Answer: Yes. Even today, number theory research highly relevant to efficient crypto is ongoing...
Yes, but number theory only gained practical application relatively recently. Your claim was that if people in the 1500s and 1600s had had access to this number theory, we’d all be better off now. It seems you believe that we’d now have more advanced number theory because of this. But my claim is that this stuff was seen as useless back then, so they would have mostly sat on this knowledge, and number theory now would be about where it is.
A lot of problems in the world need to be solved given the political constraints that exist...
But those “political constraints” are not laws of nature, they are descriptions of current power relations which academics have helped bring about. I’m glad that the economics faculty spend much of their time thinking of ways to fix the problems caused by the sociology faculty, but it would save everyone time and money if they all went home.
Ok. Do you prefer Quality-adjusted life years ?
No. I’d be more impressed with Gates if he gave people cash to satisfy their own revealed preferences, rather than arbitrary metrics. But that wouldn’t look as caring.
“Involved with” is an extremely weak standard. The thing is that even if Microsoft had never existed, similar products (such as software or hardware from IBM, Apple, Linux, Tandy) would have been in those positions.
Yeah, maybe, although presumably it helped on the margin. But if Gates hadn’t set up his foundation, the resources involved would have gone to some use. Why are you only looking at one margin, and not the other?
Let’s examine why people are willing to do so. It isn’t efficiency...
But this notion of “efficiency” that you are using is merely a synonym for what we care about, specifically efficiency to the user. A more convenient UI, for example, is likely orders of magnitude more important than memory usage for efficiency to the user—yet convenience is subjective. Moreover, bundling, marketing, brands and network effects are not examples of market failure. In fact, marketing produces positive externalities. Of course Microsoft has a first-mover advantage over someone trying to make a new OS today, but that’s not an “unfair” advantage.
I’ll grant you that Microsoft has advantages in government contracting that they wouldn’t have in a proper free market, but you should in turn admit that they have also suffered from anti-trust laws.
Gates’s charities specifically go around doing things that people say they want but don’t bother to do with their own money.
That some people make noise about wanting to help charity but don’t doesn’t make the people who actually do it as contributing less utility. Or is there some other point here I’m missing?
I wasn’t talking about potential donors, I was talking about recipients. If you talk a lot about how much you love literature, but in fact you spend all your money on beer, then some so-called philanthropist building you a library is just a waste of everyone’s time.
Yes, but number theory only gained practical application relatively recently. Your claim was that if people in the 1500s and 1600s had had access to this number theory, we’d all be better off now.
Advances in Diophantine number theory in the Renaissance led directly to complex numbers and analytic geometry, which led to calculus and all of physics. If the Library at Alexandria had been preserved, the Industrial Revolution could have happened centuries earlier.
That’s an intriguing causal chain but its length & breadth give me pause. Are there any articles, books, or papers that nicely sum up the evidence for it (and ideally the evidence against it)?
Yes, but number theory only gained practical application relatively recently. Your claim was that if people in the 1500s and 1600s had had access to this number theory, we’d all be better off now. I
Sorry, poor wording on my part. I mentioned number theory initially as an area because it is the one where we most unambiguously lost Greek knowledge. But it seems pretty clear we lost many other areas also, hence why I mentioned trig, where we know that there were multiple treatises on the geometry of triangles and related things which are no longer extant but are referenced in extant works.
I’m not at all convinced incidentally by the argument that people would have just sat on the number theory. Since the late 1700s, the rate of mathematical progress has been rapid. So while direct focus on the areas relevant to cryptography might not have occurred, closely connected areas (which are relevant to crypto) would certainly be more advanced.
I’m glad that the economics faculty spend much of their time thinking of ways to fix the problems caused by the sociology faculty, but it would save everyone time and money if they all went home.
So what evidence do you have that the economists are fixing the problems created by the sociologists in any meaningful sense?
No. I’d be more impressed with Gates if he gave people cash to satisfy their own revealed preferences, rather than arbitrary metrics. But that wouldn’t look as caring.
So that won’t work at multiple levels. A major issue when assisting people in the developing world is coordination problems (there are things that will help a lot but if everyone has a little bit of money they don’t have an easy way to pool the money together in a useful fashion). Moreover, this assumes a degree of knowledge which people simply don’t have. A random African doesn’t know necessarily that bednets are an option, or even have any good understanding of where to get them from. And then one has things like vaccine research. You are essentially assuming that market forces will win do what is best when one is dealing with people who are lacking in basic education and institutions to effectively exercise their will even if they had the education.
