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How much a job pays has a weak correlation with how much it 'matters'. Growing food matters a lot, growing food doesn't pay that well. HFT pays very well, HFT

by soup10 14y ago

How much a job pays has a weak correlation with how much it 'matters'. Growing food matters a lot, growing food doesn't pay that well. HFT pays very well, HFT doesn't matter that much. How much something pays is determined by the whims of the markets. Free market capitalism provides a basic framework to roughly match supply with demand and incentivize people to work. But the 'demand' is determined by whoever has the money. The problem is, the actors with money don't spend it with the intent to maximize the benefit to society as a whole. They spend it 'selfishly', to maximize their personal interests. There's nothing wrong with that, it's how capitalism works. But if everyone spent their money to benefit society as whole, then there would be an extremely strong correlation between how much a job pays and how much it 'matters'. I feel that in the long run the markets work just fine and does act to benefit society since people are generally ethical. But it doesn't act to 'maximize' the benefit to society. I mean why did it take warfare for us to take space exploration seriously? And why did the internet start as a military network? I think capitalism is a pretty decent system. But I wish we did a better job of pushing research and innovation for their own sake. Not as a reactive measure to beat the competition or get an upper-hand militarily. I think nearsightedness on what's best 'now' and 'for ourselves', leads to a lot of work that feels like it doesn't matter.

HSO 14y ago
> if everyone spent their money to benefit society as whole, then there would be an extremely strong correlation between how much a job pays and how much it 'matters'. if it was possible to determine ex ante what benefits society the most, it wouldn't even be a contest, of course we could all agree to do that, it's almost tautological. the problem is that in 99% of the cases we don't know. should i pay 50 cents on a banana, or is 1 euro a fair price. will 2 euro maximize aggregate welfare? and who actually is "society as a whole"? is it just the most people, or should we stratify? is one group better or more worthy than another?
- tiziano88 14y ago
  > if it was possible to determine ex ante what benefits society the most, it wouldn't even be a contest, of course we could all agree to do that, it's almost tautological. The prisoner's dilemma is a simple example of a situation in which cooperation would be the ideal solution for everyone, nonetheless players tend to behave selfishly.
  - hpatel 14y ago
    The problem with the current system isn't that people act selfishly i.e. in a way that creates most value for themselves. The problem is that the selfish actions of some actors(the figurative 1%) count for overwhelmingly more than others. And a lot of actors don't have any say at all(those below the poverty line). In such a system, the selfish 'demands' of most other actors don't matter. Say on HN, there were a few people (type A) that could instantly give 1,000,000 points to any comment or post and everybody else could give only 1(type B). A post could provide value for 100,000 type Bs and yet some other post that type A liked would always rise to the top. If this were true, HN would be a very boring place to be. The goal should be to empower all actors to act selfishly - perhaps not equally, but atleast in a 'reasonably' proportionate fashion.
    - tgrass 14y ago
      I'm not sure this is generally true. This holds for rare, luxury goods and limited markets (like housing). But the concentration of wealth in a minority AFAIK doesn't seem to bid up large markets like corn or paper.
      - hpatel 14y ago
        Consider the example given by creamyhorror below - the influence of money in the political process. What if besides having a disproportionately high number of points on HN, you had the power to influence the creators of HN so that a percentage of all the points on HN went to you? Or, what if you had millions of points on HN and were able to convince the makers of HN that you should be able to vote on HN with only 0.5 points per vote?
  - snowwrestler 14y ago
    Yes, because the players do not have complete information. The correct strategy is only obvious to those outside the experiment. When you extend the concept to society as a whole, we are all players. No one is outside it. That's why I agree with HSO that it's not possible to state absolutely what would best benefit society.
hpatel 14y ago
You nailed it. The key problem is 'demand' is determined only by whoever has money. Capitalism works because each person gets a say in what is important and creates value for them. The problem is that if you don't have above a certain amount of money, you don't get much of a say. In the age of immense income inequality, this completely distorts the 'demand' generation aspect of capitalism. What if we divorced 'demand'(what creates value for each person) from money (payment for value created) and gave all actors an equal right to determine demand irrespective of their ability to pay? We are working on building such a world.
- anamax 14y ago
  > What if we divorced 'demand'(what creates value for each person) from money (payment for value created) and gave all actors an equal right to determine demand irrespective of their ability to pay? Demand is already divorced from ability to pay - anyone can "demand" anything. The "problem" is that suppliers don't care about demand. They only care about being paid. If a million people demand X but are unwilling to pay for it while 10 people demand Y and are willing to pay for it, why am I going to produce X instead of Y?
  - hpatel 14y ago
    Divorcing ability to pay doesn't necessarily have to mean nobody pays. We are already beginning to see the early stages of such a system. All freemium services are in essence an example of such a system and therefore by extension most startups. Gmail satisfies the demand of millions of customers for an email service but doesn't ask them to pay. This doesn't mean gmail doesn't make gains. Currently, the primary funder of such services are ad and brand agencies. What if we lived in a world where any individual could basically play the role that ad/brand agencies play in supporting freemium services today?
    - anamax 14y ago
      > All freemium services are in essence an example of such a system No, they aren't. They exist because sufficient people pay. > and therefore by extension most startups. Do you really think that a significant number of startups are freemium? > Currently, the primary funder of such services are ad and brand agencies. Not at all. They're funded by "heavy users" - see dropbox. Ad supported is not freemium.

