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Here are some more underinformed thoughts :) Please tell me where I'm being wrong/stupid, previous corrections have been very useful to me in thinking about this stuff!
The purpose of an economy, as far as I can see, is to produce things that people want, without producing too many things people don't want.
There is also a second-order effect here - economies should also produce 'the ability to produce more things people want in the future' and avoid producing 'a reduction in the ability to produce more things people want in the future'.
(I am using a very wide definition of 'things people want' here. People want iphones, food, world peace, novelty, countryside, etc etc. People don't want zunes (or insert your favourite failed gadget here), hunger, suffering, ugly architecture, hopelessness, etc etc.)
We haven't found a better way of measuring 'want' except in money (i.e. we model 'how much people want stuff' as 'how much money people are willing to pay for stuff'). I haven't been able to come up with a better measure either!
The present economy, up until the current blip at least, seems to be pretty good at producing things people want - at least for people in this country / 'the Western world'.
It seems to be pretty awful at not producing things people don't want ('minimising negative externalities', I believe, if we want to get techincal) and is starting to show signs of failing at 'ensuring people have the ability to produce more things people want in the future'.
So far, governments have been able to shore up the edges of this (regulation on pollution etc tamping down the negative externalities, public service education and healthcare and infrastructure keeping the productivity rising), but this is also breaking down - partially because the 'produce stuff people want - manufacturing the 'want' too if necessary' part of the system has gone into hyperdrive and become bigger than any governmental co-ordination acna handle.
Some key problems seem to be:
1) Money concentrates and gets inherited; there's not a complete relationship between 'what is good' and 'what people will spend money on'. So far, not enough people can agree on a better way to measure 'what is good'. There are ways to make money a 'better' model (for certain people's definition of 'better') like redistributive taxation and basic income guarantees, but they start to pretty obviously become awkward patches on the system only undertaken at the sufferance of those who could get ahead by breaking the system - and when the way to get ahead is to break the system rather than work within it, the system traditionally doesn't do well (see: various attempted implementations of communism).
2) There might not actually be enough stuff to go round, especially with the damage we've been doing to future productive capacity by ignoring that part of the equation. This makes people even more reluctant to try new models than the general human reluctance to change things - it might turn out that a model that maximises e.g. human happiness does it by markedly reducing the happiness of the people who are currently sitting on the levers of power, and also all of the people they are directly related to / care about personally...
3) We've even been messing 'make stuff people want' up lately.
I blame this partially on 'manufacture the 'want' if necessary' - there has been a lot of advancement in the ability of people to make people want stuff that isn't actually 'good' in any objective sense (if there is even an objective sense for it to be good in! this stuff is tricky) and that means there's a lot of wasted potential that doesn't necessarily immediatley look like waste.
And the other major part is lack of transparancy - especially lack of transparancy of negative externalities. When people buy things, they are pointed very firmly at the good ('this iphone makes my life better and makes me feel like I am living in the future') and away from the bad ('this iphone is manufactured in terrible conditions and uses a lot of irreplacable resources that we aren't doing enough to find alternatives for - it contains a lot of Suffering and Making My Future Suck').
The negative externalities build up and build up until they start making it harder to produce 'good' stuff - stuff people want - and that's why we're suddenly noticing them now...
The purpose of an economy, as far as I can see, is to produce things that people want, without producing too many things people don't want.
There is also a second-order effect here - economies should also produce 'the ability to produce more things people want in the future' and avoid producing 'a reduction in the ability to produce more things people want in the future'.
(I am using a very wide definition of 'things people want' here. People want iphones, food, world peace, novelty, countryside, etc etc. People don't want zunes (or insert your favourite failed gadget here), hunger, suffering, ugly architecture, hopelessness, etc etc.)
We haven't found a better way of measuring 'want' except in money (i.e. we model 'how much people want stuff' as 'how much money people are willing to pay for stuff'). I haven't been able to come up with a better measure either!
The present economy, up until the current blip at least, seems to be pretty good at producing things people want - at least for people in this country / 'the Western world'.
It seems to be pretty awful at not producing things people don't want ('minimising negative externalities', I believe, if we want to get techincal) and is starting to show signs of failing at 'ensuring people have the ability to produce more things people want in the future'.
So far, governments have been able to shore up the edges of this (regulation on pollution etc tamping down the negative externalities, public service education and healthcare and infrastructure keeping the productivity rising), but this is also breaking down - partially because the 'produce stuff people want - manufacturing the 'want' too if necessary' part of the system has gone into hyperdrive and become bigger than any governmental co-ordination acna handle.
Some key problems seem to be:
1) Money concentrates and gets inherited; there's not a complete relationship between 'what is good' and 'what people will spend money on'. So far, not enough people can agree on a better way to measure 'what is good'. There are ways to make money a 'better' model (for certain people's definition of 'better') like redistributive taxation and basic income guarantees, but they start to pretty obviously become awkward patches on the system only undertaken at the sufferance of those who could get ahead by breaking the system - and when the way to get ahead is to break the system rather than work within it, the system traditionally doesn't do well (see: various attempted implementations of communism).
2) There might not actually be enough stuff to go round, especially with the damage we've been doing to future productive capacity by ignoring that part of the equation. This makes people even more reluctant to try new models than the general human reluctance to change things - it might turn out that a model that maximises e.g. human happiness does it by markedly reducing the happiness of the people who are currently sitting on the levers of power, and also all of the people they are directly related to / care about personally...
3) We've even been messing 'make stuff people want' up lately.
I blame this partially on 'manufacture the 'want' if necessary' - there has been a lot of advancement in the ability of people to make people want stuff that isn't actually 'good' in any objective sense (if there is even an objective sense for it to be good in! this stuff is tricky) and that means there's a lot of wasted potential that doesn't necessarily immediatley look like waste.
And the other major part is lack of transparancy - especially lack of transparancy of negative externalities. When people buy things, they are pointed very firmly at the good ('this iphone makes my life better and makes me feel like I am living in the future') and away from the bad ('this iphone is manufactured in terrible conditions and uses a lot of irreplacable resources that we aren't doing enough to find alternatives for - it contains a lot of Suffering and Making My Future Suck').
The negative externalities build up and build up until they start making it harder to produce 'good' stuff - stuff people want - and that's why we're suddenly noticing them now...
no subject
Date: 2011-12-31 10:35 am (UTC)From:I'm using 'stuff that people want' as a proxy for 'good stuff' here, because I don't think anyone has found a better proxy for value than 'people want this'.
no subject
Date: 2011-12-31 12:24 pm (UTC)From:In any case, I think the second formulation is wrong, too. I, for one, study economics for the same reason I study physics or CS or engineering: because I think it's useful to know how things work. Whether economics does an adequate job of that is debateable ;)
I'm curious about your concept of "waste". It seems ill-defined, based on preconceptions of sustainability and a closed system, and - in extremis - requires a violation of the second law of thermodynamics.
no subject
Date: 2011-12-31 12:42 pm (UTC)From:It seems fairly obvious to me that we don't want people to spend time and effort (disregarding materials for a moment) producing things that nobody wants (poorly designed goods, parts for machines that never get built, digging a hole and filling it in again etc), or things that people actively don't want (ugly holes in the ground, choking smog, a rise in birth defects).
So a well-functioning economic system (as far as I can tell at the moment) would incentivise people away from activities that caused their time and effort to be converted into useless or actively anti-useful stuff...
no subject
Date: 2011-12-31 12:56 pm (UTC)From:You seem to be asking for those costs to be given disproportionate weight?
no subject
Date: 2011-12-31 01:07 pm (UTC)From:I believe if people _knew_ the damage their consumer choices were doing to the things they value, if they were communicated in the same kind of visceral way that the benefits are in advertising and marketing campaigns, that they would choose very differently (and more rationally, and with a better long-term outcome for themselves, individually, never mind the rest of the world).
Also, people often buy something and are disappointed by it - and are encouraged to be disappointed in it so they buy something else. Planned obsolescence seems to be a major source of waste too - there always has to be something wrong with the Current Thing so that you can get people to upgrade to the Next Thing, which is a waste of time and effort on the part of all the people who had to put together the Current Thing...
no subject
Date: 2011-12-31 04:50 pm (UTC)From:Not that, if there really were an impending resource shortage and prices are too low, some people would be buying like crazy in order to profit from the eventual rise? Or that people are choosing rationally because the "damage" - to them and to others - is negligible?
Whether it's "imperfect information" or "false consciousness", it's still a profoundly insulting idea that the proletariat are making the wrong decisions.
no subject
Date: 2011-12-31 05:10 pm (UTC)From:But I'm interested in your point of view still, even if it is different from mine and you seem to need to present it as the only reasonable point of view ;).
Some people _are_ buying like crazy in order to profit from the eventual rise. Others are putting into place other preparations on account of believing the markets in derivatives of the actual goods are unlikely to remain trustworthy, and therefore won't show up on the readily available market pricing.
I am quite happy to insult people that are making the wrong decisions and I am glad when someone does me the courtesy of doing likewise...
no subject
Date: 2011-12-31 06:17 pm (UTC)From:Will reply properly tomorrow - party starting now.
no subject
Date: 2012-01-02 12:57 am (UTC)From: