I'm not certain I get your point, Degs.These collaborative efforts by no means repeal the law of supply and demand. They are merely another method of working within that law. Sleds and blimps both are subject to the law of gravity.There are plenty of studies that show that collaboration in business enables growth in circumstances where competition does not. An example is education. Even if the whole system was 'private' - collaboration by competing schools to come up with a standardized testing and expected knowledge curriculum enables them to set "price/performance" expectations in the marketplace that lets them optimize costs and pricing. http://blogs.hbr.org/cs/2011/05/partnership_not_purchase_order.html http://hbr.org/product/best-practices-for-industry-university-collaborati/an/SMR360-PDF-ENG?Ntt=partnership%20collaboration (HBR aint exactly "liberal") http://www.tamarackinstitute.org/downloads/clife/book_collaborationchallenge.pdf http://aomarticles.metapress.com/content/c81k107575987175/
God's hand isn't the "invisible hand" under discussion in Adam Smith -- the invisible hand is, essentially, self interest. The baker offers a better product than his competitor not because he wants to serve you better, per se, but because doing so generates more profit for him. Thus, a better product is offered via the invisible hand of market forces. The "invisible hand of Jupiter"is merely a descriptive device.as for natural selection - my bad, you are right about the sequence. But the idea of "survival of the most fit" IE the "struggle for survival" goes back to the 9th Century philosophers like Al-Jahiz. And the whole issue of how individual self-interest drives success was very much something that was being debated at the time but restricted in may ways by the idea that "God's Hand" is somehow involved. After all, Smith uses the "invisible hand" motive in earlier works talking about "the invisible hand of Jupiter".
Yes -- but the point of Smith's analysis is that you, as a consumer, would probably be likely to drive further (spend more) to go to a car wash that ALSO made no use of phosphates and was hence better for the environment -- and that car wash would profit thereby. If a chain of car washes exploited this fact and attracted the business of greenies throughout the greater Northwest, it would be more profitable than car washes that did not do so.And therein you miss what is really going on. Because you define profits in a very narrow manner limited by YOUR scope of conception of such. But the BROADER one's scope of "profitability" is - the broader one's view of maximizing that profit is. Two examples:
I don't use phosphate based soaps in washing my car in my driveway and instead go to a carwash. Because even though it costs me more (less profit in the short run) it helps protect the quality of water in my lake (more enjoyment ie broader 'profit' view)
No, my view of profits is that if I sell something for less than I paid for it, I didn't make a profit. If my vote is a commodity, it is not a saleable one, and it is not directly affected by the law of supply and demand. There is a finite number of votes available, but the customers of those votes are not allowed to spend money for them, and so we cannot set a price point. When I vote for a given candidate and his policies, my view of the profit might be altruistic -- a profit for society as a whole rather than for myself personally, even if I accepted your foolish analysis of Reagan's presidency.Your view of the "profits" you would have in voting for Reagan lead you to vote for him. He in turn drastically slashed student aid for University - as a result you did not get the Fin. Aid you needed, and therefore did not get a college education. And this will likely have COST YOU about $20,000/year in average salary for your whole lifetime.
BTW -- I received a college education. I did not receive a college degree. Throughout my career I've found this to be about as important in real life as it is in the movie version of "The Wizard of Oz." "Why, anybody can have a brain. That's a very mediocre commodity. Every pusillanimous creature that crawls on the Earth or slinks through slimy seas has a brain. Back where I come from, we have universities, seats of great learning, where men go to become great thinkers. And when they come out, they think deep thoughts and with no more brains than you have. But they have one thing you haven't got: a diploma."
As I went to work in my planned career field, worked along side people who had diplomas and made the same pay as them, and left for a more lucrative career field, I doubt I've had a significant loss in earnings as result.
Keynes 1923:
- Thread starter Woolleybugger
- Start date
Woolleybugger
Mayor
How shallow can you get....Keynes was ethically lazy? What kind of world do you live in...wow.
It's total bullsh!t, just like everything else produced by Liberals.
Woolleybugger
Mayor
JD, Keynes was a guy that lived long ago, when you were born.
That doesn't make it NOT bullsh!t
degsme
Council Member
But simply calling it bullsh!t doesn't make it so... particluarly coming from a guy who can't answer why he destroys millions of "potential human beings" every night.
Huh??
degsme
Council Member
Translation of whom or what?
degsme
Council Member
Your invocation was of the self-interest of the Butcher and Baker leading to an optimized output point on the Supply/Demand curve. Which is essentially what Smith argued. The collaboration research shows that this is not necessarily the case. That in many cases, individuated self-interest leads to systemic collapse (the classic liquidity trap) whereas cooperative engagement that sublimates individuated self-interest sustains the system and the long term view of self-interest
Smith's mistake was to assume "rational actors" in both short and long term behaviour. And as Kahneman's Nobel Prize winning work demonstrates - this is rarely the case when it comes to the Butcher/Baker etc. So if you have irrational perception of self-interest operating, you do not actually have TRUE self-interest operating. It is true that this also can apply to collaborative efforts, but precisely because it involves the "wisdom of the crowds" every bit as much as "supply and demand" do- you often reach more optimal outcomes.
