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Topic: Finding the best system of economy (Read 77754 times)
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Finding the best system of economy
From the article (book review) Innovation: The Government Was Crucial After All

Quote
“The great advances of civilization,” wrote Milton Friedman in Capitalism and Freedom, his influential best seller published in 1962, “whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government.” He did not say what he made of the state-sponsored art of Athens’s Periclean Age or the Medici family, who, as Europe’s dominant bankers but then as Florentine rulers, commissioned and financed so much Renaissance art. Or the Spanish court that gave us Velázquez. Or the many public universities that produced great scientists in our times. Or, even just before Friedman was writing, what could he have made of the Manhattan Project of the US government, which produced the atomic bomb? Or the National Institutes of Health, whose government-supported grants led to many of the most important pharmaceutical breakthroughs?

We could perhaps forgive Friedman’s ill-informed remarks as a burst of ideological enthusiasm if so many economists and business executives didn’t accept this myth as largely true.

Re: Finding the best system of economy

Reply #100 –
Quote from: ensbb3 – on
I'm sure I'm marginal on some things but if I've learned anything from this tangent It's how little the economy is involved in my decision making. Even when money is tight a few dollars here or there isn't enough to deviate from what works and not needing to save a dollar has never stopped me from not spending it. Results may very of course.
I think that rather than change what I buy, I'd better pay more attention to where I buy it.[1] I do that for surprisingly large differences, like at the one store Frosch dish washing liquid is literally less than half the price of at another, but for an everyday object like mushrooms I often pay 10-20 cents more than the cheapest price. Heck, I even pay 50 % more for milk & buttermilk because the store with the more affordable (butter)milk (AH) is super out of the way in the north of town. They closed down the one much closer to me.  :no:

We recently also started saving some money through the discovery of frozen bulk Quorn over at Colruyt. But you can save money more proactively than just by randomly running into an opportunity like that.
1 Although I might also cut back on more expensive cheese and possibly bio products.↵

Re: Finding the best system of economy

Reply #101 –
Quote from: ensbb3 – on
Some other Unconventional Economic Indicators that have been promoted include:

1. Hemlines: First suggested in 1925 by George Taylor of the Wharton School of Business, the Hemline Index proposes that skirt hemlines are higher when the economy is performing better. For instance, short skirts were in vogue in the 1990s when the tech bubble was increasing.
2. Haircuts: Paul Mitchell founder John Paul Dejoria suggests that during good economic times, customers will visit salons for haircuts every six weeks, while in bad times, haircut frequencies drop to every eight weeks.
3. Dry-cleaning: Another favorite Greenspan theory, this indicator suggests that dry cleaning drops during bad economic times, as people only take clothes to the cleaners when they absolutely need to when budgets are tight.
4. Fast food: Many analysts believe that during financial downturns, consumers are far more likely to purchase cheaper fast food options, while when the economy heads into an upswing, patrons are more likely to focus more on buying healthier food and eating in nicer restaurants.
What I find curious about these indicators is that most of them are allegedly trying to capture consumer behaviour, something that the mainstream theory is incapable of. According to the mainstream economic theory, just one type of people exists: maximisers of economic profit. In reality, there are at least three types: hoarders, hustlers, and drifters.

Maximisers of profit are a combination of hoarders and hustlers, whereas the bulk of consumers are drifters. After fulfilling their primary needs, drifters buy stuff just because other people are buying the same or similar stuff, or if minimalism is in the vogue, they do not buy anything. There may be more pennywise and less pennywise drifters, but they do their thing completely regardless how economy at large is doing.

With the last point (fast food), I guess they are referring to the famous Big Mac Index. It is useful for measuring purchasing power parity rather than consumer behaviour in relation to upswings and downturns of economy. West-branded fast food is a completely different social phenomenon in e.g. Eastern Europe compared to Western Europe and USA.

In Eastern Europe, McDonalds and Burger King are a symbol of the stage of development where prestigious global brands enter the local market. Visiting such places signals that you can afford shiny foreign things. It has nothing to do with cheapness or even with fastness. In under-industrialised countries, Western fast food brands are an outrageously expensive choice compared to e.g. forest produce which comes only at the expense of picking (and most people are picking forest produce by themselves because this is what under-industrialised means). When these people go to a fast food restaurant, they are not thinking about saving money. They think about showing off and having fun like they have seen in the movies, nevermind the health effects.

This is why the Big Max Index measures purchasing power parity, not much else. Also those other indices measure, in a limited way, purchasing power parity in various social strata. They can have a relation to macroeconomic trends on the assumption that economy equals consumption. Wrong assumption.

Economics is about the least attractive science, not really worth to be called a science. Accounting and econometrics are something, but economics is nothing.

Re: Finding the best system of economy

Reply #102 –
Quote from: ersi – on
With the last point (fast food), I guess they are referring to the famous Big Mac Index.
Oh right, I've heard of that.

Quote from: ersi – on
In Eastern Europe, McDonalds and Burger King are a symbol of the stage of development where prestigious global brands enter the local market.
Back in the mid-'90s, there was a particular ad McDonald's ran on TV. A bunch of kids were hanging around a set of swings talking about what their dads did.[1] "My dad's a teacher, mine's a banker, mine's a lawyer. Dude, what's your dad do? My dad works at McDonald's." Cue stunned silence from the kids.

When I first saw that ad, for the first split second I thought it was shocked silence at the family's misfortune and I was afraid the poor kid was about to get bullied.
1 Maybe it was a dubbed American ad? I'm not sure if native Dutch ads were so bluntly sexist.↵

Re: Finding the best system of economy

Reply #103 –
Quote from: Frenzie – on
Maybe it was a dubbed American ad? I'm not sure if native Dutch ads were so bluntly sexist.
[video]https://www.youtube.com/watch?v=xdGIJFVRZpE[/video]

If this is a real ad by McDonalds, then they easily compete with Disney in overt racism. And yes, the message is "I'm lovin' it", their current catchphrase, but from the bad quality and general lack of availability of the video, it seems the ad was cancelled.

Is there some "Black TV" network in USA?

Edit: And yes, it looks like in USA the marketing departments in all earnestness posit the question, "How can we dupe that particular demographic into buying the product?" https://adage.com/article/cmo-strategy/mcdonald-s-hits-refresh-african-american-marketing/317145

Re: Finding the best system of economy

Reply #104 –
Nope, definitely a fully Dutch commercial. Turns out there's a subtlety I missed at the time: the kid's dad in the commercial is actually a famous architect of presumably greater importance than some random lawyer.

https://www.youtube.com/watch?v=PTlDfAQNXkI

(And it says it was from 2000? Huh, it somehow feels older in my memory.)

Re: Finding the best system of economy

Reply #105 –
Quote from: ersi – on
Western fast food brands are an outrageously expensive choice compared to e.g. forest produce which comes only at the expense of picking

Well to be fair, urbanites have always been more dependent on how their money works. I grew up in a small town. Gardens, hunting and foraging were just a thing. 

Re: Finding the best system of economy

Reply #106 –
Yeah, living in a city has some truly bizarre aspects, at least from my perspective as someone who didn't grow up in one. (My parents did.)

Things like blackberries are basically weeds that to quite some extent you want to get rid of. Of course you eat plenty of actual blackberries from about August to October, but they're just these things that are there. Same for watercress (except more of a welcome guest than a weed), etc., etc., etc. But here in the city blackberries are some kind of expensive delicacy, as is watercress.

Re: Finding the best system of economy

Reply #107 –
Quote from: Frenzie – on
But here in the city blackberries are some kind of expensive delicacy...
Some of them are indeed expensive. :)

Re: Finding the best system of economy

Reply #108 –
Yum, chips!

Re: Finding the best system of economy

Reply #109 –
Hail Finland! And congrats for independence day again! (Dec. 6)

Finland Is a Capitalist Paradise
"Can high taxes be good for business? You bet."

Re: Finding the best system of economy

Reply #111 –
In Rotterdam they're making playgrounds out of old windmill blades.



They also recycle them into some kind of wooden plank alternative.

They say the ideal is to make ones that can be remade into base components to make new blades, but we're not there yet.

So while it's a bit of a problem, just tossing them in landfills has the appearance of primarily being an American approach. But one might argue the problem is a lack of capitalism. When certain common goods like air and dumping grounds are "free," capitalism isn't doing anything at all.

Marx vs Friedman

Reply #112 –
The Globalist published some scattered notes juxtaposing Marx and Friedman. A few notable quotes:

Quote from: https://www.theglobalist.com/karl-marx-and-milton-friedman-capitalism-communism-ideologies/
Friedman often is caricatured as an unqualified defender of free markets, but this is inaccurate.

While he was deeply hostile to government intervention in the economy, he recognized standard market failures including externalities (“neighborhood effects”).
If I were to point out a single biggest flaw in economics as science, it is exactly the concept of "externalities" or "exogenous shocks". Those phenomena, like industrial pollution, a supply shortage from foreign countries and busts of any sector are inseparable from economy, so they are really something that economics must account for. Economics can make sense as a social science, not as mere mathematical model.

Quote from: https://www.theglobalist.com/karl-marx-and-milton-friedman-capitalism-communism-ideologies/
A product of the Great Depression, Friedman particularly disputed the Keynesian claim for active countercyclical policy. A steady rate of growth of the money supply was all that was needed to stabilize the economy.

In complete contradiction to Marx, Friedman believed that government, not capitalism, produced business cycles.

If monetary policy were driven by simple rules rather than the judgments of policy makers, market economies would grow steadily.

I think of Friedman as an “economic deist” who thought that relatively few government interventions would be sufficient to set the economy running unmonitored, like clockwork.

Build the capitalist clock, wind it up, and then let capitalism run without further intervention.
That's Reaganomics and Thatcherism in a nutshell, I guess. Except it resulted in the kind of growth (somewhat captured by the stock market indexes) that was actually accumulation to the top of the pyramid, logically bound to follow by a crisis, as Keynes (and Marx) correctly perceived.

Quote from: https://www.theglobalist.com/karl-marx-and-milton-friedman-capitalism-communism-ideologies/
As disappointing as it may be to libertarians (excluding the sizable corps of true believers, immune to evidence), a complicated society needs a lot of complicated, active public policy, both microeconomic and macroeconomic.
Agreed.

Quote from: https://www.theglobalist.com/karl-marx-and-milton-friedman-capitalism-communism-ideologies/
If [Friedman's] dream of inactive government has not been supported by history, his attention to the importance people attach to autonomy, and the social cost of restricting it, is as important as ever.
So Friedman's contribution was more of a sociological nature: He emphasised that people like freedom. But this was already known. And even more was known: Freedom is a word that can be easily abused to dupe the masses.

Quote from: https://www.theglobalist.com/karl-marx-and-milton-friedman-capitalism-communism-ideologies/
Neither Marx nor Friedman made lasting contributions to economic theory, in my view. However, anyone who tries to understand and to intervene in today’s political economic processes had better pay attention to what they said.

We cannot understand modern political economic developments without bringing to bear Marx’ understanding of the role of social class. Nor can we understand them without Friedman’s appreciation of markets as expressions of freedom.
Okay. Any comment? Anybody? Oh, well...

Re: Finding the best system of economy

Reply #113 –
Matthew 7:16-20

Libertarianism has proven as harmful, and ultimately as tyrannical, as the other ideologies of the 20th century.

Re: Finding the best system of economy

Reply #115 –
A nice video starting with a slice of early history of Iceland.

[video]https://www.youtube.com/watch?v=HTN64g9lA2g[/video]

The modelling leads to the conclusion that anarcho-capitalism is no alternative to the capitalism we have; it just is plain (corporate) capitalism. You cannot be a proponent of entrepreneurial freedoms, small government, and democracy all at the same time (a la Reaganomics, Thatcherism and neoliberalism). It's because in companies and corporations there is no democracy, thus the unmitigated expansion of entrepreneurial freedoms leads to an oppressive social order for the majority (social order = form of government).

And here's another modelling of anarcho-capitalism, a game called Habbo that I did not know about earlier.

