply the same standards to the private sector.
QuoteQuote from: "Bibliofagus"And if the government wouldn't have had any money to spend they'd just all roll over and die or something?
No. They'd have to compete for my business like everyone else by trying to convince me that what they've got is worth more to me than my money.
Ah. Like they are competing for the governments money right now. Got it.
QuoteQuote from: "Bibliofagus"What the hell is your point? Somebody got to rich by doing a fucking deal with somebody with too much power? Do you REALLY believe this does not happen in the private sector? I mean really?
No, it doesn't happen in the private sector because no company has the power to take your money at gun point and give it to whoever the hell it wants.
Sick people who have no money get their patented medicine for free nowadays in the US? Goodness. Didn't realise that.
Furthermore you are dodging the point.
Quote from: "Xerographica"Money would lose value because there wouldn't be price tags on bread? Money doesn't have value because there are price tags on bread...it has value because you had to sacrifice your life to earn it.
And why would you do that if you didn't need money to buy the things you need to survive or do the things you
want to do? If I could just
not pay, why wouldn't I? Money has value because it represents other resources. If I have $10 I can buy some gas, or a six-pack, or cigarettes, or a gatorade, or a couple of the burritos that have been sitting under the heat lamp for the last 6 hours. If there is no price, then money does not represent resources because you don't need it to get those resources.
This is why theft is illegal. If you get a resource and don't pay for it, you're circumventing the system and harming the economy. There seems to be not difference between your non-profit society and one that legalized theft. Neither will go very far.
QuoteWhy are you trying to explain the importance and function of money when I never said anything about getting rid of money?
BECAUSE THE FUNCTION IS WHAT MAKES IT IMPORTANT! If you take away the function it's no longer valuable to society, just like a car without an engine.
Am I getting through yet?
QuoteIf you can get enough bread without ever having to donate any money to your local bakery then what's the problem?
The problem is you won't be able to do that for very long!
QuoteIf you can't get enough bread to match your demand...then is this problem bigger than your other problems? How many other problems do you have? If a shortage of bread is your only problem then clearly the system I described is superior to the current one.
HA! Your system would have a shortage of everything in less than 6 months. The economy you're describing couldn't support anything more than an Amish lifestyle.
QuoteIf a shortage of bread is your biggest problem then you'd give your money to the bakery.
Think: does the baker have to pay for the flour or is that a donation system, too?
Quote from: "Plu"Explain how morals are even relevant to free market capitalism?
Because economics is just the study of what society does with it's money. Are you arguing that we could have a society without morals?
QuoteThe people of my grandparents generation could buy a loaf of bread for $0.10, and I pay $2.00, but I'm still a lot richer than they are.
That's called inflation.
QuotePart of the reason you could once flip burgers and pay for college is also that minimum wages, relatively speaking, used to be higher. Also, you can still make it through college flipping burgers, it's just a really shitty life while you're doing it.
(Also I have no idea what the quality comparison is between education then and now. Especially on the level of sciences and computers we have come a long way in the last 30 years.)
This relative change in value being that the price of minimum wage has steadily increased while the purchasing power of that wage has actually decreased is an example of the unsupportable liberal policies eating each other. Large amounts of government spending drives up the prices of certain goods because it is by default increasing demand. Prices then RISE to attract more resources to meet that demand. When those prices rise, the government's response is to throw more money at it? This will only increase prices further, and it only gets worse. When the government starts printing money to pay for all of this shit suddenly you're making the situation worse in TWO ways. You're artificially driving up costs because of artificial increase in demand, and you're decreasing the value of the currency which further inflates prices. This snow-ball effect only gets faster and more pronounced until it finally rams into the ski lodge and takes everyone with it.
Seems like a reasonable story. And you claim this would not happen in a free market? How does that work? Does it mean we lose all the services the government uses the goods it buys for? Because that would be a really bad outcome. Likewise if poor people lose access to those government services because they now become paid services; that would also be bad.
I'm also not sure how the government created "artificial demand" if they're buying resources they actually use to do useful things with.
The point about inflation makes sense, but that mostly seems coupled to the fact that money is a really weird measure of resources because it doesn't actually mean anything.
Quote from: "Bibliofagus"Most of what Cheney did however is standard practise in the private sector.
Example?
QuoteThe big difference is that we expect better behaviour of our governments than we do of the private sector.
You're wrong, there. If people expected better from their government officials then how did Cheney get away with this? He was re-elected with Bush, ya know.
QuoteOkay... let me rephrase:
Really? You actually check all the companies your brand of whiskey does business with before buying a bottle?
No, and why would I?
QuoteYou appear to be butthurt about the fact that some government officials are making more money than you think they should.
The money that they're "making" is being stolen from the private sector. That's what I have a problem with.
QuoteSo I was assuming you would apply the same standards to the private sector.
I don't even understand what you're talking about.
QuoteAh. Like they are competing for the governments money right now. Got it.
They weren't competing for government funds. They were getting exclusive access to high dollar contracts.
QuoteSick people who have no money get their patented medicine for free nowadays in the US?
It's covered by tax payers through Medicare.
QuoteFurthermore you are dodging the point.
There doesn't seem to be one from you...
Quote from: "Xerographica"Quote from: "The Whit"You throw around this "optimal funding" like it's a real thing. Optimal to whom?
It's the amount of funding that provides the maximum value to society. The optimal funding for garlic farmers will allow them to produce just enough garlic to meet the demand for garlic. Obviously everybody does not demand the same exact amounts of garlic...which is why the only way we can determine "optimal funding" is by allowing consumers to shop for themselves.
Are you familiar with Douglas' theory of social credit? You should be, if you think that your statement is worthy of consideration. (It's not.)
Quote from: "Colanth"Quote from: "Xerographica"Quote from: "The Whit"You throw around this "optimal funding" like it's a real thing. Optimal to whom?
It's the amount of funding that provides the maximum value to society. The optimal funding for garlic farmers will allow them to produce just enough garlic to meet the demand for garlic. Obviously everybody does not demand the same exact amounts of garlic...which is why the only way we can determine "optimal funding" is by allowing consumers to shop for themselves.
Are you familiar with Douglas' theory of social credit? You should be, if you think that your statement is worthy of consideration. (It's not.)
Pareto-efficiency versus Douglas' theory of social credit? Are you kidding me? You've just revealed that you know less than shit about the field of economics. That being said, you're smarter than Plu in the sense that you actually managed to throw some name out there. Keep throwing names/concepts out there. I'll let you know if any of them are relevant to the concept of Pareto-efficiency.
Quote from: "The Whit"BECAUSE THE FUNCTION IS WHAT MAKES IT IMPORTANT! If you take away the function it's no longer valuable to society, just like a car without an engine.
HA! Your system would have a shortage of everything in less than 6 months. The economy you're describing couldn't support anything more than an Amish lifestyle.
The function of money is to allow you to communicate what your true priorities are. As long as people have the freedom to communicate what their priorities are...then it's logically impossible for there to be shortages of things that are truly important to society.
Unless you want to argue that everybody would just save their money. But it's absurd to argue that more people would derive greater utility from saving their money than from using it to communicate their priorities. If nobody felt any need to spend their money then clearly there weren't any shortages of things that people truly valued.
Quote from: "Xerographica"Pareto-efficiency versus Douglas' theory of social credit? Are you kidding me? You've just revealed that you know less than shit about the field of economics. That being said, you're smarter than Plu in the sense that you actually managed to throw some name out there. Keep throwing names/concepts out there. I'll let you know if any of them are relevant to the concept of Pareto-efficiency.
How about instead of that, you explain why social credit won't work? Feel free to make fun of Heinlein's analysis of Douglas, too. (Hey, that's TWO names.)
I believe they call that check and mate. (I doubt that you'll understand the reference, even if I wait another 73 years.)
Quote from: "Xerographica"The function of money is to allow you to communicate what your true priorities are. As long as people have the freedom to communicate what their priorities are...then it's logically impossible for there to be shortages of things that are truly important to society.
Unless you want to argue that everybody would just save their money. But it's absurd to argue that more people would derive greater utility from saving their money than from using it to communicate their priorities. If nobody felt any need to spend their money then clearly there weren't any shortages of things that people truly valued.
We know you don't know the first thing about applied economics - you don't have to keep proving it like this. (Applied economics is about as like theoretical economics as tomatoes are like hedgehogs.)
Quote from: "Xerographica"The function of money is to allow you to communicate what your true priorities are. Through prices. What you're talking about is the price system.
