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Ayn Rand Philosophy, Objectivism, Science, Self-interest

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  1. #76
    Quote Originally Posted by wufwugy View Post
    If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.
    Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.
  2. #77
    Quote Originally Posted by MadMojoMonkey View Post
    So explain suicide to me. How is this a maximization of utility?
    Easy: the person feels it's better to be dead than to be alive. Utility maximized.

    Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.
  3. #78
    Quote Originally Posted by NightGizmo View Post
    Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.
    As far as I can tell, what he did was help change modelling for how utility is maximized. For example he showed holes in the expected utility hypothesis, which says that the value of a choice is the statistical expectation of the valuations of the outcome of the relevant choices. This doesn't suggest utility isn't maximized, but that valuation is assessed differently than earlier models suggest.

    There are versions of rational choice theory that are testable, and they're all flawed. I don't know much about the specific models, and have instead been discussing the assumption behind the theory behind the models. Kahneman didn't "disprove" rational choice theory, but gave more insight into it. Rational choice theory has been used increasingly over the years, presumably because the models "work" even though they don't work perfectly.
    Last edited by wufwugy; 05-08-2016 at 12:55 PM.
  4. #79
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    Quote Originally Posted by wufwugy View Post
    Easy: the person feels it's better to be dead than to be alive. Utility maximized.

    Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.
    This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.
    Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.

    The point of economics is still to make predictions, yeah?
    How does this definition of utility support your ability to make predictions?

    How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?
  5. #80
    Quote Originally Posted by MadMojoMonkey View Post
    This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.
    Why would somebody commit suicide except that they think it's for the best? If I remember the history right, one of the breakthroughs in rationality came when Gary Becker (also a Nobel winner) began applying the concept in unorthodox ways. A popular example is heroin addiction. Despite all the drawbacks of shooting up again, if an addict decided to shoot up again, he still acted in such a way that reflects what he wanted the most. Even though it was unwise and even if his decision was influenced by other factors, he still shot up the heroin because he wanted to do so more than he wanted to not do so.

    Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.
    Yeah the base assumption is not testable. Many models that go beyond this basic assumption are testable though. I don't know much about the various models. The Kahneman example appears to be one where he challenged one of the more popular models, showing ways in which it is flawed. Or something to that effect.

    The point of economics is still to make predictions, yeah?
    Sorta. Predictions are involved in the scientific method, but the point of economics still is just description of production, distribution, and consumption of goods and services.

    How does this definition of utility support your ability to make predictions?
    I'm not sure if I can answer this. My guess would be that it gives direction and provides sense to interpretations. For example, if you assume that people have a statistically related chance of eating burgers when they want to eat burgers, you're in a more sensible spot than if you assume that there is no correlation between desire to eat burgers and burgers eaten. I don't think I know enough to answer this question though.

    How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?
    If I didn't already, I would use the heroin example. If that explanation doesn't make sense, let me know and I'll try harder.

    The short of it is that when you do something, you do it because you want to do it more than you want to not do it. An alternative would be something like "decisions are random" or "people do what they don't want to do."

    Confusion can arise because of interpretations of "want." Let's say you have an alcohol problem and you want to quit. You can think of many reasons: it makes you feel worse, you're not sleeping well, you're losing your senses, you're wasting money, etc.. These are all reasons that make you want to not consume that next drink. But then there are other reasons that make you want to consume that next drink: you're in withdrawals and feel like shit, you're used to it, you don't want to change, your dopamine is in the tank and you're jonesin' for that immediate pickup on the first sip, your stress is racking up and you just want a stress free night, etc.. Well, economists say that if you chose to have the drink, you did it because it is what you most wanted when all these sub-wants were weighed. Even though at the time you could be thinking that it's a terrible decision and you're ruining your life, your brain thought, for whatever reason, that the marginal utility of taking that drink was better than not taking it.
    Last edited by wufwugy; 05-08-2016 at 03:40 PM.
  6. #81
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    Quote Originally Posted by a500lbgorilla View Post
    Yeah, I agree.
    So what is won for arguing so well? What is won for finding the perfect ideals?
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  7. #82
    Quote Originally Posted by a500lbgorilla View Post
    So what is won for arguing so well? What is won for finding the perfect ideals?
    If you want to try to continually improve yourself, it's best to know the direction you want to move towards.
  8. #83
    Wuf -- I think you're generally right that people make decisions that they think are right at that particular moment. But that doesn't mean that they are acting rationally, objectively speaking.

    All of your examples show that people can act extremely irrationally -- doesn't that conflict with an economic model that relies on the premise that all agents in the system are acting in their rational self-interest?
  9. #84
    Quote Originally Posted by NightGizmo View Post
    Wuf -- I think you're generally right that people make decisions that they think are right at that particular moment. But that doesn't mean that they are acting rationally, objectively speaking.

    All of your examples show that people can act extremely irrationally -- doesn't that conflict with an economic model that relies on the premise that all agents in the system are acting in their rational self-interest?
    In the context of economic self-interest, rationality =! reason.

    Moving your hand away from a flame because it hurts is rational. Jumping because a loud noise scares you is rational. Getting upset with somebody because you don't like their skin color is rational. Buying Lucky Charms because you want Lucky Charms is rational. Buying Fruit Loops instead, for whatever reason, is also rational. Cutting yourself because you like pain is rational. Attempting an unsuccessful suicide because you want attention is rational.

    In a sense, doing what you want is the most rational thing you can do. Irrational would be if your hand touches a hot burner and your brain sends all the signals that it's hot and you feel the pain and you think the pain and you have no reason whatsoever to not pull your hand away, yet you don't pull your hand away. In this sense, irrationality is describing the impossible. This is rational: wanting something is wanting it. This is irrational: wanting something is not wanting it.

    Economic rationality is like saying that organisms are causal agents. Economists describe rationality through utility because that's the only way it makes sense. The other options are that behavior is random or counter-rational like the leave-hand-on-burner-even-though-brain-says-pull-away example.

    Probably all of the confusion can be cleared up by noting that rationality in economics is totally different than the way the term is used colloquially and in other fields. Economic rationality has nothing to do with it being "good" or "smart" but with it being what you most want at the time.

    Economic rationality may seem like an unimportant concept since it's completely arbitrary and unfalsifiable, but part of why economists like it is because it provides a useful perspective. For example, when you hear about somebody committing suicide, you think "it couldn't have been so bad, that was a bad decision, etc.", but what economists say is that the person committed suicide because it was the best option they saw, it was the thing they wanted the most. I would argue that this is intuitive. Even though you may think committing suicide for the types of reasons people typically do is unreasonable, I suspect you would agree that it only makes sense that somebody would do it if they saw it as the best option. I mean, when somebody kills himself, the net conscious/subconscious value assessment of his options is not "I most want to eat this burger;" it is instead "I most want to kill myself."
    Last edited by wufwugy; 05-09-2016 at 02:09 PM.
  10. #85
    Well crap, that definition is so vague that it practically loses all meaning. From http://www.merriam-webster.com/dictionary/rational:

    based on facts or reason and not on emotions or feelings
    So economists decide they can eliminate the meaning of a word and then try to use it to justify their models? Sounds like bullshit to me.
  11. #86
    Quote Originally Posted by wufwugy View Post
    In this sense, irrationality is describing the impossible.
    So irrationality can't exist within an economic model? It assumes that anything anyone does, regardless of how crazy, stupid, or self-destructive, is rational? I don't see how any model that's based on such a flimsy premise could work.

    Unless you destroy the definition of rational, I guess.
  12. #87
    Quote Originally Posted by NightGizmo View Post
    So irrationality can't exist within an economic model? It assumes that anything anyone does, regardless of how crazy, stupid, or self-destructive, is rational? I don't see how any model that's based on such a flimsy premise could work.

    Unless you destroy the definition of rational, I guess.
    A model isn't meant to be reality it's meant to be a model. How well that model works dictates its use. As far as I'm aware (not very) economic models are incredibly simple in their scope when compared to what you'd expect if a model were to predict reality.

    Emotional factors clearly play a role in decisions people make in real life and I'm sure Wuf has said in the past there is a whole section of economics that tries to deal with quantifying these emotions.
    Last edited by Savy; 05-09-2016 at 03:17 PM.
  13. #88
    Quote Originally Posted by NightGizmo View Post
    Well crap, that definition is so vague that it practically loses all meaning. From http://www.merriam-webster.com/dictionary/rational:



    So economists decide they can eliminate the meaning of a word and then try to use it to justify their models? Sounds like bullshit to me.
    Many models are created to be testable; the economic view of rationality is not about justifying models. Rational behavior is a base assumption that allows the field to make sense. Things are no different in other sciences, where they require base assumptions to allow the science to have meaning.

    As for the changed meaning of the word, this is also common in all sorts of fields. It's frustrating to deal with, but scientists have never been easy to deal with.

    So irrationality can't exist within an economic model? It assumes that anything anyone does, regardless of how crazy, stupid, or self-destructive, is rational? I don't see how any model that's based on such a flimsy premise could work.

    Unless you destroy the definition of rational, I guess.
    Economic models aren't attempts to gauge that which is "crazy, stupid, or self-destructive" behavior, but to describe production and consumption of goods and services. To begin this process, economists assume that behavior is caused by the ultimate net "want" of individuals, and they call it "rational."

    As for irrationality in economics, I don't know enough to say much on this. The contribution by "irrationalists" in the field is pretty small, and it's not really even economics in the first place; it's psychology. It can be said that there is some crossover, I guess. As far as I can tell, my university only offers an economics course dealing with something along the lines of irrationality like once every five years or something. It appears that the models that psychologists like Kahneman challenged still are the most functional.
    Last edited by wufwugy; 05-09-2016 at 03:28 PM.
  14. #89
    Quote Originally Posted by ImSavy View Post
    Emotional factors clearly play a role in decisions people make in real life and I'm sure Wuf has said in the past there is a whole section of economics that tries to deal with quantifying these emotions.
    I think what happens is probably that "crazy, stupid, and self-destructive" behavior is really hard to model, so economists tend to understand it little. I've seen it said that after economists learn about all the straight forward behavior stuff that makes sense, then they learn about the stuff that seems less sensible. But really I can't say specifically. Economists certainly try to model all behavior related to production and consumption of goods and services, but a lot of them don't think much of the psychology stuff brought by famous "irrationalist" people like Dan Ariely contributes much.

    P.S. From glancing over Wiki, apparently "behavioral economists" don't even say they study irrationality, but "bounds of rationality."
  15. #90
    Quote Originally Posted by wufwugy View Post
    As for the changed meaning of the word, this is also common in all sorts of fields. It's frustrating to deal with, but scientists have never been easy to deal with.
    They didn't change the meaning, they eliminated it. Based on your definition, when an economist says, "Agents act rationally", they might as well just say "Agents act." Their intended meaning is the same thing in both statements. Because from what you're saying, it doesn't matter what a person's reasons are -- all that matters is that they did something.

    So why even use the word "rational" anymore?

    Also, I don't know that the term "scientist" applies to a person that thinks that rationality is devoid of reason and comes up with theories that are not meant to be tested or provable.
  16. #91
    Quote Originally Posted by NightGizmo View Post
    They didn't change the meaning, they eliminated it. Based on your definition, when an economist says, "Agents act rationally", they might as well just say "Agents act." Their intended meaning is the same thing in both statements. Because from what you're saying, it doesn't matter what a person's reasons are -- all that matters is that they did something based on reasons.

    So why even use the word "rational" anymore?

    Also, I don't know that the term "scientist" applies to a person that thinks that rationality is devoid of reason and comes up with theories that are not meant to be tested or provable.
    I added the bolded. That's where the assumption of rationality comes from. Economists say that when people do things, they have rationale for doing them. They assume this rationale is a conscious/subconscious valuation of net benefit, which is another way of saying that which is most desired. They claim desire is adequate since costs and benefits really just boil down to desire. When you're buying a burger for $5, really what you're saying is that you desire that burger more than any other $5 item, $5 of work, or the next best option (like $6 tacos or instead eating nothing and dieting like you had been thinking about).
  17. #92
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    This is fascinating and I'm really glad that NightGizmo is making these observations. I'm curious to follow what wuf's reply is.
  18. #93
    It should also be noted that economists aren't uniform on the topic. An example is that some economists never discuss behavior as if it's irrational and some often do. This just makes it all extra confusing. A lot of economists don't take the logic as far as I've presented here (but still some do), and this is a big part of why the stuff doesn't make sense.

    The field has far too much quantitative talent and too little qualitative talent. Graduate programs prioritize non-economics quantitative talent (to such a degree that it has shown itself as a significant problem in economics at the political level), and most that work with economics in business misuse it all the time (the most common example is saying "demand" when they mean "quantity demanded"). But that's a whole nother can of worms.
    Last edited by wufwugy; 05-09-2016 at 06:50 PM.
  19. #94
    Quote Originally Posted by wufwugy View Post
    I added the bolded. That's where the assumption of rationality comes from. Economists say that when people do things, they have rationale for doing them. They assume this rationale is a conscious/subconscious valuation of net benefit, which is another way of saying that which is most desired. They claim desire is adequate since costs and benefits really just boil down to desire. When you're buying a burger for $5, really what you're saying is that you desire that burger more than any other $5 item, $5 of work, or the next best option (like $6 tacos or instead eating nothing and dieting like you had been thinking about).
    But economists don't care about the actual reasons, right? Which strips the term "rational" of any meaning. Especially since you claim that in economics, all behavior is by definition rational.

    Instead of "Agents act rationally", you can replace it with "Agents act based on reasons that are irrelevant to rest of our theory." Which, again, might as well be "Agents act."

    I'm still confused why they even bother to use the word rational.
  20. #95
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    Quote Originally Posted by wufwugy View Post
    If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.
    Well, I assume you don't believe that economics is nonsensical, so..

    How can you resolve that "maximize their utility" essentially means "do whatever they feel like doing?"


    Or if it doesn't need resolving... can you elaborate (like... a bit... not an essay)?
  21. #96
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    Because, frankly, if the theory of economics starts with, "People are batshit crazy and random, but we need to figure out how to be more awesome in this morass while being also batshit crazy and random." then I can at least agree with the first principles.
  22. #97
    Quote Originally Posted by NightGizmo View Post
    But economists don't care about the actual reasons, right? Which strips the term "rational" of any meaning. Especially since you claim that in economics, all behavior is by definition rational.

    Instead of "Agents act rationally", you can replace it with "Agents act based on reasons that are irrelevant to rest of our theory." Which, again, might as well be "Agents act."

    I'm still confused why they even bother to use the word rational.
    The economics framework is that people act based on value assessments, regardless of what they are. They call this rational. This view has meaning because then if you can model value assessments, you can model behavior, or something to that effect.

    Where rationality gets really mixed up is that different people (including economists) have different views of what "value assessments" are. They all include a very broad range of things, but it was people like Gary Becker who famously argued that they apply to previously unconsidered things, like rational addiction. Since utility maximization is in the eye of the beholder, the logical extension of the work Becker did is that all behavior is utility maximization and thus rational.

    So, to your frustration with the vernacular, it is quite likely that it originally meant something different. I mean, in this sense, I agree, rational isn't the most constructive a word to use. But I do think it is meaningful to say that people act based on preferences. I mean, this is a basic assumption that can't be proved, but it's one economists have to make. They just chose to call it rational behavior. Intuitively, it is rational behavior for somebody to act upon a preference, by extension, since all actions come by preference, all actions can be called rational. But yeah I get how it's a confusing word to use.

