Alvin Roth is no doubt a bright guy, but the idea that he has done more lasting good for humanity than, say, Sam Walton, is absurd.
I wouldn’t be so sure about that. I’m not about to investigate the economics of their entire supply chain (I already don’t shop at Walmart simply due to location, so it doesn’t even stand to influence my buying decisions,) but I wouldn’t be surprised if Walmart is actually wealth-negative in the grand scheme. They produce very large profits, but particularly considering that their margins are so small and their model depends on dealing in such large bulk, I think there’s a fair likelihood that the negative externalities of their business are in excess of their profit margin.
It’s impossible for a business to be GDP negative, but very possible for one to be negative in terms of real overall wealth produced when all externalities are accounted for, which I suspect leads some to greatly overestimate the positive impact of business.
Why focus on the negative externalities rather than the positive? And why neglect all the partner surpluses—consumer surplus, worker surplus, etc? I’d guess that Walmart produces wealth at least an order of magnitude greater than its profits.
Why focus on the negative externalities rather than the positive?
Because corporations make a deliberate effort to privatize gains while socializing expenses.
GDP is a pretty worthless indicator of wealth production, let alone utility production; the economists who developed the measure in the first place protested that it should by no means be taken as a measure of wealth production. There are other measures of economic growth which paint a less optimistic picture of the last few decades in industrialized nations, although they have problems of their own with making value judgments about what to measure against industrial activity, but the idea that every economic transaction must represent an increase in well-being is trivially false both in principle and practice.
Only if there are any gains to socialize. Consider honestly the societal gain from the marginal published paper, particularly given that it gets 0 cites from other papers not by the same author.
Consider honestly the societal gain from the marginal published paper, particularly given that it gets 0 cites from other papers not by the same author.
So, I’d be curious what evidence you have that the average paper gets 0 citations from papers not by the same author across a wide variety of fields. But, in any event, the marginal return rate per a paper isn’t nearly as important as the marginal return rate per a paper divided by the cost of a paper. For many fields (like math), the average cost per a paper is tiny.
Consider honestly the societal gain from the marginal published paper, particularly given that it gets 0 cites from other papers not by the same author.
So, I’d be curious what evidence you have that the average paper gets 0 citations from papers not by the same author across a wide variety of fields.
Either I cannot write clearly or others cannot read clearly, because again and again in this thread people are responding to statements that are not what I wrote. The common factor is me, which makes me think it is my failure to write clearly, but then I look at the above. I referred to “the marginal published paper”, and even italicised the word marginal. JoshuaZ replies by asking whether I have evidence for my statement about “the average paper.” I don’t know what else to say at this point.
However, yes, I have plenty of evidence that the marginal paper across a wide variety of fields gets 0 citations, see e.g. Albarran et al. Note incidentally that there are some fields where the average paper gets no citations!
the marginal paper across a wide variety of fields gets 0 citations
I don’t think a marginal paper is a thing (marginal cost isn’t a type of cost, but represents a derivative of total cost). Do you mean that d(total citations)/d(number of papers) = 0?
Note incidentally that there are some fields where the average paper gets no citations!
This seems impossible, unless all papers get no citations, ie. no-one cites anyone but themselves. That actually happens?
Of course the marginal paper is a thing. If there were marginally less research funding, the research program cancelled wouldn’t be chosen at random, it would be the least promising one. We can’t be sure ex ante that that would be the least successful paper, but given that most fields have 20% or more of papers getting no citations at all, and other studies show that papers with very low citation counts are usually being cited by the same author, that’s good evidence.
Note that I did not say that papers, on average, get no citations. I said that the average (I.e. median) paper gets no citations.
f there were marginally less research funding, the research program cancelled wouldn’t be chosen at random, it would be the least promising one.
Weren’t you just a few posts ago talking about the problems of politics getting involved in funding decisions? But now you are convinced that in event of a budget cut it will be likely to go cut the least promising research? This seems slightly contradictory.
If there were marginally less research funding, the research program cancelled wouldn’t be chosen at random, it would be the least promising one.