Moreover, bundling, marketing, brands and network effects are not examples of market failure.
Huh? All of these can result in total utility going down compared to what might happen if one picked a different market equilibrium. How are these not market failures?
In fact, marketing produces positive externalities.
In limited circumstances, marketing can produce positive utility (people learn about products they didn’t have knowledge of, or they get more data to compare products), but I’m curious to here how marketing is at all likely to produce positive externalities.
I’ll grant you that Microsoft has advantages in government contracting that they wouldn’t have in a proper free market, but you should in turn admit that they have also suffered from anti-trust laws.
Yes, they have and that’s ok. Anti-trust laws help market stability. The prevent the problem we’ve seen in the banking and auto industries of being too big to fail, and prevent the problem of bundling to force products on new markets (which again I’m quite curious to here an explanation for how that isn’t a market failure).
So what evidence do you have that the economists are fixing the problems created by the sociologists in any meaningful sense?
I confess I don’t understand this question. Could you please clarify?
A major issue when assisting people in the developing world is coordination problems… education… institutions...
But these “institutions” are not laws of nature, they aren’t even tangible things—an “institution” is just a description of the way people co-ordinate with each other. So yes, people in developing countries often can’t co-ordinate because they have bad institutions, but it would be equally true to say that they can’t have good institutions because they don’t co-ordinate.
A random African doesn’t know necessarily that bednets are an option, or even have any good understanding of where to get them from.
Actually, I think that a “random African” likely knows a lot more about what would improve his standard of living than you or I, and my mind boggles at any other presumption. If he’d rather spend his money on beer than bednets, but you give him a bednet anyway, then I hope it makes you happy, because you’re clearly not doing it for him.
I’m curious to here how marketing is at all likely to produce positive externalities.
Apart from the reasons you already mentioned, marketing creates a brand which reduces information costs. This is of course particularly important in a low information market. Spending money to promote your brand is a pre-commitment to provide satisfactory quality products.
Huh? All of these can result in total utility going down compared to what might happen if one picked a different market equilibrium. How are these not market failures?
Firstly, no-one can “pick” a market equilibrium. Secondly, order is defined in the process of its emergence. Thirdly, proof of a possibility and a demonstration of a real-world effect are not the same thing.
Microsoft have also suffered from anti-trust laws
Yes, they have and that’s ok… The prevent the problem we’ve seen in the banking and auto industries of being too big to fail
So every time a business gains on account of departures from the free market, that’s a travesty, but every time it loses, that’s the way things are supposed to work. No wonder you think academics are the only ones who do any good. Besides, TBTF isn’t an economic problem, this is a political problem. They had too many lobbyists to be allowed to fail, that’s all.
I’m quite curious to here an explanation for how [bundling] isn’t a market failure
How is it a market failure? It’s possible for bundling to reduce consumer surplus, but that’s just a straight transfer.
So what evidence do you have that the economists are fixing the problems created by the sociologists in any meaningful sense?
I confess I don’t understand this question. Could you please clarify?
You said earlier that:
I’m glad that the economics faculty spend much of their time thinking of ways to fix the problems caused by the sociology faculty, but it would save everyone time and money if they all went home.
My confusion was over this claim in that it seems to assume that a) sociologists are creating societal problems and b) economists are solving those problems.
But these “institutions” are not laws of nature, they aren’t even tangible things—an “institution” is just a description of the way people co-ordinate with each other. So yes, people in developing countries often can’t co-ordinate because they have bad institutions, but it would be equally true to say that they can’t have good institutions because they don’t co-ordinate.
Human behavior is not path independent. Institutions help coordination because prior functioning governments and organizations help people to keep coordinating. Values also come into play: Countries with functioning governments have citizens with more respect for government so they are more likely to cooperate with it an so on.
Apart from the reasons you already mentioned, marketing creates a brand which reduces information costs. This is of course particularly important in a low information market. Spending money to promote your brand is a pre-commitment to provide satisfactory quality products.
This only makes sense in a context where markets are low information and marketing creates actual information and where negative behavior by a brand will have a substantial reduction in sales. In practice, people have strong brand loyalty based on familiarity with logos and the like,. So people will keep buying the same brands not because they are the best but that’s because what they’ve always done. Humans are cognitive misers, and a large part of marketing is hijacking that.
Huh? All of these can result in total utility going down compared to what might happen if one picked a different market equilibrium. How are these not market failures?
Firstly, no-one can “pick” a market equilibrium.
You are missing the point. The point is that there are other stable equilibria that are better off for everyone but issues like networking effects and technological lock-in prevent people from moving off the local maximum.