[video]https://www.youtube.com/watch?v=hE6jxjKPNZQ[/video]

So what's the alternative? In real life, there are state-designated strategic domains such as vital resources, energy, military, possibly also education and healthcare etc. The more there are such strategic domains and the more closely they are regulated with price controls, trade barriers and other protections, the more mixed the economy is. It's mixed, not socialist. The government has to operate for the social benefit of the society, something that capitalist companies do not do. Companies can give salaries to the workers, but they cannot guarantee that the salary will be just, sufficient, or that the money will be convertible and stable. Companies also do not guarantee that products are beneficial for the people and that the trade or production is not too harmful for the environment. The government needs to identify the strategic domains, pay attention to equitable distribution of the resources and products of the domain to the society and be diligent punishing any abuses, particularly when own officials fail to observe the rules or become corrupt, but also when companies encroach.

All this is of course unenforceable in a game where the environment is created by a for-profit company. The game reflects its creator. A for-profit creator of course defines the terms and calls the shots for his own profit.

Re: Finding the best system of economy

Reply #116 –
Gonna have to make saving the environment and treating workers good profitable somehow. Perhaps if the government took contracts based on these attributes and not just lowest bidder. Tax incentives for years compliant, tax spikes for years not. Maybe if lawmakers just quit taking corporate money and worked for the people or something. Radical idea, that last one, I know. 

Re: Finding the best system of economy

Reply #117 –
‘No one should have more than €10m’: the author of Limitarianism on why the super-rich need to level down radically

Quote from: https://www.theguardian.com/books/2024/jan/21/how-much-personal-wealth-is-enough-ingrid-robeyns-limitarianism
Here’s a couple of good questions for an election year: while we may talk about minimum wages, why don’t we ever discuss maximum wages? And, while our politicians may argue about how little a family can survive on, why do they never address the other end of the inequality scale: just how much accumulated wealth might be too much?

The best move ever is of course to come up with a catchy name for your theory. In this case, it's Limitarianism.

Re: Finding the best system of economy

Reply #118 –
Nobody should own more than me sounds like a good economic model. Comparativism?

Re: Finding the best system of economy

Reply #119 –
There are six reasons to tax and none involve funding the government

https://www.youtube.com/watch?v=rFHvyiXuxAM

The correct understanding of monetary economy is biblical: Render unto Caesar the things which are Caesar's.

It is not economically sound to be a tinfoil-hat sov-cit private-property fundie gun-toting American theocratic Q terrorist.

Re: Finding the best system of economy

Reply #120 –
Robert Reich lists 15 ways of building a better future, and the most important of these is a universal basic income (especially assuming AI *will* take everyone's job). Another is tax everyone, not just the poor and middle class. I wonder why it never occurred to either party in USA to have a social leaning.

The video is a compilation of the economics series Robert Reich had ongoing on his channel.

https://www.youtube.com/watch?v=osDCl0cPHB4

Re: Finding the best system of economy

Reply #121 –
Machines will take over human jobs when, and only when, the economic value of that job is lower than cost of doing that job (in time, effort, inconvenience) is to the employee. That is, when it is no longer profitable to hire any human.

Most of human effort in history has been to produce food, clothes, transport and shelter. This has mostly been taken over by machines. It would take half a year to a year, starting with the sheep, to produce one woolen sweater. Less if heavily industrialised, but the carding and spinning and knitting would take a minimum of three (wo)man-months. Practically nobody would be willing to pay 3-12 months wages for a handmade sweater, so that job is lost.

We may pay a premium for hand-made (though that hand is very much machine-assisted), but manufacture is very much a machine's job these days. But as machines makes products cheaper, we have more resources to appreciate services, and there the human premium is often very large. The nurse may be machine-assisted, but we very much appreciate the nurse, or the teacher.

Re: Finding the best system of economy

Reply #122 –
Quote from: jax – on
Machines will take over human jobs when, and only when, the economic value of that job is lower than cost of doing that job (in time, effort, inconvenience) is to the employee. That is, when it is no longer profitable to hire any human.
You are wrong on the point of the cost of the job to the employee. I know people who receive less pay (or are scammed of their wages) than it costs them to go to work. This is how immensely valuable jobs are to people. People take loans to be able to go to work.

The actual factor is the cost of the employees to the employers. As long as humans can be squeezed of profit by employing them, they will be employed. When humans are no longer profitable to the employer, then the employer stops employing. Under the current system, nothing obligates employers to employ anyone. This is nothing new. Where I live, this has been so since 1990 or thereabouts.

