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  Topic: Economic theory, game theory and social impacts, continuing discussion of economic theory< Next Oldest | Next Newest >  
sir_toejam



Posts: 846
Joined: April 2005

(Permalink) Posted: Jan. 04 2006,12:07   

hey all,

just a placeholder to continue some very interesting discussion on economic theory, game theory, and social impacts of various strategies.

cheers

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 04 2006,12:43   

Cheers Sir ToeJam!

Interesting stuff over at the PT thread - but I think we need to re-define the topic somehow?

Perhaps Flint could do it if he joins us??

  
BWE



Posts: 1902
Joined: Jan. 2006

(Permalink) Posted: Jan. 04 2006,12:48   

Ok I'll bite.
Flint,
Quote
I can only disagree that economics is a form of morality. We might make economic decisions for moral reasons, but economics doesn’t care, anymore than mathematics cares if we decide three is a magic number.

We have seen economies (or at least attempted economies) where taxes are 100%, and *everyone* lives by subsidy. We saw terrible productivity, terrible environmental practices, entirely shoddy workmanship (when anyone bothered to work), empty shelves “full” of “free” goods, etc.

You may not *like* the idea that income determines the quality of our lives in many ways, but not for nothing is the free market described as the worst possible arrangement, except for everything else that’s been tried.


Economics doesn't care is true, but economics doesn't exist w/out economic activity. And that, dear flint, is a bunch of moral decisions. I agree about the free market thing you mentioned but it does have drawbacks that I think Keynes and Adam Smith make clear. http://books.google.com/books?i....ev=http

--------------
Who said that ev'ry wish would be heard and answered
When wished on the morning star
Somebody thought of that, and someone believed it
Look what it's done so far

The Daily Wingnut

   
haceaton



Posts: 14
Joined: Dec. 2005

(Permalink) Posted: Jan. 04 2006,13:44   

Flint said:
Quote
By economic principle, those who have more money are producing more of value - that is, more stuff that other people are willing to pay for.


Let's take Paris Hilton for example. It's true she produces porn, stupid TV shows and other stuff "of value" but suppose she didn't and instead did nothing but eat the food brought by her servants and agree to let her accountant execute a simple strategy (to be described). Suppose further a total abolishment of the estate tax as Bush would like (and although it's oh-so-hard to figure out what effects this might have, I'm going to make a wild guess how it could affect dear Paris).

So her strategy is to inherit her billion(s), invest in a broad mix of stocks and securities worldwide, taking care to choose those that either pay no dividends or very low dividends. She could hope that Bush would get his "no taxes on captial gains" wet dreams but until then she will only sell the losers as necessary. She uses her portfolio to secure loans for whatever spending needs she might have. As fully secured loans she gets a pretty good interest rate, but let's be really generous and say 10% per annum. Now suppose she spends a mere $10 million annually just for a modest living style (I know, it's really hard to go a year on a mere $10 million, but she's playing the miser in order to get really rich). Suppose on average her $1 billion portfolio gains in value at 6.5%, well below the historic stock market average return of  8.7%. She spends $10 million on snacks and such and another $1 million on interest (actually she usually just lets the interest accrue and pledges more stocks as necessary). Her accountant might even sell the odd loser stock (accruing a capital loss carry over) and make a loan payment or two. With a bit of loss-carry-over she can even sell a few winners now and again just to keep her interests costs down. Note that she never pays taxes 'cause she's got no income. Say she does this for another 50 years and dies. She's got loans totaling just over $11.6 billion assuming she's never made interest payments. No matter, her portfolio is worth $21.9 billion. Say she has a child who inherits these assets and debts. Through the magic of resetting the cost basis at the time of death, there are no capital gains for her heir to pay taxes on, (s)he just sells $11.6 billion of the stocks, pays off the loans and starts over.

This (jiggered, the actually results of a real strategy like this are way better than the bogus numbers I've used above) example clearly illustrates the wisdom of a few of Flint's ideas: (1) nobody can figure out what the heck tax policy effects might be, especially not a layman*, (2) Rich folks like Paris are super productive and all rich people like them have more money 'cause they've produced more value, and (3) There is no moral element *at all* to any economic policy.

*The layman might be tempted to think that any policy formulated by wealthy elites would result in the wealthy elite become richer in relative terms than everyone else, but that would just be a dumb guess with no basis in reality.

  
C.J.O'Brien



Posts: 395
Joined: Aug. 2005

(Permalink) Posted: Jan. 04 2006,13:53   

A random thought Re: "economics doesn't care" vs. "economics depends on an economy (with its moral baggage)"
It has often been pointed out that, even if it were true, as many fundies like to claim, that "evolution is bad (for morals or society) because it teaches us we're no better than (amoral) animals" this implication has no bearing on the truth or usefulness of the theory AS a scientific theory.

So, does a similar situation hold in economic theory? i.e. should economists consider the potential effects on society of economic policies inspired by their work? Or are they engaged in a descriptive enterprise that can be isolated from actual economic behavior?

--------------
The is the beauty of being me- anything that any man does I can understand.
--Joe G

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 04 2006,13:54   

Funny co-incidence - I watched 'One day in Paris' today and she certainly passed on some added value to me - although it didn't cost me a penny as I ripped off the bittorrent.

Money isn't everything as they say.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 04 2006,13:56   

BWE:

I'm not sure we can get very far along these lines. I view an economy in the traditional microeconomic view, as everyone trying to make rational decisions as to how best to allocate their resources, so as to maximize their self-interest. I see this process as being entirely amoral. I have a dollar. I can spend it on food, or I can spend it on gasoline (let's say). I can't spend it on both. Well, what's more important to me, getting somewhere or eating? I make my allocation decision. At least as I see it, this is a moral decision only in the loosest possible sense.

I won't deny that people attempt to apply economic pressures for moral reasons, but this doesn't make economics moral anymore than using a baseball bat to mug someone makes the bat a mugger. An economy is an emergent property of many individual allocation decisions. That property is irrespective of the rationale the individual actors have for their decisions, except insofar as they are presumed to be acting selfishly.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 04 2006,14:20   

haceaton:

I'm not sure what you are trying to say. My best guess is that you are attempting to score points with sarcasm, and if that's so, you win all the points. If you have any particular problem, I hope you can articulate it clearly. However, I can say that the ideas you ascribe to me are clearly in error: I said no such thing. I can try to clear that up a little:

Quote
nobody can figure out what the heck tax policy effects might be

No, I didn't say this. I was talking about the effects of LOTS of tax policies, all at once, on the national economy. I certainly agree that if I had been talking about the effects on any particular individual of a change in income tax rates, the effect on that individual would be pretty obvious. Now, would changing the tax rate on that individual have any measurable effect on national economic productivity? How would you isolate it?