Unless you want to argue that everybody would just save their money. Collectors would, but it would have no practical use. But it's absurd to argue that more people would derive greater utility from saving their money than from using it to communicate their priorities. Unless those priorities are saving for a rainy day. However, in your system people wouldn't even use money. If nobody felt any need to spend their money then clearly there weren't any shortages of things that people truly valued. Maybe what the person desires costs more than what he/she has on them, and they need to save to afford something...like a car.
You still have not addressed any of my questions directly.
Quote from: "Plu"Seems like a reasonable story. And you claim this would not happen in a free market? How does that work? Does it mean we lose all the services the government uses the goods it buys for? Because that would be a really bad outcome. Likewise if poor people lose access to those government services because they now become paid services; that would also be bad.
You'd have to be a bit more specific about which services you're talking about. If you mean roads and military then they certainly would receive funding.
QuoteI'm also not sure how the government created "artificial demand" if they're buying resources they actually use to do useful things with.
I should rephrase that. It's not "artificial demand" because demand is infinite. It's an artificial inflation of access to that resource. By making it cost less, more people can afford it. This throws supply and demand off equilibrium towards shortage, and prices rise to correct for that.
The point about inflation makes sense, but that mostly seems coupled to the fact that money is a really weird measure of resources because it doesn't actually mean anything.[/quote] Money represents resources, and as all resources are different they will all have different prices.
QuoteYou'd have to be a bit more specific about which services you're talking about. If you mean roads and military then they certainly would receive funding.
Mostly all of them. Roads, the military, schools and universities, the fireguard, police, hospitals, research, the court system. There's a
lot of things the government does that either is not profitable but important, or would be disastrous to most of the populaton if it were for-profit.
Surely some people would fund some of them, but not enough. (Because everyone will think "oh I need my money, I guess I'll let other people fund the roads/police/schools instead")
QuoteI should rephrase that. It's not "artificial demand" because demand is infinite. It's an artificial inflation of access to that resource. By making it cost less, more people can afford it. This throws supply and demand off equilibrium towards shortage, and prices rise to correct for that.
I still don't see how it's artificial. There's an actual increase in access to the resource, because the government is playing the role of the supplier of the resource. If the government were a regular company, things would work exactly the same. The only problem is that you still have a company that has a goal other than making as much money as possible, but you'll need to have those in order to keep society running. If an economic model can't handle those, it's simply not feasible to use for a large society.
QuoteMoney represents resources, and as all resources are different they will all have different prices.
That's what everyone says, but money really just seems to represent money, it seems to have long lost any kind of measuring point in the real world for what it actually is.
Quote from: "Plu"Mostly all of them. Roads, the military, schools and universities, the fireguard, police, hospitals, research, the court system. There's a lot of things the government does that either is not profitable but important, or would be disastrous to most of the populaton if it were for-profit.
Surely some people would fund some of them, but not enough. (Because everyone will think "oh I need my money, I guess I'll let other people fund the roads/police/schools instead")
If it effects them people will fund it, which is why most of the tax money needs to stay inside the citizen's state and even more preferably inside their county. If the roads start going to crap people will shift their tax money to road maintenance. If there aren't enough fire fighters, or police, or judges, people will shift their money to those services. In order for this to work the tax payers need to feel the effects of their funding choices and the only way to do that it to keep most of their money in their area. The federal government is the furthest removed for local problems and will be the least effective at solving these problems, and they are the furthest removed from the populace making it harder to hold them accountable.
The Gravina Island Bridge is a perfect example of what I'm talking about. Estimated at almost 400 million dollars, the bridge would link to a small airport and about 50 residents. This comes about because congress can vote money out of the feredal coffers and into their own communities, and what you get is the tragedy of the commons as each legislator tries to pull more money back home, regardless of how that money will be used. If that money doesn't leave the area in the first place, you don't have this problem.
The only reason why the bridge didn't happen is because the state didn't want to put up it's share of the dough. If I had it my way the states would be the highest government that had anything to do with infrastructure.
QuoteI still don't see how it's artificial. There's an actual increase in access to the resource, because the government is playing the role of the supplier of the resource.
Because the government is not part of the market place. In the market place, consumer action influences market prices so resources are used to meet demand. When the government spends money to subsidize tuition they are meddling with the cost of that service and sending skewed signals to the consumers. These consumers act on these signals, and supply must adjust to meet the adjusted demand. It does so by increasing prices so it can invest in expansion and lower demand to a level it can meet. If federal funding for tuition is not increased, the market will find it's new equilibrium.
