4 ms·

Like many people here I would like to believe that the state of the world that ensures the highest profits and the state of the world that makes the most people

Like many people here I would like to believe that the state of the world that ensures the highest profits and the state of the world that makes the most people happy are one and the same. I am coming to think that isn't true.

kitsune_ 14y ago
How could that ever be true? As an example: most people would prefer everything to be free, and a company would like to have a monopoly on a necessity and thus the ability to charge arbitrary prices. Or even shorter, everyone wants to get stuff, lots of stuff without having to lift a finger. Out of this, every company-customer relationship has to be dysfunctional. The idea that the economy is a perfectly fair system where everyone profits equally in a transaction is a fairy tale. It completely ignores the imbalances of power inherent in social systems. In a perfectly free market, imbalances of power will be compounded over time, similar to the theory of the big bang where small imperfections of the early universe are fundamental to the large structures that follow.
- deleted 14y ago
  [deleted]
- philh 14y ago
  > everyone wants to get stuff, lots of stuff without having to lift a finger. We don't know how to make such a world exist. The claim is not, "if we could snap our fingers and make the world look like anything we wanted, the happiest world we could create would also be the world with the most massive profits". It's closer to, "if we want to optimise for happiness going forward from the world we have, then we should also optimise for allowing companies to make profits". (Not to say I agree with the claim, but that particular argument is missing the point.)
- kevinburke 14y ago
  I was thinking about a service like Uber, which people love, even though it's more expensive. When I take an Uber I don't complain about how I should be getting cab rides for free (although that would be nice) - I revel in how much better the experience is than waiting around for a regular cab.
  - pbreit 14y ago
    Über appeals to maybe 10% of the population.
drivebyacct2 14y ago
Do... people... really believe this?
- _delirium 14y ago
  There's a certain pop-libertarianism that does take this Panglossian view that we live in a perfectly tuned universe, where market dynamics, unless interfered with by the state, always produce the best outcomes, recognizing value and allocating resources. It reminds me a bit of some new-agey environmentalism, which believes that ecosystems always work optimally in a harmonious balance, unless humans interfere with Nature's dynamics. (To be fair, I would say most hardcore libertarian philosophy is based on natural-rights type views, and doesn't make arguments about maximizing outcomes at all.)
- JonnieCache 14y ago
  If you believe, clap your hands and say, "I believe in the market economics fairy!"
  - pjscott 14y ago
    Hi! I'm the Market Economics Fairy! I help supply and demand equilibriate everywhere! There are a bunch of things that can lead to markets working poorly. For example, transactions are not free. Theoretically, if a rambunctious man could persuade his neighbors to let him blast his stereo at high volume in exchange for a bit of cash, all would be slightly better off -- but since this would require repeated bargaining with a bunch of neighbors, in practice it probably would not happen. http://en.wikipedia.org/wiki/Coase_theorem http://en.wikipedia.org/wiki/Coase_theorem http://en.wikipedia.org/wiki/Transaction_costs http://en.wikipedia.org/wiki/Transaction_costs Another problem is that humans and fairies are not omniscient, nor are we perfectly economically rational, no matter how much the sparkles in our hearts may ache with yearning to be so! Perhaps there is a way to replace NBC with something far better, and in order to make it happen, all we need is some hard work and a few billion dollars of investment money, carefully applied. If only we had the foresight to take such a gamble -- but in this imperfect world, none of us have the clarity of foresight needed to make such a huge gamble reasonable. http://en.wikipedia.org/wiki/Bounded_rationality http://en.wikipedia.org/wiki/Bounded_rationality And that's before we need to worry about ugly stuff like regulatory capture and violent coercion! If you can improve any aspect of this situation, I will shoot abundant glitter out of my wand in your honor, and the world will be improved! Sincerely, the market economics fairy!
locopati 14y ago
Coming to think? Here, let me help you along. A mining company or an oil company can ensure highest profits by cutting corners (on worker safety, on disposal of toxic waste, on the rights of those around them). Those profits come at the expense of the workers, the people who live near the facilities, the environment around those facilities. Examples are almost too numerous, so I'll give a few recent ones: Massey Energy in West Virginia, BP in the Gulf of Mexico, Royal Dutch Shell the Niger Delta of Nigeria.
- kevinburke 14y ago
  Oil companies have reputations, and are playing repeated games, not just one off games... in addition they have incentives not to behave this way, such as the large fine and giant loss in shareholder value after BP spilled oil into the Gulf.
  - enneff 14y ago
    Ha ha. Imagine a world where multinationals are held accountable for their mistakes! It took an error the size of the Gulf incident to even draw the public attention. Meanwhile in Nigeria there are hundreds of square kilometres of devastated landscape because of oil company shortcuts. Nobody cares about environmental destruction in far away places. The oil companies have no incentives not to cut corners there.
kevinburke 14y ago
Realizing now that this comment came off as way too sappy. Some companies make products that make people happy, and profit as a result. Examples: Apple, Southwest, Uber, Sonic.net, Flip etc. I would like more of these companies to exist, and for companies to focus more on customer satisfaction. To my chagrin it's not clear these companies are any more profitable than their competitors who focus less on customer satisfaction.

