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I so wish this were true, but unfortunately economics has a catch-all called "externalities" for anything that doesn't fit neatly into its implicit assessments
by willguest 1y ago
I so wish this were true, but unfortunately economics has a catch-all called "externalities" for anything that doesn't fit neatly into its implicit assessments of what value is. Pollution is tricky, so we push it outside the boundaries of value-estimation, along with any social nuance that we deem unquantifiable, and carry on as is everything is understood.
- DrewADesign 1y agoeconomics being deeply imperfect doesn’t really change my point
- willguest 1y agoIndeed, but I think it renders your point obsolete, since deeply imperfect resource allocation isn't really resource allocation at all, it is (in this case) resource accumulation. Are you suggesting that compound interest serves to redistribute the wealth coming from extractive industries?
- DrewADesign 1y agoAre you suggesting that economics is primarily concerned with compounding interest?
- willguest 1y agono, i am suggesting that economics is primarily concerned with resource accumulation. my point about compound interest is that it is a major mechanism that prevents equitable redistrubution of resources, and is thus a factor in making economics (as it stands) bad at resource allocation.
- DrewADesign 1y agoEconomics is the study of resource allocation at various levels ranging from individuals to global societies and everything in between. Resource accumulation is certainly something people, groups of people, organizations, societies, etc tend to do, and so it is something economists would study. Many economists are greedy jerks that believe hoarding wealth is a good thing. None of that changes what economics is any more than any any political faction changes what political science is.
- willguest 1y agoThis is late, probably too late, but if you really want to get into the weeds of this, here is a better summary that what I can produce, from a paper that explains it better than I can: "The model is a work of fiction based on the tacit and false assumption of frictionless barter. Attempting to apply such microeconomic foundations to understand a monetary economy means that mistakes in reasoning are inevitable." (p.239) https://academic.oup.com/cje/article/48/2/235/7492210 https://academic.oup.com/cje/article/48/2/235/7492210
- DrewADesign 1y agoA paper that criticizes microfoundations counters what I said? Later.