The market cares for individuals about as much as evolution does.
Yes. Bezos can bid more for the meal than the hungry drifter. Why is that the case? It’s because Bezos is instrumental to offering a useful service to literally billions of people and the drifter… isn’t.
It seems cruel. It is cruel. But it’s a cruel world we live in. It is perfectly possible for preventing Bezos from being mildly “hangry” at an inopportune time to alleviate more suffering worldwide than preventing one shiftless vagrant from starving to death.
And that’s not intuitively obvious because your social instincts are programmed for a world where you know everyone in your entire community personally and can see exactly what they’re contributing with your own eyes.
Set the situation in a small tribe where you’re choosing between feeding the shaman who knows where the watering holes are and what food is safe to eat and is obviously critical to the survival of everyone, or feeding the aged cripple who can barely walk unassisted and your social instincts will likely choose correctly. You’ll still be sad, but finite resources often means hard choices.
We use markets to decide things like this because they’re the most efficient way we know of to deal with the scope of the calculation being far too big for our puny brains to handle all at once. But that cuts us off from always being able to understand the why of the calculation result. And so when the market hands down a result that is painful to look at we reflexively want to call it a “market failure” and “correct” it.
But there are consequences for doing that. The fact that the immediate consequences of the market’s choice are obvious and the long-term consequences of overriding that choice are invisible (except with great effort) doesn’t mean that there are no costs. There is no free lunch. Every choice must be paid for. While you might sometimes “beat the market” and spot the more-optimal solution just the sheer difference in data-crunching capability means that, most of the time, you’re going to be wrong. Even if the consequences don’t hit for years. Even if you’ve stopped paying attention by the time the piper comes around to collect his due.
At the end of the day what keeps the system running is that 98% of us are decent people who care about others, even strangers. Jeff Bezos certainly could outbid the starving vagrant. But, unless this were the last meal in the world, would he? Likely not.
And if he did I expect he could be easily persuaded to purchase a more normal meal for the fellow—it’s a trivial cost to him and most normal people would get a good feeling from doing it.
And even if he didn’t, in a full economy that high bid lowers the cost of another meal and encourages an increase in meal production, so that 2% of selfish people are still at least pulling their own weight.
It’s not that a market always makes things perfect for everyone. It’s that, in the long run, it screws up less often that the other systems we currently know of.
The market cares for individuals about as much as evolution does.
Yes. Bezos can bid more for the meal than the hungry drifter. Why is that the case? It’s because Bezos is instrumental to offering a useful service to literally billions of people and the drifter… isn’t.
It seems cruel. It is cruel. But it’s a cruel world we live in. It is perfectly possible for preventing Bezos from being mildly “hangry” at an inopportune time to alleviate more suffering worldwide than preventing one shiftless vagrant from starving to death.
And that’s not intuitively obvious because your social instincts are programmed for a world where you know everyone in your entire community personally and can see exactly what they’re contributing with your own eyes.
Set the situation in a small tribe where you’re choosing between feeding the shaman who knows where the watering holes are and what food is safe to eat and is obviously critical to the survival of everyone, or feeding the aged cripple who can barely walk unassisted and your social instincts will likely choose correctly. You’ll still be sad, but finite resources often means hard choices.
We use markets to decide things like this because they’re the most efficient way we know of to deal with the scope of the calculation being far too big for our puny brains to handle all at once. But that cuts us off from always being able to understand the why of the calculation result. And so when the market hands down a result that is painful to look at we reflexively want to call it a “market failure” and “correct” it.
But there are consequences for doing that. The fact that the immediate consequences of the market’s choice are obvious and the long-term consequences of overriding that choice are invisible (except with great effort) doesn’t mean that there are no costs. There is no free lunch. Every choice must be paid for. While you might sometimes “beat the market” and spot the more-optimal solution just the sheer difference in data-crunching capability means that, most of the time, you’re going to be wrong. Even if the consequences don’t hit for years. Even if you’ve stopped paying attention by the time the piper comes around to collect his due.
At the end of the day what keeps the system running is that 98% of us are decent people who care about others, even strangers. Jeff Bezos certainly could outbid the starving vagrant. But, unless this were the last meal in the world, would he? Likely not.
And if he did I expect he could be easily persuaded to purchase a more normal meal for the fellow—it’s a trivial cost to him and most normal people would get a good feeling from doing it.
And even if he didn’t, in a full economy that high bid lowers the cost of another meal and encourages an increase in meal production, so that 2% of selfish people are still at least pulling their own weight.
It’s not that a market always makes things perfect for everyone. It’s that, in the long run, it screws up less often that the other systems we currently know of.