kitsune_ 14y ago

How could that ever be true? As an example: most people would prefer everything to be free, and a company would like to have a monopoly on a necessity and thus the ability to charge arbitrary prices. Or even shorter, everyone wants to get stuff, lots of stuff without having to lift a finger. Out of this, every company-customer relationship has to be dysfunctional. The idea that the economy is a perfectly fair system where everyone profits equally in a transaction is a fairy tale. It completely ignores the imbalances of power inherent in social systems. In a perfectly free market, imbalances of power will be compounded over time, similar to the theory of the big bang where small imperfections of the early universe are fundamental to the large structures that follow.

deleted 14y ago
[deleted]
philh 14y ago
> everyone wants to get stuff, lots of stuff without having to lift a finger. We don't know how to make such a world exist. The claim is not, "if we could snap our fingers and make the world look like anything we wanted, the happiest world we could create would also be the world with the most massive profits". It's closer to, "if we want to optimise for happiness going forward from the world we have, then we should also optimise for allowing companies to make profits". (Not to say I agree with the claim, but that particular argument is missing the point.)
kevinburke 14y ago
I was thinking about a service like Uber, which people love, even though it's more expensive. When I take an Uber I don't complain about how I should be getting cab rides for free (although that would be nice) - I revel in how much better the experience is than waiting around for a regular cab.
- pbreit 14y ago
  Über appeals to maybe 10% of the population.

drivebyacct2 14y ago

Do... people... really believe this?

_delirium 14y ago
There's a certain pop-libertarianism that does take this Panglossian view that we live in a perfectly tuned universe, where market dynamics, unless interfered with by the state, always produce the best outcomes, recognizing value and allocating resources. It reminds me a bit of some new-agey environmentalism, which believes that ecosystems always work optimally in a harmonious balance, unless humans interfere with Nature's dynamics. (To be fair, I would say most hardcore libertarian philosophy is based on natural-rights type views, and doesn't make arguments about maximizing outcomes at all.)
JonnieCache 14y ago
If you believe, clap your hands and say, "I believe in the market economics fairy!"
- pjscott 14y ago
  Hi! I'm the Market Economics Fairy! I help supply and demand equilibriate everywhere! There are a bunch of things that can lead to markets working poorly. For example, transactions are not free. Theoretically, if a rambunctious man could persuade his neighbors to let him blast his stereo at high volume in exchange for a bit of cash, all would be slightly better off -- but since this would require repeated bargaining with a bunch of neighbors, in practice it probably would not happen. http://en.wikipedia.org/wiki/Coase_theorem http://en.wikipedia.org/wiki/Coase_theorem http://en.wikipedia.org/wiki/Transaction_costs http://en.wikipedia.org/wiki/Transaction_costs Another problem is that humans and fairies are not omniscient, nor are we perfectly economically rational, no matter how much the sparkles in our hearts may ache with yearning to be so! Perhaps there is a way to replace NBC with something far better, and in order to make it happen, all we need is some hard work and a few billion dollars of investment money, carefully applied. If only we had the foresight to take such a gamble -- but in this imperfect world, none of us have the clarity of foresight needed to make such a huge gamble reasonable. http://en.wikipedia.org/wiki/Bounded_rationality http://en.wikipedia.org/wiki/Bounded_rationality And that's before we need to worry about ugly stuff like regulatory capture and violent coercion! If you can improve any aspect of this situation, I will shoot abundant glitter out of my wand in your honor, and the world will be improved! Sincerely, the market economics fairy!

locopati 14y ago

Coming to think? Here, let me help you along. A mining company or an oil company can ensure highest profits by cutting corners (on worker safety, on disposal of toxic waste, on the rights of those around them). Those profits come at the expense of the workers, the people who live near the facilities, the environment around those facilities. Examples are almost too numerous, so I'll give a few recent ones: Massey Energy in West Virginia, BP in the Gulf of Mexico, Royal Dutch Shell the Niger Delta of Nigeria.

kevinburke 14y ago
Oil companies have reputations, and are playing repeated games, not just one off games... in addition they have incentives not to behave this way, such as the large fine and giant loss in shareholder value after BP spilled oil into the Gulf.
- enneff 14y ago
  Ha ha. Imagine a world where multinationals are held accountable for their mistakes! It took an error the size of the Gulf incident to even draw the public attention. Meanwhile in Nigeria there are hundreds of square kilometres of devastated landscape because of oil company shortcuts. Nobody cares about environmental destruction in far away places. The oil companies have no incentives not to cut corners there.

kevinburke 14y ago

Realizing now that this comment came off as way too sappy. Some companies make products that make people happy, and profit as a result. Examples: Apple, Southwest, Uber, Sonic.net, Flip etc. I would like more of these companies to exist, and for companies to focus more on customer satisfaction. To my chagrin it's not clear these companies are any more profitable than their competitors who focus less on customer satisfaction.