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>Why are people paying those workers? In short, in modern, mainstream economic theory the ideas that explain this are what's called Market Failures. In 2001, t
by wallace_f 10y ago
>Why are people paying those workers?
In short, in modern, mainstream economic theory the ideas that explain this are what's called Market Failures. In 2001, the Nobel Prize in economics went to people who studied information asymmetries, which lead to market failures.
A concrete and classic example is the Tragedy of the Commons.
My earlier example of the financial sector, which in 2008 showed everyone how private gains created public losses in the form of subsidies, recession, inflation, bail-outs, moral hazard, public-sector risk, was created despite (and many argue in part, because) of government-oversight.
Another, more benign example, is one I was reminded of while on vacation in France. A toilet bloc was guarded by an unhappy attendant who took 1 euro per use. It would be better to install a 100euro toll gate and give her the remaining profit to buy a computer to play video games (or art supplies, whatever she wants to do), in the hours between cleanings. Everyone wins. This is what's called pareto-efficient. Someone is made better off and no one is made worse off (tourists don't need to encounter an unhappy attendant, either).
- graeme 10y agoHow would UBI solve this? If the jobs were still profitable to the employer, they'd be done. It's not clear to me how UBI solves market failures.
- wallace_f 10y agoNot all jobs are necessarily done because they are profitable to an employer. Mainstream economic theory supports this idea as my previous post explains. However, to address your general sentiment: First let's establish the premise that the most important thing to ones survival and welfare in the world today is money. Without that--and therefore by separating the relationship between survival, social status, welfare and money--it could be argued that we would take a step in the direction of fixing incentive alignment.
- 0xcde4c3db 10y ago> In 2001, the Nobel Prize in economics went to people who studied information asymmetries, which lead to market failures. People might know part of this work better by the paper title / catchphrase "market for lemons" [1]. This inspired "lemon laws" in several countries. [1] https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons