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> A key notion of economics is that if two people voluntarily agree to something, it must be of some benefit of them at that moment compared to alternatives els

> A key notion of economics is that if two people voluntarily agree to something, it must be of some benefit of them at that moment compared to alternatives else they wouldn't have agreed. A market can consist solely of such interaction. The problem is that interactions of two other people can also impose cost on me. Then if this is worse than some opportunity lost is not clear cut. > Pure free-market economics adopts the epistemological stance that utility isn't quantifiable I know, but it's an absurd stance, isn't it? It let's you do things like seeing a person that has a heart attack and thinking "I see you have a heart attack, but why should I help you, maybe it's your preference!" I think any actor has to assume certain, at least very fuzzy, preferences of other actors to be able to operate in the world. I suspect there are actual rational reasons why people don't want to have their preferences revealed, and this economic school of thought's usage of the "non-quantifiable argument" is just a one of the possible rationalizations. > so discussing solutions without defining optimality is pointless I actually feel the same way reading the article.

logicchains 11y ago
>The problem is that interactions of two other people can also impose cost on me. Then if this is worse than some opportunity lost is not clear cut. The economic answer would be that the possible costs it could impose on you can be expressed as violations of your property rights, and if they wished to do this then they'd need to compensate you, or else you could sue them for redress. >I know, but it's an absurd stance, isn't it? It let's you do things like seeing a person that has a heart attack and thinking "I see you have a heart attack, but why should I help you, maybe it's your preference!" Being absurd doesn't necessarily make it less philosophically valid. In one sense the whole concept of morality is absurd, via https://en.wikipedia.org/wiki/Regress_argument https://en.wikipedia.org/wiki/Regress_argument. There's even a school of philosophy called Absurdism that based around recognition of the absurdity of seeking absolute values that inherently cannot be found: https://en.wikipedia.org/wiki/Absurdism https://en.wikipedia.org/wiki/Absurdism. On a more concrete level, the rejection of quantifiable utility is based on rejection of the extra assumptions it requires. Two in particular: firstly, it assumes some kind of simple relationship, so that if person X buys 10 apples for $100, then they valued each apple at $10 (linear), or maybe the first at $50, the second at 25$, etc. (polynomial). There is however no irrefutable logical justification for the assumption, e.g. perhaps they valued the first at $30, the second at $1, the third at $4, the fourth at $5. Secondly, it assumes that a person's preferences at time t have any relation to their preferences at time t+1.
- asgard1024 11y ago
  > The economic answer would be that the possible costs it could impose on you can be expressed as violations of your property rights Let me explain a specific example: If a person A cheats person B out of his money, it affects me negatively. It poses a risk in the future that person A, being a cheater, will repeat this many times and eventually will have enough money to cheat me. (Both B and me will agree to be cheated by A at the time when we will be cheated, yet it won't be our preference. Kind of like getting a forced move by check in chess.) Now I am not sure your claim, that this problem can be expressed as property rights, is correct. At very least, these would have to be collective property rights. In fact, I think what we are getting here, if we are to express this correctly as property rights, to is state control over transactions, in one way or another. > Being absurd doesn't necessarily make it less philosophically valid. I would say it's a good way not to be taken seriously, but YMMV. > On a more concrete level, the rejection of quantifiable utility is based on rejection of the extra assumptions it requires. Which is a bullshit excuse. We have mathematical capabilities to deal with these kinds of problems - probability, fuzzy logic, whatever. It's just laziness of economists to show that the free market assumptions hold under these new assumptions. (To be fair, it's probably not laziness, I doubt they would hold.) In particular, we can model things like this in computers. I don't know of much cases where this was actually done, but I heard that free market in silico very quickly collapsed into an oligopolic mess. Anyway, your assumptions should be close to the real world as much as possible. That should be the criteria for choosing them. It's a nice curiosity to have free markets work under some weird, unrealistic assumptions, but it's rather useless in the real world.
  - logicchains 11y ago
    >Let me explain a specific example: If a person A cheats person B out of his money, it affects me negatively. It poses a risk in the future that person A, being a cheater, will repeat this many times and eventually will have enough money to cheat me. (Both B and me will agree to be cheated by A at the time when we will be cheated, yet it won't be our preference. Kind of like getting a forced move by check in chess.) It depends what you mean by "cheat". If A lies, then A potentially committed fraud or the like, and can be persecuted. If A just took advantage of B's gullibility (sold him some great swampland or the like), this wouldn't pose any risk to you unless you were gullible too. >Which is a bullshit excuse. We have mathematical capabilities to deal with these kinds of problems - probability, fuzzy logic, whatever. It's just laziness of economists to show that the free market assumptions hold under these new assumptions. It's a not about a lack of mathematics, it's an empistemological issue: how can these assumptions be justified? Any qualitative model necessarily requires more assumptions. As all moral assumptions/statements are ultimately arbitrary due to the regress problem I mentioned previously, fewer assumptions means less arbitrarity. >In particular, we can model things like this in computers. You can't model things like this in computers until you can model human brains in computers. Until then, you have to make arbitrary assumptions that some kind of agent in particular model morally approximates an actual human, which is yet another assumption that must be justified. >It's a nice curiosity to have free markets work under some weird, unrealistic assumptions, but it's rather useless in the real world. You're missing the point that it's about how "work" is defined. If you define it by allowing people to maximise their ordinal utility at each given moment in time, then they "work" by default. If you define it by some other criteria, then how much they work depends on how similar those criteria are to maximising momentary ordinal utility.

