5 ms·

Meritocracy is a very quaint goal. There is so much value in our societies produced by capital that cannot be attributed to work or decision-making of some livi

Meritocracy is a very quaint goal. There is so much value in our societies produced by capital that cannot be attributed to work or decision-making of some living person - such as machinery, know-how (technological and organizational), land, natural resources, organic products. Most people, if they would be paid based on merit, couldn't survive in our society, because they produce so little of value on its own. Fighting for "meritocracy" therefore becomes fight for attribution, how big piece of resulting pie you deserve. But this deserve has not much to do with merit of your work, it has to do with your ability to fight for it, imperfect information, and kindness of other people.

lmm 11y ago
So how about we spend a few minutes trying to solve those problems rather than just throwing up our hands? A sufficiently low-friction market already resolves a lot of the attribution issues, and we're already seeing that happen - as transaction costs shrink it becomes more and more practical to outsource more of a business. What if it reached the point where every company was <50 people - small enough that everyone knew everyone? Or even the point where everyone was a freelancer? Externalities are of course a thing. But technology is improving to the point where we can track them and build them into the market. What if e.g. for every gram of pollution, you were charged in real time?
- plonh 11y ago
  You miss the key: a huge amount of my value is generated by tools created by our ancestors -- who deserves credit for those tools? Me? Those dead people's children?
  - lmm 11y ago
    You presumably bought the tools at a fair price that reflects how much value they add for you.
    - asgard1024 11y ago
      I actually didn't.. They are just there! I got them for free (as a part of my training) and they have immense value. You argument hints at something called labor theory of value, which quickly leads to contradictions, once you include time and technological progress into your models (such as people should get more for labor even if they are doing less of it). Honestly, I think if people are honest to themselves, they will see that there is plenty of stuff providing value for free (a simple example - tree that grows apples). Then asking to be paid just for your merit is obviously a losing proposition.
- pjc50 11y ago
  > *sufficiently low-friction market* .. drives the rate of profit to zero at all points along the value chain, except where there is a monopoly or "rent" that can extract all the value. Example: San Francisco is a system for moving money from venture capital to real estate.
  - asgard1024 11y ago
    Exactly! 15 years ago, I was interested in economics. Since I originally studied physics, and I couldn't help noticing that some very simple examples are missing from the economic textbooks, namely how to build the macroeconomic model (aggregate functions) from the microeconomic ones. One very simple example is to have two markets, one between producer and distributor and another between distributor and consumer. It turns out, there is no "rule" as to what the distributor's cut should be. Any margin is possible! It depends on relative negotiation positions of all parties. So, to say (sufficiently) free markets are the answer is pretty much as no answer at all..
    - TeMPOraL 11y ago
      There is no rule because the answer becomes a (semi-)stable equilibrium of a system of feedback loops. Much of the cases where "sufficiently free markets" are used as an (invalid) answer happen when someone assumes a-priori what the equilibirum will be without considering the actual feedback loops in the system.
    - lmm 11y ago
      If the distributor's cut becomes too large then some producers will switch to become distributors, and vice versa.
      - asgard1024 11y ago
        That may happen, but it doesn't answer the question what the cut will be. I don't think there is an answer, since as GP pointed out, in free market, both margins should approach 0, so the ratio can be anything in that limit. This also raises a question, if no one can make a profit, why should people want free market? Basically, free market promises subsistence wages to workers. And what about consumers switching to distributors? That's the problem, you (wrongly) see economy as having two parts - one part producers, another part consumers (and so presumably you put distributors together with producers), but it really isn't like that, it's cyclic. You can't always hammer it into some supply-demand model (that's actually what makes the example interesting!).
- asgard1024 11y ago
  > So how about we spend a few minutes trying to solve those problems rather than just throwing up our hands? If I were to solve it, I would just give people democratic rights (pretty much everyone the same vote) to decide how economic resources are allocated. But lots (if not most) of people are against that idea.
  - TeMPOraL 11y ago
    Such solution has some obvious failure modes. For instance: - People optimize locally, working for what they think is their best interest, even if on aggregate they lose. This is basic coordination problem; the very reason we form societies is because global optimization, often requiring to fogoe individual short-term gain, leads to better outcomes. - The way people vote strongly depends on education they get; especially in our technological civilization, a lot of important issues (like energy) are beyond the understanding of majority of electorate. Democracy depends on educated populace. - People are not independent actors wrt. to voting; in the age of free media, your votes will not reflect the "will of the many", but the will of most charismatic people on TV. Note that "the most charismatic" usually does not mean "the smartest".
    - johnchristopher 11y ago
      Your three points comes down to the old `people are too dumb to vote' stance that every democratic movement had to fight through history. And the `elite' optimizes locally as well, directly at the expense of the weakest.
      - TeMPOraL 11y ago
        I don't see the two statements being wrong, and definitely not mutually exclusive. With non-elected elite there's at least a chance that said elite has any actual qualifications instead of just being popular. To be clear - I'm not that big on authoritarianism. I just don't see the value proposition of democracy being actually realized. Given the points I mentioned previously, we are still ruled by elite, except that it is constrained to choose their options only based on popularity, and unable to make hard decisions in areas that matter[0]. About the only thing democracy delivers as promised is bloodless government transition. Even the actual work in democractic country's administration is done by unelected officials. At this point I've given up hoping that democratic governments will help solve climate change or energy problems. Private companies may be able to, but that's only because they're capable of behaving in inherently undemocratic ways, like releasing a new technology upon the world (nobody asked us to vote whether we want to have Facebook or not) or projecting the will of single individuals onto the society ("you will drive electric cars, whether you want it or not", said Musk, and proceed to burn as much money as it took to make electric cars compete with ICE ones[1]). [0] - even if such decision wouldn't immediately piss of half of the electorate by itself, your political opponents will make sure it will render you practically unelectable [1] - yes, there were electric cars before, but it took Tesla to basically force the market into accepting them as an option, and they did that on purpose

