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The thing about markets is that they cut through all of the fuzzy thinking about what jobs "should" pay more than others, and tell us what we actually pay - wha

The thing about markets is that they cut through all of the fuzzy thinking about what jobs "should" pay more than others, and tell us what we actually pay - what we collectively find valuable. That reality escapes most people.

TeMPOraL 11y ago
> The thing about markets is that (...) tell us (...) what we collectively find valuable. No, they don't - that's the very point of this article. What society finds valuable and what is economically valuable are two different, separate concepts (and we should really have two different words for them - the term "value" is way overloaded). First of all, the market is not an information display - it's an actor. It doesn't report on how much something is "worth", nor does it "settle" on true prices - it provides a lot of intertia and maintains whatever status it ends up with. Rarely can a society coordinate strongly enough to have its collective will affect the market on purpose (if it could, soccer players and movie stars wouldn't be making that much money). Secondly, the market - that emergent system of aggregated individual economic decisions and incentives - suffers from the typical problems of greedy optimizations. It gets stuck in stupid local minimums. It gets stuck in idiotic feedback loops. Look at e.g. advertising industry - a negative feedback loop where each actor works to cancel out the effort put by other actors. It's a stupid loop that can suck up infinite amount of resources - not money, but tangible resources. Time, manpower, fuel, energy. Think of how much of e.g. printing industry exists only to support advertising by manufacturing trash - leaflets, magazines, billboards, etc. Nature - or the Creator, if you're a believer - gave us brains so that we can notice and correct local minimas and stupid feedback loops of incentive gradients. Market economy isn't a god.
- golemotron 11y ago
  > Rarely can a society coordinate strongly enough to have its collective will affect the market on purpose (if it could, soccer players and movie stars wouldn't be making that much money). This is just wrong. Soccer players, movie stars, and the organizations that front them make money based upon ticket sales. If you don't want them to make as much money you don't buy the ticket. Buying the ticket is making a choice to give them that money. The problem is that it is easy for people to dissociate from the choices that they make with their purchasing. Not everyone is this deluded. Some people boycott things they disagree with. What you are arguing is that mechanisms like boycott, i.e., voting with your dollars don't always work in the sense of producing outcomes that an observer might consider better for everyone. The same case could be made about democracy for exactly the same reasons. That is a different argument than the one outlined here, that markets do not represent the direct choice of their participants. They certainly do, even when the participants refuse to acknowledge that they are making those choices.
RobertoG 11y ago
"what we collectively find valuable" The mystic approach to markets. What determine the wage of a job is scarcity or abundance of people available to do that job. Multiply by one hundred the number of doctors or programmers and you will see "how valuable" their job is. You can apply that to the economy in general. Keep a few millions without job and you will see how you don't need to pay so much to the lucky that have a job.
- Chris2048 11y ago
  > Multiply by one hundred the number of doctors or programmers and you will see "how valuable" their job is. The reason there is a scarcity is precisely the fact that multiplying availability is not easy, i.e. training is long and/or hard and/or expensive. If you find yourself in a lucrative, scarce job, just make sure it's hard enough that it will always be that way...
mac01021 11y ago
That's probably 90% true, but there are phenomena that defy this. Imagine you live in a society where the population is mainly composed of two segments. Members of the first segment enjoy consuming service A. Members of the second segment would benefit tremendously from service B, but all the money is held by the first segment. Which service are you going to spend your time offering to the public? This is at least part of the reason that, as a software engineer, I am much better off selling my time to an advertising company than (say) running a programming/compsci dojo for middle school kids in a low-income urban community. You'll say, of course, that advertising is so lucrative because businesses around the world (and therefore the society made up of them) value the extra income that advertising provides. You'll say that society as a whole does, in fact, want more, better advertisements. But I suspect that there is a segment of the population just as large that would rather everyone in the advertising industry do something else. Only that segment can't pay.
- Chris2048 11y ago
  > selling my time to an advertising company than (say) running a programming/compsci dojo for middle school kids There are lucrative teaching jobs, and lucrative consumer products bought by low-income communities. But in this case, teaching dojos don't scale the same way ads do. Also, high-income communities can often incubate products that eventually become available to low-income communities, after they get over initial cost burdens. Advertising is a good example though: If everyone uses ads, there is no individual (company) advantage to using ads, but you still have to use them to compete.
  - mac01021 11y ago
    At the risk of hurting my case, advertising is probably not quite as good an example as you're making it out to be. In particular, competition between two brands of the same product need not be a zero sum game. If every beer company runs ads in which beautiful women fawn over a guy drinking beer, the outcome might be that every company sees higher profits than in a world without any ads at all.
- golemotron 11y ago

TeMPOraL 11y ago

> The thing about markets is that (...) tell us (...) what we collectively find valuable. No, they don't - that's the very point of this article. What society finds valuable and what is economically valuable are two different, separate concepts (and we should really have two different words for them - the term "value" is way overloaded). First of all, the market is not an information display - it's an actor. It doesn't report on how much something is "worth", nor does it "settle" on true prices - it provides a lot of intertia and maintains whatever status it ends up with. Rarely can a society coordinate strongly enough to have its collective will affect the market on purpose (if it could, soccer players and movie stars wouldn't be making that much money). Secondly, the market - that emergent system of aggregated individual economic decisions and incentives - suffers from the typical problems of greedy optimizations. It gets stuck in stupid local minimums. It gets stuck in idiotic feedback loops. Look at e.g. advertising industry - a negative feedback loop where each actor works to cancel out the effort put by other actors. It's a stupid loop that can suck up infinite amount of resources - not money, but tangible resources. Time, manpower, fuel, energy. Think of how much of e.g. printing industry exists only to support advertising by manufacturing trash - leaflets, magazines, billboards, etc. Nature - or the Creator, if you're a believer - gave us brains so that we can notice and correct local minimas and stupid feedback loops of incentive gradients. Market economy isn't a god.

golemotron 11y ago
> Rarely can a society coordinate strongly enough to have its collective will affect the market on purpose (if it could, soccer players and movie stars wouldn't be making that much money). This is just wrong. Soccer players, movie stars, and the organizations that front them make money based upon ticket sales. If you don't want them to make as much money you don't buy the ticket. Buying the ticket is making a choice to give them that money. The problem is that it is easy for people to dissociate from the choices that they make with their purchasing. Not everyone is this deluded. Some people boycott things they disagree with. What you are arguing is that mechanisms like boycott, i.e., voting with your dollars don't always work in the sense of producing outcomes that an observer might consider better for everyone. The same case could be made about democracy for exactly the same reasons. That is a different argument than the one outlined here, that markets do not represent the direct choice of their participants. They certainly do, even when the participants refuse to acknowledge that they are making those choices.

RobertoG 11y ago

"what we collectively find valuable" The mystic approach to markets. What determine the wage of a job is scarcity or abundance of people available to do that job. Multiply by one hundred the number of doctors or programmers and you will see "how valuable" their job is. You can apply that to the economy in general. Keep a few millions without job and you will see how you don't need to pay so much to the lucky that have a job.

Chris2048 11y ago
> Multiply by one hundred the number of doctors or programmers and you will see "how valuable" their job is. The reason there is a scarcity is precisely the fact that multiplying availability is not easy, i.e. training is long and/or hard and/or expensive. If you find yourself in a lucrative, scarce job, just make sure it's hard enough that it will always be that way...

mac01021 11y ago

That's probably 90% true, but there are phenomena that defy this. Imagine you live in a society where the population is mainly composed of two segments. Members of the first segment enjoy consuming service A. Members of the second segment would benefit tremendously from service B, but all the money is held by the first segment. Which service are you going to spend your time offering to the public? This is at least part of the reason that, as a software engineer, I am much better off selling my time to an advertising company than (say) running a programming/compsci dojo for middle school kids in a low-income urban community. You'll say, of course, that advertising is so lucrative because businesses around the world (and therefore the society made up of them) value the extra income that advertising provides. You'll say that society as a whole does, in fact, want more, better advertisements. But I suspect that there is a segment of the population just as large that would rather everyone in the advertising industry do something else. Only that segment can't pay.

Chris2048 11y ago
> selling my time to an advertising company than (say) running a programming/compsci dojo for middle school kids There are lucrative teaching jobs, and lucrative consumer products bought by low-income communities. But in this case, teaching dojos don't scale the same way ads do. Also, high-income communities can often incubate products that eventually become available to low-income communities, after they get over initial cost burdens. Advertising is a good example though: If everyone uses ads, there is no individual (company) advantage to using ads, but you still have to use them to compete.
- mac01021 11y ago
  At the risk of hurting my case, advertising is probably not quite as good an example as you're making it out to be. In particular, competition between two brands of the same product need not be a zero sum game. If every beer company runs ads in which beautiful women fawn over a guy drinking beer, the outcome might be that every company sees higher profits than in a world without any ads at all.
golemotron 11y ago