Quote
Rich folks like Paris are super productive and all rich people like them have more money 'cause they've produced more value

No, not quite. Fortunately, you quoted the general principle - that money tends in general to go to to those who earn it. But of course, there will be plenty of exceptions. In the case of Paris Hilton, part of her fortune was inherited, but part has resulted from her own activities - whether or not YOU consider her TV shows valuable. And then there are lottery winners, etc. But what you're doing is like pointing to helium balloons as "proof" that the observation that dropped items fall is foolish. Good work, man!

Incidentally, let's say we decided to eliminate inheritance, and have the government confiscate everything everyone died still owning. Would THAT have any macroeconomic impact? Or would you need to know what the government decided to do with the money?

Quote
There is no moral element *at all* to any economic policy.

You're on a roll! I was careful not to speak about economic policy, only about economic activity. In general, ALL economic policies have moral overtones if not direct moral intentions. They are adopted to Make Things Better. Economic policies, in general, are attempts to manipulate the forces of supply and demand (and thus distort market mechanisms) to achieve some moral purpose.

  
sir_toejam



Posts: 846
Joined: April 2005

(Permalink) Posted: Jan. 04 2006,15:10   

Quote
I won't deny that people attempt to apply economic pressures for moral reasons, but this doesn't make economics moral anymore than using a baseball bat to mug someone makes the bat a mugger


in fact, we seem to readily forget how evolutionary theory has been abused by those who want to find their own justifications for racism, etc.

I certainly wouldn't fault evolutionary theory for the abuse of bigots, nor would i fault economic theories for the abuses of politicos and corporate wankers either.

Which is exactly why i wanted to track down the origins of the current competing economic theories and seperate them from the various abuses that they have been subjected to.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 04 2006,16:10   

Sir Toejam:

There aren't so much economic theories, as economic schools of thought. You might really want to visit this Wikipedia page. The battle between the Austrian school (Mises, etc.) and the Keynesians is surprisingly bitter.

Wikipedia also introduces you to the monetarists, the classicists, the supply siders, and other views. You might get some insight into this battle at this site (with which I must say I agree entirely, and the Austrians detest it).

  
Alan Fox



Posts: 1556
Joined: Aug. 2005

(Permalink) Posted: Jan. 05 2006,00:39   

How is economics any better at forecasting than fortune telling?

  
haceaton



Posts: 14
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,05:06   

Flint:
Quote

nobody can figure out what the heck tax policy effects might be

Quote

No, I didn't say this. I was talking about the effects of LOTS of tax policies, all at once, on the national economy.


Can you explain how tax policies are applied singly, not all at once so that you can understand their effects? I didn't think so.

In terms of the national economy, I agree nobody can understand all of the effects on the national economy, but you can understand a few important ones. For instances virtually every policy that Bush has advocated can, will and has had the effect of making the rich richer at a faster rate than everyone else. That's not their only effect but it is one significant effect. I think maybe this is an effect that is meaningless to you. It seems like the only effects you're concerned with are the GDP and its first derivative. However, as a moral issue, some people care how the money is distributed. The "biggest economic boom" in history may have occured during the late 90's by your view, but median household income (in the U.S.) went up a lot faster during the 50's. Hint: a lot more of the 90's boom went to the super-rich which is why the median didn't rise that much.

This whole side-thread started because you expressed derision with someone who held an opinion on some economic policy while admitting no formal training in economics. The odd thing is that you've since been arguing that those with expertice really don't know very well what effects different policies will have either. I disagree, I think many policy formulators have a pretty good idea what effects their policies while have (probably not the global consequences but at least the most basic consequence that they care about). They know it will make them and their supporters even richer in relative terms which is what they care about.

Quote
But what you're doing is like pointing to helium balloons as "proof" that the observation that dropped items fall is foolish.


Paris was a bad example because, as I admitted, she does produce "value". I tired to abstract it by saying "what if" she didn't does those value added activities. The trouble is that the tens of thousands of rich oafs that actually don't do anything except get richer are not well know by the public, so they make rather abstract examples. But I have to disagree with your analogy to my point. I'd guess that about half of the rich people are rich due to their "value" contributions to the economy and the other half were born in to it or just had it fall in their lap. In terms of total dollars this is a big deal. To extend your analogy it would be as if 20% of the mass of the earth were helium balloons floating up which you'd like to describe as inconsequential because they were only a few thousand balloons with all that mass.

Quote
I was careful not to speak about economic policy, only about economic activity.


Sorry, my bad. I'm glad you've cleared up that you agree that economic policy decisions are often moral decisions. Kinda suggests that maybe laymen with no formal economic training might not be so absurd to voice opinions on these moral matters.

  
BWE



Posts: 1902
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,05:44   

Quote
But I would posit that economic desisions that we need to make as a people are largely moral decisions. i.e. How far do you let members of your community fall? How do we justify witholding preventative health care based on income? Are we equating income with quality of being? etc.


Flint,

I guess my point is that economics as an academic tool of analysis is certainly not moral and is also far more complicated than a few weeks worth of study could do any justice for. But the original point was that evolution is too complicated for the layman (which I happen to sort of disagree with but that is a very long thought so I will save it for another time) and that economics is too. My point was and is that they are fundementally different things. Economic activity and policy decisions are inherently decisions that a layman can and should be a part of precicely because they are moral decisions. A community has to decide if they want to allow a walmart for example. That is a moral decision to a large extent. A small community is not allowed to decide that all business with x number of employees pay for health insurance  or a living wage or etc. Those sorts of powers would most certainly be used to limit competition and encourage cronyism. (Hobbs) But the community includes all its members and the community at large needs to decide whether to employ economic policies that marginalize those on the left side of the bell curve even more. Either that is OK or it is not. THat is a value judgement.