lmm 11y ago

So how about we spend a few minutes trying to solve those problems rather than just throwing up our hands? A sufficiently low-friction market already resolves a lot of the attribution issues, and we're already seeing that happen - as transaction costs shrink it becomes more and more practical to outsource more of a business. What if it reached the point where every company was <50 people - small enough that everyone knew everyone? Or even the point where everyone was a freelancer? Externalities are of course a thing. But technology is improving to the point where we can track them and build them into the market. What if e.g. for every gram of pollution, you were charged in real time?

plonh 11y ago
You miss the key: a huge amount of my value is generated by tools created by our ancestors -- who deserves credit for those tools? Me? Those dead people's children?
- lmm 11y ago
  You presumably bought the tools at a fair price that reflects how much value they add for you.
  - asgard1024 11y ago
    I actually didn't.. They are just there! I got them for free (as a part of my training) and they have immense value. You argument hints at something called labor theory of value, which quickly leads to contradictions, once you include time and technological progress into your models (such as people should get more for labor even if they are doing less of it). Honestly, I think if people are honest to themselves, they will see that there is plenty of stuff providing value for free (a simple example - tree that grows apples). Then asking to be paid just for your merit is obviously a losing proposition.
pjc50 11y ago
> *sufficiently low-friction market* .. drives the rate of profit to zero at all points along the value chain, except where there is a monopoly or "rent" that can extract all the value. Example: San Francisco is a system for moving money from venture capital to real estate.
- asgard1024 11y ago
  Exactly! 15 years ago, I was interested in economics. Since I originally studied physics, and I couldn't help noticing that some very simple examples are missing from the economic textbooks, namely how to build the macroeconomic model (aggregate functions) from the microeconomic ones. One very simple example is to have two markets, one between producer and distributor and another between distributor and consumer. It turns out, there is no "rule" as to what the distributor's cut should be. Any margin is possible! It depends on relative negotiation positions of all parties. So, to say (sufficiently) free markets are the answer is pretty much as no answer at all..
  - TeMPOraL 11y ago
    There is no rule because the answer becomes a (semi-)stable equilibrium of a system of feedback loops. Much of the cases where "sufficiently free markets" are used as an (invalid) answer happen when someone assumes a-priori what the equilibirum will be without considering the actual feedback loops in the system.
  - lmm 11y ago
    If the distributor's cut becomes too large then some producers will switch to become distributors, and vice versa.
    - asgard1024 11y ago
      That may happen, but it doesn't answer the question what the cut will be. I don't think there is an answer, since as GP pointed out, in free market, both margins should approach 0, so the ratio can be anything in that limit. This also raises a question, if no one can make a profit, why should people want free market? Basically, free market promises subsistence wages to workers. And what about consumers switching to distributors? That's the problem, you (wrongly) see economy as having two parts - one part producers, another part consumers (and so presumably you put distributors together with producers), but it really isn't like that, it's cyclic. You can't always hammer it into some supply-demand model (that's actually what makes the example interesting!).
asgard1024 11y ago
> So how about we spend a few minutes trying to solve those problems rather than just throwing up our hands? If I were to solve it, I would just give people democratic rights (pretty much everyone the same vote) to decide how economic resources are allocated. But lots (if not most) of people are against that idea.
- TeMPOraL 11y ago
  Such solution has some obvious failure modes. For instance: - People optimize locally, working for what they think is their best interest, even if on aggregate they lose. This is basic coordination problem; the very reason we form societies is because global optimization, often requiring to fogoe individual short-term gain, leads to better outcomes. - The way people vote strongly depends on education they get; especially in our technological civilization, a lot of important issues (like energy) are beyond the understanding of majority of electorate. Democracy depends on educated populace. - People are not independent actors wrt. to voting; in the age of free media, your votes will not reflect the "will of the many", but the will of most charismatic people on TV. Note that "the most charismatic" usually does not mean "the smartest".
  - johnchristopher 11y ago
    Your three points comes down to the old `people are too dumb to vote' stance that every democratic movement had to fight through history. And the `elite' optimizes locally as well, directly at the expense of the weakest.
    - TeMPOraL 11y ago
      I don't see the two statements being wrong, and definitely not mutually exclusive. With non-elected elite there's at least a chance that said elite has any actual qualifications instead of just being popular. To be clear - I'm not that big on authoritarianism. I just don't see the value proposition of democracy being actually realized. Given the points I mentioned previously, we are still ruled by elite, except that it is constrained to choose their options only based on popularity, and unable to make hard decisions in areas that matter[0]. About the only thing democracy delivers as promised is bloodless government transition. Even the actual work in democractic country's administration is done by unelected officials. At this point I've given up hoping that democratic governments will help solve climate change or energy problems. Private companies may be able to, but that's only because they're capable of behaving in inherently undemocratic ways, like releasing a new technology upon the world (nobody asked us to vote whether we want to have Facebook or not) or projecting the will of single individuals onto the society ("you will drive electric cars, whether you want it or not", said Musk, and proceed to burn as much money as it took to make electric cars compete with ICE ones[1]). [0] - even if such decision wouldn't immediately piss of half of the electorate by itself, your political opponents will make sure it will render you practically unelectable [1] - yes, there were electric cars before, but it took Tesla to basically force the market into accepting them as an option, and they did that on purpose