For example - irrationality about what is sinful for a long time meant you could not buy anything before 11am on a Sunday ("blue laws"), despite very clear economic demand. It took COLLABORATIVE EFFORT by those who lacked that irrationality to operate OUTSIDE the market to change that.
Your carwash analysis is similarly flawed. Under Smith - the carwash would hide how it deals with its water because it is in the self-intersts of the carwash owner to externalize those costs onto society to maximize profit. And any competitor that sought to "greenwash" would be forced to match prices and thus you have a race to the bottom. But by society setting a floor on the externalization of such costs VIA REGULATORY MECHANISMS (EPA water discharge quality) - ALL carwashes are forced to fully integrate those costs. This reduces some of the prevalence of carwashes, as it excludes those who can only profit when costs are externalized, but it also makes for a more efficient market, since the true COGS are reflected in the price.
Similarly EPA regulation PREVENTS my neighbor from externalizing his carwash costs onto my private property by preventing him from washing in his driveway via fines and a regulatory enforcment mechanism.
But again, the reality is that you did not have the SCOPE OF CONCEPTION to connect that voting for Reagan would personally cost you $1,000,000+ over the course of your lifetime. (And if you received a full college education, you would have a degree. Most who claim to have received a college education minus the degree really are missing some significant parts of the education).
And yes, the lack of a degree reduces the salary offer you get. EVENTUALLY your resume becomes the stronger differentiator, but by then, the college degreed folks are already earning at a higher level. The data on this is quite clear. http://www.census.gov/prod/2002pubs/p23-210.pdf
Smith's mistake was to assume "rational actors" in both short and long term behaviour. And as Kahneman's Nobel Prize winning work demonstrates - this is rarely the case when it comes to the Butcher/Baker etc. So if you have irrational perception of self-interest operating, you do not actually have TRUE self-interest operating. It is true that this also can apply to collaborative efforts, but precisely because it involves the "wisdom of the crowds" every bit as much as "supply and demand" do- you often reach more optimal outcomes.
For example - irrationality about what is sinful for a long time meant you could not buy anything before 11am on a Sunday ("blue laws"), despite very clear economic demand. It took COLLABORATIVE EFFORT by those who lacked that irrationality to operate OUTSIDE the market to change that.
Your carwash analysis is similarly flawed. Under Smith - the carwash would hide how it deals with its water because it is in the self-intersts of the carwash owner to externalize those costs onto society to maximize profit. And any competitor that sought to "greenwash" would be forced to match prices and thus you have a race to the bottom. But by society setting a floor on the externalization of such costs VIA REGULATORY MECHANISMS (EPA water discharge quality) - ALL carwashes are forced to fully integrate those costs. This reduces some of the prevalence of carwashes, as it excludes those who can only profit when costs are externalized, but it also makes for a more efficient market, since the true COGS are reflected in the price.
Similarly EPA regulation PREVENTS my neighbor from externalizing his carwash costs onto my private property by preventing him from washing in his driveway via fines and a regulatory enforcment mechanism.
Wrong analysis. Smith's point is that you THOUGHT you were voting your own "self-interest" when you actually harmed your own self-interest. Even the "altruistic" view is one of "self interest" - because you believe that "Society's best interests as a whole" is in your own "best interests".....
But again, the reality is that you did not have the SCOPE OF CONCEPTION to connect that voting for Reagan would personally cost you $1,000,000+ over the course of your lifetime. (And if you received a full college education, you would have a degree. Most who claim to have received a college education minus the degree really are missing some significant parts of the education).
And yes, the lack of a degree reduces the salary offer you get. EVENTUALLY your resume becomes the stronger differentiator, but by then, the college degreed folks are already earning at a higher level. The data on this is quite clear. http://www.census.gov/prod/2002pubs/p23-210.pdf
Woolleybugger
Mayor
BTW, UK GDP worse than expected...looks like austerity does indeed decrease aggregate demand...
http://www.bbc.co.uk/news/business-18187354
http://www.bbc.co.uk/news/business-18187354
degsme
Council Member
Noticed that one too. 0.3% of GDP lost in ONE QUARTER. That works out to 1.2% of GDP in a year. Precisely what is predicted for the Ryan Plan... Note that the UK PREDICTION was for LESS GDP reduction. So that argues that the Ryan Plan will probably be more like 2% of GDP.. IE pushing unemployment close to double digits again...
Woolleybugger
Mayor
I just got a report from a fund I own in my 401k. One of them is an international fund. They trailed one of the euro indices in performance and someone there wrote up a reason. Turns out that bankers are weighting keynesian stimulus which is wrong. They should continue with austerity so that budgets could line up with revenues giving businesses the confidence to invest again in europe. Business is hoarding cash because of uncertainty about the future. If they knew the future was contraction and economic hardship, that would give them the confidence to invest again. It was so weird that I almost want to liquidate it today...
degsme
Council Member
I find it humourous to have you lecture Wooley and myself on "classroom economics" when in fact both of us have actually started companies and been involved in both successful and failed startups - whereas you have only ever been an employee. The "reality on the ground" is that Keynesian policies work and Supply Side policies do not. And you can find that looking at how Reagan's Tax cuts affected reinvestment in the economy , how GWB's affected the economy vs. how Obama's stimulus worked (and it actually worked even according to the GOP controlled CBO).