Secondly, order is defined in the process of its emergence. Thirdly, proof of a possibility and a demonstration of a real-world effect are not the same thing.
What do these two sentences mean?
So every time a business gains on account of departures from the free market, that’s a travesty, but every time it loses, that’s the way things are supposed to work.
I don’t know where you saw a statement that implied that, and I’m curious how you got that sort of idea from what I wrote.
Besides, TBTF isn’t an economic problem, this is a political problem. They had too many lobbyists to be allowed to fail, that’s all.
There’s an argument for that in the case of the car industry, but the economic consensus is that the economy as a whole would have gotten much worse if the banks hadn’t been bailed out.
How is it a market failure? It’s possible for bundling to reduce consumer surplus, but that’s just a straight transfer.
Technological lock-in and network effects again. For example, in the case of Internet Explorer, having it bundled with Windows meant that many people ended up using IE by default, got very used to it, and then it had an advantage compared to other browsers which stayed around (because people then wrote software that needed IE and webpages emphasized looking good in IE). In this context, if the consumers had been given a choice of browsers, it is likely that other browsers, especially Netscape (and later Firefox) would have done much better, and by most benchmarks Netscape was a better browser.
Actually, I think that a “random African” likely knows a lot more about what would improve his standard of living than you or I, and my mind boggles at any other presumption.
So why haven’t they all done so? An RA may well have more on-the-ground knowledge, but a do-gooder may well have more of the kind of knowledge that you learn in school. Since the D-G is not seeking to take over the RA’s entire life, it’s a case of two heads are better than one.
If he’d rather spend his money on beer than bednets, but you give him a bednet anyway, then I hope it makes you happy, because you’re clearly not doing it for him.
You could do with distingusihing short term gains from long term interests. People don’t pop out of the womb knowing how to maximise the latter. It takes education. And institions: why save when the banks are crooked.
But these “institutions” are not laws of nature, they aren’t even tangible things—an “institution” is just a description of the way people co-ordinate with each other. So yes, people in developing countries often can’t co-ordinate because they have bad institutions, but it would be equally true to say that they can’t have good institutions because they don’t co-ordinate.
It would be truer still to say that good institions take a long and fragile history to evolve. They didn’t evolve everywerhe and they arrived late where they did. Go back about 500 years and no one had good (democratic, accountable, fair honest) instituions.
Apart from the reasons you already mentioned, marketing creates a brand which reduces information costs. This is of course particularly important in a low information market. Spending money to promote your brand is a pre-commitment to provide satisfactory quality products.
It’s hard to know where to start with that lot. Brands aren’t information like lib raries are information, they are an attempt to get people t
to buy things by whatever means is permitted. They can be wors than no information at all, since African mothers would have presumably continued to brest fee without nestle’s intervention:
“The Nestlé boycott is a boycott launched on July 7, 1977, in the United States against the Swiss-based Nestlé corporation. It spread in the United States, and expanded into Europe in the early 1980s. It was prompted by concern about Nestle’s “aggressive marketing” of breast milk substitutes (infant formula), particularly in less economically developed countries (LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of babies, largely among the poor.[1] Among the campaigners, Professor Derek Jelliffe and his wife Patrice, who contributed to establish the World Alliance for Breastfeeding Action (WABA), were particularly instrumental in helping to coordinate the boycott and giving it ample visibility worldwide.”
Actually, I think that a “random African” likely knows a lot more about what would improve his standard of living than you or I, and my mind boggles at any other presumption. If he’d rather spend his money on beer than bednets, but you give him a bednet anyway, then I hope it makes you happy, because you’re clearly not doing it for him.
Yes, because all humans are perfectly rational and have unlimited willpower. But then again, why doesn’t he sell the bednet I gave him and buys beer with it?
Yes, because all humans are perfectly rational and have unlimited willpower.
And I claim that where? Are you claiming that the donors are perfectly rational and have unlimited willpower—and are also perfectly altruistic?
My claim is the modest and surely uncontroversial one that JoshuaZ’s “random African” is a better guardian of his own welfare than you, or Bill Gates, or a random do-gooder.
But then again, why doesn’t he sell the bednet I gave him and buys beer with it?
Because you gave everyone else in the area a bednet, so now there’s a local glut. But yes, I’m sure some people do sell their bednets.
My claim is the modest and surely uncontroversial one that JoshuaZ’s “random African” is a better guardian of his own welfare than you, or Bill Gates, or a random do-gooder.