Tax policies make that judgement whether they can be related to their consequences or not. My stock and investment choices have been very succsessful for me. But I do not own stock in walmart or haliburton. Both of those stocks have done quite well over the past several years but my moral decision, however hypocritical it may be, was to not own those stocks. I always vote yes on school and library bonds for the same reason. In my moral world schools would have lots of money. Enough to send the x grade class on a trip to DC every year. Enough to have full time art and music instructors. Enough to buy curriculum from the best places. Enough to bring inspirational people in to talk to the school at assemblies. Enough to have plenty of sports equipment. I think that's enough to illustrate my point.

Evolution is a descriptive word that describes a process that is observable and verifiable. Unfortunately for the fundies, it has been verified. Economics as a discipline is useful to describe behavior but the behavior is largly moral.

--------------
Who said that ev'ry wish would be heard and answered
When wished on the morning star
Somebody thought of that, and someone believed it
Look what it's done so far

The Daily Wingnut

   
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,05:50   

haceaton:

Quote

Can you explain how tax policies are applied singly, not all at once so that you can understand their effects? I didn't think so.

Only insofar as you did - that the effects on a single individual can be sorted out pretty easily.

Quote
In terms of the national economy, I agree nobody can understand all of the effects on the national economy, but you can understand a few important ones. For instances virtually every policy that Bush has advocated can, will and has had the effect of making the rich richer at a faster rate than everyone else. That's not their only effect but it is one significant effect.

No question about it, but again that's NOT a national effect in terms of the national economy. That's an effect on basically the richest 1/2 of 1% of the population. For them, it's significant.

Quote
I think maybe this is an effect that is meaningless to you. It seems like the only effects you're concerned with are the GDP and its first derivative. However, as a moral issue, some people care how the money is distributed.

Yes, but this is a somewhat different orientation. You're talking here about the politics of envy. Personally, if I'm making $X a year and I'm comfortable, I don't become any less comfortable to discover that someone else is making $100X a year. Nor do I feel poorer to learn that tax cuts have raised them to $120X a year. But I understand that some people pay attention to these ratios, and DO feel poorer.

Quote
The "biggest economic boom" in history may have occured during the late 90's by your view, but median household income (in the U.S.) went up a lot faster during the 50's. Hint: a lot more of the 90's boom went to the super-rich which is why the median didn't rise that much.

I agree there are many ways to measure a boom. I was using the DOW as a yardstick, but of course this is limited in lots of ways. Perhaps median household income is better. Perhaps unemployment rate is better. I'm aware that much of that boom didn't really translate into economic activity.

Quote
This whole side-thread started because you expressed derision with someone who held an opinion on some economic policy while admitting no formal training in economics.

This is only partially correct. I was expressing derision that someone who admitted no formal training or knowledge, was expressing an opinion I felt ANY formal training or knowledge would refute. To compare with evolution, there's a difference in my mind between somone saying "I have never studied any biology but it looks like chimps resemble gorillas" and someone saying "I have never studied any biology but I know that evolution doesn't happen." Supply and demand don't go away because people dislike the moral implications.

Quote
The odd thing is that you've since been arguing that those with expertice really don't know very well what effects different policies will have either. I disagree, I think many policy formulators have a pretty good idea what effects their policies while have (probably not the global consequences but at least the most basic consequence that they care about). They know it will make them and their supporters even richer in relative terms which is what they care about.

I'm not sure if I follow this correctly. Hopefully, we've agreed that there is a difference between predicting what effect a policy will have on a specific cohort of economic actors, and predicting what effect the policy will have on the economy at large. Policy formulators tend to focus on constituencies; their purposes are political. Even so, actual and intended effects don't always coincide; sometimes they are wildly different. One school of though argues quite persuasively that the Great Depression was made MUCH deeper and longer because in response to the first symptoms, Congress took the worst possible fiscal tack.

Quote
I'd guess that about half of the rich people are rich due to their "value" contributions to the economy and the other half were born in to it or just had it fall in their lap.

Yes, I think that sounds about right. In economic terms, I think we could say that *someone* earned the money by making a genuine contribution valued highly by the market. Fortunes can certainly take generations of heirs not doing much productively before dissipating.

Quote
Kinda suggests that maybe laymen with no formal economic training might not be so absurd to voice opinions on these moral matters.

Not absurd, but not necessarily correct either. Most of these moral opinions are statements of preference, and everyone has preferences. But preferences are not economics. Here's an example: we have a factory chuffing pollution into the air. We want it stopped. Now, should we levy a fine for polluting of $X, or should we sell the polluter a pollution license for $X? Most people find the former morally satisfying and the latter morally appalling, yet economically (from the perspective of the polluter), there's no difference. $X has been added to the cost of doing business.

I'm always amused at the anger toward WalMart. They are moral victims of their own success - they have provided what their customers want so excessively successfully that they are now being vilified for doing so. People aren't willing to give up their low prices, but they demand better wages, more benefits, more competition, better community dynamics etc. IN ADDITION.

  
BWE



Posts: 1902
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,06:06   

Quote
I'm always amused at the anger toward WalMart. They are moral victims of their own success - they have provided what their customers want so excessively successfully that they are now being vilified for doing so. People aren't willing to give up their low prices, but they demand better wages, more benefits, more competition, better community dynamics etc. IN ADDITION.


No. They used a business model which takes advantage of communities offering food stamps and health care. They made what I think of as an immoral business model which cuts costs by letting welfare pay their workers. Sure the people who don't work there like the low prices at first but it is difficult to see the real cost of those low prices. I will argue all day over this one: Walmarts business model is equivalent to me finding a way to tack my automatic mortgage deduction onto my neigbor's and make it look like property tax. I get to live in a nice house and my neigbor is trying to figure out how to make enough money to pay for his kids textbooks. He is bitching about all the money he pays for his property tax and starts voting for people who promise to cut taxes.

--------------
Who said that ev'ry wish would be heard and answered
When wished on the morning star
Somebody thought of that, and someone believed it
Look what it's done so far

The Daily Wingnut

   
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,06:07   

BWE:

Quote
Economic activity and policy decisions are inherently decisions that a layman can and should be a part of precicely because they are moral decisions.

I still don't understand. I gave an example of a purchasing decision. I didn't see any morality involved.

Quote
A community has to decide if they want to allow a walmart for example. That is a moral decision to a large extent.

