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> Paul Milgrom, a Stanford economist known for revolutionizing the field of auctions It's not surprising. Economists are known for constructing theories that s

> Paul Milgrom, a Stanford economist known for revolutionizing the field of auctions It's not surprising. Economists are known for constructing theories that sound plausible to the typical person, but which are subtly geared to concentrate wealth at the top. Did we not learn from "trickle-down economics"? Economists core moral value is maximum efficiency, but I think overall efficiency is better at a happy medium rather than a maximum. Like Ivan Illich has talked about, sometimes it's better to have a speed limit on progress... > During the Google antitrust trial, Milgrom picked apart the government’s assertions that the company had abused its power The entire problem is that Google has too much absolute power. We need a new version of antitrust that doesn't just target percentage power, but absolute as well.

gatane 2y ago
Ivan Illich mentioned! Do you know which of his books mentions that idea?
- vouaobrasil 2y ago
  "Energy and Equity"
lokar 2y ago
A second price (sealed) auction has been a standard idea for a long time. It’s hardly some kind of tricky or biased approach.
Workaccount2 2y ago
At it's heart, economics just models what naturally happens as a result of how reality is constructed. Mother nature follows this same course, concentrating power on the most powerful. It's just a general rule of existing in this universe that fortune favors the fortunate and misfortune favors the misfortunate. That doesn't mean we should embrace that, but it shouldn't be surprising economists talk about it and study it a lot. People just seem to get upset when economists have to be the ones to tell them that making it a law that iron is equal in value to gold will not make everyone rich.
- _aavaa_ 2y ago
  > At it's heart, economics just models what naturally happens as a result of how society is constructed by people. > It's just a general rule of existing in this universe that fortune favors the fortunate and misfortune favors the misfortunate. But it is not a rule of the universe that society must allow those fortunate who make billions to keep or get that wealth.
  - JumpCrisscross 2y ago
    > not a rule of the universe that society must allow those fortunate who make billions to keep or get that wealth This is a total non sequitur from the comment you're responding to. Descriptive versus prescriptive [1]. [1] https://en.wikipedia.org/wiki/Positive_and_normative_economics https://en.wikipedia.org/wiki/Positive_and_normative_economi...
    - _aavaa_ 2y ago
      It is not. The comment I replied to starts with "economics just models what naturally happens as a result of how reality is constructed" and then says "a general rule of existing in this universe that fortune favors the fortunate", which the very clear implication that economics then models for us that the fortunate in our economy get more fortunate because that's how the universe is constructed. But this isn't true. The wealthy in our society get more wealthy because those are the system we have. There's no law of the universe that says we can't increase taxes more, or spend more resources to ensure those at the bottom don't starve. "when economists have to be the ones to tell them that making it a law that iron is equal in value to gold will not make everyone rich." Economists are the same people hand-wringing and saying that we couldn't possibly tax those who have too much because ... profits.
      - lazide 2y ago
        Nope. If you have wealth, that means you have tools at your disposal to protect yourself and concentrate more wealth. If you do so. If you don’t have wealth, you don’t. If society likes it or not just means others are actively trying to take it away (or not) and might still overwhelm whatever tools you have/are using. It doesn’t mean you aren’t still advantaged by having them. All you need to see that is by looking at what happens when society tries to hurt those without wealth, and how much easier that goes. Examples include everyone from warlords to drug kingpins to the ‘strongest lion’. It happens literally without societies existing, to within things like the USSR.
ZeroGravitas 2y ago
Your comment about "efficiency" reminded me of Pareto Efficiency, which Google's AI incorrectly summarises as: > a situation where resources are allocated efficiently and no further improvements can be made to society's well-being. Of course the unstated rule that the AI left out is that this is the best you can do if you're not allowed to redistribute to the poor from the wealthy. Apparently that is by definition "inefficient". Vilfredo Pareto of course is credited by some as a precursor to Fascism, acknowledged as an inspiration to Mussolini turning to Facsism, and somone who publicly welcomed Mussolini's takeover as step towards a "minimal state". But some people get really annoyed if you say he's a fascist.
- JumpCrisscross 2y ago
  > Vilfredo Pareto of course is credited by some as a precursor to Fascism This is ad hominem. That isn't just a criticism of the comment, but pointing out that it's literally illogical. Heisenberg and von Braun worked for and sympathised with the Naxis. That doesn't make quantum mechanics and rocketry fascist.
  - ZeroGravitas 2y ago
    You seem to be confusing "worked for a Fascist regime on a technical topic" and "helped inspired the creation of Fascism with his work in political economy". I would definitely want to read an alternative history where the Nazis built their entire ethos on quantum mechanics and rocketry, but that's not the reality we live in. We live in the one were someone who was anti-democratic because he thought the workers and the speculators would use it to take power from the aristocrats and the business owners inspired Facsism.
JumpCrisscross 2y ago
> Economists are known for constructing theories that sound plausible to the typical person, but which are subtly geared to concentrate wealth at the top Milgrom wrote the book on auction theory, a subcategory of game theory, a domain of mathematics. Your criticism is with a consulting firm started by an economist. Not economics per se let alone mathematics. Even then, your critique is unsustained. Milgrom is saying Google ran fair auctions. I don't believe anyone has put forward evidence to suggest it didn't. The point isn't that he's wrong; it's that he's irrelevant. Google's antitrust problem isn't in it running unfair auctions, but being the only auction house. > "trickle-down economics" Not economics [1]! > Economists core moral value is maximum efficiency Karl Marx was an economist. [1] https://en.wikipedia.org/wiki/Trickle-down_economics#History https://en.wikipedia.org/wiki/Trickle-down_economics#History
- cbsmith 2y ago
  > Milgrom is saying Google ran fair auctions. I don't believe anyone has put forward evidence to suggest it didn't. ...and the idea that running fair auctions are subtly geared to concentrate wealth at the top is silly. Yes, there is a well understood principle that fair auctions will out-compete unfair auctions in the long run, but whether that concentrates wealth at the top is a consequence of a lot of other factors that are entirely external to the auction dynamics.
  - JumpCrisscross 2y ago
    > there is a well understood principle that fair auctions will out-compete unfair auctions in the long run In what sense? If anything, the market failure of non-competitive markets almost implies the reverse: power prefers unfair auctions. > whether that concentrates wealth at the top is a consequence of a lot of other factors Correct. (And as an aside, sealed-bid auctions are particularly good for small bidders or bidders in an adversarial market, the latter for the same reasons a secret ballot is better for small parties.)
    - cbsmith 2y ago
      > No, there isn’t. If anything, the market failure of non-competitive markets almost implies the reverse: power prefers unfair auctions. I do not follow your reasoning here. What do you mean by "the market failure of non-competitive markets"? Seriously, this stuff is econ 101. Ultimately auctions are about bringing together as many buyers and sellers as possible to produce as much liquidity as possible. Fair auctions naturally attract more buyers and sellers than unfair auctions. If the auction is unfair to say, buyers, then you'll have fewer buyers using them than auctions that are fair or favour buyers, which in turn means that sellers will get access to fewer buyers, so they'll go somewhere else.
AndyMcConachie 2y ago
Google runs the auctions and is a participant in the auctions. I don't care how fancy your math is there is no way these auctions are fair.
cscurmudgeon 2y ago
> The entire problem is that Google has too much absolute power. What is the metric used to quantify this? Should any group be subject to this criteria? Do governments also fall under this? (An aside: If an intelligent alien were to visit Earth, they will observe that solely profit chasing companies are bad but power chasing governments have done worse. Both are bad and ideally no entity should have a lot of absolute or relative power.)
AndrewKemendo 2y ago
Very well put Capitalism fully captured the discipline of modern economics - which are the priests of capitalism Anything that isn’t capitalist is “heterodox” and not taken seriously or seen as adversarial to Capitalism (true)
- throw10920 2y ago
  This isn't a productive comment until you define "capitalism" in your own words, and what "things" there are that aren't capitalism. Right now this is just dog-whistling. And this: > which are the priests of capitalism Is emotional manipulation without substance, and not appropriate for HN.
  - AndrewKemendo 2y ago
    Certainly Capitalism is a philosophy that believes chiefly property or capital is a real objectively measured thing, and that property ownership and labor inputs and the rightful owner of value increases are separate, but interconnected and managed by rational actors with increasingly perfect information Specifically that there should be, not just that there is, but that the natural state of the world is that there is a distinction between capital ownership and labor inputs with respect to assignment of value an ownership More specifically capitalism‘s core claim is that value creation is independent of labor inputs and as a result, the capital owner is the expected and rightful claimant to whatever portions of the value increase they can demand. A modern capitalist economist would point at the “failure” of the labor theory of value to actually be put into use in a economic system. Further, it assumes that labor has perfect economic flexibility and mobility, and that the flexibility and mobility of capital is simply limited by trade agreements and lack of intermediaries in price setting across all markets So the final end result of the process of capitalism is what the Mises Institute economists, and all of the Chicago school would effectively finally land at which is this pure economic liberalism otherwise known as anarcho-capitalism where every single individual is its own independent legal entity with perfect information making perfect rational decisions disintermediated from governments or groups.
    - 2y ago
throw10920 2y ago
> Economists are known for constructing theories that sound plausible to the typical person, but which are subtly geared to concentrate wealth at the top. I've never heard anyone ever say that they knew economists for this. It seems likely you just made this up. > Economists core moral value is maximum efficiency Citation needed. I've never met or seen a single encomist who believes that efficiency is a moral imperative. > We need a new version of antitrust that doesn't just target percentage power, but absolute as well. Who is "we" and what empirical evidence suggests that we "need" this?
- talldayo 2y ago
  > Citation needed. I've never met or seen a single encomist who believes that efficiency is a moral imperative. I bet you haven't. It's like asking a programmer if designing weapons is their primary imperative - nearly everyone will say no. But when you examine the number of people that make contributions that could be weaponized or is abused as a weapon by their superiors, the statistics tell a different story. Nobody wants to say they contribute to a surveillance state, but you also can't really deny that technology is being promoted so it can reach that stage. Economists don't want you to know what sausage it is they're making. But the most successful and influential ones are certainly being used as adversaries to pro-consumer economic policy because that's why these people are paid in the first place. > Who is "we" and what empirical evidence suggests that we "need" this? "we" are people that import American software products, and the evidence is the crumbling and neglected shit-heap of smartphone regulation. It is obviating serious privacy laws, creating stagnant markets that do not benefit users, and forcing developers to cover first-party costs when it should be platform-holders and customers picking up the bill.
  - JumpCrisscross 2y ago
    > the most successful and influential ones are certainly being used as adversaries to pro-consumer economic policy because that's why these people are paid in the first place What do you think the economists at the FTC are doing?
    - 2y ago
josu 2y ago
>but which are subtly geared to concentrate wealth at the top. Wealth tends to concentrate. So any action that creates wealth will also increase wealth concentration (in most cases). So unless economists, or anyone for that matter, try to construct theories that compensate for that externality, then most wealth creative theories will also have the effect of wealth concentration. >Economists core moral value is maximum efficiency, but I think overall efficiency is better at a happy medium rather than a maximum. You are talking about pareto efficiency vs pure efficiency and economists are well aware of this tradeoff. Vilfredo Pareto was himself an economist. A situation is pareto efficient when you can't make anyone better without making anyone else worse (your "happy medium"). Your claim is that "economists" don't care about pareto efficiency and only care about efficiency, which is absurd, they even defined the term. A good economist will lay out both the benefits and problems of their theory, and will propose mitigating measures for any negative externalities that it may cause.

