Perhaps the 1994 Crime Bill really did cause the drop in violent crime, or perhaps the causality goes the other way: the spike in violent crime motivated politicians to pass the act in the first place. (Note that the act was passed slightly after the violent crime rate peaked!)
In an ideal political system, wouldn’t we hope both of these happen?
If your job is creating shoes from start to finish, it’s fairly straightforward to measure productivity: it’s merely the dollar value of the shoes you make each year based on market prices.
Isn’t this completely wrong? The price will be something like their marginal value, but most shoes are worth much more than the marginal shoe, due to diminishing marginal returns. The marginal shoe probably just replaces a kinda-broken-but-still-usable shoe or an outgrown shoe, but you could handle this in other ways, e.g. going to a different shoemaker or getting hand-me-downs or whatever, leading to very low marginal value despite high absolute value. This quantification is thus ignoring almost all the consumer surplus.
Furthermore, the value of a shoe overestimates the productivity of making the shoe, because making it deprives society of the resources needed for the shoe. This is probably faithfully-enough reflected in the prices, but my model is society usually works with extremely thin profit margins, so the bulk of the price will be due to the cost of production.
Or another way of phrasing is that this quantification assumes consumer surplus equals production cost (kind of like the labor theory of value), which I think is only true in a very narrow range of circumstances.
In an ideal political system, wouldn’t we hope both of these happen?
Isn’t this completely wrong? The price will be something like their marginal value, but most shoes are worth much more than the marginal shoe, due to diminishing marginal returns. The marginal shoe probably just replaces a kinda-broken-but-still-usable shoe or an outgrown shoe, but you could handle this in other ways, e.g. going to a different shoemaker or getting hand-me-downs or whatever, leading to very low marginal value despite high absolute value. This quantification is thus ignoring almost all the consumer surplus.
Furthermore, the value of a shoe overestimates the productivity of making the shoe, because making it deprives society of the resources needed for the shoe. This is probably faithfully-enough reflected in the prices, but my model is society usually works with extremely thin profit margins, so the bulk of the price will be due to the cost of production.
Or another way of phrasing is that this quantification assumes consumer surplus equals production cost (kind of like the labor theory of value), which I think is only true in a very narrow range of circumstances.