by soup10 14y ago

HSO 14y ago

> if everyone spent their money to benefit society as whole, then there would be an extremely strong correlation between how much a job pays and how much it 'matters'. if it was possible to determine ex ante what benefits society the most, it wouldn't even be a contest, of course we could all agree to do that, it's almost tautological. the problem is that in 99% of the cases we don't know. should i pay 50 cents on a banana, or is 1 euro a fair price. will 2 euro maximize aggregate welfare? and who actually is "society as a whole"? is it just the most people, or should we stratify? is one group better or more worthy than another?

tiziano88 14y ago
> if it was possible to determine ex ante what benefits society the most, it wouldn't even be a contest, of course we could all agree to do that, it's almost tautological. The prisoner's dilemma is a simple example of a situation in which cooperation would be the ideal solution for everyone, nonetheless players tend to behave selfishly.
- hpatel 14y ago
  The problem with the current system isn't that people act selfishly i.e. in a way that creates most value for themselves. The problem is that the selfish actions of some actors(the figurative 1%) count for overwhelmingly more than others. And a lot of actors don't have any say at all(those below the poverty line). In such a system, the selfish 'demands' of most other actors don't matter. Say on HN, there were a few people (type A) that could instantly give 1,000,000 points to any comment or post and everybody else could give only 1(type B). A post could provide value for 100,000 type Bs and yet some other post that type A liked would always rise to the top. If this were true, HN would be a very boring place to be. The goal should be to empower all actors to act selfishly - perhaps not equally, but atleast in a 'reasonably' proportionate fashion.
  - tgrass 14y ago
    I'm not sure this is generally true. This holds for rare, luxury goods and limited markets (like housing). But the concentration of wealth in a minority AFAIK doesn't seem to bid up large markets like corn or paper.
    - hpatel 14y ago
      Consider the example given by creamyhorror below - the influence of money in the political process. What if besides having a disproportionately high number of points on HN, you had the power to influence the creators of HN so that a percentage of all the points on HN went to you? Or, what if you had millions of points on HN and were able to convince the makers of HN that you should be able to vote on HN with only 0.5 points per vote?
- snowwrestler 14y ago
  Yes, because the players do not have complete information. The correct strategy is only obvious to those outside the experiment. When you extend the concept to society as a whole, we are all players. No one is outside it. That's why I agree with HSO that it's not possible to state absolutely what would best benefit society.

hpatel 14y ago

You nailed it. The key problem is 'demand' is determined only by whoever has money. Capitalism works because each person gets a say in what is important and creates value for them. The problem is that if you don't have above a certain amount of money, you don't get much of a say. In the age of immense income inequality, this completely distorts the 'demand' generation aspect of capitalism. What if we divorced 'demand'(what creates value for each person) from money (payment for value created) and gave all actors an equal right to determine demand irrespective of their ability to pay? We are working on building such a world.

anamax 14y ago
> What if we divorced 'demand'(what creates value for each person) from money (payment for value created) and gave all actors an equal right to determine demand irrespective of their ability to pay? Demand is already divorced from ability to pay - anyone can "demand" anything. The "problem" is that suppliers don't care about demand. They only care about being paid. If a million people demand X but are unwilling to pay for it while 10 people demand Y and are willing to pay for it, why am I going to produce X instead of Y?
- hpatel 14y ago
  Divorcing ability to pay doesn't necessarily have to mean nobody pays. We are already beginning to see the early stages of such a system. All freemium services are in essence an example of such a system and therefore by extension most startups. Gmail satisfies the demand of millions of customers for an email service but doesn't ask them to pay. This doesn't mean gmail doesn't make gains. Currently, the primary funder of such services are ad and brand agencies. What if we lived in a world where any individual could basically play the role that ad/brand agencies play in supporting freemium services today?
  - anamax 14y ago
    > All freemium services are in essence an example of such a system No, they aren't. They exist because sufficient people pay. > and therefore by extension most startups. Do you really think that a significant number of startups are freemium? > Currently, the primary funder of such services are ad and brand agencies. Not at all. They're funded by "heavy users" - see dropbox. Ad supported is not freemium.