gatane 2y ago

Ivan Illich mentioned! Do you know which of his books mentions that idea?

vouaobrasil 2y ago
"Energy and Equity"

lokar 2y ago

A second price (sealed) auction has been a standard idea for a long time. It’s hardly some kind of tricky or biased approach.

Workaccount2 2y ago

At it's heart, economics just models what naturally happens as a result of how reality is constructed. Mother nature follows this same course, concentrating power on the most powerful. It's just a general rule of existing in this universe that fortune favors the fortunate and misfortune favors the misfortunate. That doesn't mean we should embrace that, but it shouldn't be surprising economists talk about it and study it a lot. People just seem to get upset when economists have to be the ones to tell them that making it a law that iron is equal in value to gold will not make everyone rich.

_aavaa_ 2y ago
> At it's heart, economics just models what naturally happens as a result of how society is constructed by people. > It's just a general rule of existing in this universe that fortune favors the fortunate and misfortune favors the misfortunate. But it is not a rule of the universe that society must allow those fortunate who make billions to keep or get that wealth.
- JumpCrisscross 2y ago
  > not a rule of the universe that society must allow those fortunate who make billions to keep or get that wealth This is a total non sequitur from the comment you're responding to. Descriptive versus prescriptive [1]. [1] https://en.wikipedia.org/wiki/Positive_and_normative_economics https://en.wikipedia.org/wiki/Positive_and_normative_economi...
  - _aavaa_ 2y ago
    It is not. The comment I replied to starts with "economics just models what naturally happens as a result of how reality is constructed" and then says "a general rule of existing in this universe that fortune favors the fortunate", which the very clear implication that economics then models for us that the fortunate in our economy get more fortunate because that's how the universe is constructed. But this isn't true. The wealthy in our society get more wealthy because those are the system we have. There's no law of the universe that says we can't increase taxes more, or spend more resources to ensure those at the bottom don't starve. "when economists have to be the ones to tell them that making it a law that iron is equal in value to gold will not make everyone rich." Economists are the same people hand-wringing and saying that we couldn't possibly tax those who have too much because ... profits.
    - lazide 2y ago
      Nope. If you have wealth, that means you have tools at your disposal to protect yourself and concentrate more wealth. If you do so. If you don’t have wealth, you don’t. If society likes it or not just means others are actively trying to take it away (or not) and might still overwhelm whatever tools you have/are using. It doesn’t mean you aren’t still advantaged by having them. All you need to see that is by looking at what happens when society tries to hurt those without wealth, and how much easier that goes. Examples include everyone from warlords to drug kingpins to the ‘strongest lion’. It happens literally without societies existing, to within things like the USSR.