logicchains 11y ago

>The problem is that interactions of two other people can also impose cost on me. Then if this is worse than some opportunity lost is not clear cut. The economic answer would be that the possible costs it could impose on you can be expressed as violations of your property rights, and if they wished to do this then they'd need to compensate you, or else you could sue them for redress. >I know, but it's an absurd stance, isn't it? It let's you do things like seeing a person that has a heart attack and thinking "I see you have a heart attack, but why should I help you, maybe it's your preference!" Being absurd doesn't necessarily make it less philosophically valid. In one sense the whole concept of morality is absurd, via https://en.wikipedia.org/wiki/Regress_argument https://en.wikipedia.org/wiki/Regress_argument. There's even a school of philosophy called Absurdism that based around recognition of the absurdity of seeking absolute values that inherently cannot be found: https://en.wikipedia.org/wiki/Absurdism https://en.wikipedia.org/wiki/Absurdism. On a more concrete level, the rejection of quantifiable utility is based on rejection of the extra assumptions it requires. Two in particular: firstly, it assumes some kind of simple relationship, so that if person X buys 10 apples for $100, then they valued each apple at $10 (linear), or maybe the first at $50, the second at 25$, etc. (polynomial). There is however no irrefutable logical justification for the assumption, e.g. perhaps they valued the first at $30, the second at $1, the third at $4, the fourth at $5. Secondly, it assumes that a person's preferences at time t have any relation to their preferences at time t+1.

asgard1024 11y ago
> The economic answer would be that the possible costs it could impose on you can be expressed as violations of your property rights Let me explain a specific example: If a person A cheats person B out of his money, it affects me negatively. It poses a risk in the future that person A, being a cheater, will repeat this many times and eventually will have enough money to cheat me. (Both B and me will agree to be cheated by A at the time when we will be cheated, yet it won't be our preference. Kind of like getting a forced move by check in chess.) Now I am not sure your claim, that this problem can be expressed as property rights, is correct. At very least, these would have to be collective property rights. In fact, I think what we are getting here, if we are to express this correctly as property rights, to is state control over transactions, in one way or another. > Being absurd doesn't necessarily make it less philosophically valid. I would say it's a good way not to be taken seriously, but YMMV. > On a more concrete level, the rejection of quantifiable utility is based on rejection of the extra assumptions it requires. Which is a bullshit excuse. We have mathematical capabilities to deal with these kinds of problems - probability, fuzzy logic, whatever. It's just laziness of economists to show that the free market assumptions hold under these new assumptions. (To be fair, it's probably not laziness, I doubt they would hold.) In particular, we can model things like this in computers. I don't know of much cases where this was actually done, but I heard that free market in silico very quickly collapsed into an oligopolic mess. Anyway, your assumptions should be close to the real world as much as possible. That should be the criteria for choosing them. It's a nice curiosity to have free markets work under some weird, unrealistic assumptions, but it's rather useless in the real world.
- logicchains 11y ago
  >Let me explain a specific example: If a person A cheats person B out of his money, it affects me negatively. It poses a risk in the future that person A, being a cheater, will repeat this many times and eventually will have enough money to cheat me. (Both B and me will agree to be cheated by A at the time when we will be cheated, yet it won't be our preference. Kind of like getting a forced move by check in chess.) It depends what you mean by "cheat". If A lies, then A potentially committed fraud or the like, and can be persecuted. If A just took advantage of B's gullibility (sold him some great swampland or the like), this wouldn't pose any risk to you unless you were gullible too. >Which is a bullshit excuse. We have mathematical capabilities to deal with these kinds of problems - probability, fuzzy logic, whatever. It's just laziness of economists to show that the free market assumptions hold under these new assumptions. It's a not about a lack of mathematics, it's an empistemological issue: how can these assumptions be justified? Any qualitative model necessarily requires more assumptions. As all moral assumptions/statements are ultimately arbitrary due to the regress problem I mentioned previously, fewer assumptions means less arbitrarity. >In particular, we can model things like this in computers. You can't model things like this in computers until you can model human brains in computers. Until then, you have to make arbitrary assumptions that some kind of agent in particular model morally approximates an actual human, which is yet another assumption that must be justified. >It's a nice curiosity to have free markets work under some weird, unrealistic assumptions, but it's rather useless in the real world. You're missing the point that it's about how "work" is defined. If you define it by allowing people to maximise their ordinal utility at each given moment in time, then they "work" by default. If you define it by some other criteria, then how much they work depends on how similar those criteria are to maximising momentary ordinal utility.