I agree that if U.S. dollars were being sent directly to Kenyan recipients and used only to purchase foreign goods, so that foreign goods were being directly sent from the U.S. to Kenyan recipients, then improvement in measured outcome for recipients compared to non-recipients would be an appropriate metric, and that the decomposition would be perverse. But if the received money, in the form of Kenyan pesos, is being used primarily to purchase Kenyan goods, and causing those goods to be shipped to one villager rather than another while also possibly increasing velocity of trade, remedying inequality, and enabling completely different actors to buy some amount of foreign goods, then I honestly don’t understand why this scenario should have the same causal mechanisms as the scenario where foreign goods are being shipped in from outside the country.
As he mentioned, at least one difference is who ends up getting the products, along with the causes of this effect, such as increased velocity, etc… So it does make sense to treat it differently.
It changes who gets the foreign products, but it’s equivalent to just having a string of trades so that the guy who you gave a product to actually gets what he wants. It doesn’t make things worse for anyone.
Yes, but that string of trades is increased velocity, which is a very significant effect on economies that you wouldn’t get to the same extent if you just gave the final person what they want.
Each trade is apparently beneficial, to irrational actors, with potentially large power/exploitability differences (eg lottery tickets are “beneficial”), and values that differ from what you might care about (eg Pedophile rings have some “beneficial” trades involved).
That, said, it’s probably actually beneficial overall. Just that the simple proof doesn’t get you there.
Each trade may be beneficial to the parties involved (although even this isn’t necessarily true for the ordinary sense of the word “beneficial”), but it need not be beneficial to the economy as a whole. Trades can have negative externalities.
Giving money from the US to Kenya that is used to buy products from the US is equivalent to giving products to Kenya. You make it sound like it isn’t.
As he mentioned, at least one difference is who ends up getting the products, along with the causes of this effect, such as increased velocity, etc… So it does make sense to treat it differently.
It changes who gets the foreign products, but it’s equivalent to just having a string of trades so that the guy who you gave a product to actually gets what he wants. It doesn’t make things worse for anyone.
Yes, but that string of trades is increased velocity, which is a very significant effect on economies that you wouldn’t get to the same extent if you just gave the final person what they want.
Is it a bad effect?
Each trade is beneficial, or it wouldn’t happen.
Each trade is apparently beneficial, to irrational actors, with potentially large power/exploitability differences (eg lottery tickets are “beneficial”), and values that differ from what you might care about (eg Pedophile rings have some “beneficial” trades involved).
That, said, it’s probably actually beneficial overall. Just that the simple proof doesn’t get you there.
Each trade may be beneficial to the parties involved (although even this isn’t necessarily true for the ordinary sense of the word “beneficial”), but it need not be beneficial to the economy as a whole. Trades can have negative externalities.
They can, but it’s not the sort of thing that you assume when you don’t have proof otherwise.