And your model about how the carwash guy can make more profit by advertising as "green" ignores the PRACTICAL REALITY that absent EPA standards on what IS and IS NOT "green" ANY Carwash owner can do that. Except that the owner that externalizes costs undercuts the one who actually is green. Absent regulation, this sort of abuse and hence market distortion GOES ON ALL THE TIME. The quintessential example is Andrew Carnegie vs. the Jones Lauth company. Bernard Lauth invented cold rolling which was less expensive than Carnegie's "hot rolling" of rails. So Carnegie undercut Lauth's prices (at a loss) AND bad mouthed Lauth's process to the customers until Lauth had to sell the process license to Carnegie (and some of the works). Carnegie immediately started cold rolling his rails and selling them as a "Special new More durable rail"...
This sort of anti-competitive behaviour is today REGULATED. It is part of that mean and nasty regulatory process you object to that is covered by Interstate Commerce. But under your line of reasoing, Carnegie's successors could avoid that by simply transacting all their rail sales WITHIN THE STATE, and requiring all their customers to set up subsidiary corporations within the state of Manufacture. Thus such sales would be "local" and not subject to federal anti-trust regulations. Even THOUGH the product was actually part and parcel of an interstate commerce system.
Now as to college education - at your age the college degree might help a bit, but not that much - your resume path is already the limiting factor. What you miss is that not only would your starting salary have been 50% higher - you would have had FASTER PROMOTION opportunities, because without a degree, you were filtered out for those roles. Same applies in Media Relations. My partner came out of univ with a law degree and a masters in poli-sci. She stepped into the role of PR Secty to the minister of science in FR. That in turn launched the rest of her career at a much higher level. THAT is what the degrees do. They get you in the door at levels you cannot get into initially without the degree.
And since Reagan cut higher ed budgets by 40% and since "Affirmative Action" only accounted for 10% of that disbursment, the likelihood that your failure to get financial aid was because of Affirmative Action is 4:1 against. In Voting for Reagan, YOU VOTED AGAINST YOUR OWN SELF INTERST.
And Smith's version of "self-interest" was not that of the greater society, but of INDIVIDUAL self-interest. As you point out, societal self-interest is borne by GOVERNMENT not by the marketplace.
And your model about how the carwash guy can make more profit by advertising as "green" ignores the PRACTICAL REALITY that absent EPA standards on what IS and IS NOT "green" ANY Carwash owner can do that. Except that the owner that externalizes costs undercuts the one who actually is green. Absent regulation, this sort of abuse and hence market distortion GOES ON ALL THE TIME. The quintessential example is Andrew Carnegie vs. the Jones Lauth company. Bernard Lauth invented cold rolling which was less expensive than Carnegie's "hot rolling" of rails. So Carnegie undercut Lauth's prices (at a loss) AND bad mouthed Lauth's process to the customers until Lauth had to sell the process license to Carnegie (and some of the works). Carnegie immediately started cold rolling his rails and selling them as a "Special new More durable rail"...
This sort of anti-competitive behaviour is today REGULATED. It is part of that mean and nasty regulatory process you object to that is covered by Interstate Commerce. But under your line of reasoing, Carnegie's successors could avoid that by simply transacting all their rail sales WITHIN THE STATE, and requiring all their customers to set up subsidiary corporations within the state of Manufacture. Thus such sales would be "local" and not subject to federal anti-trust regulations. Even THOUGH the product was actually part and parcel of an interstate commerce system.
Now as to college education - at your age the college degree might help a bit, but not that much - your resume path is already the limiting factor. What you miss is that not only would your starting salary have been 50% higher - you would have had FASTER PROMOTION opportunities, because without a degree, you were filtered out for those roles. Same applies in Media Relations. My partner came out of univ with a law degree and a masters in poli-sci. She stepped into the role of PR Secty to the minister of science in FR. That in turn launched the rest of her career at a much higher level. THAT is what the degrees do. They get you in the door at levels you cannot get into initially without the degree.
And since Reagan cut higher ed budgets by 40% and since "Affirmative Action" only accounted for 10% of that disbursment, the likelihood that your failure to get financial aid was because of Affirmative Action is 4:1 against. In Voting for Reagan, YOU VOTED AGAINST YOUR OWN SELF INTERST.
And Smith's version of "self-interest" was not that of the greater society, but of INDIVIDUAL self-interest. As you point out, societal self-interest is borne by GOVERNMENT not by the marketplace.
Woolleybugger
Mayor
Just go finish your degree. Do it because it's important to you not because you think it might make you money. At your age, its not where you have been, it's where you are going. As a kid though, the reverse is usually the way it works unless you have connections. I really cannot fathom why anyone would decide to vote for Reagan, especially a young person...
degsme
Council Member
Gun fetishism... nothing more nor less.
degsme
Council Member
Good descrpition of your own comments Jack.
If the alternative to austerity is insolvency, which option should be taken?
Horseshit. No more no less.