Again, I don't understand. I think the community should understand by now that a WalMart is going to have pervasive economic consequences. They even know what those consequences are going to be. So they can make an informed decision as to whether the benefits (which are very real) outweigh or are outweighed by the consequences (which are also very real).

Even the decision whether to spend your money on an apple or a quart of motor oil is a value judgment.

Quote
Both of those stocks have done quite well over the past several years but my moral decision, however hypocritical it may be, was to not own those stocks.

As I wrote earlier, it's entirely possible to attempt to impose economic pressures for moral reasons.

Quote
In my moral world schools would have lots of money.

Here's where my idea of economics comes in. Yes, I agree. Schools should have lots of money. Most government programs are worthwhile and should have lots of money. Charities are valuable and should have lots of money. Taxes should be low because *I* should have lots of money. But hard as I search through your post, I simply can't find what you have decided you will *do without* so that schools can have more money. Maybe you're saying you're willing to pay (let's say) double your current taxes? OK, that's a community decision.

Quote
Economics as a discipline is useful to describe behavior but the behavior is largly moral.

Maybe this terminology is too vague? Economics describes tradeoffs. Individual economic actors (you and me, for example) allocate our resources according to our best current understanding of our self-interest, however much enlightenment we choose to extend to that understanding. Now, we have everyone making their individual decisions, and what emerges is a large-scale pattern of resource allocation. Resources here are more than money, they're time and skill. Economics tries to study these patterns, to learn how they arise and how they can be modified.

I think you're right that economics is a tool of analysis. The actors are making moral decisions perhaps, but the economy is not moral. The ballplayers care dearly who wins the game, but the game itself (the set of rules they play by) does not care.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,06:13   

BWE:

Quote
No. They used a business model which takes advantage of communities offering food stamps and health care. They made what I think of as an immoral business model which cuts costs by letting welfare pay their workers.


But WalMart has broken no rules; as I said, they have set low prices as their goal. They are dedicated to doing everything legally possible to keep prices minimized. If the community rules allow them to pass costs outside their system, then of course they will do so. To go back to my ballplayer analogy, WalMart tries everything possible within the rules to win their game.

Now, you seem to be saying that the rules should be changed, because they permit organizations like WalMart to cut their costs by shifting costs where you'd prefer they not be permitted to do so. But following the rules is not immoral, and WalMart follows the rules (and are punished when they do not). So what you are saying is that the RULES are immoral. And the community can certainly change the rules if they desire to do so.

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,06:43   

.. seems like I was right to suggest this side thread - and that you wanted to push your particular 'school of economic thought Flint'.

Quote
Yes, I think that sounds about right. In economic terms, I think we could say that *someone* earned the money by making a genuine contribution valued highly by the market. Fortunes can certainly take generations of heirs not doing much productively before dissipating.


So what was it all these Russian billionaires did over the last few years to make them so rich Flint? Hasn't your country gone through a similar history of vast fortunes gained by dubious means? .. and once these fortunes are in place - aren't they self-perpetuating regardless of any added value that the current owners might give to them?

I think game theory is far superior as a model of how society works with money rather than economics. Think motivation?
As a rich man with rich friends do you think that George W Bush was being entirely altruistic by suggesting tax cuts for the rich? some conflict of interest surely? no possiblility that he was using his power to re-inforce a monopoply position? And even in a democracy votes can be manipulated if you throw enough money at the 'problem'.

I found a passage by Matt Ridley (next best British populariser of Evolutionary Biology) in the 'Origins of Virtue' which suggests that even slime moulds employ 'taxation' and 'public goods'. I'll post it a bit later when I get a chance..
:D

  
BWE



Posts: 1902
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,06:49   

Quote
Now, you seem to be saying that the rules should be changed, because they permit organizations like WalMart to cut their costs by shifting costs where you'd prefer they not be permitted to do so. But following the rules is not immoral, and WalMart follows the rules (and are punished when they do not). So what you are saying is that the RULES are immoral. And the community can certainly change the rules if they desire to do so.


Ok. We are saying the same thing I think. Economic policy is making rules and that is the morality I was talking about. Walmart broke no rules but the rules didn't anticipate walmart either. Yes, my morality would say that we should change the rules. I wouldn't need to pay as much more tax if I wasn't already paying for food, rent and health care for walmart employees.

Earlier you said something about politics of envy. Ok, If I am getting by then why should I care if you are making millions.
Answer: I don't. I do care if you are releasing pcb's into the waterways near where I live, making a million and leaving the pcb's. I do care if you are shifting the costs of your business onto me through my tax burden. I don't shop at walmart and it irritates me that I have to spend money there through taxes. I do care that our tax burden is becoming less fair with the tax policies that Bush has pushed. I do care that the lottery and cigarette taxes are taxes on the poor. That is my personal morality. As a citizen, I have an obligation to at least learn enough about what I am voting for to vote my conscience. Thus, the layman doesn't need to understand game theory to make informed economic decisions because economic decisions are largely moral. In zen, half of your training is figuring out that the rules aren't the game.

--------------
Who said that ev'ry wish would be heard and answered
When wished on the morning star
Somebody thought of that, and someone believed it
Look what it's done so far

The Daily Wingnut

   
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,07:53   

Dean Morrison:

I think we are not communicating here. Let's start at a very general level. People, by application of time and skill, produce goods and services others want. People exchange these things. That's an economy. Economic activity results in the distribution of goods and services.

There is no explicit or implicit requirement that those who produce the most market value, be the same people as those who end up with the most money. Indeed, entire political economies have been set up explicity to *prevent* this sort of thing, for one reason or another. One thing economics CAN tell us is how per capita production relates to per capita wealth over the long term. The general trend has been, the closer these two correlate, the larger the per capita wealth across the economy as a whole.

Now, is increasing per capita wealth ("growing the economy") a good thing? Economics can't answer that, but most individuals find it desirable. Economics doesn't even pass moral judgment over theft. That's simply another economic transaction, with economic implications.

I won't say that most rich people "deserve" to be rich, but I WILL say that we can tell whether someone is doing something someone else is willing to pay for. I should also point out that investment is a value in the sense that it enables others to create value. Investment is rewarded with interest and dividends and (sometimes) with capital appreciation.

I'm not saying anything about altruism. I personally think Bush is rewarding his supporters, as any politician seeks to do.

