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Disagree with your view of the essay, but your anecdote is interesting. I learned something from analyzing the anecdote with inappropriate sincerity. Why- of t

Disagree with your view of the essay, but your anecdote is interesting. I learned something from analyzing the anecdote with inappropriate sincerity. Why- of their own free will- would each economist offer $20,000 to eat the turd? There can essentially only be one answer. They value the schadenfreude or sense of power derived from watching their fellow economist eat the turn at greater than $20,000. Why would each economist eat the turd? They value an extra $20,000 more than they value avoiding the disgust associated with eating the turd. Long story short, that $40,000 of seemingly destructive trade appears to have improved both their lives according to their own value functions.

natural219 9y ago
You would do well to check if your beliefs are falsifiable. If you believe that GDP objectively, universally, and precisely maps to real-world value, no thought experiment will disabuse you of that notion.
- yorwba 9y ago
  Are you claiming that "GDP objectively, universally, and precisely maps to real-world value" is non-falsifiable? Unless you reason is that nobody can even tell you what real-world value is, that proposition can easily be falsified. If you ever observe a trade that changes GDP in a way that does not correspond to the change in real-world value, the belief is shown to be false. Of course that isn't just a thought experiment, you have to actually do the observations.
  - natural219 9y ago
    I said something slightly different; I claimed the commentor's beliefs were potentially unfalsifiable, and then I characterized those beliefs as "GDP mapping objectively etc to real world value"
    - loup-vaillant 9y ago
      I bet "GDP mapping objectively etc to real world value" is in fact falsifiable (and false, at least to some extent).
      - NoGravitas 9y ago
        You would have to compare the GDP to some measure that better maps to real world value. And the choice of measure to use would be controversial. HDI? GNH? HPI? GNW? I agree that GNP is a terrible measure of real world value (a lot of things increase GNP that decrease human well-being on a global or long-term scale). But if you want to falsify it, you need some other measure. Is the other measure falsifiable?
NoGravitas 9y ago
This story is a remarkable reductio-ad-absurdum of the Subjective Theory of Value.
- SilasX 9y ago
  No, it isn't. It introduces a non-standard situation where the actors' motivations are hard to model, and results in a non-standard outcome. That doesn't help build the firmer X-free worldmodel that I would count as a refutation of X. It requires us to posit someone who's money-hungry enough to do something disgusting for a large amount of money and yet who still would spend all of that gain to get some (for-most-people) trivial kick out of seeing someone else do the same. Well, yes, if two people both had that bizarre preference set, and you fully intuited the implications of that situation, it wouldn't be strange to view it as creation of that much value, because both of them satisfied each other's values. I don't see how this parable carries more kick than if you cut off the parable halfway through and said, "hah! Someone ate feces for money! That's silly, isn't it?" Yes, bizarre values lead to bizarre outcomes. But then, if that's all you want to prove, then just "go Rule 34" and link some fetish sites. To the extent that the parable has a valuable lesson, it's "back-and-forth exchange of money for services, if officially canceled out, is a kind of gain in utility that doesn't show up in formal accounting". (E.g. Alice provides romantic satisfaction to Bob, who simultaneously provides romantic satisfaction to Alice. They do not transfer money on net. "We're right where we were before, and didn't create any value." Um, yeah you did.) Or, if the point is that decisions can be regretted (which you could tweak the Alice/Bob example to include) , sure, but that doesn't shed a lot of light on the Subjective Theory of Value.
  - natural219 9y ago
    It seems abundantly clear to me that humans routinely take actions that are far more irrational than eating a turd for $20,000. There are literally TV shows dedicated to that type of thing. The whole point is to draw absurdity to the Subjective Theory of Value -- the claim that, if a trade occurs, the trade must be Good, because both participants (with full information!) made a rational (!) calculation that this trade was in their best (!) long-term (!) interests. I find this proposition -- one that rests at the heart of economics -- to be incredibly dangerous and outrageously wrong, but since our entire economy / political system sort of depends on this being true, I don't know what to do about it.
mcguire 9y ago
Why do I suspect that this reasoning is circular?

natural219 9y ago

You would do well to check if your beliefs are falsifiable. If you believe that GDP objectively, universally, and precisely maps to real-world value, no thought experiment will disabuse you of that notion.

yorwba 9y ago
Are you claiming that "GDP objectively, universally, and precisely maps to real-world value" is non-falsifiable? Unless you reason is that nobody can even tell you what real-world value is, that proposition can easily be falsified. If you ever observe a trade that changes GDP in a way that does not correspond to the change in real-world value, the belief is shown to be false. Of course that isn't just a thought experiment, you have to actually do the observations.
- natural219 9y ago
  I said something slightly different; I claimed the commentor's beliefs were potentially unfalsifiable, and then I characterized those beliefs as "GDP mapping objectively etc to real world value"
  - loup-vaillant 9y ago
    I bet "GDP mapping objectively etc to real world value" is in fact falsifiable (and false, at least to some extent).
    - NoGravitas 9y ago
      You would have to compare the GDP to some measure that better maps to real world value. And the choice of measure to use would be controversial. HDI? GNH? HPI? GNW? I agree that GNP is a terrible measure of real world value (a lot of things increase GNP that decrease human well-being on a global or long-term scale). But if you want to falsify it, you need some other measure. Is the other measure falsifiable?

NoGravitas 9y ago

This story is a remarkable reductio-ad-absurdum of the Subjective Theory of Value.

SilasX 9y ago
No, it isn't. It introduces a non-standard situation where the actors' motivations are hard to model, and results in a non-standard outcome. That doesn't help build the firmer X-free worldmodel that I would count as a refutation of X. It requires us to posit someone who's money-hungry enough to do something disgusting for a large amount of money and yet who still would spend all of that gain to get some (for-most-people) trivial kick out of seeing someone else do the same. Well, yes, if two people both had that bizarre preference set, and you fully intuited the implications of that situation, it wouldn't be strange to view it as creation of that much value, because both of them satisfied each other's values. I don't see how this parable carries more kick than if you cut off the parable halfway through and said, "hah! Someone ate feces for money! That's silly, isn't it?" Yes, bizarre values lead to bizarre outcomes. But then, if that's all you want to prove, then just "go Rule 34" and link some fetish sites. To the extent that the parable has a valuable lesson, it's "back-and-forth exchange of money for services, if officially canceled out, is a kind of gain in utility that doesn't show up in formal accounting". (E.g. Alice provides romantic satisfaction to Bob, who simultaneously provides romantic satisfaction to Alice. They do not transfer money on net. "We're right where we were before, and didn't create any value." Um, yeah you did.) Or, if the point is that decisions can be regretted (which you could tweak the Alice/Bob example to include) , sure, but that doesn't shed a lot of light on the Subjective Theory of Value.
- natural219 9y ago
  It seems abundantly clear to me that humans routinely take actions that are far more irrational than eating a turd for $20,000. There are literally TV shows dedicated to that type of thing. The whole point is to draw absurdity to the Subjective Theory of Value -- the claim that, if a trade occurs, the trade must be Good, because both participants (with full information!) made a rational (!) calculation that this trade was in their best (!) long-term (!) interests. I find this proposition -- one that rests at the heart of economics -- to be incredibly dangerous and outrageously wrong, but since our entire economy / political system sort of depends on this being true, I don't know what to do about it.

mcguire 9y ago

Why do I suspect that this reasoning is circular?