It is not (language warning) entirely uncontroversial. Whether through poor education or through giving disproportionate value to present circumstances (and none or too little to future circumstances), people can and often do do things that are, in the long run, self-defeating. (And note that this ‘long run’ can be measured in weeks or months, even hours in particularly extreme cases).
At least one study suggests that the ability to reject a present reward in favour of a greater future reward is detectable at a young age and is correlated with success in life.
Of course people can do things that are self-defeating—did I ever suggest otherwise? I never said people are perfect guardians of their own self-interest, I said, and I repeat, that a random person is a better guardians of his own self-interest than a random do-gooder.
I am getting a little frustrated with people arguing against strawmans of my positions, which has now happened several times on this thread. Am I being unclear?
None of those links suggest that people are worse guardians of their own self-interest than the outsider. In fact, quite the reverse. Take the fertilizer study. The reason that the farmers weren’t following the advice of the Kenyan Ministry of Agriculture was that it was bad advice. To quote:
[T]he full package recommended by the Ministry of Agriculture is highly unprofitable on average for the farmers in our sample… the official recommendations are not adapted to many farmers in the region.
So the study demonstrates that the farmers were better guardians of their own self-interest than some bureaucrat in Nairobi (no doubt advised by a western NGO). If they had been forced to follow the (no doubt well-meaning) advice, they would have been much worse off. Maybe some would have died. Now, at the same time, they don’t know every possible combination, and it turns out that if they changed their farming methodology, they could become more productive. Great! That’s how society advances—by persuading people as to what is in their self-interest, not by making someone else their guardian.
a random person is a better guardians of his own self-interest than a random do-gooder.
Phrased in this way, I think that I agree with you, on average.
In the original context of your statement, however, I had thought that you meant that “a random charity recipient” instead of “a random person”.
Now, charity recipients are still people, of course. However, charity recipients are usually people chosen on the basis of poverty; thus, the group of people who are charity recipients tend to be poor.
Now, some people are good guardians of their own long-term self-interest, and some are not. This is correlated with wealth in an unsurprising way (as demonstrated in the marshmallow experiment linked to above); those people who are better guardians of their own long-term self-interest are, on average, more likely to be above a certain minimum level of wealth than those who are not. They are, therefore, less likely to be charity recipients. Therefore, I conclude that people who are in a position to receive benefits from a charity are, on average, worse guardians of their own long-term self-interest than people who are in a position to contribute to a charity.
So. I therefore conclude that a person, on average, will be a better guardian of his own self-interest than a random person of the category (charity recipient); since the selection of people who fall into that category biases the category to those who are poor guardians of their own self-interest. It’s not the only factor selected for in that category, but it’s significant enough to have a noticeable effect.
I said, and I repeat, that a random person is a better guardians of his own self-interest than a random do-gooder.
But likely not a better guardian of his or her own self interest than a nonrandom do-gooder who’s researched the specific problems the person is dealing with and developed expertise in solving them with resources that the person is has had no opportunity to learn to make use of.
Certainly—tautologically—he’s not a better guardian of his or her own self interest than some who is in fact a better one. But inventing a fictional character who is in fact a better one does not advance any argument.
One might as well invent a nonrandom do-gooder who thinks they have properly researched what they think are the specific problems the person is dealing with and thinks they have developed expertise in solving them with resources that they think the person has had no opportunity to learn to make use of, but who is nonetheless wrong. As with, apparently, and non-fictionally, the Kenyan Ministry of Agriculture.
Of course, less qualified guardians of an individual’s self interest who believe themselves to be more qualified are a legitimate risk, but that doesn’t mean that the optimal solution is to have individuals act exclusively as guardians of their own self interest.
If the Kenyan Ministry of agriculture follows the prescriptions of the researchers in the article cited above, they will thereby become better guardians of those farmers’ interests than the farmers have thus far been, within that domain.
Of course, less qualified guardians of an individual’s self interest who believe themselves to be more qualified are a legitimate risk, but that doesn’t mean that the optimal solution is to have individuals act exclusively as guardians of their own self interest.
The optimal solution isn’t necessarily to have someone else act as the “guardian” of their self-interest, however well informed. BTW, I don’t know if this is true of American English, but in British English, one meaning of “guardian” is what an orphan has in place of parents. Doing things for adults without consulting them is usually a bad idea.
If the Kenyan Ministry of agriculture follows the prescriptions of the researchers in the article cited above, they will thereby become better guardians of those farmers’ interests than the farmers have thus far been, within that domain.
Not if they try to do so by simply coming in and telling the farmers what to do, nor by deciding the farmers’ economic calculations are wrong and manipulating subsidies to get them to do differently. (I’ve only glanced at the article; I don’t know if this is what they did.) Even when they’re right about what the farmers should be doing, they will go wrong if they use the wrong means to get that to happen. Providing information might be a better way to go. The presumption that if only you know enough, you can direct other people’s lives for them is pretty much always wrong.
Doing things for adults without consulting them is usually a bad idea.
But none of the examples given are of one person taking over another’s life. Most of this debate revolves around
the fallact that someone either runs their own life, or has it run for them. In fact, there are many degress of advice/help/co-operation.
I don’t know if this is true of American English, but in British English, one meaning of “guardian” is what an orphan has in place of parents.
Yes, this meaning is in American English as well. A typical parental permission form for a child to go on a field trip or what-have-you will ask for the signature of “a parent or legal guardian”.
a random person is a better guardians of his own self-interest than a random do-gooder.
That isn’t obvious. D-G’s are likely to be qualified to help people, the people they are helping are
likely to have a hsitory of not helping themselves sucessfully.
So the study demonstrates that the farmers were better guardians of their own self-interest
Would they have had access to fertilizer at all w/out the govt? Two heads are better than one, again.
Are you claiming that the donors are perfectly rational and have unlimited willpower—and are also perfectly altruistic?
I’m not.
My claim is the modest and surely uncontroversial one that JoshuaZ’s “random African” is a better guardian of his own welfare than you, or Bill Gates, or a random do-gooder.
I might agree about myself or “a random do-gooder” (dunno about Gates), but these people do look like they’ve done their homework.
My claim is the modest and surely uncontroversial one that JoshuaZ’s “random African” is a better guardian of his own welfare than you, or Bill Gates, or a random do-gooder.
People like Bill Gates aren’t “random do-gooders”. I’d not it find it strange that in the counterfactual that Bill Gates had the time to guard my own welfare (let alone some random African’s), he might do a better job at it than I would myself. Certainly he might provide useful tips about how to invest my money for example, might know ways that I’ve not even heard of.
People like Bill Gates aren’t “random do-gooders”.
Bill Gates was a software executive who got into malaria prevention and education reform and poverty reduction and God knows what else, not because of his deep knowledge and expertise in those subjects, but a generalised wish to become a philanthropist. He’s the very archetype of a random do-gooder.
I’d not it find it strange that in the counterfactual that Bill Gates had the time to guard my own welfare (let alone some random African’s), he might do a better job at it than I would myself.
But the whole point is that he doesn’t have the time (or knowledge, or inclination, or incentives, or …) to guard your welfare—or that of a “random African”. Sure, if Bill Gates was my father he might be a better guardian of my welfare than I am. But he ain’t.
My point is that the qualification “random” is rather silly when applied to one of the most wealthy people in the world. That he achieved that wealth (most of which he did not inherit) implies some skills and intelligence most likely beyond that of a randomly selected do-gooder.
An actually randomly-selected do-gooder would probably be more like a middle-class individual who walks to a soup-kitchen and offers to volunteer, or who donates money to UNICEF.
So every time a business gains on account of departures from the free market, that’s a travesty, but every time it loses, that’s the way things are supposed to work. No wonder you think academics are the only ones who do any good. Besides, TBTF isn’t an economic problem, this is a political problem. They had too many lobbyists to be allowed to fail, that’s all.
If you talk a lot about how much you love literature, but in fact you spend all your money on beer, then some so-called philanthropist building you a library is just a waste of everyone’s time.
Yes, but number theory only gained practical application relatively recently. Your claim was that if people in the 1500s and 1600s had had access to this number theory, we’d all be better off now. It seems you believe that we’d now have more advanced number theory because of this. But my claim is that this stuff was seen as useless back then, so they would have mostly sat on this knowledge, and number theory now would be about where it is.
But those “political constraints” are not laws of nature, they are descriptions of current power relations which academics have helped bring about. I’m glad that the economics faculty spend much of their time thinking of ways to fix the problems caused by the sociology faculty, but it would save everyone time and money if they all went home.
No. I’d be more impressed with Gates if he gave people cash to satisfy their own revealed preferences, rather than arbitrary metrics. But that wouldn’t look as caring.
Yeah, maybe, although presumably it helped on the margin. But if Gates hadn’t set up his foundation, the resources involved would have gone to some use. Why are you only looking at one margin, and not the other?
But this notion of “efficiency” that you are using is merely a synonym for what we care about, specifically efficiency to the user. A more convenient UI, for example, is likely orders of magnitude more important than memory usage for efficiency to the user—yet convenience is subjective. Moreover, bundling, marketing, brands and network effects are not examples of market failure. In fact, marketing produces positive externalities. Of course Microsoft has a first-mover advantage over someone trying to make a new OS today, but that’s not an “unfair” advantage.
I’ll grant you that Microsoft has advantages in government contracting that they wouldn’t have in a proper free market, but you should in turn admit that they have also suffered from anti-trust laws.
I wasn’t talking about potential donors, I was talking about recipients. If you talk a lot about how much you love literature, but in fact you spend all your money on beer, then some so-called philanthropist building you a library is just a waste of everyone’s time.
Advances in Diophantine number theory in the Renaissance led directly to complex numbers and analytic geometry, which led to calculus and all of physics. If the Library at Alexandria had been preserved, the Industrial Revolution could have happened centuries earlier.
That’s an intriguing causal chain but its length & breadth give me pause. Are there any articles, books, or papers that nicely sum up the evidence for it (and ideally the evidence against it)?
Sorry, poor wording on my part. I mentioned number theory initially as an area because it is the one where we most unambiguously lost Greek knowledge. But it seems pretty clear we lost many other areas also, hence why I mentioned trig, where we know that there were multiple treatises on the geometry of triangles and related things which are no longer extant but are referenced in extant works.
I’m not at all convinced incidentally by the argument that people would have just sat on the number theory. Since the late 1700s, the rate of mathematical progress has been rapid. So while direct focus on the areas relevant to cryptography might not have occurred, closely connected areas (which are relevant to crypto) would certainly be more advanced.
So what evidence do you have that the economists are fixing the problems created by the sociologists in any meaningful sense?
So that won’t work at multiple levels. A major issue when assisting people in the developing world is coordination problems (there are things that will help a lot but if everyone has a little bit of money they don’t have an easy way to pool the money together in a useful fashion). Moreover, this assumes a degree of knowledge which people simply don’t have. A random African doesn’t know necessarily that bednets are an option, or even have any good understanding of where to get them from. And then one has things like vaccine research. You are essentially assuming that market forces will win do what is best when one is dealing with people who are lacking in basic education and institutions to effectively exercise their will even if they had the education.
Huh? All of these can result in total utility going down compared to what might happen if one picked a different market equilibrium. How are these not market failures?
In limited circumstances, marketing can produce positive utility (people learn about products they didn’t have knowledge of, or they get more data to compare products), but I’m curious to here how marketing is at all likely to produce positive externalities.
Yes, they have and that’s ok. Anti-trust laws help market stability. The prevent the problem we’ve seen in the banking and auto industries of being too big to fail, and prevent the problem of bundling to force products on new markets (which again I’m quite curious to here an explanation for how that isn’t a market failure).
I confess I don’t understand this question. Could you please clarify?
But these “institutions” are not laws of nature, they aren’t even tangible things—an “institution” is just a description of the way people co-ordinate with each other. So yes, people in developing countries often can’t co-ordinate because they have bad institutions, but it would be equally true to say that they can’t have good institutions because they don’t co-ordinate.
Actually, I think that a “random African” likely knows a lot more about what would improve his standard of living than you or I, and my mind boggles at any other presumption. If he’d rather spend his money on beer than bednets, but you give him a bednet anyway, then I hope it makes you happy, because you’re clearly not doing it for him.
Apart from the reasons you already mentioned, marketing creates a brand which reduces information costs. This is of course particularly important in a low information market. Spending money to promote your brand is a pre-commitment to provide satisfactory quality products.
Firstly, no-one can “pick” a market equilibrium. Secondly, order is defined in the process of its emergence. Thirdly, proof of a possibility and a demonstration of a real-world effect are not the same thing.
So every time a business gains on account of departures from the free market, that’s a travesty, but every time it loses, that’s the way things are supposed to work. No wonder you think academics are the only ones who do any good. Besides, TBTF isn’t an economic problem, this is a political problem. They had too many lobbyists to be allowed to fail, that’s all.
How is it a market failure? It’s possible for bundling to reduce consumer surplus, but that’s just a straight transfer.
You said earlier that:
My confusion was over this claim in that it seems to assume that a) sociologists are creating societal problems and b) economists are solving those problems.
Human behavior is not path independent. Institutions help coordination because prior functioning governments and organizations help people to keep coordinating. Values also come into play: Countries with functioning governments have citizens with more respect for government so they are more likely to cooperate with it an so on.