    On that note, economics is possibly the most poorly communicated science there is. It's so bad that the main economist who covers the Federal Reserve that I read regularly attacks the Fed for using whack language that sends all sorts of unintended signals to investors as well as the public. A significant unforced error in this regard is how the Fed constantly talks about inflation as if the general public understands it. The Fed usually says idiotic things like "we need inflation to rise" when what they're really saying is "we need nominal incomes to rise, which would be signified in part by inflation rising" yet all the public hears is "we're gonna reduce the value of your dollar and raise prices of the things you buy, suckers."
    Last edited by wufwugy; 05-09-2016 at 09:53 PM.
  23. #98
    Quote Originally Posted by MadMojoMonkey View Post
    Because, frankly, if the theory of economics starts with, "People are batshit crazy and random, but we need to figure out how to be more awesome in this morass while being also batshit crazy and random." then I can at least agree with the first principles.
    The assumption is that actions come from preferences. Maybe somebody can have batshit crazy or random preferences, but the claim of rationality is that it's the preference being acted upon.

    How can you resolve that "maximize their utility" essentially means "do whatever they feel like doing?"
    Utility is preference. Maximized utility would be always acting on preference. The basic assumption of rational behavior is that people always act on preference.

    I won't argue against rationality being a poor choice of word. I mean, since it's confusing, there's the proof in the pudding right there that it's a poor choice of words. The reason the discussion of rationality emerges on this forum is somebody points out an example of dumb or inefficient behavior and says that's evidence against the assumption of rationality. I say this isn't evidence against rationality because the dumb or inefficient behavior was still based on preference.
  24. #99
    There is even more confusion since practitioners use the terms only within subsets of goods and services. However, this is inadequate philosophically. They do things like find utility by contrasting payments for types of goods and services. But this doesn't mean that utility exists for only paid for goods and services. Utility is necessarily something in all decisions. Yet when practice is this narrow idea of utility and rationality, it opens the door for people to counter the concepts by calling them inadequate.
  25. #100
    Quote Originally Posted by wufwugy View Post
    The economics framework is that people act based on value assessments, regardless of what they are. They call this rational. This view has meaning because then if you can model value assessments, you can model behavior, or something to that effect.
    Objectivism also believes that people act based on their set of values. But I believe that it differs from the economic framework in that value systems can be deemed irrational if they are poorly formed. Or, at the very least, the actions resulting from a poorly formed value system is irrational.

    It still seems to me that economists are ignoring the actual value systems and instead just using a lot of fast-talking to establish a premise that lets them model whatever they want. Or I'm still missing something. I never studied economics, so that's a possibility, I guess.
  26. #101
    I just found this:

    https://en.wikibooks.org/wiki/Princi...nomics/Utility

    I recommend reading the whole thing (it's short), but here's the part about rationality (bold is mine):

    In economics, we usually say that an individual is "rational" if that individual maximizes utility in their decisions. That is, whenever an individual is to choose between a group of options, they are rational if they choose the option that, all else equal, gives the greatest utility. Recalling that utility includes every element of a decision, this assumption is not particularly difficult to accept. If, when everything is taken into account, one decision provides the greatest utility, which is equivalent to meaning that it is the most preferred, then we would expect the individual to take that most preferred option.

    This should not necessarily be taken to mean that individuals who fail to quantify and measure every decision they make are behaving irrationally. Rather, this means that a rational individual is one who always selects that option that they prefer the most.
    The rationality assumption may seem trivial, but it is basic to the study of economics. This assumption gives a basis for modeling human behavior and decision making. If we could not assume rationality, it would be impossible to say what, when presented with a set of choices, an individual would select. The notion of rationality is therefore central to any understanding of microeconomics.
  27. #102
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    So rational actor = not a literal puppet?

    Wait, are we literally saying that all creatures are rational actors, then?

    This broad definition no longer even applies specifically to humans.
  28. #103
    Quote Originally Posted by MadMojoMonkey View Post
    So rational actor = not a literal puppet?

    Wait, are we literally saying that all creatures are rational actors, then?

    This broad definition no longer even applies specifically to humans.
    We're saying that people are preferential actors and that it is rational to be preferential. In a sense, this is the most basic type of rationality. It's not a thoroughly thoughtful abstraction, but it certainly makes sense that when the options are (1) act on preference, (2) do not act on preference, or (3) act or do not act on preference randomly, then (1) is the most rational.

    I don't see anything wrong with the point that it could apply to other species, other than it not being terribly useful since we're not modeling economic behavior of other species.
  29. #104
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    Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.
    Our brains have just one scale, and we resize our experiences to fit.

  30. #105
    Quote Originally Posted by CoccoBill View Post
    Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.
    What? You're just stating an opinion about free markets, not defining the term in any meaningful way.
  31. #106
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    Well, that's just like, your opinion. Man.
  32. #107
    Quote Originally Posted by CoccoBill View Post
    Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.
    It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.

    From this emerges the reasoning that nobody has the level of expertise on your personal decisions like you do; therefore it is you who should make your decisions and bear the results. This same paradigm works at all levels, including families, businesses, and communities. Expertise and wisdom of crowds are of the utmost importance to society, but mandates and regulations dished out by a handful of bureaucrats to the enormous quantities of masses is not an effective way to engage them.

    Keep in mind that those with expertise on economics are intense proponents of free markets, and that bureaucrats do not have enough expertise to command trillions of decisions from above.
    Last edited by wufwugy; 05-12-2016 at 09:45 PM.
  33. #108
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    Quote Originally Posted by CoccoBill View Post
    Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.
    Free markets tap the ingenuity and expertise of societies in a far more effective and efficient way than any state ever has. It doesn't take much observation of the political system to prove this; to rise in the public sector usually has very little to do with being an expert at anything other than at gaming the political system itself.
  34. #109
    Over 10k posts in this "What is something we underappreciate" thread, and notice how every example is something that would not exist except for the efforts of free enterprise.

    https://www.reddit.com/r/AskReddit/c...derappreciate/
  35. #110
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    Quote Originally Posted by wufwugy View Post
    It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.
    What's missing from this? It can't just be individual actions determine group actions.

    And, surely some regulations are of great benefit to society. I'm in no position to protect myself from fraud, for example.
  36. #111
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    Quote Originally Posted by NightGizmo View Post
    What? You're just stating an opinion about free markets, not defining the term in any meaningful way.
    You may be lacking some historical context of this conversation. That is what wuf seems to claim. My personal opinion is completely and strikingly different.
    Our brains have just one scale, and we resize our experiences to fit.

  37. #112
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    Quote Originally Posted by wufwugy View Post
    It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.

    From this emerges the reasoning that nobody has the level of expertise on your personal decisions like you do; therefore it is you who should make your decisions and bear the results. This same paradigm works at all levels, including families, businesses, and communities. Expertise and wisdom of crowds are of the utmost importance to society, but mandates and regulations dished out by a handful of bureaucrats to the enormous quantities of masses is not an effective way to engage them.

    Keep in mind that those with expertise on economics are intense proponents of free markets, and that bureaucrats do not have enough expertise to command trillions of decisions from above.
    Each individual most likely knows best what his goals are, my point is he often doesn't know how to get there. Also, I'm not convinced that setting "policies" (whether through regulations or dynamically through free markets) for each individual based on their unique preferences is better for the society as a whole than setting them with collective goals in mind. Free market may be more effective, but it doesn't ensure movement in the right direction, collectively speaking.
    Last edited by CoccoBill; 05-13-2016 at 07:58 AM.
    Our brains have just one scale, and we resize our experiences to fit.