Economics can describe what sorts of redistributive properties monopolies lead to. In general, monopolies have two effects on wealth: they polarize it, and they reduce it. Economics doesn't pass judgment on whether this is a "bad thing." Economics only describes what happens and how it happens.

Back to the baseball game. You seem entirely hung up on who wins, and you pay no attention to how the game works. You're like the creationists reacting to the Dover decision - who cares what the law is or how the court system works or what our procedures and principles are? THE WRONG SIDE WON. What else matters?

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,08:12   

Now which economic model are these little critters following?:

(From 'The Origins of Virtue'  - Matt Ridley 1996) chap1 Pg 27

" In the slime mould, the confederation of amoebae that comes together to build a stalk from which to launch spores, there is a classic conflict of interest. Up to a third of the ameobae will have to make the stalk, as opposed to spores  and will die.
An amoeba that avoids being in the stalk therefore thrives at the expense of a more public spirited colleague, and leaves more of its selfish genes behind. How does the confederation persuade the amoebae to do their stalk duty and die? Often the amoebae that come together to make a stalk are from different clones, so nepotism is  not the only answer. Selfish Clones might still prevail.
The question turns out to be a familiar one for economists. The stalk is a public good, provided for out of taxation - like a road. The spores are private profits that can be made from using the road. The clones are like different firms who are facing the decision of facing the decision of how much tax to pay for the road. The ''law of equalisation of net incomes' says that, knowing how many clones are contributing to the stalk, each clone should reach the same conclusion about how much to allocate to the spores (the net income). The rest should be paid in stalk (tax). It is a game in which cheating is supressed, though precisely how is not yet clear.

{He then goes on...}

In human beings, too, there is always conflict between the selfish individual and the greater good. Indeed so pervasive is this tendancy that a whole theory of political science has come to be based on it.........

Ridley seems to get his info on slime moulds from this paper:

Matsuda, H. and Harada, Y. 1990. Evolutionarily stable stalk to spore ratio in cellular slime moulds and the law of equalisation of net incomes.
Journal of Theoretical Biology 147:329-44

Perhaps economists should study slime moulds - no danger of influencing their subjects - or 'insider trading'????
:D

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,08:13   

BWE:

I admit I simply don't know what you're trying to say most of the time.

Quote
I do care if you are releasing pcb's into the waterways near where I live, making a million and leaving the pcb's.

I don't blame you. So what? If we as a community want to change this, economics tells us we'd be well advised to change the financial incentives. This happens because when the incentive changes, the perceived self-interest of the polluter will change. Economics holds that the polluter, as an economic actor, will act in his perceived self-interest.

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I do care if you are shifting the costs of your business onto me through my tax burden. I don't shop at walmart and it irritates me that I have to spend money there through taxes.

I'm not sure I understand this. Are you referring to the tax breaks communities have sometimes extended to WalMart to attract a store to their district? Increasingly, results are coming in showing that communities tend to suffer a net economic loss by offering large tax breaks to major employers. So this practice may become less common in the future. Economics, by the way, is a tool that allows people to generate and analyze these results.

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I do care that our tax burden is becoming less fair with the tax policies that Bush has pushed.

What do you mean by "fair"? I've seen claims that "fair" means everyone pays the same amount, claims that "fair" means everyone pays the same *rate*, claims that "fair" means that the rich pay all the taxes and the poor get subsidies, etc. Which is your version of fair?

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I do care that the lottery and cigarette taxes are taxes on the poor.

I think you've made a poor selection here - there is no requirement that anyone purchase either one. If I place a price on my product that nobody is obligated to pay, and some people choose to pay it, then for those people BY DEFINITION I have placed a fair price on my product.

Now, you might be talking about taxes and fees that are effectively regressive, in the sense that poorer people spend a higher percentage of their income on such taxes and fees than richer people spend. So I'm going to guess that when you spoke earlier about "fair", you meant either neutral or progressive effective tax rates. Now, so what? Yes, changing the shape of the tax structure has economic consequences. We can figure them out, so we can say who wins and who loses, and within some range how MUCH they win or lose, as a result. Whether any of them *ought* to win or lose, economics can't tell us.

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That is my personal morality. As a citizen, I have an obligation to at least learn enough about what I am voting for to vote my conscience.

Yes, I agree. To the degree that you can predict the consequences of your actions, you can more accurately direct your efforts so as to achieve your perceived self-interest.

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Thus, the layman doesn't need to understand game theory to make informed economic decisions because economic decisions are largely moral.

Huh? You just built a case for the exact opposite - that the layman DOES need to understand these things if his decisions are to result in what he wants. You just said the layman is "obligated" (I don't like the term. He isn't obligated to inform and educate himself) to learn enough to know that if he does X, the likely result is Y. And that's what economic analysis can tell him. And I also agree with an implication you carefully don't make explicit: Most people DO NOT know the consequences of their actions, they only have a seat-of-the-pants, often dead wrong, "feel" for what's "right". Then, when they don't get what they expect, they blame others for being "immoral".

Economics is a tool, like math. By themselves, these tools are not moral.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,08:22   

Dean Morrison:

Quote
Perhaps economists should study slime moulds

I can only laugh. Such tradeoffs are pretty much the ENTIRE content of economics 101. Typically, in that class you will graph cost against benefit. At one extreme (all spore, no stalk) the benefits are 0. At the opposite extreme (all stalk, no spore) the benefits are also zero. The graph between them is a parabola. The "ideal" tradeoff between stalk and spore is where reproduction is maximized. This occurs (it's easy to see on the graph) where the slope is zero - the very top of the parabola. Piece of cake, just take the first derivative of the equation of the curve, and that's where your maximum lies.

Of course, the amoebae didn't apply differential calculus to find this mix. Most likely, they used trial and error. Those who most nearly approximated the maximum did the best job of reproducing.

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,08:38   

Am I wrong in thinking that you more or less hold to a 'laissez faire' school of economic thought Flint?