This only makes sense in a context where markets are low information and marketing creates actual information and where negative behavior by a brand will have a substantial reduction in sales. In practice, people have strong brand loyalty based on familiarity with logos and the like,. So people will keep buying the same brands not because they are the best but that’s because what they’ve always done. Humans are cognitive misers, and a large part of marketing is hijacking that.
You are missing the point. The point is that there are other stable equilibria that are better off for everyone but issues like networking effects and technological lock-in prevent people from moving off the local maximum.
What do these two sentences mean?
I don’t know where you saw a statement that implied that, and I’m curious how you got that sort of idea from what I wrote.
There’s an argument for that in the case of the car industry, but the economic consensus is that the economy as a whole would have gotten much worse if the banks hadn’t been bailed out.
Technological lock-in and network effects again. For example, in the case of Internet Explorer, having it bundled with Windows meant that many people ended up using IE by default, got very used to it, and then it had an advantage compared to other browsers which stayed around (because people then wrote software that needed IE and webpages emphasized looking good in IE). In this context, if the consumers had been given a choice of browsers, it is likely that other browsers, especially Netscape (and later Firefox) would have done much better, and by most benchmarks Netscape was a better browser.
So why haven’t they all done so? An RA may well have more on-the-ground knowledge, but a do-gooder may well have more of the kind of knowledge that you learn in school. Since the D-G is not seeking to take over the RA’s entire life, it’s a case of two heads are better than one.
You could do with distingusihing short term gains from long term interests. People don’t pop out of the womb knowing how to maximise the latter. It takes education. And institions: why save when the banks are crooked.
It would be truer still to say that good institions take a long and fragile history to evolve. They didn’t evolve everywerhe and they arrived late where they did. Go back about 500 years and no one had good (democratic, accountable, fair honest) instituions.
It’s hard to know where to start with that lot. Brands aren’t information like lib raries are information, they are an attempt to get people t to buy things by whatever means is permitted. They can be wors than no information at all, since African mothers would have presumably continued to brest fee without nestle’s intervention:
“The Nestlé boycott is a boycott launched on July 7, 1977, in the United States against the Swiss-based Nestlé corporation. It spread in the United States, and expanded into Europe in the early 1980s. It was prompted by concern about Nestle’s “aggressive marketing” of breast milk substitutes (infant formula), particularly in less economically developed countries (LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of babies, largely among the poor.[1] Among the campaigners, Professor Derek Jelliffe and his wife Patrice, who contributed to establish the World Alliance for Breastfeeding Action (WABA), were particularly instrumental in helping to coordinate the boycott and giving it ample visibility worldwide.”
Yes, because all humans are perfectly rational and have unlimited willpower. But then again, why doesn’t he sell the bednet I gave him and buys beer with it?
And I claim that where? Are you claiming that the donors are perfectly rational and have unlimited willpower—and are also perfectly altruistic?
My claim is the modest and surely uncontroversial one that JoshuaZ’s “random African” is a better guardian of his own welfare than you, or Bill Gates, or a random do-gooder.
Because you gave everyone else in the area a bednet, so now there’s a local glut. But yes, I’m sure some people do sell their bednets.
It is not (language warning) entirely uncontroversial. Whether through poor education or through giving disproportionate value to present circumstances (and none or too little to future circumstances), people can and often do do things that are, in the long run, self-defeating. (And note that this ‘long run’ can be measured in weeks or months, even hours in particularly extreme cases).
At least one study suggests that the ability to reject a present reward in favour of a greater future reward is detectable at a young age and is correlated with success in life.
Of course people can do things that are self-defeating—did I ever suggest otherwise? I never said people are perfect guardians of their own self-interest, I said, and I repeat, that a random person is a better guardians of his own self-interest than a random do-gooder.
I am getting a little frustrated with people arguing against strawmans of my positions, which has now happened several times on this thread. Am I being unclear?
None of those links suggest that people are worse guardians of their own self-interest than the outsider. In fact, quite the reverse. Take the fertilizer study. The reason that the farmers weren’t following the advice of the Kenyan Ministry of Agriculture was that it was bad advice. To quote:
So the study demonstrates that the farmers were better guardians of their own self-interest than some bureaucrat in Nairobi (no doubt advised by a western NGO). If they had been forced to follow the (no doubt well-meaning) advice, they would have been much worse off. Maybe some would have died. Now, at the same time, they don’t know every possible combination, and it turns out that if they changed their farming methodology, they could become more productive. Great! That’s how society advances—by persuading people as to what is in their self-interest, not by making someone else their guardian.
Phrased in this way, I think that I agree with you, on average.
In the original context of your statement, however, I had thought that you meant that “a random charity recipient” instead of “a random person”.
Now, charity recipients are still people, of course. However, charity recipients are usually people chosen on the basis of poverty; thus, the group of people who are charity recipients tend to be poor.
Now, some people are good guardians of their own long-term self-interest, and some are not. This is correlated with wealth in an unsurprising way (as demonstrated in the marshmallow experiment linked to above); those people who are better guardians of their own long-term self-interest are, on average, more likely to be above a certain minimum level of wealth than those who are not. They are, therefore, less likely to be charity recipients. Therefore, I conclude that people who are in a position to receive benefits from a charity are, on average, worse guardians of their own long-term self-interest than people who are in a position to contribute to a charity.
So. I therefore conclude that a person, on average, will be a better guardian of his own self-interest than a random person of the category (charity recipient); since the selection of people who fall into that category biases the category to those who are poor guardians of their own self-interest. It’s not the only factor selected for in that category, but it’s significant enough to have a noticeable effect.
But likely not a better guardian of his or her own self interest than a nonrandom do-gooder who’s researched the specific problems the person is dealing with and developed expertise in solving them with resources that the person is has had no opportunity to learn to make use of.
Certainly—tautologically—he’s not a better guardian of his or her own self interest than some who is in fact a better one. But inventing a fictional character who is in fact a better one does not advance any argument.
One might as well invent a nonrandom do-gooder who thinks they have properly researched what they think are the specific problems the person is dealing with and thinks they have developed expertise in solving them with resources that they think the person has had no opportunity to learn to make use of, but who is nonetheless wrong. As with, apparently, and non-fictionally, the Kenyan Ministry of Agriculture.
Of course, less qualified guardians of an individual’s self interest who believe themselves to be more qualified are a legitimate risk, but that doesn’t mean that the optimal solution is to have individuals act exclusively as guardians of their own self interest.
If the Kenyan Ministry of agriculture follows the prescriptions of the researchers in the article cited above, they will thereby become better guardians of those farmers’ interests than the farmers have thus far been, within that domain.
The optimal solution isn’t necessarily to have someone else act as the “guardian” of their self-interest, however well informed. BTW, I don’t know if this is true of American English, but in British English, one meaning of “guardian” is what an orphan has in place of parents. Doing things for adults without consulting them is usually a bad idea.
Not if they try to do so by simply coming in and telling the farmers what to do, nor by deciding the farmers’ economic calculations are wrong and manipulating subsidies to get them to do differently. (I’ve only glanced at the article; I don’t know if this is what they did.) Even when they’re right about what the farmers should be doing, they will go wrong if they use the wrong means to get that to happen. Providing information might be a better way to go. The presumption that if only you know enough, you can direct other people’s lives for them is pretty much always wrong.
But none of the examples given are of one person taking over another’s life. Most of this debate revolves around the fallact that someone either runs their own life, or has it run for them. In fact, there are many degress of advice/help/co-operation.
Yes, this meaning is in American English as well. A typical parental permission form for a child to go on a field trip or what-have-you will ask for the signature of “a parent or legal guardian”.
That isn’t obvious. D-G’s are likely to be qualified to help people, the people they are helping are likely to have a hsitory of not helping themselves sucessfully.
Would they have had access to fertilizer at all w/out the govt? Two heads are better than one, again.
I’m not.
I might agree about myself or “a random do-gooder” (dunno about Gates), but these people do look like they’ve done their homework.
People like Bill Gates aren’t “random do-gooders”. I’d not it find it strange that in the counterfactual that Bill Gates had the time to guard my own welfare (let alone some random African’s), he might do a better job at it than I would myself. Certainly he might provide useful tips about how to invest my money for example, might know ways that I’ve not even heard of.
Bill Gates was a software executive who got into malaria prevention and education reform and poverty reduction and God knows what else, not because of his deep knowledge and expertise in those subjects, but a generalised wish to become a philanthropist. He’s the very archetype of a random do-gooder.
But the whole point is that he doesn’t have the time (or knowledge, or inclination, or incentives, or …) to guard your welfare—or that of a “random African”. Sure, if Bill Gates was my father he might be a better guardian of my welfare than I am. But he ain’t.
My point is that the qualification “random” is rather silly when applied to one of the most wealthy people in the world. That he achieved that wealth (most of which he did not inherit) implies some skills and intelligence most likely beyond that of a randomly selected do-gooder.
An actually randomly-selected do-gooder would probably be more like a middle-class individual who walks to a soup-kitchen and offers to volunteer, or who donates money to UNICEF.
He didn’t say that. You’re being a troll.
I disagree. See this post by Yvain.