  38. #113
    Quote Originally Posted by CoccoBill View Post
    You may be lacking some historical context of this conversation. That is what wuf seems to claim. My personal opinion is completely and strikingly different.
    Oops, fair enough.
  39. #114
    I typed this at the end after having made the post, but moved it to the front:

    ***The final four paragraphs are probably the most important points I've made on this subject. They gets to the heart of why my position is what it is. They are textbook economics and they gets to the heart of why economists are intense proponents of free markets, why most economists favor deregulation in most ways, and why world renowned economists like Milton Friedman say things like this famous line attributed to him: "if you put the federal government in charge of the Sahara desert, in fives years there'd be a shortage of sand."

    Quote Originally Posted by JKDS View Post
    What's missing from this? It can't just be individual actions determine group actions.
    Individuals act. Even large corporations are made up of the actions of each of its individuals. Economists have found no other way to mathematically represent economic behavior.

    And, surely some regulations are of great benefit to society. I'm in no position to protect myself from fraud, for example.
    Standards set through free markets with regards to fraud would be of even greater benefit to society. Standards set by governments regarding a large number of regulations are quite detrimental to society. The reason for this goes back to the different types of markets identified in economics. The idea that governments should set regulations necessarily means that the regulations exist in a monopolistic market, and the idea that private entities should regulate amongst themselves necessarily means that regulations exist in a monopolistic competition market.

    Monopolistic market and monopolistic competition market are the technical names of the market types learned in ECON 101. Monopolistic markets benefit only a few at the expense of many by creating scarcity and increasing prices. Governments are this kind of market, and when you look at the sectors of economies that governments regulate, it makes sense that governments are indeed this kind of market since the sectors have much greater scarcity and higher prices than sectors in freer markets. Another element of monopolistic markets is that they aren't conducive to innovation; instead they're actively inhibiting of innovation. This means that once a monopolistic market is set, it tends to stay that way for a long, long time. This dynamic is evident in government regulation, as it should be since governments are monopolistic markets.

    Monopolistic competition markets make up the majority of other types of sectors. Electronics, plumbing, publishing, clothing, restaurants, are just a handful of examples of monopolistic competition markets. They're "monopolistic" because their goods and services are differentiated. Of the several characteristics that describe monopolistic competition, the main element that gives it the "competition" and thus distinguishes it from monopolistic exclusively is the market has low barriers to entry and exit of producers. While entry and exit is affected by several elements, the chief determinant is regulation by governments.

    The other type of market is "perfect competition." They're rare, and exist for things like wheat, where products are not differentiated. In Utopia, all goods and services would exist in perfect competition markets, but the best that modern civilization can do now (and will be able to do for probably at least a few centuries) is turn as many of its monopolistic markets into monopolistic competition markets.
  40. #115
    Quote Originally Posted by CoccoBill View Post
    Each individual most likely knows best what his goals are, my point is he often doesn't know how to get there. Also, I'm not convinced that setting "policies" (whether through regulations or dynamically through free markets) for each individual based on their unique preferences is better for the society as a whole than setting them with collective goals in mind. Free market may be more effective, but it doesn't ensure movement in the right direction, collectively speaking.
    Who are these angels that can ensure movement in the right direction?
  41. #116
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    I'd really appreciate it if you walk through this more slowly.

    So the first step is saying, "People are rational actors," where rational is a fluffy filler word which bears no meaning in the sentence. If any meaning can be attributed to the word "rational" it seems to be in the legal sense of "responsible for their," as far as I can tell.

    While this is a squishy starting point, I don't disagree with the sentiment that "People do stuff and they are responsible / accountable for their own choices."


    What's the next step? If it goes straight to "people know what is best for themselves," then you lost me already. There needs to be some real clarity on these terms. How many times have you been stuck in a rut and a friend says something that you immediately think is obvious and good advice? Until that moment, you did not know what was "best for yourself." You may not have even wanted to talk to that friend.


    This isn't even getting to the point of people who are being taken advantage of by other people due to the free market influences. There is money to be made off of exploiting children to the point of unquestionable abuse. The free market gives this value, and leaves absolutely no incentive to regulate it in a manner which is both meaningful and possible. People who perpetuate the abuse will continue to do so as long as there is money to be made... which it always will, even if only in black markets (the most free of markets, I'd assume).

    What do you have to say for this brutal nature of human desire and selfishness to create a value on the creation of human suffering? How can the free markets ever possibly curtail this?
  42. #117
    In the third video of the OP, Yaron Brook made a comment that implied he doesn't think FDIC deposit insurance should exist. Do you believe that basic banking regulations shouldn't exist and that consumer deposits shouldn't be protected? So if a bank is mismanaged (either due to incompetence or outright corruption) and fails so completely that they cannot pay back any deposits, that the consumer is SOL and loses all of their money?
  43. #118
    I know you did not want to read a long essay, so stopped when the post was much smaller. But as I was rereading your post to make sure I addressed your points, it more than doubled in size.

    Quote Originally Posted by MadMojoMonkey View Post
    I'd really appreciate it if you walk through this more slowly.

    So the first step is saying, "People are rational actors," where rational is a fluffy filler word which bears no meaning in the sentence. If any meaning can be attributed to the word "rational" it seems to be in the legal sense of "responsible for their," as far as I can tell.

    While this is a squishy starting point, I don't disagree with the sentiment that "People do stuff and they are responsible / accountable for their own choices."


    What's the next step? If it goes straight to "people know what is best for themselves," then you lost me already. There needs to be some real clarity on these terms. How many times have you been stuck in a rut and a friend says something that you immediately think is obvious and good advice? Until that moment, you did not know what was "best for yourself." You may not have even wanted to talk to that friend.
    The act of being rational is the act of acting on preference; irrational would be acting against preference or randomly acting on or against preference. It is not that people know what is best for them (in the reasoned abstract sense), but that people know what they prefer (in a here and now valuation sense)*. Economics doesn't attempt to model the former but does attempt to model the latter. This is probably because modeling abstractions and thoughts and even preferences is about as impossibly hard as it gets. What economists do instead is say they can model preference indirectly by modeling consumer behavior.


    *Even a state of confusion on preference is still a preference, since at that moment, the person prefers none of the options, or rather, the option of not having chosen yet.


    This isn't even getting to the point of people who are being taken advantage of by other people due to the free market influences. There is money to be made off of exploiting children to the point of unquestionable abuse. The free market gives this value, and leaves absolutely no incentive to regulate it in a manner which is both meaningful and possible. People who perpetuate the abuse will continue to do so as long as there is money to be made... which it always will, even if only in black markets (the most free of markets, I'd assume).

    What do you have to say for this brutal nature of human desire and selfishness to create a value on the creation of human suffering? How can the free markets ever possibly curtail this?
    This is a fantastic question. Seriously. It's the kind that I need to be able to answer. Before we get to that, I should point out that black markets are not free markets; they're the antithesis of free markets. They exist because of regulations, for regulations are what push the sectors out of normal markets and into "black" markets. Even still, most black market transactions are beneficial for all parties. They include things like construction projects that skirt useless regulations. I know a ton of people who operate with elements of the black market in construction, and they do it because the zoning and building regulations in Washington state are insane. They're "you can only have this small number of sheds on your vast plot of land because some suit-and-ties at the capitol who have never even set foot in the woods or on a farm say so" level insane.

    Regarding abuse within black markets, the demand for abused goods and services (like sex slaves) exists because consumers can't get what they want in normal markets. It isn't that there is value in selling a suffering, abused sex slave, but that there is value in selling sex, and the only way to get it because of bad laws is through suffering, abused slaves.

    When it comes to the very small but still existent proportion of people who desire to consume the abuse of people (like psychopaths, murderers, rapists), they can be dealt with effectively through other means that don't involve integrating them with normal people looking for something like just sex like the laws that create black markets do.

    As for something like "forced" labor, it isn't actually forced. The examples in emerging economies are of people (sometimes children) choosing to improve the amount of pleasure in their lives by working and developing more wealth than they otherwise could. This is happening in real time by the millions. The narrative of abusive factories in China is wrong.

    As for something like actual slave labor based on something like color, it is non-competitive and couldn't exist today simply because the products of the labor would be too expensive. The incentives for slaves to work is to not be punished. This results in really low levels of productivity. Contrast to how China sweat shop laborers are very productive; it's because their incentive is to improve their wealth and net pleasures. American slavery was beginning to struggle before the Civil War and I think that if the war had never happened, all slaves would still have eventually been emancipated since enterprise was gradually making products cheaper than plantations could.



    It is basic human nature that people tend to choose to not suffer. Because the value of something is dependent on its consumption, when people have choice, they tend to choose things that provide pleasure and eschew things that provide suffering. This reduces the value of practices that cause suffering and increases the value of practices that cause pleasure. Adam Smith's most famous observation details this: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." He's saying that because people choose pleasure over suffering, producers have to provide pleasure enough that consumers will choose their services. Those that cannot, or those that dish out suffering explicitly, do not receive the consumptive choice of others, and they lose economic power that includes their own ability to consume. This is suffering to them, so their goals end up aligning with the so-called goals of society, where pleasures and positives are constructed and suffering and negatives are eschewed.

    On a philosophical note, the way free markets curtail abuses is the same way governments, communities, and individuals do; it's just a more effective way on the macro level than governments. What stops people from being abused when that person is abused? That person not wanting to be abused and other people not wanting that person from being abused. This value is not exclusively incorporated at the level of government; it remains in free markets. There is not a magic reason for how the morals held by people in societies can only be distributed from a capitol building and bureaucracies, and one can see how it is easier for individuals' morals to remain relevant when they aren't distributed from a capitol building or bureaucracies.
  44. #119
    Quote Originally Posted by NightGizmo View Post
    In the third video of the OP, Yaron Brook made a comment that implied he doesn't think FDIC deposit insurance should exist. Do you believe that basic banking regulations shouldn't exist and that consumer deposits shouldn't be protected? So if a bank is mismanaged (either due to incompetence or outright corruption) and fails so completely that they cannot pay back any deposits, that the consumer is SOL and loses all of their money?
    I agree with him. FDIC is a fantastic example of moral hazard and unintended consequences. It incentivizes risk-taking because the government mandates bailouts. This is the exact thing that constructed the subprime housing crisis. The government had several laws on the books and institutions working (Fannie and Freddie, Community Reinvestment Act, and many others) that incentivized riskier and riskier loans. The behavior of lenders and investment banks was a symptom of this.

    Banking is already intensely regulated. It is one of the most regulated industries in the world, as it was before the housing crisis and Great Recession. It does not make sense that even more regulations will somehow fix it, especially when most economists view many of its existing regulations as creating moral hazard.

    Consumers (and producers of all sorts) respond differently when regulations are different. Consumers of bank deposits won't just park their money in banks to the degree that they do now if they know they're SOL if the bank is mismanaged. In a free banking system, consumers would have far greater incentives to diversify and consume insurance, and the decentralization would greatly reduce systemic risk (risk to the whole system) caused by various things like mismanagement of a group of banks.

    Ofc the worst banking regulation of them all is the money monopoly. That's the real killer. It took the Fed until 2003 IIRC to finally admit that it created the Great Depression.
  45. #120
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    Quote Originally Posted by Renton View Post
    Free markets tap the ingenuity and expertise of societies in a far more effective and efficient way than any state ever has. It doesn't take much observation of the political system to prove this; to rise in the public sector usually has very little to do with being an expert at anything other than at gaming the political system itself.
    The brain exists in a pristine environment. If you were to skin your thumb right now, just nick off a bit deep enough, you would not gush out blood. It would pool because your circulatory system, which moves blood through your body, at the furthest reaches merely seeps it through openings into the blood-sponge of your hand. Outside of your arteries, you're a pool of blood. There's a distinct difference when it comes a certain organ - your brain. Blood does not leak from capillaries into the brain, there's a secure border called the Blood Brain Barrier that filters only select elements to enter the august space of brainmatter.

    In a similar way, free markets can't exist without the blood-brain barrier of the State. While they may be most efficient at their given task, they must be supported by manifold contraptions which preserve it, and chief among them is what is called the State.
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  46. #121
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    Quote Originally Posted by NightGizmo View Post
    If you want to try to continually improve yourself, it's best to know the direction you want to move towards.
    gay
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  47. #122
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    That's a fine analogy but the post I was replying to was implying that the state consists of experts and collective wisdom, which it just does not.

    I think it's reasonable to posit that free markets wouldn't function as well without the state to maintain law and order and such. That's a different argument entirely. But CoccoBill believes that the state is the only way for groups of people to cooperate and make decisions. A socialist person who understands economics still understands the great value that comes from free markets; he just believes that certain projects need to be financed through taxation which will enhance the effectiveness of the free market. He certainly doesn't believe that the profit-and-loss system just consists of individuals winging it; that there's no incentive to be an expert in this context; that expertise and knowledge wouldn't be cultivated and accumulated under these conditions.
  48. #123
    Quote Originally Posted by Renton View Post
    I think it's reasonable to posit that free markets wouldn't function as well without the state to maintain law and order and such.
    Just curious, what is that reason?

    Edit: I'm looking for something more than "to maintain law and order." I'm looking for why it's important for that to come from the state.
  49. #124
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    Quote Originally Posted by wufwugy View Post
    Just curious, what is that reason?

    Edit: I'm looking for something more than "to maintain law and order." I'm looking for why it's important for that to come from the state.
    The reasoning behind the belief would be something along the lines of "this is the only type of free market that has been observed to flourish." Which is true. We just don't know what a completely free society would be like because it has never happened. My point was merely that it is possible to be a socialist and be aware of basic economics at the same time, and to reconcile those two things. It's incredibly rare that this happens, but in theory it is possible to happen. I suspect if all socialists were to take some econ courses, 95% of them would reject socialist theory.
  50. #125
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    Quote Originally Posted by wufwugy View Post
    Who are these angels that can ensure movement in the right direction?
    No one. Figuring out the right path and the correct steps to get there is science. I far trust the collective human knowledge and understanding here over individuals.
    Our brains have just one scale, and we resize our experiences to fit.

  51. #126
    Quote Originally Posted by CoccoBill View Post
    No one. Figuring out the right path and the correct steps to get there is science. I far trust the collective human knowledge and understanding here over individuals.
    Do you find it ironic that science is fundamentally free market?

    Since you do not want individuals with too much power, why do you support a system that explicitly requires a set of individuals having too much power?

    Is there room for a different system, one that has demonstrated uncountable times over, that it engages human knowledge and understanding better than any others yet tried?
  52. #127
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    Quote Originally Posted by Renton View Post
    But CoccoBill believes that the state is the only way for groups of people to cooperate and make decisions. A socialist person who understands economics still understands the great value that comes from free markets; he just believes that certain projects need to be financed through taxation which will enhance the effectiveness of the free market. He certainly doesn't believe that the profit-and-loss system just consists of individuals winging it; that there's no incentive to be an expert in this context; that expertise and knowledge wouldn't be cultivated and accumulated under these conditions.
    No I wouldn't say I believe that, I believe a structured and policy-based system is needed to keep greed and selfishness at manageable levels. I also don't think I'd call myself a socialist. A government is always going to have non-experts just as free markets are going to have individuals winging it, both are people with identical genetics. You're assuming profit to be the only incentive for doing anything, and that's where I disagree strongly. A lot of people become experts for entirely different reasons, but it might be most of them are women.
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  53. #128
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    Quote Originally Posted by wufwugy View Post
    Do you find it ironic that science is fundamentally free market?

    Since you do not want individuals with too much power, why do you support a system that explicitly requires a set of individuals having too much power?
    Science is a method, not an economic or political system, I think your analogy is misplaced.

    I'm not sure I think members of government have too much power. Some exceptions may exist. No one should have too much power, but some people should have more power than others.
    Our brains have just one scale, and we resize our experiences to fit.

  54. #129
    Quote Originally Posted by CoccoBill View Post
    Science is a method, not an economic or political system, I think your analogy is misplaced.
    Why is it that free market principles are required to ensure the integrity and robustness of science yet not economics or politics (especially since economics and politics are sciences)? What is special about government that keeps those who have its power from needing to be challenged?

    I'm not sure I think members of government have too much power. Some exceptions may exist. No one should have too much power, but some people should have more power than others.
    Many members of government have significantly more power than any members of private enterprise. If what you want is more human knowledge and less rule by individual decree, how does supporting monopoly power and opposing competition amongst the people do that?
  55. #130
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    Quote Originally Posted by wufwugy View Post
    Why is it that free market principles are required to ensure the integrity and robustness of science yet not economics or politics (especially since economics and politics are sciences)? What is special about government that keeps those who have its power from needing to be challenged?
    Which principles are these exactly? A government certainly needs a way to keep those in power in check, CoccoBillistan would probably be either ruled by a benevolent informed dictator (me), or have much stricter rules on re-elections, oversight ans transparency as current governments. The priorities get skewed if there are career politicians more interested in getting re-elected than doing their job, and external influence (campaign finance etc) should be weeded out, for example. New employees are great for companies because they bring experience and fresh ideas, but that effect is typically exhausted in a few years. After that it's better they find a new job and a fresh recruit replaces him. Same should happen in the government, if representatives and senators served say max 4 years, they might even have an incentive to get shit done.

    Quote Originally Posted by wufwugy View Post
    Many members of government have significantly more power than any members of private enterprise. If what you want is more human knowledge and less rule by individual decree, how does supporting monopoly power and opposing competition amongst the people do that?
    That's debatable, the Kochs for example probably wield effective power quite similar to top brass in government. Without a government they would be the de facto government. POTUS is probably a fairly big exception, but the POTUS has significantly more relative power than his colleagues in other countries. I'm in no way against individual freedom, quite the contrary, I have fairly libertarian views when it comes to regulating individuals. If someone's actions affect only themselves they should be free to do as they please, but if they affect others, regulations are IMO needed.
    Our brains have just one scale, and we resize our experiences to fit.

  56. #131
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    Quote Originally Posted by CoccoBill View Post
    Which principles are these exactly?
    Ditto
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  57. #132
    Quote Originally Posted by CoccoBill View Post
    Which principles are these exactly?
    Science is decentralized and unregulated. There is no rules committee that assigns the rules by which science must be conducted. I believe that if this were proposed, scientists, nearly without exception, would oppose it, because they have first hand experience with how important it is that science be open to all and have no bias. A regulatory bureaucracy that oversees conduction of science would very quickly spell the end of its integrity. Data would become unreliable and discovery would come to a halt.

    The free reality of science allows it to exist on the merits instead of by decree. Things that are repeatable are kept and everything else is discarded. Bureaucracies do not have this. They are by nature prohibiting of the kind of openness and merit that science has in peer review and experimentation.

    A government certainly needs a way to keep those in power in check, CoccoBillistan would probably be either ruled by a benevolent informed dictator (me), or have much stricter rules on re-elections, oversight ans transparency as current governments.
    The bold are mutually exclusive. Who conducts the oversight? Who keeps their power in check?

    This dilemma is why even the most theoretically egalitarian government tried -- communism -- resulted in virtual dictatorial bureaucracies at the tippy top. The only way I've found to keep powers in check is the kind constructed in the United States Constitution: explicit prohibition of government intrusion into citizen space. This is where ideals of freedom of speech, assembly, the press, and religion come from. These ideals became a part of civilization through the idea that liberty does not come from government granting it, but that liberty comes from governments prohibiting themselves from infringing upon natural liberties of humans. Today, we take these liberties for granted. I hope that instead we would learn the lesson that since liberties that we today take for granted came from government prohibiting its own intrusion, we should make government further prohibited from intrusion for other things.

    The priorities get skewed if there are career politicians more interested in getting re-elected than doing their job, and external influence (campaign finance etc) should be weeded out, for example.
    This "external influence" is the people. Take away the ability for people to finance campaigns however they see fit, and you will have created a ruling class of a small number of political insiders. This is because the barrier to entry to politics would be astronomical. This is the type of thing seen in the many communist countries that all failed. Finance from the people was prohibited and the ruling party basically became God.

    Take a look at the last few years of elections in America. The narrative that the rich buy elections is dead.

    New employees are great for companies because they bring experience and fresh ideas, but that effect is typically exhausted in a few years. After that it's better they find a new job and a fresh recruit replaces him. Same should happen in the government, if representatives and senators served say max 4 years, they might even have an incentive to get shit done.
    This is an idea worth thinking about. I can't say one way or another what the ramifications would be. I suspect that it would probably be good since it would probably greatly diminish the ability for government to intrude into peoples' lives.

    That's debatable, the Kochs for example probably wield effective power quite similar to top brass in government. Without a government they would be the de facto government.
    Are you arguing that the Kochs currently wield similar power to top powers in the government or that if there was no government then the Kochs would start acting like a government? Those are two different things.

    The Kochs do not hold power; they only have some ability to lobby. Do you think it would be better if the Kochs had no ability to lobby and those with power had only to answer to those with power? Many have the ability to lobby, many rival the Kochs, and the lobbying done by organizations representing "the people" have even more influence that people like the Kochs. Us having voices is not what's wrong, but the government having the ability to favor one voice over another is. It is still the case that no Koch and no NRA put people in prison, raid homes in search of weed, nor fine people for working without paying licensing fees.

    Governments receive revenues from taxes; this is fundamentally different than entities that receive revenues from consumer choice. Governments hold their tax power by legitimacy, i.e., they are viewed legitimate in the eyes of the citizenry at large, so there is little revolt. In the absence of government, the Kochs wouldn't come close to having this. This topic can go a lot of directions, and I don't really want to go into them, but the point I want to make is that the idea that the Kochs would be the de facto government in the absence of government is assuming something that isn't there. If the Kochs did become a government, it would be by way of them and entire regions of people deciding to set their businesses aside and instead become government. It's not the Kochs we'd have to worry about in this scenario; it's large swaths of people who want to take other peoples' stuff and are afraid of their stuff being taken. The Kochs would actually be primary targets. Governments tend to arise from populism, and populism typically targets the rich.

    POTUS is probably a fairly big exception, but the POTUS has significantly more relative power than his colleagues in other countries. I'm in no way against individual freedom, quite the contrary, I have fairly libertarian views when it comes to regulating individuals. If someone's actions affect only themselves they should be free to do as they please, but if they affect others, regulations are IMO needed.
    I'm glad you said this. Do you think it is reasonable that those who should have regulatory power should also have familiarity with the topics at hand? If so, does this suggest that only those affected by decisions should have say in decisions?
  58. #133
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    Quote Originally Posted by wufwugy View Post
    Science is decentralized and unregulated. There is no rules committee that assigns the rules by which science must be conducted. I believe that if this were proposed, scientists, nearly without exception, would oppose it, because they have first hand experience with how important it is that science be open to all and have no bias. A regulatory bureaucracy that oversees conduction of science would very quickly spell the end of its integrity. Data would become unreliable and discovery would come to a halt.

    The free reality of science allows it to exist on the merits instead of by decree. Things that are repeatable are kept and everything else is discarded. Bureaucracies do not have this. They are by nature prohibiting of the kind of openness and merit that science has in peer review and experimentation.
    Pure nonsense.

    There are regulatory bureaucracies AND rules committees, or something that nearly approaches them in the peer-review process and, you know, ethics.

    Maybe study science before talking about its structure and nature.
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  59. #134
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    Quote Originally Posted by wufwugy View Post
    Science is decentralized and unregulated.
    Rilla already covered this bit, but aspects of science are both centralized and regulated. Also, decentralization and unregulation are not principles of free markets.

    Quote Originally Posted by wufwugy View Post
    The bold are mutually exclusive. Who conducts the oversight? Who keeps their power in check?
    The party tasked with oversight duties. It's much better to have limited oversight than no oversight.

    Quote Originally Posted by wufwugy View Post
    This dilemma is why even the most theoretically egalitarian government tried -- communism
    I've said this a few times before, there was nothing egalitarian about communism. It was pure oligarchical tyranny masquerading as socialism.

    Quote Originally Posted by wufwugy View Post
    The only way I've found to keep powers in check is the kind constructed in the United States Constitution: explicit prohibition of government intrusion into citizen space. This is where ideals of freedom of speech, assembly, the press, and religion come from. These ideals became a part of civilization through the idea that liberty does not come from government granting it, but that liberty comes from governments prohibiting themselves from infringing upon natural liberties of humans. Today, we take these liberties for granted. I hope that instead we would learn the lesson that since liberties that we today take for granted came from government prohibiting its own intrusion, we should make government further prohibited from intrusion for other things.
    A society will always have its elite, those with more power than others. Human greed and self-preservation will take care of that. Wealth tends to concentrate through oligarchy, meritocracy and plutocracy. If a society does not have an elected government, one will be provided for them by the powerful. The only known solution that even tries to ensure the "government" acts in the best interest of it's members, is a democratically elected government. To guarantee the government does not step into the territory you describe above, it needs to have some sort of collectively agreed contract to not do so.

    Quote Originally Posted by wufwugy View Post
    Are you arguing that the Kochs currently wield similar power to top powers in the government or that if there was no government then the Kochs would start acting like a government? Those are two different things.
    Both.

    Quote Originally Posted by wufwugy View Post
    The Kochs do not hold power; they only have some ability to lobby. Do you think it would be better if the Kochs had no ability to lobby and those with power had only to answer to those with power? Many have the ability to lobby, many rival the Kochs, and the lobbying done by organizations representing "the people" have even more influence that people like the Kochs. Us having voices is not what's wrong, but the government having the ability to favor one voice over another is. It is still the case that no Koch and no NRA put people in prison, raid homes in search of weed, nor fine people for working without paying licensing fees.
    A citizen's way to affect the government is by voting, each person has one vote. On top of that the Kochs of the world can throw millions into lobbying. I'm sure you would agree that's hell of a lot more powerful than one vote? I would call that much more direct power than a single senator or congressman has, since it can swing several votes.

    Fortunately money equals speech only in the US and some other rampantly corrupt societies. Optimally voting should be the way to affect the government, not bribery.

    Quote Originally Posted by wufwugy View Post
    Governments receive revenues from taxes; this is fundamentally different than entities that receive revenues from consumer choice. Governments hold their tax power by legitimacy, i.e., they are viewed legitimate in the eyes of the citizenry at large, so there is little revolt. In the absence of government, the Kochs wouldn't come close to having this. This topic can go a lot of directions, and I don't really want to go into them, but the point I want to make is that the idea that the Kochs would be the de facto government in the absence of government is assuming something that isn't there. If the Kochs did become a government, it would be by way of them and entire regions of people deciding to set their businesses aside and instead become government. It's not the Kochs we'd have to worry about in this scenario; it's large swaths of people who want to take other peoples' stuff and are afraid of their stuff being taken. The Kochs would actually be primary targets. Governments tend to arise from populism, and populism typically targets the rich.
    Money (or what ever currency there would be without governments) can buy favors, goods, violence etc. The person with the most currency will have the most power. Without a government maybe Kochs would have less than now, I don't know, but someone would have more than others, with no government to keep them in check.

    Quote Originally Posted by wufwugy View Post
    Do you think it is reasonable that those who should have regulatory power should also have familiarity with the topics at hand?
    Yes, obviously. Currently the way to do this is by using government advisors, who research and prepare materials for the decisionmakers.

    Quote Originally Posted by wufwugy View Post
    If so, does this suggest that only those affected by decisions should have say in decisions?
    Absolutely not. Decisions should be based on objective scientific data.
    Our brains have just one scale, and we resize our experiences to fit.

  60. #135
    Quote Originally Posted by a500lbgorilla View Post
    Pure nonsense.

    There are regulatory bureaucracies AND rules committees, or something that nearly approaches them in the peer-review process and, you know, ethics.

    Maybe study science before talking about its structure and nature.
    Why so hostile?

    I'm not talking about ethics. About peer review, show me how it is only valid when done by certain people, in certain places, and using certain techniques.

    Calling something decentralized and unregulated does not mean it is a mess and without structure or standards. But that stuff is different than market regulation.
  61. #136
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  62. #137
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    Quote Originally Posted by wufwugy View Post
    About peer review, show me how it is only valid when done by certain people, in certain places, and using certain techniques.
    Well, the people and places don't matter, but the technique certainly does.

    Everyone recommends the Scientific Method. Why not try it yourself?
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  63. #138
    Quote Originally Posted by CoccoBill View Post
    Also, decentralization and unregulation are not principles of free markets.
    They are, which suggests you're defining them differently. In political contexts, when we say regulation and centralization, we mean things that arise from outside forces, meaning laws are passed and the market is changed regardless of the goings on in that market. Structures and standards are natural in markets.

    The party tasked with oversight duties. It's much better to have limited oversight than no oversight.
    Continue with this logic. When you wish to put a check on power, how is this accomplished by using a more powerful power with no checks?

    I've said this a few times before, there was nothing egalitarian about communism. It was pure oligarchical tyranny masquerading as socialism.
    Note that I said "theoretically egalitarian." Part of the theory behind communism was that it would empower the masses by using strict regulatory oversight. The results showed that the theory was wrong.

    It's hard to find theoretical distinctions between communism and socialism. Marx noted that fully enacted socialism would be communism.

    A society will always have its elite, those with more power than others. Human greed and self-preservation will take care of that.
    A lesson of economics that people don't wanna hear is that greed is good. Greed is why society has food abundance, central heating, cars, smart phones, you name it. It is when greed has government power that it is not good. I can further explain if you don't see the connection.

    Wealth tends to concentrate through oligarchy, meritocracy and plutocracy. If a society does not have an elected government, one will be provided for them by the powerful. The only known solution that even tries to ensure the "government" acts in the best interest of it's members, is a democratically elected government. To guarantee the government does not step into the territory you describe above, it needs to have some sort of collectively agreed contract to not do so. A citizen's way to affect the government is by voting, each person has one vote.
    Is your vote more powerful when it's vague and provided once every two years or when it's specific and provided many times daily? Claiming democracy is a good is not a rebuttal to my argument since I'm miles beyond that point already by promoting democracy on steroids.

    On top of that the Kochs of the world can throw millions into lobbying. I'm sure you would agree that's hell of a lot more powerful than one vote? I would call that much more direct power than a single senator or congressman has, since it can swing several votes.
    Why does this mean that the solution must be to make those with power less influenced by those without power? Kochs having lobbying power does not show a problem with them; it shows a problem with the government. Citizens should be able to influence their situation with their capital. You do it, I do it, it's about as normal as it gets. Us doing this, especially when rich people do it, is integral to societal prosperity. It's when the government steps in and gives special favors that this stops being the case.

    Fortunately money equals speech only in the US and some other rampantly corrupt societies.
    What are these other societies where money is speech?