Quote from: jax – on
Most of human effort in history has been to produce food, clothes, transport and shelter. This has mostly been taken over by machines. It would take half a year to a year, starting with the sheep, to produce one woolen sweater. Less if heavily industrialised, but the carding and spinning and knitting would take a minimum of three (wo)man-months. Practically nobody would be willing to pay 3-12 months wages for a handmade sweater, so that job is lost.
Have you ever paid a 3-12 months wages for a handmade sweater? I do not mean someone else's wages, but *your* 3-12 months wages - for a sweater.

Or do you mean it's the sweatermaker's 3-12 months wages that the sweatermaker receives per sweater? This is how you imagine the life of a full-time artisan wool-knitter?


I came across a refreshing (depressing actually) little Lektür recently: The TESCREAL bundle of ideologies that underpin AI development, also ASI (artificial superintelligence) and AGI (artificial general intelligence). It is a nice text for people to diagnose how techno-Nazi/feudalist they are.

The TESCREAL bundle is an acronym referring to the following ideologies:
- Transhumanism
- Extropianism :: The opposite of entropy. Defined as a system's capacity for improvement in intelligence, information, and vitality.
- Singularitarianism :: Rapid technological development resulting in merging humans and machines.
- Cosmism :: Spreading the new humanity all over the universe, ideally by leaving biology behind and living indefinitely as uploaded hive-mind
- Rationalism :: lesswrong.org
- Effective Altruism :: The thesis that the ultimate goal is to produce "most good" (where "good" is the progress of transhumanist projects, such as AI, AGI or cosmism) for the given limited resources.
- Longtermism :: The thesis that the (long-term or ultimate) goal justifies all means, be it ecological catastrophe, exploitation of low-cost offshore workforce in whatever side tasks, etc. which are viewed as temporary collateral damage survivable by those worthy of survival.

Some of the representatives of the ideology bundle identified in the article: Elon Musk, Peter Thiel, Jaan Tallinn (!), Sam Altman, Vitalik Buterin, Sam Bankman-Fried, Marc Andreessen.

Missing in the article: Curtis Yarvin.

Re: Finding the best system of economy

Reply #123 –
On the latter, yes I consider them to be the greatest current threat to humanity, not bureaucrat-dictators like Putin or Xi, or aging wannabe-dictators like Trump. You know this XKCD.



There have always been people like this around, but there needs to be enough disorder and conflict for them to rise to power and implement their ideas. I think they will fail, but I am sure they will try.

When I talked about value above, it was in the economist sense. Not social or personal values, but neither monetary income or profit. Rather valuation, what economic actors value. The model of people-as-value-maximisers has shortcomings, but for business purposes it serves. And yes, work has value, and not just social. There is a value in making things with others that you don't get if e.g. you were playing cards with friends. 

The type of work shifts with the entrance of the machines. Things that used to be expensive/limited, food, clothing, lighting we now have an abundance of, and it is largely produced by machines. Instead we get paid for things that would not possibly be a vocation in the past. We got professions like streaming your game play online. 

Re: Finding the best system of economy

Reply #124 –
Quote from: jax – on
Instead we get paid for things that would not possibly be a vocation in the past. We got professions like streaming your game play online.
It's not a profession. It's an activity that may or may not earn you money. And this is already a major sign that it's not a profession. A profession always earns you money.

Streaming your game play online earns money to the top streamers. Others may sometimes get something, depending on - who knows what. It does not depend on the level of polish of their "content". You either are famous or not. You might go through the effort of faking your ratings and become famous that way and thus earn money. The platform where you stream is not yours, its behaviour does not depend on you, and neither is it properly regulated. Its so-called algorithm does what it wills, or rather what its owners will - namely the earnings of the platform members are seen as a cost (kind of like in ordinary employment) and the cost can be randomly and ruthlessly cut (because the contract is far less on your side than in case of ordinary employment).

The point is that there are no "professional" characteristics that ensure you a living salary as a streamer, so it's not a profession. They live on clicks, but nobody knows what guarantees clicks, except networking and cheating which have no necessary connection with whatever it is the streamer is streaming. To be a profession, there should be advertised vacancies for streamers.