What an arrogant narrow minded ideology this researcher has "If you just use your money to, I don’t know, buy the tenth car for your garage, that will only stay in your garage. [...] there are just way more effective ways of enhancing the public good than being, in layman’s terms, “economically productive.”"
You can afford the tenth car because you already contributed to the common good to earn that money! If you're supposed to also spend your money enhancing the public good then it's not really your money so how are you rewarded for the work you do?
The researcher is not expressing ideology, but rather making a point about the issues of using productivity to assess public good.
His point is that by buying your tenth car you will contribute to productivity, but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
It is even more obvious in the extreme case: if a population of N people produced N cars, the total public good of every person having one would (I hope you would agree) be higher than the total public good of one person having all of them for their own use. However, in both cases the productivity is the same.
Thus, whilst productivity is a useful measure, it does not account for everything we might be interested in when considering the effectiveness of our economies.
> His point is that by buying your tenth car you will contribute to productivity, but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
How does he know that? That isn't an obvious thing at all. I know a bloke who owns 5 cars; his family has 5 people in it. They are a very productive family and they get a lot done for the public good as a family with those cars. The quoted example only works because the premise is that the money is going to be wasted and then the conclusion is that the money is being wasted. A weak example.
I can guarantee all investment is done by wealthy people; poor people can't invest by virtue of having no money. Practically all investment is done by the middle- and upper- classes. It isn't really possible to make a pithy point about this sort of thing because there needs to be discussion of things like investment outcomes; some subjects can't be simplified. "Public Good" isn't an instant thing, it takes place over time.
I thought it was clear (though obviously not) from the example that it was an idealised case, where "ownership" was referring to exclusive use. Your counter-example does not fit that simplified model - you are effectively describing a case where there is one car per person. The premise is not that "wasting money is wasteful", but rather that unequal distribution of resources is wasteful.
It is not the case that all investment is done by wealthy people - large amounts of investment is carried out and directed by governments. Indeed, my understanding is that, if one properly accounts for failed enterprises, there is no significant evidence for greater efficiency in private markets than public ones, both in terms of time-averaged economic growth, and in terms of generating large technological improvements.
> but the use value of your tenth car is much lower than having those same ten cars (and thus the same productivity) spread across ten people.
But the point is that any (however small) value for the person who earned it is justified, while whatever value it might have for other people is irrelevant, since it's not theirs.
In the same way you could argue that buying a car in the first world is immoral because buying it for someone else in the third world would provide them with higher value.
Earned wealth is not public wealth, unless we live in communist utopia where nobody earns or owns anything.
What does “earned” mean when we are the inheritors of 100s of trillions of years of brutal, ruthless, evolutionary work done by those who came before us?
We are able to at best apply a light touch to the tiller of the massive, complex ship into which we were born that we cannot claim any credit for making. Indeed, no one can.
This doesn’t mean we shouldn’t credit people for making good choices, but the idea that every penny we get we completely deserve is certainly not an established fact. It is at best an opinion, and a poorly justified one at that.
There is no morality involved. The assertion is only that's it's more _productive_ to distribute resources this way. Productivity might be a multiplier but can not be innately good itself.
Well, that is a philosophical question. You could’ve used a bus a saved 1000 kids in Africa or you could’ve bought a car and let them die.
Same applies for people in another state or even city. We don’t want to pay for someone’s else cancer treatment.
We just don’t think about it and most of us just don’t care. I did care more when I was younger, but rose glasses tend to fall when you grow up.
I now leaning towards capitalism when I will treat you as bad as the law allows me and extract as much money is possible as it is a fair game.
What does any of that have to do with "corporate" America? When the Eastern Bloc still existed, people there also bought stuff for themselves when they could afford it, instead of buying more stuff for people starving in Africa, where goods would have been "more productive".
I don’t enjoy it.that is how the game is played.
You either an object of politics (and by politics I mean much more than just government) or you a subject.
Here is interesting read for you: Dictator’s handbook. Helped me to finally put the puzzle together.
> Well, that is a philosophical question. You could’ve used a bus a saved 1000 kids in Africa or you could’ve bought a car and let them die. Same applies for people in another state or even city. We don’t want to pay for someone’s else cancer treatment.
> We just don’t think about it and most of us just don’t care. I did care more when I was younger, but rose glasses tend to fall when you grow up. I now leaning towards capitalism when I will treat you as bad as the law allows me and extract as much money is possible as it is a fair game.
> Welcome to corporate America.