QuoteIf the government were a regular company, things would work exactly the same. The only problem is that you still have a company that has a goal other than making as much money as possible, but you'll need to have those in order to keep society running. If an economic model can't handle those, it's simply not feasible to use for a large society.
Not quite sure what you're saying here.
That's what everyone says, but money really just seems to represent money, it seems to have long lost any kind of measuring point in the real world for what it actually is.[/quote]
That's because you can't just print any other resource. Money needs to be limited, too. If you have an ever increasing money supply, you're debasing your currency. As the level of devalue or inflation rises towards the interest rate of savings, people stop saving because it is better to just spend their money because their money is just going to devalue in a bank. If the interest rate on a savings account is 2% but inflation is 3%, then my money is going to devalue by 1%. I could better use my money by finding something that has at least less than 1% rate of devalue. The problem with this is that savings is where loan money is supposed to come from.
When when savings are down because of inflation, loans should also drop off because of lack of funds. The way to fix this problem is to secure the money by roping in inflation. Instead, the government lends money it doesn't have to banks so they can loan out. All this does in needlessly increase the deficit and accelerate the inflation problem. This is why we have a "jobless recovery". Banks are still making money hand over fist because they're getting interest from loans they shouldn't be making while the lay person gets the shaft. Our money is constantly devaluing and the market can never stabilize and correct itself.
The single biggest problem with Keynes is his misunderstanding of savings. Savings is the driving factor behind a good economy, because savings represents surplus that can (and is) used for expansion. A sound currency is the heart of a good economy. If the US doesn't get off of it's deficit binge it's going to have a heart-attack. The biggest problem with this is that the USD is the reserve currency for the world. If it still is when this heart-attack hits, we're taking the global economy with us.
Quote from: "The Whit"When when savings are down because of inflation, loans should also drop off because of lack of funds. The way to fix this problem is to secure the money by roping in inflation. Instead, the government lends money it doesn't have to banks so they can loan out. All this does in needlessly increase the deficit and accelerate the inflation problem. This is why we have a "jobless recovery". Banks are still making money hand over fist because they're getting interest from loans they shouldn't be making while the lay person gets the shaft. Our money is constantly devaluing and the market can never stabilize and correct itself.
The single biggest problem with Keynes is his misunderstanding of savings. Savings is the driving factor behind a good economy, because savings represents surplus that can (and is) used for expansion. A sound currency is the heart of a good economy. If the US doesn't get off of it's deficit binge it's going to have a heart-attack. The biggest problem with this is that the USD is the reserve currency for the world. If it still is when this heart-attack hits, we're taking the global economy with us.
I've read this a few times to wrap my head around it...
is this your assertion or someone elses? I guess I'm not seeing the connection of savings to inflation. Things might be different in the US but not all economies are tied to savings like you are saying.
In canada banks make large profits by loaning out money for less then they pay to get the money...well those and fees. I also don't see the correlation of savings and a good economy. Economies are built on trade, selling of goods. if people are sitting on their money then no one is buying anything and trade slows down.
I want the US dollar to go up because then it makes the goods i sell to the US much more competitive. To me the sign of a good economy in the US is not saving their money but using it to purchase items.
I also know I'm late to the party here.
Quote from: "Plu"QuoteMoney represents resources, and as all resources are different they will all have different prices.
That's what everyone says, but money really just seems to represent money, it seems to have long lost any kind of measuring point in the real world for what it actually is.
money is just a trade instrument. back before money you would trade your wife for a couple of goats. governments came along an created currency so the guy could still keep his goat.
Quote from: "surly74"I've read this a few times to wrap my head around it...
is this your assertion or someone elses? I guess I'm not seeing the connection of savings to inflation. Things might be different in the US but not all economies are tied to savings like you are saying.
In canada banks make large profits by loaning out money for more then they pay to get the money...well those and fees.
I also don't see the correlation of savings and a good economy. Economies are built on trade, selling of goods. if people are sitting on their money then no one is buying anything and trade slows down.
[/quote]You're making the same error in analysis that Keynes made. He sees savings as idle resources, but they're not. Those savings don't just sit in an account and rot, banks take those savings and loan them out at interest. As a result, banks give interest to those who have savings accounts (less than the interest they charge for loans) to attract money to loan. So, savings are
NOT idle. Savings drive consumption.