    Optimally voting should be the way to affect the government, not bribery.
    First off, lobbying and bribery are two totally different things. Lobbying is an incredibly good thing; the problem is when government has power over things it shouldn't. The solution isn't to take away the lobbying.

    There's too much double standard going on. Average citizens have tremendous lobbying power. A member of the NRA pays a tiny fraction of his income for a lobbying juggernaut.



    Money (or what ever currency there would be without governments) can buy favors, goods, violence etc. The person with the most currency will have the most power. Without a government maybe Kochs would have less than now, I don't know, but someone would have more than others, with no government to keep them in check.
    So, you're afraid of the Kochs having too much power so you wish to create an entity with tremendously greater power? Why? Because you get the vote? But you had a much more effective vote back before you constructed the tremendously greater power in the first place. Color me confused.

    Absolutely not. Decisions should be based on objective scientific data.
    Most of the time, this is not available. Which means that typically the most familiar with an issue are those most affected by it. This is not always the case, but this reality is why economics teaches it.
  64. #139
    Quote Originally Posted by a500lbgorilla View Post
    Well, the people and places don't matter, but the technique certainly does.

    Everyone recommends the Scientific Method. Why not try it yourself?
    What techniques do you mean? Like double blinds and such? Those matter because scientists consider them important for evaluating studies. They don't exist by decree. There is no bureaucracy ruling over the entire scientific community that has a law saying that all studies must be double blind or else they're invalid.
  65. #140
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    Quote Originally Posted by wufwugy View Post
    What techniques do you mean? Like double blinds and such? Those matter because scientists consider them important for evaluating studies. They don't exist by decree. There is no bureaucracy ruling over the entire scientific community that has a law saying that all studies must be double blind or else they're invalid.
    The idea of 'exists by decree' is baloney to me. Nothing of science exists by decree. It exists.
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  66. #141
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    But there is a bureaucracy ruling over scientists and it's manned by old, successful scientists. They know science and they know how to navigate the harried waters of the unknown.
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  67. #142
    Quote Originally Posted by a500lbgorilla View Post
    The idea of 'exists by decree' is baloney to me. Nothing of science exists by decree. It exists.
    That was my point. Regulation, at least its meaning in a political context, is existence by decree.
  68. #143
    Quote Originally Posted by a500lbgorilla View Post
    But there is a bureaucracy ruling over scientists and it's manned by old, successful scientists. They know science and they know how to navigate the harried waters of the unknown.
    I object to calling this a bureaucracy, but I do know what you're talking about. Structures and standards are natural and very important.
  69. #144
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    Quote Originally Posted by wufwugy View Post
    That was my point. Regulation, at least its meaning in a political context, is existence by decree.
    OK.

    Science also only understands things in very narrow bands, in very focused ways. The world around science stills moves forward.

    Think about what the best of science can tell you about tomorrow, May 22nd 2016, and see how many details are left blank.

    That no aspect of science exists "by decree" doesn't say anything about the idea of things that exist "by decree"

    PS "by decree" vrs "not by decree" is a nonsense line to draw
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  70. #145
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    Quote Originally Posted by wufwugy View Post
    I object to calling this a bureaucracy, but I do know what you're talking about. Structures and standards are natural and very important.
    There are entire fields of science on fire right now arguing over the structure of the bureaucracy surrounding them.
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  71. #146
    Quote Originally Posted by a500lbgorilla View Post
    There are entire fields of science on fire right now arguing over the structure of the bureaucracy surrounding them.
    What bureaucracy? What fields? What are they discussing?
  72. #147
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    The peer review process. Psychology. Why people produce apparently good but ir-reproduceable science.
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  73. #148
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    Plus there's also a discussion about pay-walled peer-review publications and the free labor of peers to review new science.
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  74. #149
    That's not bureaucracy.
  75. #150
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    Quote Originally Posted by wufwugy View Post
    They are, which suggests you're defining them differently. In political contexts, when we say regulation and centralization, we mean things that arise from outside forces, meaning laws are passed and the market is changed regardless of the goings on in that market. Structures and standards are natural in markets.
    Citation needed, I can't find them.

    http://freemarketprinciples.com/principles.php

    I digress, but I find your use of "we" here a bit amusing. "We", as in us the economists, who get it. A bit ad verecundiam, don't you think?

    Quote Originally Posted by wufwugy View Post
    Continue with this logic. When you wish to put a check on power, how is this accomplished by using a more powerful power with no checks?
    It doesn't have to be more powerful, it just needs to be independent. This actually works quite well in practice, similarly to corporations. Think of the internal audit function. Works much much better than no oversight at all.

    Quote Originally Posted by wufwugy View Post
    Note that I said "theoretically egalitarian." Part of the theory behind communism was that it would empower the masses by using strict regulatory oversight. The results showed that the theory was wrong.

    It's hard to find theoretical distinctions between communism and socialism. Marx noted that fully enacted socialism would be communism.
    The Soviet Union was as much socialist as Russia is democratic.

    Quote Originally Posted by wufwugy View Post
    A lesson of economics that people don't wanna hear is that greed is good. Greed is why society has food abundance, central heating, cars, smart phones, you name it. It is when greed has government power that it is not good. I can further explain if you don't see the connection.
    Greed is also a big reason why societies have crime. Things aren't just good or evil. You're trying to paint the world black and white.

    Quote Originally Posted by wufwugy View Post
    Is your vote more powerful when it's vague and provided once every two years or when it's specific and provided many times daily? Claiming democracy is a good is not a rebuttal to my argument since I'm miles beyond that point already by promoting democracy on steroids.
    I don't see how this is relevant to my point.

    Quote Originally Posted by wufwugy View Post
    Why does this mean that the solution must be to make those with power less influenced by those without power? Kochs having lobbying power does not show a problem with them; it shows a problem with the government. Citizens should be able to influence their situation with their capital. You do it, I do it, it's about as normal as it gets. Us doing this, especially when rich people do it, is integral to societal prosperity. It's when the government steps in and gives special favors that this stops being the case.
    You jumped over my whole point of there always being those who are more powerful than others. A government is simply a way to keep them in check, to ensure they don't get too much power and influence over others. Lobbying undermines that. And I don't care if there would be even more stuff if free market.

    Quote Originally Posted by wufwugy View Post
    What are these other societies where money is speech?
    I first typed only the US, but then changed it since the situation is pretty similar in countries with high corruption.

    Quote Originally Posted by wufwugy View Post
    First off, lobbying and bribery are two totally different things.
    Do you find any irony comparing this to tax vs theft or abortion vs murder?

    Quote Originally Posted by wufwugy View Post
    Lobbying is an incredibly good thing; the problem is when government has power over things it shouldn't. The solution isn't to take away the lobbying.
    Now you just lost me completely. It's good that those with wealth have a disproportionate influence over others?

    Quote Originally Posted by wufwugy View Post
    There's too much double standard going on. Average citizens have tremendous lobbying power. A member of the NRA pays a tiny fraction of his income for a lobbying juggernaut.
    How is this a good thing? Because USA has the highest gun violence stats in the world? I'd go about differently trying to solve overpopulation.

    Quote Originally Posted by wufwugy View Post
    So, you're afraid of the Kochs having too much power so you wish to create an entity with tremendously greater power? Why? Because you get the vote? But you had a much more effective vote back before you constructed the tremendously greater power in the first place. Color me confused.
    I only had a tremendously greater power in the first place if I happened to be wealthy.

    Quote Originally Posted by wufwugy View Post
    Most of the time, this is not available. Which means that typically the most familiar with an issue are those most affected by it. This is not always the case, but this reality is why economics teaches it.
    If the data is not available, there shouldn't be regulations regarding it.
    Our brains have just one scale, and we resize our experiences to fit.

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