4 ms·

Can you explain how it’s a complete mess? I have been interested in economics for a long time and as such read many published articles but I have a hard time ac

by bogota 5y ago

Can you explain how it’s a complete mess? I have been interested in economics for a long time and as such read many published articles but I have a hard time actually applying it to anything in the real world. Often the majority of economists are completely wrong just look at recent inflation predictions. You don’t have to look hard to find the field is consistently far off the mark.

pakitan 5y ago
I'm not an economist but the examples with tobacco and premier league wages struck me too as extremely bad. Supply/demand curves are an abstraction and for that abstraction to be remotely useful, you need to assume all else is being equal. You can't just take decades of data, with massive change in culture and health consciousness, and declare "Supply/demand curves are wrong because tobacco price fell, while consumption also fell! The economists lied to us when they told us price is the only thing that drives consumption!" Well, bullshit, no economist ever claimed that. And the rising salaries of the premier league plays are not a big mystery. If all clubs can fire the worst 50% of their players, their salary budget is increased. If that happens in a company like McDonalds, you can can just keep paying the rest the same or even less because everyone can flip burgers. Premier league clubs can't just pocket the "saved" money, they still need the absolute top players to win and if you don't pay your talent the most you can afford, some other club will. This has nothing to do with the failings of supply/demand curves. If anything it's a prime example of them working exactly as expected.
- kevin_morrill 5y ago
  More over the risk of death is part of the cost calculation for tobacco. Not all prices / values are monetary. This is a crucial aspect any serious economist incorporates and this article completely misses.

by bogota 5y ago

pakitan 5y ago

I'm not an economist but the examples with tobacco and premier league wages struck me too as extremely bad. Supply/demand curves are an abstraction and for that abstraction to be remotely useful, you need to assume all else is being equal. You can't just take decades of data, with massive change in culture and health consciousness, and declare "Supply/demand curves are wrong because tobacco price fell, while consumption also fell! The economists lied to us when they told us price is the only thing that drives consumption!" Well, bullshit, no economist ever claimed that. And the rising salaries of the premier league plays are not a big mystery. If all clubs can fire the worst 50% of their players, their salary budget is increased. If that happens in a company like McDonalds, you can can just keep paying the rest the same or even less because everyone can flip burgers. Premier league clubs can't just pocket the "saved" money, they still need the absolute top players to win and if you don't pay your talent the most you can afford, some other club will. This has nothing to do with the failings of supply/demand curves. If anything it's a prime example of them working exactly as expected.

kevin_morrill 5y ago
More over the risk of death is part of the cost calculation for tobacco. Not all prices / values are monetary. This is a crucial aspect any serious economist incorporates and this article completely misses.