QuoteI want the US dollar to go up because then it makes the goods i sell to the US much more competitive. To me the sign of a good economy in the US is not saving their money but using it to purchase items.
That's only because the prices aren't allowed to fluctuate. If the dollar strengthened and prices were allowed to fluctuate to accommodate for that, there would be no net difference in trade.
QuoteI also know I'm late to the party here.
Welcome to the conversation!
Quote from: "The Whit"You're making the same error in analysis that Keynes made. He sees savings as idle resources, but they're not. Those savings don't just sit in an account and rot, banks take those savings and loan them out at interest. As a result, banks give interest to those who have savings accounts (less than the interest they charge for loans) to attract money to loan. So, savings are NOT idle. Savings drive consumption.
I'm aware of what banks do with the money people deposit. How can you say savings drive consumption? those are completely polar opposite. If I'm saving my money I'm not purchasing anything. There is money to loan out but I'm not needing a loan because I'm not spending the money I have saved.
If everyone saved their money consumer purchasing would halt. That is going to have a negative effect because producers are having a hard time with sales. As a producer I don't want people saving their money.
I've read the criticisims to the paradox of thrift but there seems to be too many assumptions made to criticize the paradox when it comes to loanable funds.
QuoteThat's only because the prices aren't allowed to fluctuate. If the dollar strengthened and prices were allowed to fluctuate to accommodate for that, there would be no net difference in trade.
prices can and do flucuate all the time. is there something specifc you are talking about that can't flucuate?
In my situation (trade with Canada and US) I sell my product for a certain price. My price is close to what my competitors in the US sell it for because the two dollars are very close. 10 years ago when the canadian dollar was 60 cents to the US dollar life was easy. I could lower my price far below any US competitor and sell more based on price alone.
QuoteIf it effects them people will fund it, which is why most of the tax money needs to stay inside the citizen's state and even more preferably inside their county. If the roads start going to crap people will shift their tax money to road maintenance. If there aren't enough fire fighters, or police, or judges, people will shift their money to those services.
I'm not okay with an "we'll fix it when it breaks" approach to social services. It's expensive enough to keep a country running when you keep things in good repair, but when you have to wait for people to feel the effects of not enough fire fighters, or police, or judges (you realise that 'feeling the effect' means people dying and homes burning down, right?) then it'll be that much more expensive to restore, assuming it's still possible.
There's a good reason we keep things maintained instead of waiting for them to crash and burn before acting on it. If you introduce a system where that maintenance no longer exists for whatever reason, you are introducing a bad system.
QuoteThe federal government is the furthest removed for local problems and will be the least effective at solving these problems, and they are the furthest removed from the populace making it harder to hold them accountable.
This I agree with. Keep most of the money close. Or at the very least, don't have a big pot that any county can claim from. I'd understand the idea of shifting extra tax to areas that have less income for whatever reason, but to pile it up and give it to whomever has the best story doesn't work.
QuoteBecause the government is not part of the market place. In the market place, consumer action influences market prices so resources are used to meet demand. When the government spends money to subsidize tuition they are meddling with the cost of that service and sending skewed signals to the consumers. These consumers act on these signals, and supply must adjust to meet the adjusted demand. It does so by increasing prices so it can invest in expansion and lower demand to a level it can meet. If federal funding for tuition is not increased, the market will find it's new equilibrium.
You'd think that if there's high demand, supply would change so they can handle
more demand, not raise prices so that demand becomes lower. If you're doing the latter, you are pretty much creating artificial scarcity, which puts the problem-side with the companies refusing to cater to the growing demand, not with the government that's creating that demand by helping consumers afford the goods.
Quote from: "surly74"Quote from: "The Whit"You're making the same error in analysis that Keynes made. He sees savings as idle resources, but they're not. Those savings don't just sit in an account and rot, banks take those savings and loan them out at interest. As a result, banks give interest to those who have savings accounts (less than the interest they charge for loans) to attract money to loan. So, savings are NOT idle. Savings drive consumption.
I'm aware of what banks do with the money people deposit.
Banks don't actually loan out the money on deposit - that would be a stupid loss of profit. In the US, large banks have to hold a 10% reserve for loans. (IOW, if you have $1 million out in loans, you have to have only $100k in your vault or on deposit in the Fed.) If a bank has $1 million on deposit, and loans money on deposit, it can earn interest on $1 million. If it uses the $1 million as its reserve, it can earn interest on $10 million in loans.
