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>A large proportion of the expense of this mission goes to paying the wages of domestic scientists and engineers in India. >This money will in turn get taxed an

by pravda 12y ago

>A large proportion of the expense of this mission goes to paying the wages of domestic scientists and engineers in India. >This money will in turn get taxed and spent by the recipients and pumped back into the local economy. Your fallacy is... http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window

gamblor956 12y ago
The broken window fallacy is that of breaking things and repairing/rebuilding them to generate economic activity, i.e., an endless cycle. The OP is arguing that this mission creates new economic assets and activities that expand India's economic base.
- rz2k 12y ago
  In fact it is a similar situation if you believe that the mission itself does not produce sufficient value. The salaries are not merely money being cycled around in the economy if the labor being paid for results in the scientists not having time or inclination to produce other labor. Furthermore, it is likely that the resources launched off of the planet could have been used for something else. Whether or not it is equivalent to the broken window fallacy really does depend on subjective assessments of the value produced by the missions. However, it is also worth noting that even the broken window fallacy is not some universal law, and relies on its own assumptions. In certain market failure conditions destroying something and fixing it as a mechanism for increasing the velocity of money could have a net benefit. Although it is very useful to distinguish between the real economy and money transactions as though money is an abstraction for resources being traded around, the best policies also acknowledge the existence of money, as well as friction in the economy.
  - HCIdivision17 12y ago
    I think you're spot on here. And reading `tn13's comment [0], I think it's clear their goal is to produce real, tangible value with their space program. There's an enormous amount of waste in developing an industry, and I would just as soon write off a Mars mission as part of that. (After all, if you want credibility for your satellite launch operations, safely hitting Mars is a pretty good indicator!) [0] https://news.ycombinator.com/item?id=8364792 https://news.ycombinator.com/item?id=8364792
  - baddox 12y ago
    The creation of valuable knowledge, experience, and technology is a valid argument. Mentioning that engineers' salaries get taxed is a bad argument, since that's just a smaller portion of what was already tax revenue.
- yummyfajitas 12y ago
  Zizee had 4 paragraphs, and pravda pointed out that paragraph 3 was fallacious. The fact that paragraphs 1 and 2 are not doesn't change this. I have no idea why pravda is being downmodded, beyond silly mood affiliation.
  - anigbrowl 12y ago
    Because he's wrong, and so are you. The 'broken window Fallacy' is Bastiat's observation that while the income generated for glaziers from repairing rboken windows is indeed a form of economic activity, and that this is nice enough if you're in the window business, it's economically inefficient because the economic activity merely restores the status quo instead of going to finance new production - had the window remained unbroken, the shopkeeper might have bought a book or a suit of clothes. The glazier's gain is the shopowner's loss and so there's no net improvement. But that's a wholly inappropriate analogy for this situation of expenditure going towards Indian scientists and technicians, because they were engaged in new and productive work rather than merely receiving a subsidy. The Indian government didn't have an existing interplanetary program that was scrapped and replaced with another; it built one from scratch. In terms of Bastiat's analogy, it would be as if the shopkeeper hired the glazier to install a new window in what had previously been a blank wall. The direct economic value of measuring whether there is methane in Mars' atmosphere is intangible - just as it would be hard to measure the impact of a newly-added window on a shopkeeper's turnover at the time of its installation. It could also be argued that NASA or some other space agency could conduct the same measurement on some future Mars project, and so the ISRO effort is probably duplicative. But even if the direct economic output of the craft itself is assumed to be zero, the development of the satellite manufacturing and launch capability, which is a net economic gain too, whereas the replacement of a broken window does not have any innovative component (since the prior existence of the window means the capability to make it already existed). It seems to me that you and the other two posters who are arguing this position are making the implicit assumption that that NASA et al. have a comparative advantage in the development of space technology and that therefore Indian efforts are economically superfluous, in addition to your general distaste for the notion of government as client.
    - 12y ago
stillsut 12y ago
Breakthrough space-tech is in no way is comparable to the broken window fallacy. In the latter, a window is replaced with a window, while in this case something un-precedented has been created. Most of the wealth of developed nations comes from the belief that holding an asset will be worth more later - for example a house in your neighborhood will be increasingly valuable because people will continue to want buy it for the local schools, jobs, etc. How the rate at which assets are projected to increase in value is THE central lever on economic performance. What space tech does is says: the assets in this economy have the potential to increase in value at a greater rate. This makes everyone in the economy better off due to investment speculation "wealth from belief". However, I do think its valid to critique India if it were to over-invest in space-tech: they are not a modern economy with a large middle class yet, and thus could see more lucrative gains from New-Deal / GI-Bill -esque promotion of middle class. That being said, any (safe) investment portfolio should have a mix of all possible good policies, which includes tech programs along with social-welfare.
- logicchains 12y ago
  Wealth doesn't come from the belief that holding an asset will be worth more later; it comes from assets being invested in some way that makes them actually worth more later. E.g. I dig up some resource, and rather than consuming it I invest it in building some device that increases my ability to dig up resources in future. Wealth comes from productivity improvements. Developed countries are wealthier because it takes a tiny fraction of human effort to produce e.g. a car or a loaf of bread compared to in a developed country, because through investing in technology/capital we're much more productive at making cars and bread.
noselasd 12y ago
If you're equating that to the broken window fallacy, you're saying that this space mission is among the worst use of the money that was spent - I don't think many would agree with that.