You seem to be making the argument that this school is supported by mathmatical 'proofs' and is not therefore open to question.
I'd say there are economic 'truths' involved, and study of economic dynamics should inform our fiscal policies. However it seems to me that your view requires some underlying assumptions that are contentious. The existance, efficiancy and even desireablity of a 'free markets' being just some of them for example.
Your assertions about Wal-Mart for example - depend on them functioning in a free market. If they are extremely dominant in one area then they are likely to be able to develop monopoly powers - undesireable from any point of view.
The only corrective force available to the population is democracy. However in the USA - with no limits on campaign financing then rich corporations have the means to manipulate the popular vote to see that this doesn't happen.
Democracy, after briefly flourishing in Russia, has now succumbed to the same process. The pressure from the West to adopt the 'free market' and privatisation has effectively delivered the wealth of the country into the hands of a few crooked individuals who now control the state.
Economics, in the form of the study of systems - is of course fairly neutral (althought we all have 'Point of View' of course) - economic 'schools of thought' that are pushed politically are not.
You're entitled to your views, and you will find that I share many of them.
However I don't think that either of us should pretend that our 'economic views' are either 'entirely neutral' - or free from value judgements.

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,08:54   

Quote
Of course, the amoebae didn't apply differential calculus to find this mix. Most likely, they used trial and error. Those who most nearly approximated the maximum did the best job of reproducing.


A bit more complex, weird and wonderful than that I'm afraid. Not just of tending toward the optimal solution on a graph - that would be an everyday example of evolution.

Slime moulds are single-celled organisms that live in colonies. The colonies that were studied were not mono-clonal If a single clone out-competed it's peers (which is what you'd expect) then all slime mould colonies should be mono-clonal. Each clone 'wants' to be making the spores not the stalk. In the end they all end up contributing the same proportion of 'tax' for the same 'benefit' - presumably in relation to their prevelance in the colony ('capital?) The very fact that we find multi-clonal colonies means there must be some undetected (at the time that that was written) form of 'policing' or at least some reason to believe that the other clones won't 'cheat'.
The passage suggests the the slime moulds can even detect how many clones there are in the colony (in order to work out it's allocation of resources).
Remarkable for a single-celled organism don't you think?
.. but then .. slime moulds are just weird.... :0

  
BWE



Posts: 1902
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,09:08   

Right. Sorry.

I get that I don't always make sense. I'll try this again.

My point is that self-interest is a largely moral issue. And that you don't need a thorough understanding of economics to have a valid opinion about economics. Individual policy and economic decisions do have a moral element. I am not talking about economics as a field of study. I am talking about economic policy and activity as a series of decisions. Economics as a field of study is simply descriptive and to some extent prescriptive in a very amoral sense. The actual decisions we make are not the rules and the rules are not the decisions. We fall because of gravity but we choose whether to jump off a cliff.

Either we allow pcb emmitters to dump thim into the waterways or we don't or we find some kind of a middle ground. I don't need to know much about rational self-interest to know that my personal morality dictates that I do not lend my vote to allow pollution to continue.

Walmart is shifting their costs to me through taxes by hiring people for less than a living wage and setting up systems to help those employees take advantage of  food stamps, rent assistance and publicly funded health care. Those are things that my taxes pay for. My sense of rational self-interest says that I should lend my ballot to the policies which force walmart to assume those costs. But I don't need to know about rational self-interest to know that I feel that way.

Being as economic choices are largely moral, I get to define whether I think Bush's tax policies are fair and I don't think they are so regardless of whether my fair and your fair are similar, my morality dictates my position. I just paid a sonofabitch in capital gains taxes when I sold a building we owned. In the end it amounted to a little over 7%. If that was my income tax that wouldn't seem so bad but writing one check made it hurt. However, my morality justifies my writing the check because the society around me alowed me to make the transaction. So for me it's a good tradeoff. But once again, it's my morality that dictates my position.

I chose cigarette and lottery very carefully because my point is that my individual sense of morality dictates that taking advantage of peoples' ignorance is morally wrong. Me personally. In order to follow my own personal morality I should vote or involve myself in such a way as to make these things less rather than more.

But I don't think you need to know much economics to make these kinds of decisions. I think unintended consequenses are not very common in the kinds of policy decisions I have used as examples. Cutting taxes on the super wealthy takes that tax money out of the public coffers. Period. If you start reducing spending eventually you hit schools and libraries. Maybe you get a boom in services catering to the super rich but I haven't seen any data showing an increase in infrastructure investment.

--------------
Who said that ev'ry wish would be heard and answered
When wished on the morning star
Somebody thought of that, and someone believed it
Look what it's done so far

The Daily Wingnut

   
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,09:16   

Dean Morrison:

Quote
Am I wrong in thinking that you more or less hold to a 'laissez faire' school of economic thought Flint?

I don't know why this even matters. Laissez faire economics has knowable consequences. Regulation has knowable consequences. "Pure" socialism has knowable consequences, both (in general terms) for the economy as a whole, and for the individual actors within it.

Now, do I *prefer* a system of economic management that, like a rising tide, expands and lifts all boats? Yes, personally, I do prefer that, but within limits and with certain constraints.

Quote
You seem to be making the argument that this school is supported by mathmatical 'proofs' and is not therefore open to question.

I don't see where this statement might be coming from. Economics as a tool can be used to analyze the economic consequences of various management goals and techniques. But I feel like I'm trying to explain how addition works, and you're trying to decide which numbers I must like best.

Quote
I'd say there are economic 'truths' involved, and study of economic dynamics should inform our fiscal policies.

"Inform" is perhaps a slippery term here. Such a study may be helpful in telling us what results different policy alternatives are more likely to produce. They are useless for telling us which results are "better".

Quote
However it seems to me that your view requires some underlying assumptions that are contentious. The existance, efficiancy and even desireablity of a 'free markets' being just some of them for example.

Some markets exist that are freer than others that exist. Is this an "underlying assumption"? I'd call that a straightforward observation. Is market freedom "desirable"? Economics can't tell us our desires. It might help us REACH our desires, but that's something entirely separate.

Quote
Your assertions about Wal-Mart for example - depend on them functioning in a free market. If they are extremely dominant in one area then they are likely to be able to develop monopoly powers - undesireable from any point of view.

Again, you are complete blinkered by moralistical concerns. WalMart is successfully reaching WalMart's own goals, within the constrants within which WalMart must operate. Are their goals "good" ones? WalMart thinks so; that's why they're doing it. Indeed, I would argue that monopoly is the inevitable (and rapid) result of a completely unregulated free market. Which is just wonderful for the monopolists, but pretty grim for everyone else.

However, I seriously doubt that WalMart can achieve a true monopoly. They don't even control the largest segment of the retail pie in US history - that crown still belongs to A&P (remember them? Whatever became of A&P?)