Of course that's all fiat money, which is one of the main problems with the current financial situation in the world.
Quote from: "Plu"You'd think that if there's high demand, supply would change so they can handle more demand, not raise prices so that demand becomes lower. If you're doing the latter, you are pretty much creating artificial scarcity, which puts the problem-side with the companies refusing to cater to the growing demand, not with the government that's creating that demand by helping consumers afford the goods.
1973. Oil crisis. Remember? In the US, we had alternate day gasoline purchasing, and the price skyrocketed. Due to a shortage in oil, right?
Wrong. Oil tankers were anchored in harbors, so closely packed that one friend of mine claimed that you could walk from Galveston to Houston without touching water. Why? There was no place to put all that oil. There was no shortage, the refineries were just not refining it, to create a "shortage", so they could inflate prices.
So does it happen? Of course.
Quote1973. Oil crisis. Remember?
Uh, no. That was 13 years before I was born, and on the other side of the world. :P
And obviously that happens; I just want to make it clear who is being the bad guy
when it happens. I don't buy that the government is the bad guy for creating more demand; the supplier is the bad guy for upping the prices instead of increading the available supply.
Quote from: "surly74"I'm aware of what banks do with the money people deposit. How can you say savings drive consumption? those are completely polar opposite. If I'm saving my money I'm not purchasing anything. There is money to loan out but I'm not needing a loan because I'm not spending the money I have saved.
You're correct that you're not the one using those resources, but when that money gets loaned out, the person that took out the loan DOES use it to consume. They pay back + interest to the bank and the bank then pays it back to you, the saver, through interest.
Just because YOU aren't using something doesn't mean it doesn't get used. Let's say you're not using a TV so you put it in storage. That is a resource that is going unused. If the storage unit were able to rent that TV out to someone else for a small fee, that TV is not an idle resource because
someone is using it.
QuoteIf everyone saved their money consumer purchasing would halt. That is going to have a negative effect because producers are having a hard time with sales. As a producer I don't want people saving their money.
You don't want people to save
all of their money, but who the hell would? People need money to do things, like live, but just because some of that goes into a savings account does not mean it just sits there like it's in "timeout".
QuoteI've read the criticisims to the paradox of thrift but there seems to be too many assumptions made to criticize the paradox when it comes to loanable funds.
A recession is exactly why we need savings. When there is a recession we need those savings to draw on to prop up the economy. Think about old agricultural societies saving the harvest for winter or the next year. When the next harvest isn't so good, the society survives by pulling from it's pooled resources. The market adjusts supply to meet demand and the society lives on for another year. If that society did not save enough food to feed everyone through the drought demand will fall to meet supply in the form of
EVERYONE STARVING TO DEATH. It's the same way with money.
In a recession, people pull from their savings to pay the bills. This will shorten the supply of savings. Having less money to loan out, banks will increase interest rates on loans. This means that only projects that yield a higher return than the going interest rate will get funded, but that's part of the system correcting itself. As the bank sees it's loanable funds start to dry up it will increase interest rates on savings to attract more investors. Those who have the funds to invest will do so, putting money back into the loanable funds pool and interest rates will stabilize. As this occurs, banks will lower interest rates on loans to compete with each other for your business. As these interest rates drop, loans increase. Those companies that get these loans hire more people and expand, this lowers the unemployment rate and puts more cash in circulation, in turn increasing the amount of money that can be used for savings. This then snowballs into prosperity, and your economy is healthy as an ox.
Quoteprices can and do flucuate all the time. is there something specifc you are talking about that can't flucuate?
In my situation (trade with Canada and US) I sell my product for a certain price. My price is close to what my competitors in the US sell it for because the two dollars are very close. 10 years ago when the canadian dollar was 60 cents to the US dollar life was easy. I could lower my price far below any US competitor and sell more based on price alone.
If the value of a dollar falls, the price of goods should rise in response to that fall in value. If the value of the dollar rises, prices should fall. The value of the currency is an indicator of another factor, not the driving force.
I didn't run everyone off did I?
Quote from: "The Whit"I didn't run everyone off did I?
I think the new theist troll has them a bit distracted.
A goldfish wandered into the shark tank?