by pravda 12y ago

gamblor956 12y ago

The broken window fallacy is that of breaking things and repairing/rebuilding them to generate economic activity, i.e., an endless cycle. The OP is arguing that this mission creates new economic assets and activities that expand India's economic base.

rz2k 12y ago
In fact it is a similar situation if you believe that the mission itself does not produce sufficient value. The salaries are not merely money being cycled around in the economy if the labor being paid for results in the scientists not having time or inclination to produce other labor. Furthermore, it is likely that the resources launched off of the planet could have been used for something else. Whether or not it is equivalent to the broken window fallacy really does depend on subjective assessments of the value produced by the missions. However, it is also worth noting that even the broken window fallacy is not some universal law, and relies on its own assumptions. In certain market failure conditions destroying something and fixing it as a mechanism for increasing the velocity of money could have a net benefit. Although it is very useful to distinguish between the real economy and money transactions as though money is an abstraction for resources being traded around, the best policies also acknowledge the existence of money, as well as friction in the economy.
- HCIdivision17 12y ago
  I think you're spot on here. And reading `tn13's comment [0], I think it's clear their goal is to produce real, tangible value with their space program. There's an enormous amount of waste in developing an industry, and I would just as soon write off a Mars mission as part of that. (After all, if you want credibility for your satellite launch operations, safely hitting Mars is a pretty good indicator!) [0] https://news.ycombinator.com/item?id=8364792 https://news.ycombinator.com/item?id=8364792
- baddox 12y ago
  The creation of valuable knowledge, experience, and technology is a valid argument. Mentioning that engineers' salaries get taxed is a bad argument, since that's just a smaller portion of what was already tax revenue.
yummyfajitas 12y ago
Zizee had 4 paragraphs, and pravda pointed out that paragraph 3 was fallacious. The fact that paragraphs 1 and 2 are not doesn't change this. I have no idea why pravda is being downmodded, beyond silly mood affiliation.
- anigbrowl 12y ago
  Because he's wrong, and so are you. The 'broken window Fallacy' is Bastiat's observation that while the income generated for glaziers from repairing rboken windows is indeed a form of economic activity, and that this is nice enough if you're in the window business, it's economically inefficient because the economic activity merely restores the status quo instead of going to finance new production - had the window remained unbroken, the shopkeeper might have bought a book or a suit of clothes. The glazier's gain is the shopowner's loss and so there's no net improvement. But that's a wholly inappropriate analogy for this situation of expenditure going towards Indian scientists and technicians, because they were engaged in new and productive work rather than merely receiving a subsidy. The Indian government didn't have an existing interplanetary program that was scrapped and replaced with another; it built one from scratch. In terms of Bastiat's analogy, it would be as if the shopkeeper hired the glazier to install a new window in what had previously been a blank wall. The direct economic value of measuring whether there is methane in Mars' atmosphere is intangible - just as it would be hard to measure the impact of a newly-added window on a shopkeeper's turnover at the time of its installation. It could also be argued that NASA or some other space agency could conduct the same measurement on some future Mars project, and so the ISRO effort is probably duplicative. But even if the direct economic output of the craft itself is assumed to be zero, the development of the satellite manufacturing and launch capability, which is a net economic gain too, whereas the replacement of a broken window does not have any innovative component (since the prior existence of the window means the capability to make it already existed). It seems to me that you and the other two posters who are arguing this position are making the implicit assumption that that NASA et al. have a comparative advantage in the development of space technology and that therefore Indian efforts are economically superfluous, in addition to your general distaste for the notion of government as client.
  - 12y ago

stillsut 12y ago

Breakthrough space-tech is in no way is comparable to the broken window fallacy. In the latter, a window is replaced with a window, while in this case something un-precedented has been created. Most of the wealth of developed nations comes from the belief that holding an asset will be worth more later - for example a house in your neighborhood will be increasingly valuable because people will continue to want buy it for the local schools, jobs, etc. How the rate at which assets are projected to increase in value is THE central lever on economic performance. What space tech does is says: the assets in this economy have the potential to increase in value at a greater rate. This makes everyone in the economy better off due to investment speculation "wealth from belief". However, I do think its valid to critique India if it were to over-invest in space-tech: they are not a modern economy with a large middle class yet, and thus could see more lucrative gains from New-Deal / GI-Bill -esque promotion of middle class. That being said, any (safe) investment portfolio should have a mix of all possible good policies, which includes tech programs along with social-welfare.

logicchains 12y ago
Wealth doesn't come from the belief that holding an asset will be worth more later; it comes from assets being invested in some way that makes them actually worth more later. E.g. I dig up some resource, and rather than consuming it I invest it in building some device that increases my ability to dig up resources in future. Wealth comes from productivity improvements. Developed countries are wealthier because it takes a tiny fraction of human effort to produce e.g. a car or a loaf of bread compared to in a developed country, because through investing in technology/capital we're much more productive at making cars and bread.

noselasd 12y ago

If you're equating that to the broken window fallacy, you're saying that this space mission is among the worst use of the money that was spent - I don't think many would agree with that.