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Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean tha

Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Areas that are 'overall prosperous' are going to tend to drive economic migration. As a city's area for development tends to be limited this is going to drive population densities upward, as compared to areas that are not economically desirable. San Francisco is a great example, all the way back to its beginnings. San Francisco was practically created by the California gold rush. At the start of 1848 its population was around 1,000. By the end of 1849, it's population was 25,000. By 1890 it's population was 300,000 and it was the 8th largest city in the US. By 1906 the population was more than 400,000. Things then got shaken up by the quake of 1906. But the whole point is that as its population increased 40,000% in about 5 decades, you'd have seen population densities skyrocket. But the city didn't become prosperous because the population density increased. Its prosperity caused the density increases.

SilasX 8y ago
>Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Yep. And most economic policy is based on exactly this fallacy: "When 'the economy' is prosperous, people are buying a lot. Therefore, if we artificially stimulate the economy, we will get prosperity in the relevant, desired sense."
- yongjik 8y ago
  That's not a fallacy. If a lot of people start to buy a lot, more jobs are created. You are trying to take the case of a single household (where "buying a lot" can only mean using a lot of money) and apply that to the whole society.
  - SilasX 8y ago
    You just bought into the fallacy -- jobs (and buying stuff) are only good when they're satisfying a legit demand, not one artificially created by the stimulus policy. To the extent that that the desire to provide that job or purchase that item is artificial, the "prosperity" indicated by that action is likewise artificial. If I put a gun to your head and forced you to buy a sofa, that's not the same kind of prosperity as when you independently judged that you needed a sofa and freely bought one. The same basic dynamic is going on when I conceal it slightly by forcing other people to give me money so I can subsidize your sofa purchase.
    - yongjik 8y ago
      I take it that you don't believe in Keynesian theory, which is fine for me, but if you want to persuade people that you can disprove one of the most influential economic theories, then you might need a better argument than the tired old "What if somebody put a gun to your head?" story.
      - SilasX 8y ago
        If "believing in Keynesian theory" requires you to believe that economic prosperity is something different from satisfying human desires and we should optimize for the former anyway, then no one should "believe in" it. Do you want policies that satisfy human desires, or do you want to goose an arbitrary metric?
        fjsolwmv 8y ago
        The foundation of keynsianism is the fact that an idle worker's lost productivity is waste, and putting that worker to work generates something of value. Obviously doing useless work is useless, but making a market so that the worker can be connected with a consumer is a net win. Fiscal keynsianism, aka printing money and handing it out, creates that market by giving consumers buying power to buy things they want, motivating the worker to do work creating value instead of sitting idle wasting their labor. It's a catalyst to activate the real economy.

SilasX 8y ago

>Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Yep. And most economic policy is based on exactly this fallacy: "When 'the economy' is prosperous, people are buying a lot. Therefore, if we artificially stimulate the economy, we will get prosperity in the relevant, desired sense."

yongjik 8y ago
That's not a fallacy. If a lot of people start to buy a lot, more jobs are created. You are trying to take the case of a single household (where "buying a lot" can only mean using a lot of money) and apply that to the whole society.
- SilasX 8y ago
  You just bought into the fallacy -- jobs (and buying stuff) are only good when they're satisfying a legit demand, not one artificially created by the stimulus policy. To the extent that that the desire to provide that job or purchase that item is artificial, the "prosperity" indicated by that action is likewise artificial. If I put a gun to your head and forced you to buy a sofa, that's not the same kind of prosperity as when you independently judged that you needed a sofa and freely bought one. The same basic dynamic is going on when I conceal it slightly by forcing other people to give me money so I can subsidize your sofa purchase.
  - yongjik 8y ago
    I take it that you don't believe in Keynesian theory, which is fine for me, but if you want to persuade people that you can disprove one of the most influential economic theories, then you might need a better argument than the tired old "What if somebody put a gun to your head?" story.
    - SilasX 8y ago
      If "believing in Keynesian theory" requires you to believe that economic prosperity is something different from satisfying human desires and we should optimize for the former anyway, then no one should "believe in" it. Do you want policies that satisfy human desires, or do you want to goose an arbitrary metric?
      - fjsolwmv 8y ago
        The foundation of keynsianism is the fact that an idle worker's lost productivity is waste, and putting that worker to work generates something of value. Obviously doing useless work is useless, but making a market so that the worker can be connected with a consumer is a net win. Fiscal keynsianism, aka printing money and handing it out, creates that market by giving consumers buying power to buy things they want, motivating the worker to do work creating value instead of sitting idle wasting their labor. It's a catalyst to activate the real economy.