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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 ded

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.

SilasX 9y ago
I was replying to the idea that the parable demonstrates those points for someone who doesn't already agree. (And that's not the SVT you're describing, but the SVT plus some ancillary claims that I agree are flawed -- see the last paragraphs of my other reply.)
- natural219 9y ago
  I'm curious to pick your brain about this. What is a better concept to describe the idea that "if a trade occurs, it is Good?" I agree STV does contain real insights about the nature of trading, but there's some ideological extrapolation that transforms obviously correct things like marginal diminishing utility to "justifying every trade as it occurs as inexorably good" See also: http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html
  - SilasX 9y ago
    You're actually right, I think -- I don't know of a specific (standard) term to describe that fallacy, and every time I've criticized its appearance, I've had to make up a neologism or spell it out expliclity [1]. ("Vulgar Keynesianism" is one term for it, but it's not the only school that does it so it's a fair term for the precice concept.) In any case, I was just trying to make the point that a) The turd-trade example does not help the debate about the underlying concepts -- regardless of label -- because it's uses an intuition breaking situation to build intuitions, which is no more insightful than pointing and laughing at people with bizarre preferences. b) STV is not the same as the thing the parable is criticizing. [1] Example comment I remember: https://news.ycombinator.com/item?id=12242525#12243088 https://news.ycombinator.com/item?id=12242525#12243088
    - natural219 9y ago
      Man. Thank you so much. "Vulgar Keynesianism" is indeed a very good summary of my central complaint. although it arrives at it from a totally opposite direction. Sidenote: I miss when Paul Krugman was actually good :(. http://web.mit.edu/krugman/www/vulgar.html http://web.mit.edu/krugman/www/vulgar.html
Anderkent 9y ago
The weird step in the example isn't eating a turd for $20000. It's paying 20000 to see someone eat a turd. That the thought experiment is badly constructed is clear once you take the money and indirection out of the picture. Does two - clearly somewhat weird - people agreeing to eat a turd if the other person eats a turd, somehow disprove economics? Clearly for each of the two people it's the case that they get more from watching the other person eat a turd than it costs them to eat one. Maybe they're perverts. Whatever. Value was actually clearly produced.

SilasX 9y ago

I was replying to the idea that the parable demonstrates those points for someone who doesn't already agree. (And that's not the SVT you're describing, but the SVT plus some ancillary claims that I agree are flawed -- see the last paragraphs of my other reply.)

natural219 9y ago
I'm curious to pick your brain about this. What is a better concept to describe the idea that "if a trade occurs, it is Good?" I agree STV does contain real insights about the nature of trading, but there's some ideological extrapolation that transforms obviously correct things like marginal diminishing utility to "justifying every trade as it occurs as inexorably good" See also: http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html
- SilasX 9y ago
  You're actually right, I think -- I don't know of a specific (standard) term to describe that fallacy, and every time I've criticized its appearance, I've had to make up a neologism or spell it out expliclity [1]. ("Vulgar Keynesianism" is one term for it, but it's not the only school that does it so it's a fair term for the precice concept.) In any case, I was just trying to make the point that a) The turd-trade example does not help the debate about the underlying concepts -- regardless of label -- because it's uses an intuition breaking situation to build intuitions, which is no more insightful than pointing and laughing at people with bizarre preferences. b) STV is not the same as the thing the parable is criticizing. [1] Example comment I remember: https://news.ycombinator.com/item?id=12242525#12243088 https://news.ycombinator.com/item?id=12242525#12243088
  - natural219 9y ago
    Man. Thank you so much. "Vulgar Keynesianism" is indeed a very good summary of my central complaint. although it arrives at it from a totally opposite direction. Sidenote: I miss when Paul Krugman was actually good :(. http://web.mit.edu/krugman/www/vulgar.html http://web.mit.edu/krugman/www/vulgar.html

Anderkent 9y ago

The weird step in the example isn't eating a turd for $20000. It's paying 20000 to see someone eat a turd. That the thought experiment is badly constructed is clear once you take the money and indirection out of the picture. Does two - clearly somewhat weird - people agreeing to eat a turd if the other person eats a turd, somehow disprove economics? Clearly for each of the two people it's the case that they get more from watching the other person eat a turd than it costs them to eat one. Maybe they're perverts. Whatever. Value was actually clearly produced.