Ah, right, we’re on the same page now. Your argument, however, assumes that a) fruitfulness of research is quite highly predictable in advance, and b) available funds are rationally allocated based on these predictions so as to maximise fruitful research (or the proxy, citations). Insofar as the reality diverges from these assumptions, the expected number of citations of the “marginal” paper is going to approach the average number.
Note that I did not say that papers, on average, get no citations. I said that the average (I.e. median) paper gets no citations.
Oh, by “average” I assumed you meant the arithmetic mean, since that is the usual statistic.
Sorry, in this context, I switched talking about the marginal to talking about the average. You shouldn’t take my own poor thinking as a sign of anything, although in this context, it is possible that I was without thinking trying to steel man your argument, since when one is talking about completely eliminating academic funding, the average rate matters much more than the marginal rate. But the citation you’ve given is convincing that the marginal rate is generally quite low across a variety of fields.
[I]t is possible that I was without thinking trying to steel man your argument, since when one is talking about completely eliminating academic funding...
Who exactly is arguing for completely eliminating academic funding? If you mean me, I hope you can provide a supporting quote.
Who exactly is arguing for completely eliminating academic funding?
Well, various statements you’ve made seemed to imply that, such as your claim that burning down the Library of Alexandria had the advantage that:
Academics now forced to get useful job and contribute to society
and you then stated
The point is that some academics are useful and some are not; there is no market process that forces them to be so. It may be that some of the academics are able to continue doing exactly what they were doing, just for a private employer.
If you prefer, to be explicit, you seem to be arguing that all goverment funding of academics should be cut. Is that an accurate assessment? In that context, given that that’s the vast majority of academic research, the relevant difference is still the average not the marginal rate of return.
The majority of people, other than psychopaths, are not as ruthless in the quest to externalize their costs. A substantial portion of academics sacrifice renown and glory to do research they believe has intrinsic value. This is in large part the reason they can be paid so much less than people of equivalent ability in the private sector.
I agree with your general point about business men and entrepreneurship being undervalued however.
As zslatsman already said, this is not true to nearly as great an extent of most people as it is of corporations. Corporations have an obligation to maximize profits, whereas humans are rarely profit maximizers.
Some people are more willing to externalize costs than others. For instance, some people, given the opportunity to file expense reports under which they can cover luxuries, will take the opportunity to live it up as much as possible on someone else’s dollar. Other people, myself included, would feel guilty, and try to be as frugal as possible.
I wouldn’t be so sure about that. I’m not about to investigate the economics of their entire supply chain (I already don’t shop at Walmart simply due to location, so it doesn’t even stand to influence my buying decisions,) but I wouldn’t be surprised if Walmart is actually wealth-negative in the grand scheme. They produce very large profits, but particularly considering that their margins are so small and their model depends on dealing in such large bulk, I think there’s a fair likelihood that the negative externalities of their business are in excess of their profit margin.
It’s impossible for a business to be GDP negative, but very possible for one to be negative in terms of real overall wealth produced when all externalities are accounted for, which I suspect leads some to greatly overestimate the positive impact of business.
Why focus on the negative externalities rather than the positive? And why neglect all the partner surpluses—consumer surplus, worker surplus, etc? I’d guess that Walmart produces wealth at least an order of magnitude greater than its profits.
Because corporations make a deliberate effort to privatize gains while socializing expenses.
GDP is a pretty worthless indicator of wealth production, let alone utility production; the economists who developed the measure in the first place protested that it should by no means be taken as a measure of wealth production. There are other measures of economic growth which paint a less optimistic picture of the last few decades in industrialized nations, although they have problems of their own with making value judgments about what to measure against industrial activity, but the idea that every economic transaction must represent an increase in well-being is trivially false both in principle and practice.
This is true of everyone, not just corporations. I’m very suspicious that you take this scepticism only against corporations, but not academics.
Someone who is doing research that is published and doesn’t lead to direct patents is socializing gains whether or not they want to.
Only if there are any gains to socialize. Consider honestly the societal gain from the marginal published paper, particularly given that it gets 0 cites from other papers not by the same author.