Why is it that kids in Africa are going to die but not kids in the U.S.? How has such an incredible disparity in wealth come to be? Isn't the incentive structure of private capital ownership a pretty big part in this?
I just took kids in Africa as an example of humans who are very far away and struggling. I find it unacceptable when people say that they respect human life, but what they actually respect is a life of their neighbor. If we say that human life has no cost we should be investing in saving more lives over lives of someone who lives close by.
And yes, the structure has everything to do with it.
> I just took kids in Africa as an example of humans who are very far away and struggling. I find it unacceptable when people say that they respect human life, but what they actually respect is a life of their neighbor. If we say that human life has no cost we should be investing in saving more lives over lives of someone who lives close by.
> And yes, the structure has everything to do with it.
So, why are those humans over there struggling while the humans over here are not? What lead to this? The humans in the U.S. used to be very poor. How did they grow so rich?
This is one of the most ideological interviews I have ever read with an economist. Economists are unusually unaware of ideology, this is extraordinary: conducts limited research with limited applications (i.e. how people behave in lab conditions under unequal endowments), makes sweeping conclusions about tangentially related areas, makes sweeping conclusions about unrelated areas (most of the questions are unrelated to his research), and most of what he says just appears to totally random ideological musings about who adds value in society (this isn't even a question that economics can answer).
You see this from economists who fail out of physics close to 100% of the time. They don't really understand anything about the private sector, they understand even less about the economy (they just want to do things that they enjoy rather than produce things for others), and they often have these very strong feelings about capitalism...without really having any evidence for these views (or any awareness of the trade-offs...again, this is the kind of thing you don't learn in physics/math class).
You are entitled to your opinion, of course, but unfortunately this process is how our understanding of the world has increased so rapidly over the past several hundred years - laboriously proposing new models, often from intuitions we have derived from observations, and then trying to test those models by obtaining experimental evidence. If things bear out then we put more effort in, and conduct more thorough research. There are many instances of poor practice within that framework, but the process _as a whole_ has worked pretty well so far, and what is discussed here is pretty standard.
As for the Nautilus post itself, it is just an interview with someone who works in the field, not a rigorous scientific document, and they are free (surely?) to express their views about whatever they and the interviewer wish to discuss.
To your later points - I don't know what "understanding the private sector" or "understanding the economy" mean to you, but I would suggest that the person in question does have _some_ understanding of the economy (at least), inasmuch as they have contributed to a formalised understanding of the dynamics of the economy as we (humanity) currently understand them. I'm not entirely sure what else you want - perfect predictions or go home?
Frankly it just sounds like you disagreed with what they said, but, as I already mentioned, you are as entitled to your opinion (as they are to theirs).
> I don't know what "understanding the private sector" or "understanding the economy" mean to you
It means the object of scorn does not share certain assumptions about the underlying purpose of economics. To be roughly as unfairly sweeping as the gp, you get that a lot from Chicago school types.
The study of economics is conducted by a large number of people (many thousands), with (apparently, at least) diverse views. I am interested in your answers to these questions:
1. Do you believe that all economists are engaged in distributing propaganda, or just some?
2. To what end is the propaganda distributed (or maybe on whose behalf)?
3. Are other academic fields similarly concerned with distributing propaganda?
So, I'm not saying that all academia is a front for aliens.
I'm saying that the narrative produced from the status quo in economics has been, for almost all of my life, very conducive to the interests of the powerful.
Do other fields have people doing that? Of course. The petroleum industry has been able to pay for people to push their agenda. That's a thing that happens.
There are some historical, political, and material reasons for the state of economics and academia in general.
Lots of academia is literally just job training for corporations, so don't front like it's above the fray. Even genuine, and valuable, research gets prioritized over less research that isn't as valuable in the private sector. So, again, I'm not the one saying that academia has a problem. Lot's of academics have said these things.
Also, from an argumentative perspective it always seems like economics starts from something like a thought experiment and then go on to use the results of that "experiment" as a evidence in its own right.
Yes, Einstein used thought experiments, but he used known physics as the starting point. I hear economic arguments that start with a premise that isn't a settled thing like "lets assume that we are hunter gatherers on the savanna and you have some beads and I have an arrowhead." It's not based on a measurement that other people have made and agree on. It's not even based on an archaeological dig where the bones of two people were found.
I realize that isn't what actually goes into a phd thesis. Its economics used as a force of nature that bothers me. It's inevitable. Maybe I'm just calling economics the pseudo-ish stuff that I get presented as a layman. Maybe every economics school in every university has a healthy group of people who are critical of basic assumptions. I hope so.
