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> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When

by darawk 8y ago

> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When someone chooses to pay you for your product or service, they are expressing a preference for that product or service over the money, and vice versa (you express a preference for the money over the product/service). Which means, that when money is exchanged for a product or service, both parties benefit. Value is created. The utility points of the universe increase.

beefield 8y ago
I have a bridge to sell you.
perl4ever 8y ago
Sure, that is a familiar explanation of the utility of trade from Econ 101. But it does involve simplifying assumptions. What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent, and also true consent of those directly involved requires that they accurately and equally understand the consequences of their actions, which is often not true in real life. I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior.
- darawk 8y ago
  > What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent Sure, those are called externalities. I was simply explaining where the idea that trade generates value comes from. So, given that, generally we presume that trade is beneficial, unless/until someone points out an externality. Which, I certainly wouldn't make the case that there aren't any here, there are. But the way you argue against this activity is by pointing to specific externalities. > I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior. I don't think what you're getting at has so much to do with probability rounding as it does with 'coordination problems' (http://www.oxfordreference.com/view/10.1093/oi/authority.20110803095637587 http://www.oxfordreference.com/view/10.1093/oi/authority.201...)
tjpaudio 8y ago
Utility is an non-measurable unit with no connection to anything real that economics textbooks use to help people conceptualize basic theory. Capital creation versus rent seeking are concepts grounded in reality with real consequences. Creating money does not necessitate capital creation or increased well being. I suggest reading about the broken window fallacy to understand why you are wrong.
- darawk 8y ago
  I'm definitely not wrong. The description I gave is completely accurate. It, however, may not be complete. The broken window parable does not actually in any way negate what I said - the purchase of the window still makes both parties better off.

by darawk 8y ago

beefield 8y ago

I have a bridge to sell you.

perl4ever 8y ago

Sure, that is a familiar explanation of the utility of trade from Econ 101. But it does involve simplifying assumptions. What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent, and also true consent of those directly involved requires that they accurately and equally understand the consequences of their actions, which is often not true in real life. I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior.

darawk 8y ago
> What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent Sure, those are called externalities. I was simply explaining where the idea that trade generates value comes from. So, given that, generally we presume that trade is beneficial, unless/until someone points out an externality. Which, I certainly wouldn't make the case that there aren't any here, there are. But the way you argue against this activity is by pointing to specific externalities. > I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior. I don't think what you're getting at has so much to do with probability rounding as it does with 'coordination problems' (http://www.oxfordreference.com/view/10.1093/oi/authority.20110803095637587 http://www.oxfordreference.com/view/10.1093/oi/authority.201...)

tjpaudio 8y ago

Utility is an non-measurable unit with no connection to anything real that economics textbooks use to help people conceptualize basic theory. Capital creation versus rent seeking are concepts grounded in reality with real consequences. Creating money does not necessitate capital creation or increased well being. I suggest reading about the broken window fallacy to understand why you are wrong.

darawk 8y ago
I'm definitely not wrong. The description I gave is completely accurate. It, however, may not be complete. The broken window parable does not actually in any way negate what I said - the purchase of the window still makes both parties better off.