Quote
The only corrective force available to the population is democracy.

I don't understand the context you intend. "Corrective" meaning what - to change WalMart's practices to more closely conform to YOUR preferences? Yes, incentive systems can be modified that will likely accomplish this - *at someone else's expense*. As a general rule, every change that helps anyone, hurts someone else. You seem desperately eager to pin "bad guy" and "good guy" labels on economic actors. I'm more concerned with "doing X usually results in Y, and here's how."

Quote
However in the USA - with no limits on campaign financing then rich corporations have the means to manipulate the popular vote to see that this doesn't happen.

I don't see your point, but this claim is simply not correct. There is a tradeoff here as well - the corporations have lots of money, but votes win campaigns. Money can influence votes to some extent, but that influence is nowhere near as comprehensive as you prefer to think. Historically, the party less favorable toward corporations wins about half the time.

Quote
The pressure from the West to adopt the 'free market' and privatisation has effectively delivered the wealth of the country into the hands of a few crooked individuals who now control the state.

In my observation (personal opinion only here), any market requires some regulation. What causes markets to grow, and middle classes to emerge, and national wealth to accumulate, is *competition*, not necessarily "freedom." So my personaly opinion is that a nation is best off (in terms of both per capita wealth and equitable distribution of that wealth) if freedom is restricted so as to guarantee competition.

Back to economics as a tool, it says nothing about whether monopolies are good or bad. Economics makes no moral judgment. It's a way to analyze economic consequences of policies.

Quote
However I don't think that either of us should pretend that our 'economic views' are either 'entirely neutral' - or free from value judgements.
No, but perhaps not the kind of value judgment you are stuck in. I find the Keynesian approach more comprehensible than the Austrian approach, and I think the monetarists have things backwards.

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,09:47   

BWE:

Quote
I am not talking about economics as a field of study. I am talking about economic policy and activity as a series of decisions.

Then we have no disagreement. I'm talking explicitly about economics as a field of study. I've already agreed that people use their values to make ALL the judgments in their lives.

Quote
Either we allow pcb emmitters to dump thim into the waterways or we don't or we find some kind of a middle ground. I don't need to know much about rational self-interest to know that my personal morality dictates that I do not lend my vote to allow pollution to continue.

And exactly HERE is why ignorance of economics is hurting you. Presumably, these polluters are producing some product. They are selling it successfully, or they wouldn't be in business. Pollution reduces their costs. This reduction in costs means more money for something else. Let's say they use their savings to lower their prices. You purchase (in all ignorance) the least expensive, highest quality products you can. Theirs is one of them, BECAUSE they pollute. By purchasing their product, you are "lending your vote" in favor of their practices. Equally important, by NOT buying the more expensive product from the non-polluter, you are punishing him for absorbing the cost of being clean.

Quote
Walmart is shifting their costs to me through taxes by hiring people for less than a living wage and setting up systems to help those employees take advantage of  food stamps, rent assistance and publicly funded health care. Those are things that my taxes pay for. My sense of rational self-interest says that I should lend my ballot to the policies which force walmart to assume those costs. But I don't need to know about rational self-interest to know that I feel that way.

Economics can't tell you what to feel. But you might just for grins consider the tradeoffs from a different perspective. Let's look at the set of WalMart employees. They aren't being paid enough to live on by WalMart, and so you are effectively subsidizing WalMart by providing these people (through your taxes) with food stamps and the like. Yes? Now, lets shuffle the cost structure around a little bit. Let's reduce your taxes by the amount of the food stamps and other subsidies. You now have more money to spend. Let's raise WalMart's prices enough so that WalMart is now paying their employees enough so they don't NEED food stamps. Are you happy now? Yes, morally you are overjoyed.

And what has happened? Effectively, nothing at all. YOUR money is still being spent (but now through high prices rather than taxes) making WalMart's employees better off. You can spend it through taxes, or you can spend it through higher prices, or you can spend it through a higher risk of theft (burglary) by desperately poor people, etc. But now matter how you cut it, the same economic value as ever is coming out of your pocket. The ONLY thing you have gained is smug moral gratitude. You smote the wicked, you did!

Quote
Being as economic choices are largely moral, I get to define whether I think Bush's tax policies are fair and I don't think they are so regardless of whether my fair and your fair are similar

Of course, I didn't tell you MY definition of fair, I asked you to specify yours. I notice you haven't done so. You have CALLED your preferences "fair" but carefully not said what that means.

Quote
I chose cigarette and lottery very carefully because my point is that my individual sense of morality dictates that taking advantage of peoples' ignorance is morally wrong.

There isn't, to my knowledge, much if any correlation between smoking and "ignorance". I'm surrounded by brilliant engineers all day long. Most of them smoke. ALL of them know the consequences of smoking. So what are you talking about?

Quote
But I don't think you need to know much economics to make these kinds of decisions.
Yes, I agree. These are the kinds of statements that result from a fairly normal human need to assign values to everything. Neutrality is an acquired taste. The human brain is a dichotomizing machine - everything must be pigeonhold as good or bad, right or wrong, moral or immoral.

Quote
Cutting taxes on the super wealthy takes that tax money out of the public coffers. Period.

And if you put it in capital letters, do you think it would be even more true? In fact, it's only partially true. You need to ask, if this money were not taken from the super wealthy in income tax, where would it go? Into the stock market? But then it would suffer capital gains tax. Into consumption? But then it would suffer sales and excise taxes. Into building a factory? But then the employees would be paying the taxes. So the money WILL end up in the public coffers one way or another. Please follow this link. Your eyes will be opened.

Sure, since I'm not rich, I'd just LOVE to see the rich reduced to my meager level, while at the same time I'd be paying absolutely nothing in taxes. If such a policy had no economic consequences other than to shower me with money, I'd be overjoyed. Unfortunately such an economic policy will have countless drastic consequences, both direct and indirect, both immediate and downstream. Maybe if I pretended that doing so would be MORAL, those consequences would go away? Well, we can dream...

  
Dean Morrison



Posts: 216
Joined: Dec. 2005

(Permalink) Posted: Jan. 05 2006,10:08   

Flint:

You do hold  a 'laissez faire' position then, although you will allow for a certain amount of regulation - glad we cleared that up. (Perfectly respectable point of view of course - but not the only one) I was right to point out that you were introducing a 'particular economic point of view' into the Panda's thread.

The 'floating boats' analogy is of course a politically motivated one, just as much as 'trickle down'. What does the water represent in either system? or the size of the boats? or the size of the glasses? what is important the water level, or tide level? A nice image to sell to the masses, but not one that demonstrates an economic insight.

As I agreed Economics can be used as a tool of analysis. However promulagating an economic school of thought, as if it is a neccessary consequence of economic analysis; is overstretching. I said you seemed to be arguing your ideas with the certainty of mathematic proof - and you said you felt like you were trying to explain addition to me. Speaks for itself.

As for 'free markets' I noticed you ducked the potential challenge to 'efficiency'. If you accept that there  are situations where free markets are not 'efficient' -  then does impact on their desireabilty. We can make choices about how we let markets operate - we don't have to to let them operate freely from some 'higher principle'. A contentious area perhaps - but the mere existance of the contention means you shouldn't state your ideas with the confidence of a 'mathematical proof'

As for Wal-mart - I wasn't expressing moralistic concerns - other than saying the tendancy to monopoly is undesireable and to be resisted - something you agree with. As a UK citizen I don't remember the other company you were talking about (and we don't have Wal-mart - although we have it's subsidary - ASDA). I do understand that in the early part of the last century your country had to instigate a number of 'anti-trust' laws to try to control development of monopoly powers. These always seem to have been implemented after things got out of hand. I would hazard a guess that we are seeing the same process happen again with major retailers both in the US and the UK.

By corrective, I meant 'corrective' to challenging monopoly power - something you agreed yourself was undesireable.
If money doesn't influence votes that much - why do your guys spend increasing amounts at each election? ..and after all, just a few votes can swing things either way.

I'm not sure about your 'party that is less favourable to corporations' winning less than half the time? I would have thought that both your parties were favourable to corporations - just different ones. If you had had a social democratic party that was elected once then you might have a starting point - I suppose F.D.Roosevelt was the nearest you came?

And finally!!!  :D  :D  :D  :D  :D

<quote>In my observation (personal opinion only here), any market requires some regulation. What causes markets to grow, and middle classes to emerge, and national wealth to accumulate, is *competition*, not necessarily "freedom." So my personaly opinion is that a nation is best off (in terms of both per capita wealth and equitable distribution of that wealth) if freedom is restricted so as to guarantee competition.

Quote
Back to economics as a tool, it says nothing about whether monopolies are good or bad. Economics makes no moral judgment. It's a way to analyze economic consequences of policies.

[quote]
However I don't think that either of us should pretend that our 'economic views' are either 'entirely neutral' - or free from value judgements.

No, but perhaps not the kind of value judgment you are stuck in. I find the Keynesian approach more comprehensible than the Austrian approach, and I think the monetarists have things backwards.[/quote]

.. on which I am entirely in agreement with you :)  :)  :)  :)  :D  :D  :D  :D  :D

at which point I'll quit whilst we're both ahead, both our boats have been floated - and now I'll trickle down to the pub next door as it's getting late here in blighty.

Been nice sparring with you - look forward to seeing you again the next time a troll pops up :D

  
Flint



Posts: 478
Joined: Jan. 2006

(Permalink) Posted: Jan. 05 2006,10:44   

Dean,

Quote
I was right to point out that you were introducing a 'particular economic point of view' into the Panda's thread.

I wasn't trying to do so in the sense of preferring monetarism or supply side economics or the like. But I suppose you're right that I place a moral value on the greatest good for the greatest number, and that I assign the value "good" to personal freedom, comfort, and potential. And I haven't taken a moral position with respect to WalMart in any way.

Quote
What does the water represent in either system?

In the case of the rising tide, the water represents per capita wealth, as measured by the market. If we want to use money to measure it (why not?), then the water is money.

Quote
A nice image to sell to the masses, but not one that demonstrates an economic insight

Im sorry if YOU got no insight out of it. Most people do. We have seen that economic policies can lead to the expansion or contraction of the *entire economy*, irrespective of the distribution of wealth within that economy. I encourage you to keep looking.

Quote
I said you seemed to be arguing your ideas with the certainty of mathematic proof - and you said you felt like you were trying to explain addition to me. Speaks for itself.

Apparently it doesn't. You used math, so I accommodated you. In fact, if you go over what I've written, you'll see that if anything I said just the opposite of what you're now trying to put into my mouth. Economies are unweildy, messy, complex adaptive feedback systems highly resistant to any organized analytical method, where we can try to read statistical tealeaves and intuit patterns and trends. I admit I was quite astonished that you'd see this (which heceaton interpreted as "economics can't tell us anything useful at all") as mathematical certainty. My writing skills must be terrible, if one reader sees me arguing certainty whereas another sees me as arguing purest guesswork.

Quote
If you accept that there  are situations where free markets are not 'efficient' -  then does impact on their desireabilty.

I can't parse this. Efficiency can be defined fairly rigorously, while desireability is something totally unrelated. So I don't know what you're trying to say.

Quote
We can make choices about how we let markets operate - we don't have to to let them operate freely from some 'higher principle'.

I'm not aware that there even ARE any higher principles. Economics tells us (at least somewhat) how economies will react to different strategies of management.

Quote
A contentious area perhaps - but the mere existance of the contention means you shouldn't state your ideas with the confidence of a 'mathematical proof'

I remain baffled by this. Where have I done so? Imagine if I kept saying that you should write in English and not keep writing in French. You might wonder after a while...

Quote
As a UK citizen I don't remember the other company you were talking about

I wonder how many Americans remember the Great Atlantic And Pacific Tea Company. My grandmother would, if she were still alive...

Quote
I meant 'corrective' to challenging monopoly power - something you agreed yourself was undesireable.

Not sure I see this either. I wrote that monopolies have two economic consequences: they reduce the size of the entire pie, and they polarize the wealth within economies. From an economic standpoint, this is a neutral observation. No, it's not my personal preference. But I'm trying to describe how economics works, and you're trying to pin me down to my moral preferences. As I wrote earlier, I'm trying to explain addition, and you can't get past trying to decide which numbers I like best.

Quote
I'm not sure about your 'party that is less favourable...

I'm just not up for explaining American politics to you.

  
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