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I don't think that's fair. I'm not making an emotional appeal. I'm making (or attempting, at least) a rational one. You can put it in diminishing marginal valu

I don't think that's fair. I'm not making an emotional appeal. I'm making (or attempting, at least) a rational one. You can put it in diminishing marginal value terms, but I'm basically saying the same thing with fewer assumptions. Family time (or TV time or whatever) is an example to demonstrate that utility does not scale with money. On the whole poor people commuting enjoy their free time, pleasant commutes and the other things at stake just as much as rich people. That's a fairly intuitive point. Given that, the price that does not correspond to the value it provides^, inasmuch as income is unequally distributed. It corresponds to the wealth of the person making a decision and the value it provides. The value of the fast lane is fairly evenly distributed between commuters. Everyone wants to get home. Everyone hates traffic. There are differences, but they're not huge on average. What isn't evenly distributed is income. Therefore the sorting that this mechanism does is a little bit of utility based sorting and a lot of income based sorting. If income was more even, there would be an argument for such a system. Given the actual distribution, the system is probably utility destroying. Tolls are just a revenue raising mechanism, not an efficient allocation one. ^or to marginal costs

speedplane 9y ago
I see your point now. I think you could go further with it. Arguably, a poor person who has never been on an airplane would get far more "utility" from a flight on a private jet than someone who flies every day. So one could argue (a stretch), that the poor, and not the rich, should ride that toll road if it would increase total happiness more. But that seems ridiculous, and I think the issue here is that we're conflating capitalism with utilitarianism. Utilitarianism strives to maximize utility, i.e., total happiness. Capitalism strives for efficient use of scarce resources. They often overlap, but they are fundamentally different concepts. Going back to the example, I buy your argument that tolls are a crude way of maximizing utility. However, they are a good way of putting a scarce resource (fast commuting time) to economic use.
- dalbasal 9y ago
  Capitalism is another kettle of fish perhaps. A lot of liberal market ideas (Smith, Ricardo, etc) are essentially utilitarian. That is, they use utilitarian arguments to prove their points, so they're basically tied into the same assumptions. Ricardo's theory of comparative advantage is pure utilitarianism, and is the classical economics "proof" that trade is efficient. To this day, the most important theory of trade. Efficiency in economic theory is almost all utility efficiency. The If not, what does efficiency? I guess you could say that in this case it's about maximizing revenue from willing payers. That's ok, but calling it efficiency is misleading. When you say putting a scarce resource to its (most productive) use, what do you mean if not the enjoyment and benefit of its users? Incidentally, there is a cool example of an artificial market for allocating food to US food banks. It uses a highly. Manipulated fake currency, with negative pricing and competitive bidding to improve "efficiency." The trick to making it work was all about being willing to define utility in non monetary terms. Stating efficiency in dollar terms can lead to circular logic.
  - speedplane 9y ago
    Utilitarians have struggled for decades to properly define "utility". The approach Bentham took (the father of utilitarianism) is completely different from John Stewart Mills, also a giant in utilitarianism. "Utility" is a far more vague concept than "efficiency". Maximizing efficiency is less complex than utilitarianism. Capitalism strives for efficient allocation of resources based on supply and demand, i.e., what people have and what people want, it makes no promises on maximizing total happiness or equitable distribution. For a utilitarian "putting a scarce resource to its (most productive) use" would indeed be to provide the maximum amount of enjoyment. But for a capitalist, it's simply the amount that someone is willing and able to pay for it. I know some free market proponents use utilitarian ideas to make their point, and there is overlap, but they are a bad fit. Utilitarianism is a moral theory based on maximizing total good. Capitalism is an economic system that seems to have worked more than most other systems. There are moral arguments for capitalism, but they are based on individual freedom, not collective happiness.

speedplane 9y ago

I see your point now. I think you could go further with it. Arguably, a poor person who has never been on an airplane would get far more "utility" from a flight on a private jet than someone who flies every day. So one could argue (a stretch), that the poor, and not the rich, should ride that toll road if it would increase total happiness more. But that seems ridiculous, and I think the issue here is that we're conflating capitalism with utilitarianism. Utilitarianism strives to maximize utility, i.e., total happiness. Capitalism strives for efficient use of scarce resources. They often overlap, but they are fundamentally different concepts. Going back to the example, I buy your argument that tolls are a crude way of maximizing utility. However, they are a good way of putting a scarce resource (fast commuting time) to economic use.

dalbasal 9y ago
Capitalism is another kettle of fish perhaps. A lot of liberal market ideas (Smith, Ricardo, etc) are essentially utilitarian. That is, they use utilitarian arguments to prove their points, so they're basically tied into the same assumptions. Ricardo's theory of comparative advantage is pure utilitarianism, and is the classical economics "proof" that trade is efficient. To this day, the most important theory of trade. Efficiency in economic theory is almost all utility efficiency. The If not, what does efficiency? I guess you could say that in this case it's about maximizing revenue from willing payers. That's ok, but calling it efficiency is misleading. When you say putting a scarce resource to its (most productive) use, what do you mean if not the enjoyment and benefit of its users? Incidentally, there is a cool example of an artificial market for allocating food to US food banks. It uses a highly. Manipulated fake currency, with negative pricing and competitive bidding to improve "efficiency." The trick to making it work was all about being willing to define utility in non monetary terms. Stating efficiency in dollar terms can lead to circular logic.
- speedplane 9y ago
  Utilitarians have struggled for decades to properly define "utility". The approach Bentham took (the father of utilitarianism) is completely different from John Stewart Mills, also a giant in utilitarianism. "Utility" is a far more vague concept than "efficiency". Maximizing efficiency is less complex than utilitarianism. Capitalism strives for efficient allocation of resources based on supply and demand, i.e., what people have and what people want, it makes no promises on maximizing total happiness or equitable distribution. For a utilitarian "putting a scarce resource to its (most productive) use" would indeed be to provide the maximum amount of enjoyment. But for a capitalist, it's simply the amount that someone is willing and able to pay for it. I know some free market proponents use utilitarian ideas to make their point, and there is overlap, but they are a bad fit. Utilitarianism is a moral theory based on maximizing total good. Capitalism is an economic system that seems to have worked more than most other systems. There are moral arguments for capitalism, but they are based on individual freedom, not collective happiness.