ZeroGravitas 2y ago

Your comment about "efficiency" reminded me of Pareto Efficiency, which Google's AI incorrectly summarises as: > a situation where resources are allocated efficiently and no further improvements can be made to society's well-being. Of course the unstated rule that the AI left out is that this is the best you can do if you're not allowed to redistribute to the poor from the wealthy. Apparently that is by definition "inefficient". Vilfredo Pareto of course is credited by some as a precursor to Fascism, acknowledged as an inspiration to Mussolini turning to Facsism, and somone who publicly welcomed Mussolini's takeover as step towards a "minimal state". But some people get really annoyed if you say he's a fascist.

JumpCrisscross 2y ago
> Vilfredo Pareto of course is credited by some as a precursor to Fascism This is ad hominem. That isn't just a criticism of the comment, but pointing out that it's literally illogical. Heisenberg and von Braun worked for and sympathised with the Naxis. That doesn't make quantum mechanics and rocketry fascist.
- ZeroGravitas 2y ago
  You seem to be confusing "worked for a Fascist regime on a technical topic" and "helped inspired the creation of Fascism with his work in political economy". I would definitely want to read an alternative history where the Nazis built their entire ethos on quantum mechanics and rocketry, but that's not the reality we live in. We live in the one were someone who was anti-democratic because he thought the workers and the speculators would use it to take power from the aristocrats and the business owners inspired Facsism.

JumpCrisscross 2y ago

> Economists are known for constructing theories that sound plausible to the typical person, but which are subtly geared to concentrate wealth at the top Milgrom wrote the book on auction theory, a subcategory of game theory, a domain of mathematics. Your criticism is with a consulting firm started by an economist. Not economics per se let alone mathematics. Even then, your critique is unsustained. Milgrom is saying Google ran fair auctions. I don't believe anyone has put forward evidence to suggest it didn't. The point isn't that he's wrong; it's that he's irrelevant. Google's antitrust problem isn't in it running unfair auctions, but being the only auction house. > "trickle-down economics" Not economics [1]! > Economists core moral value is maximum efficiency Karl Marx was an economist. [1] https://en.wikipedia.org/wiki/Trickle-down_economics#History https://en.wikipedia.org/wiki/Trickle-down_economics#History

cbsmith 2y ago
> Milgrom is saying Google ran fair auctions. I don't believe anyone has put forward evidence to suggest it didn't. ...and the idea that running fair auctions are subtly geared to concentrate wealth at the top is silly. Yes, there is a well understood principle that fair auctions will out-compete unfair auctions in the long run, but whether that concentrates wealth at the top is a consequence of a lot of other factors that are entirely external to the auction dynamics.
- JumpCrisscross 2y ago
  > there is a well understood principle that fair auctions will out-compete unfair auctions in the long run In what sense? If anything, the market failure of non-competitive markets almost implies the reverse: power prefers unfair auctions. > whether that concentrates wealth at the top is a consequence of a lot of other factors Correct. (And as an aside, sealed-bid auctions are particularly good for small bidders or bidders in an adversarial market, the latter for the same reasons a secret ballot is better for small parties.)
  - cbsmith 2y ago
    > No, there isn’t. If anything, the market failure of non-competitive markets almost implies the reverse: power prefers unfair auctions. I do not follow your reasoning here. What do you mean by "the market failure of non-competitive markets"? Seriously, this stuff is econ 101. Ultimately auctions are about bringing together as many buyers and sellers as possible to produce as much liquidity as possible. Fair auctions naturally attract more buyers and sellers than unfair auctions. If the auction is unfair to say, buyers, then you'll have fewer buyers using them than auctions that are fair or favour buyers, which in turn means that sellers will get access to fewer buyers, so they'll go somewhere else.