So, I’d be curious what evidence you have that the average paper gets 0 citations from papers not by the same author across a wide variety of fields. But, in any event, the marginal return rate per a paper isn’t nearly as important as the marginal return rate per a paper divided by the cost of a paper. For many fields (like math), the average cost per a paper is tiny.
Either I cannot write clearly or others cannot read clearly, because again and again in this thread people are responding to statements that are not what I wrote. The common factor is me, which makes me think it is my failure to write clearly, but then I look at the above. I referred to “the marginal published paper”, and even italicised the word marginal. JoshuaZ replies by asking whether I have evidence for my statement about “the average paper.” I don’t know what else to say at this point.
However, yes, I have plenty of evidence that the marginal paper across a wide variety of fields gets 0 citations, see e.g. Albarran et al. Note incidentally that there are some fields where the average paper gets no citations!
I don’t think a marginal paper is a thing (marginal cost isn’t a type of cost, but represents a derivative of total cost). Do you mean that
d(total citations)/d(number of papers) = 0?This seems impossible, unless all papers get no citations, ie. no-one cites anyone but themselves. That actually happens?
Of course the marginal paper is a thing. If there were marginally less research funding, the research program cancelled wouldn’t be chosen at random, it would be the least promising one. We can’t be sure ex ante that that would be the least successful paper, but given that most fields have 20% or more of papers getting no citations at all, and other studies show that papers with very low citation counts are usually being cited by the same author, that’s good evidence.
Note that I did not say that papers, on average, get no citations. I said that the average (I.e. median) paper gets no citations.
Weren’t you just a few posts ago talking about the problems of politics getting involved in funding decisions? But now you are convinced that in event of a budget cut it will be likely to go cut the least promising research? This seems slightly contradictory.
Would it? I fear it would be the one whose participants are worst at ‘politics’.
Ah, right, we’re on the same page now. Your argument, however, assumes that a) fruitfulness of research is quite highly predictable in advance, and b) available funds are rationally allocated based on these predictions so as to maximise fruitful research (or the proxy, citations). Insofar as the reality diverges from these assumptions, the expected number of citations of the “marginal” paper is going to approach the average number.
Oh, by “average” I assumed you meant the arithmetic mean, since that is the usual statistic.
Sorry, in this context, I switched talking about the marginal to talking about the average. You shouldn’t take my own poor thinking as a sign of anything, although in this context, it is possible that I was without thinking trying to steel man your argument, since when one is talking about completely eliminating academic funding, the average rate matters much more than the marginal rate. But the citation you’ve given is convincing that the marginal rate is generally quite low across a variety of fields.
Who exactly is arguing for completely eliminating academic funding? If you mean me, I hope you can provide a supporting quote.
Well, various statements you’ve made seemed to imply that, such as your claim that burning down the Library of Alexandria had the advantage that:
and you then stated
If you prefer, to be explicit, you seem to be arguing that all goverment funding of academics should be cut. Is that an accurate assessment? In that context, given that that’s the vast majority of academic research, the relevant difference is still the average not the marginal rate of return.
That being a large portion of academia, this presents at least a partial argument for the present state of affairs wrt academia being publicly funded.
The majority of people, other than psychopaths, are not as ruthless in the quest to externalize their costs. A substantial portion of academics sacrifice renown and glory to do research they believe has intrinsic value. This is in large part the reason they can be paid so much less than people of equivalent ability in the private sector.
I agree with your general point about business men and entrepreneurship being undervalued however.
Uh huh. Is it true of charities?
As zslatsman already said, this is not true to nearly as great an extent of most people as it is of corporations. Corporations have an obligation to maximize profits, whereas humans are rarely profit maximizers.
Some people are more willing to externalize costs than others. For instance, some people, given the opportunity to file expense reports under which they can cover luxuries, will take the opportunity to live it up as much as possible on someone else’s dollar. Other people, myself included, would feel guilty, and try to be as frugal as possible.
Try not to overgeneralize your own mentality.