If you are an economist and I offended you, then please accept my apology. That wasn't my intention, really.
I'm not an economist, but my understanding is that some, or even a lot, of contemporary graduate-level economics is indeed like you describe, but also that there is a lot that isn't, and that the field itself is very diverse. It seemed like you were writing off everyone because of the sins of the currently dominant strand, which felt unfair.
>You can afford the tenth car because you already contributed to the common good to earn that money
You don't need to "contribute to the common good to earn that money", in fact you can actively undermine it (exploit monopoly, form a cartel, rent-seek and hog resources, buy political influence, fool people with BS ads and sponsored "research" to buy your shit, pollute and in general ignore all kinds of toxic externalities from your products, and so on...
You can definitely do bad things to earn money. But a doctor, an engineer, etc, would've already contributed to the common good even if they buy a tenth car that sits in their garage. So simply buying a tenth car that sits in your garage (and employs the people building the car) isn't in itself a bad thing or an indication that you're not contributing to the common good.
In a free society, someone can spend their money on an extra toy if they want. Nothing wrong with that. It's a strange expectation to impose on others this notion of "spending only on the common good." It's not black and white what the common good is, and that is why an educated free market is a good proxy or mechanism for figuring that out.
The laissez-faire line is that the common good happens spontaneously if you allow some people to buy ten cars. Because that's "freedom".
No matter that homelessness is rising, life expectancy is falling, debt is increasing to catastrophic levels, the planet's ecology is becoming increasingly hostile to life (ask the Australians...) - and counter-evidence is piling up on all sides.
The suggestion that aggressively acquisitive small-minded personal selfishness ought to be the one true motivator of a healthy economy should be obvious laugh-out-loud nonsense to anyone capable of rational thought.
And yet, mysteriously, it's not just taken seriously, it's elevated to a near-mystical principle of omniscient collective market wisdom. (With the caveat here that markets need to be "educated" - an interesting thing to define.)
"educated" is pretty vague. For instance, some people think that a 75% tax rate on high income is reasonable. The "market" doesn't have the right answer on what the right tax rate should be, and how everyone should contribute to the common good. This (and many parameters that already restrict the mythical free market) should be decided by the society.
Besides, someone can earn money only if they live in a country that gave them the opportunity to do so. If the hypothetical doctor was born in the jungle somewhere, it's unlikely that he or she would have been able to make any money. In that sense, it's hard to argue that a high-tax rate is confiscatory, and I don't find it outrageous if they can only afford 5 cars instead of 10, if that can give more people access to health care.
That isn't the argument though. The original comment was saying that buying a tenth car is somehow inherently immoral, which it isn't.
If I've earned the money I have honestly, it isn't anyone else's business what I do with it. Buy an 100th car or light it on fire. Anyone who wants to tell me what to do with my money (that I've earned and paid all the taxes on) can take a long walk off a short pier.
It is when you buy your 10th million car and the environment is devastated. Whether that or a million people with ten extra cars each the outcome is negative for all. So society does have some say in wealth inequality and spending of those with a much larger impact on everyone.
>But a doctor, an engineer, etc, would've already contributed to the common good even if they buy a tenth car that sits in their garage.
Not so sure. For one, doctors can't usually afford a "tenth car".
But assuming they could, or going for the medical industry at large, they are probably a net monetary loss to society, adding the costs of BS needless operations, being wined and dined by the big pharma to push BS drugs, the opioid overperscription-crisis, and of course, overcharging 3x-10x for the same treatment compared to Western Europe. Net monetary loss in the sense that you could get the same services for much much less, and not of course in the sense that you don't get better health compared to not having doctors.
Same for engineers. People making great contributions -- the transistor, new building techniques, cars, etc, sure. People making BS time-sucking social apps (who seem to get the most money) are also a net loss, if not for anything else, for the huge loss of productivity (e.g. employees slacking on social media) and personal development (people wasting hours on end on social media on dopamine feedback loops).
>In a free society, someone can spend their money on an extra toy if they want. Nothing wrong with that.
Beyond some degree there's "something" wrong with that.