AndyMcConachie 2y ago

Google runs the auctions and is a participant in the auctions. I don't care how fancy your math is there is no way these auctions are fair.

cscurmudgeon 2y ago

> The entire problem is that Google has too much absolute power. What is the metric used to quantify this? Should any group be subject to this criteria? Do governments also fall under this? (An aside: If an intelligent alien were to visit Earth, they will observe that solely profit chasing companies are bad but power chasing governments have done worse. Both are bad and ideally no entity should have a lot of absolute or relative power.)

AndrewKemendo 2y ago

Very well put Capitalism fully captured the discipline of modern economics - which are the priests of capitalism Anything that isn’t capitalist is “heterodox” and not taken seriously or seen as adversarial to Capitalism (true)

throw10920 2y ago
This isn't a productive comment until you define "capitalism" in your own words, and what "things" there are that aren't capitalism. Right now this is just dog-whistling. And this: > which are the priests of capitalism Is emotional manipulation without substance, and not appropriate for HN.
- AndrewKemendo 2y ago
  Certainly Capitalism is a philosophy that believes chiefly property or capital is a real objectively measured thing, and that property ownership and labor inputs and the rightful owner of value increases are separate, but interconnected and managed by rational actors with increasingly perfect information Specifically that there should be, not just that there is, but that the natural state of the world is that there is a distinction between capital ownership and labor inputs with respect to assignment of value an ownership More specifically capitalism‘s core claim is that value creation is independent of labor inputs and as a result, the capital owner is the expected and rightful claimant to whatever portions of the value increase they can demand. A modern capitalist economist would point at the “failure” of the labor theory of value to actually be put into use in a economic system. Further, it assumes that labor has perfect economic flexibility and mobility, and that the flexibility and mobility of capital is simply limited by trade agreements and lack of intermediaries in price setting across all markets So the final end result of the process of capitalism is what the Mises Institute economists, and all of the Chicago school would effectively finally land at which is this pure economic liberalism otherwise known as anarcho-capitalism where every single individual is its own independent legal entity with perfect information making perfect rational decisions disintermediated from governments or groups.
  - 2y ago

throw10920 2y ago

> Economists are known for constructing theories that sound plausible to the typical person, but which are subtly geared to concentrate wealth at the top. I've never heard anyone ever say that they knew economists for this. It seems likely you just made this up. > Economists core moral value is maximum efficiency Citation needed. I've never met or seen a single encomist who believes that efficiency is a moral imperative. > We need a new version of antitrust that doesn't just target percentage power, but absolute as well. Who is "we" and what empirical evidence suggests that we "need" this?

talldayo 2y ago
> Citation needed. I've never met or seen a single encomist who believes that efficiency is a moral imperative. I bet you haven't. It's like asking a programmer if designing weapons is their primary imperative - nearly everyone will say no. But when you examine the number of people that make contributions that could be weaponized or is abused as a weapon by their superiors, the statistics tell a different story. Nobody wants to say they contribute to a surveillance state, but you also can't really deny that technology is being promoted so it can reach that stage. Economists don't want you to know what sausage it is they're making. But the most successful and influential ones are certainly being used as adversaries to pro-consumer economic policy because that's why these people are paid in the first place. > Who is "we" and what empirical evidence suggests that we "need" this? "we" are people that import American software products, and the evidence is the crumbling and neglected shit-heap of smartphone regulation. It is obviating serious privacy laws, creating stagnant markets that do not benefit users, and forcing developers to cover first-party costs when it should be platform-holders and customers picking up the bill.
- JumpCrisscross 2y ago
  > the most successful and influential ones are certainly being used as adversaries to pro-consumer economic policy because that's why these people are paid in the first place What do you think the economists at the FTC are doing?
  - 2y ago

josu 2y ago

>but which are subtly geared to concentrate wealth at the top. Wealth tends to concentrate. So any action that creates wealth will also increase wealth concentration (in most cases). So unless economists, or anyone for that matter, try to construct theories that compensate for that externality, then most wealth creative theories will also have the effect of wealth concentration. >Economists core moral value is maximum efficiency, but I think overall efficiency is better at a happy medium rather than a maximum. You are talking about pareto efficiency vs pure efficiency and economists are well aware of this tradeoff. Vilfredo Pareto was himself an economist. A situation is pareto efficient when you can't make anyone better without making anyone else worse (your "happy medium"). Your claim is that "economists" don't care about pareto efficiency and only care about efficiency, which is absurd, they even defined the term. A good economist will lay out both the benefits and problems of their theory, and will propose mitigating measures for any negative externalities that it may cause.