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Whose goal? The goal of the people who own these companies is to make money with it, or carry out whatever other purpose it has. The goal of the government in

Whose goal? The goal of the people who own these companies is to make money with it, or carry out whatever other purpose it has. The goal of the government in providing a legal framework which allows these companies to exist as legal entities is to benefit society in some way. If the latter isn’t working out then maybe it needs to be adjusted.

jjoonathan 7y ago
Wealth-weighted-peoples' goal. The economic notion of "value" -- the quantity the economy optimizes -- is weighted according to wealth. "Value creation," as referred to in economic circles, is not about doing what people want, it's about doing what wealth-weighted people want. That really is the crux of it.
- logicchains 7y ago
  The idea is that "wealth-weighted" is weighted by what people want, because people get wealthy by doing what lots of people want (and are willing to pay lots for).
  - jjoonathan 7y ago
    No, people get wealthy by doing what lots of wealth-weighted people want, who in turn got wealthy by doing what lots of wealth-weighted people want... the weight enters at every step, and that's how the system runs away from itself. You can gauge its progress by looking at the wealth distribution. In a flat distribution, the economic notion of value coincides very closely with the colloquial notion of value. In a heavily skewed distribution, it doesn't correspond at all. Masses of starving poor people are of no concern to a system that assigns them 0 weight. Feeding them produces no value. In stark contrast, those with great weight can command the economy to devote great energy to highly counterproductive tasks such as consolidating and perpetuating their own power. This is an intrinsic problem of skewed distributions -- and the reason why "who's goals" is exactly the right question to ask. Of course, you can't hammer the wealth distribution completely flat without eliminating the economy's ability to incentivize, because being on the advantaged side of an uneven distribution is the reward. You have to strike a balance. That shouldn't be controversial, but on account of the great energies mentioned above, it is. By confusing the two notions of value, one can make the argument that you just did, and with that one subtle alteration the tendency of the system to run away is hidden. Note that the system you described could be obtained from the system I described by pressing a "reset" button and hammering the wealth distribution flat between each transaction. I'm sure that wasn't your intent, but it's a dramatic demonstration of how attaching the word "value" to the economic concept of wealth-weighted-value hides the problem from view.
    - logicchains 7y ago
      The "the colloquial notion of value" is philosophically groundless. The reason economics uses a particular notion of value is because it's actually grounded in relatively consistent theory. The economic notion is basically saying a mass of poor people have no value to anybody else if they're not able to do anything anybody else wants or each other want enough to pay for.

jjoonathan 7y ago

Wealth-weighted-peoples' goal. The economic notion of "value" -- the quantity the economy optimizes -- is weighted according to wealth. "Value creation," as referred to in economic circles, is not about doing what people want, it's about doing what wealth-weighted people want. That really is the crux of it.

logicchains 7y ago
The idea is that "wealth-weighted" is weighted by what people want, because people get wealthy by doing what lots of people want (and are willing to pay lots for).
- jjoonathan 7y ago
  No, people get wealthy by doing what lots of wealth-weighted people want, who in turn got wealthy by doing what lots of wealth-weighted people want... the weight enters at every step, and that's how the system runs away from itself. You can gauge its progress by looking at the wealth distribution. In a flat distribution, the economic notion of value coincides very closely with the colloquial notion of value. In a heavily skewed distribution, it doesn't correspond at all. Masses of starving poor people are of no concern to a system that assigns them 0 weight. Feeding them produces no value. In stark contrast, those with great weight can command the economy to devote great energy to highly counterproductive tasks such as consolidating and perpetuating their own power. This is an intrinsic problem of skewed distributions -- and the reason why "who's goals" is exactly the right question to ask. Of course, you can't hammer the wealth distribution completely flat without eliminating the economy's ability to incentivize, because being on the advantaged side of an uneven distribution is the reward. You have to strike a balance. That shouldn't be controversial, but on account of the great energies mentioned above, it is. By confusing the two notions of value, one can make the argument that you just did, and with that one subtle alteration the tendency of the system to run away is hidden. Note that the system you described could be obtained from the system I described by pressing a "reset" button and hammering the wealth distribution flat between each transaction. I'm sure that wasn't your intent, but it's a dramatic demonstration of how attaching the word "value" to the economic concept of wealth-weighted-value hides the problem from view.
  - logicchains 7y ago
    The "the colloquial notion of value" is philosophically groundless. The reason economics uses a particular notion of value is because it's actually grounded in relatively consistent theory. The economic notion is basically saying a mass of poor people have no value to anybody else if they're not able to do anything anybody else wants or each other want enough to pay for.