Anyone that got that from my comment, I have a reading comprehension course to sell them. To quote myself:
"But assuming they could, or going for the medical industry at large, they are probably a net monetary loss to society, adding the costs of BS needless operations, being wined and dined by the big pharma to push BS drugs, the opioid overperscription-crisis, and of course, overcharging 3x-10x for the same treatment compared to Western Europe. Net monetary loss in the sense that you could get the same services for much much less, and not of course in the sense that you don't get better health compared to not having doctors"
i was going to respond with something like this but people who post like what you responded to willfully ignore such obvious things (because they are obvious after all). they argue that they're exceptions according to free market theology, or they argue that it's still ethical in some way, or they perform some other sort of acrobatics.
> You can afford the tenth car because you already contributed to the common good to earn that money!
I'm not trying to offend you, but the notion that your compensation is necessarily proportional to your contribution to public good is terribly naive.
Surely you can agree that there are an endless number of unscrupulous ways to acquire money that don't contribute to public good, in fact, the opposite is often true. Take a corrupt public official, for instance, their contribution towards society is usually many times inversely proportional to their compensation.
I earn $100,000 a year writing god awful code for a doomed software company. Am I contributing more to the public good than the restaurant worker who cooks my food, the guy who changes my car's oil, or the guy who hauls all of my garbage away?
You may not be, but it seems that your employer is already doomed and they won't be around for long unless they do something to contribute to society. That's generally what happens to those that don't contribute: doomed to fail in the long-run.
It doesn't really matter; the system works by everyone working for their benefit; and history consistently shows that it works better than alternates such as communism, where some powerful dude decides what's good for everyone (and will shoot you if you don't enthusiastically agree 100%)
So yeah, you make decent living by writing awful code, good for you. If you think you don't deserve it, feel free to overtip your waiter. The alternatives are much much worse.
Aren't you describing a dictatorship? In communism, the state owns things, but the state can be the people; i.e. democratic communism. Isn't communism just the absence of private property? (that is, everything is public property)
Not only that, but it isn't like the money just disappears when you buy that car.
What if I buy my 10th car, and the guy I bought it from goes out and donates that money to charity or whatever the author thinks is a moral use of money? From the public's perspective, the money still goes to enhancing the public good - the only difference is that there is now a car stored in my garage instead of some other fellows.
The whole point is that that is not a minor difference. That same personal car, for that same money, would be much more useful if it was someone's first car instead of 10th. The money given for the car is the same either way, but the real utility that the car brings is not.
I don't think anyone is arguing that the value to society is the same in both circumstances. But unless you want some kind of authoritarian state, it isn't your business what someone else does with their money. Assuming they didn't break the law to get it and they paid whatever taxes they owed on it, they can do anything they want with it, including setting it on fire.
Well, in particular, setting it on fire is actually against the law, on safety and environmental reasons. The same environmental reasons will probably have to apply in the near future for over-consumption in general.
But that is all a different matter. The relevant discussion is not about trying to prevent people from spending their money for useless things. It is about the relationship between economic value and actual utility. Any transaction for a car seems to produce the same economic value, but can have vastly different social utility. Therefore, arguments that certain behaviors should be accepted because they produce economic value which must have social utility are wrong. So perhaps it does make sense to tax the rich, even though GDP or other economic value measurements will go down, because social utility will not go down proportionally.
and therefore, the price you're willing to pay for the 10th car is probably a lot lower than the price someone else may be willing to pay for their first.
The price you are willing to pay should be equal to your utility of the object.
regardless of how the buyer feels about the cost, if they buy something that of low utility to them, then they are making irrational economic choices. But since the money is theirs, i cannot interfer 'cept to tell them they are wasting their money on useless items.
But people with a lot of money tend to spend it quite "wisely" (a survivor-ship bias, since a fool and their money is soon parted).
If you have a billion dollars, there is nothing irrational about spending 100k on a car you don't really need. Those 100k have barely any utility for you, so it doesn't matter that the car also has barely any utility.
Look deeper than the money, at the relationships and realities it facilitates. Somewhere a factory worker traded time with their kids to work on that car, all so it could sit in a garage to satisfy some alienated rich guy's ego? At some point it's just waste and sacrifice.
> Somewhere a factory worker traded time with their kids to work on that car...
The factory worker most likely doesn't care about the car. They traded time with their kids for a paycheck, to be spent on those same kids or whatever else the worker desired. Even, potentially, a trophy car they don't intend to drive.
If that car doesn't get sold then there is less work for the factory, less demand for factory workers, and fewer paychecks.
You can afford the tenth car because you already contributed to the common good to earn that money! If you're supposed to also spend your money enhancing the public good then it's not really your money so how are you rewarded for the work you do?