chess | More unfocussed economic ramblings

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...

Flat | Top-Level Comments Only

Well that's what "good" and "bad" mean, isn't it?

You say that, but people often have a funny definition of 'people'...

Some would say that 'good' things don't include some things that people want (people want drugs, people want random anonymous sex) because God doesn't want people to have those things, so they aren't good even though they are desired.

Some would say that 'good' things don't include some things that people want (people want cars, people want meat) because they're bad for the environment.

And some people find it hard to say things are 'good' (fashion items I hate, daft electronic tat that looks tacky to me) when they don't like it, but other people do demonstrably want it.

So defining your proxy for value ('people want this' being assumed to be 'this is good') seems to be actually quite important (and a fundamental problem, as then we have to measure 'want', which we currently do with money, which is probably an imperfect system depending on what you're trying to maximise for).

Well, people say things like that, but I translate in my head as "I don't want there to be these things." whenever they say them. Or, in extreme cases, white noise.

Money works quite well - but has the issue that "What rich people want." is then catered for rather better for than "What poor people want.", and so the two sets of wants are rather differently values from the new "objective" standpoint.

If your life is, generally, worth everything you have, then poor people's lives are a lot cheaper, for instance.

I think that money is a reasonable first-order approximation for fungible products, but if people use it as the only point of value then you start having problems.

OTOH, assuming you have a situation where people have to work at all (which I think we still do, alas), there has to be some way of incentivising people.

Barring straightforward authoritarian means (if you don't work I'll beat you; I use brainwashing to make you want to work for me; I take all the production and apportion it based on how much work you do) the best way we've found to do it is 'you get more of the stuff you can exchange for anything you want'.

'Economics' seems to be based on 'if you have this flowing means of exchange, then it finds its own level like water - people give it to each other because they want stuff, and the people providing the most value for the most people get more of it to spend on what they want'.

Whether it's doing this well, or should be doing this at all, depends on your viewpoint - what do you value?

If your values are 'every human being is essentially as worthy as the next one of having their desires fulfilled', then the current system isn't doing very well, as you say, because poor people's desires are undervalued.

If your values are 'every human being should be as productive as possible, should be rewarded in proportion to how productive they are' then it does a little better, but the concentration-of-wealth problem means that some people's children get a better start than others because of their circumstances, which means equality of opportunity doesn't happen in practice and some people's productivity is stunted, and you might be looking for ways to improve that.

If your values are 'I want as much as possible for me and mine and screw the next guy', then whether the system works for you depends where you started :). So the rich want less regulation on their activities and a greater ability to screw the next guy, the middle classes want restrictions on how badly _they_ can be screwed but for their stuff to only be redistributed to the extent that it keeps unsightly starving beggars off their doorstep, provides collective services / insurance for things they're not rich enough to fund individually, and prevents spread of diseases in their neighbourhoods, and the poor want a share of the stuff the other people have got...

It turns out to be very hard to talk about 'correct' economic policies until you answer the question 'correct for who?'.

Exactly! And that's why you need a counterbalance from a system that's _not_ weighted by money. And politics should be that system (one person, one vote), except for in countries where there's blatant political manipulation by large wodges of cash (like the US, for instance).

In a way, you're always going to have political manipulation by large wodges of cash.

For one thing, votes are a kind of currency; they're not explicitly transferable but there is an exchange rate. Prosaically, the more leaflets you can print, the more shiny badges you can hand out, the nicer office space you can rent, the more self-confident your supporters are, the better you'll do.

We have a lot of campaigning budget restrictions in the UK for this reason, but you can't stop someone really determined from renting the office cheaper to their mates, or providing a delicious home-cooked meal to their friends which they just happen to be doing after a hard night of canvassing, or having a nice house in a convenient position to be a base for leafleting, or wearing a nicer suit...

Representative democracy also doesn't necessarily balance out educational differences very well; if your underclass are too downtrodden to use their votes effectively (which includes seeing through quite advanced advertising and marketing tricks), it doesn't really matter if they have a vote at all, especially as they're not going to be well-spoken / well-dressed / possessing of enough free time and useful contacts to be a candidate themselves.

Again, it's a matter of 'what are you maximising for'. One person, one vote is a system which has a heavy load of 'people are equal' bias in it - but if you look at it closely it has all kins of other biases in it, like 'people can't vote from prison' and 'people can't vote until they're 18' and 'people can't vote if they weren't born in this country or achieved citizenship in some other way we approve of'... so actually it's another manifestation of 'people like us are equal', and what you pick as the defining characteristics of 'people like us' is interesting and important.

(some people, after all, would want to put at least some animals in 'people like us'; I might try quite hard not to be racist, but I am quite cheerfully species-ist, so this limits my ability to complain about other people's 'narrow' definitions of 'people like us'...)

How to construct your democracy is always an interesting topic :->

I think you're being bit too black and white about the corruption of money. Sure, people can always do little things to get around it, but that's very different to the US where the backing of billionaires is necessary to be elected.

And no, democracy by itself is not the answer. You also need a decent rule of law, a free press, education, healthcare, etc. And each of those produces its own tensions. They're interacting systems, and there's no such thing as a perfect system, you just had to fudge it to try and find one that produces the least unhappiness.

(and it's the fact that people have many different priorities that make me want to break it down and work from principles of self-interest; most people at least partially want _themselves_ to be happier, healthier, longer-lived, and I _think_ that usually actually equates with 'make the world a better place' (because that reduces your risk of riots and criminal behaviour and seeing unsightly things and having places you can't go and your empathy acting up and making you upset), but I'm not _sure_ yet.)