Consumer surplus isn’t directly wiped out—that’s not the argument being made, although with sufficiently widespread perfect competition any consumer surplus is then captured from them by the Iron Law of Wages. Producer surplus under perfect competition is only that they make zero economic profits, which with only PC markets available soon means zero or worse profits.
But that’s not what I meant by destroys all value. Value != profit. We are asserting the Value is Fragile claim, and pointing out that the act of sufficiently powerful optimization will optimize against all Ys where Y is a value that is not helping in efficiently producing the perfectly competitive good set X. And we claim that at least one such Y will be destroyed and this will destroy all value (e.g. at the end of the original Meditations on Moloch, the Y is our consciousness itself, but there are many other possible choices for Y.)
If you can compactly define the set of optimization targets Z that allow said production of X, then it is easy to see that there must exist important value Y not in X and that this Y will be destroyed.
A reasonable response to this is to claim that value is not fragile, or that no proof of this has been offered. If you do not accept the Value is Fragile claim, we can go about this via the Iron Law and the inability to survive shocks or sustain reproduction of people slash social capital, or what have you, and be more concrete that way, or go to a specific Y that you can accept, such as Scott’s example in Moloch.
(Also, of course, one can make any claim one likes, even false claims. That’s how claims work.)
Zvi, okay, I’m seeing the discussion much better (I think). I still don’t think it is a correct position—economic profits and their pursuit as only one of the margins humans will maximize on so other values will also persist. But this is perhaps something of biased view for me. I came to the view long ago that some see economics as explaining all human and social actions, which I reject. I think this discussion seems to include that underlying assumption/belief (economics encompasses all that is human/social).
Still, I suspect there are still some interesting thought to be expressed and discussions about how we think about the world and it’s workings. I just hope the economic models and metaphors don’t hide too much that is important.
Fragility of value is used correctly only to make very different points from what you are stating here, that must result from how different the preference orderings you obtain are from the original preference orderings if you make changes to the complex computation that the values are. Consumer preferences in general equilibrium theory are a real-valued function whose domain is the consumption set, a subset of a full commodity space. This function can be used to define an order relation that represents the consumer’s preferences, each represented by any of an infinity of functions since you can compose them with any strictly increasing function. Consumer preferences are not the same thing as agents’ preferences or values, which are not at all related to commodity bundles, and don’t have a consumption space as domain, even though they too can be used to define order relations. You cannot make this argument confusing goods and values. The values that are fragile are not the consumer preferences. As far as the actual preferences determine consumer preferences over commodity bundles, they determine the customer’s demand function according to prices and consumer endowments or wealth and translate into buying and selling decisions, and that is relevant to perfect competition. The rest of the preferences is entirely orthogonal to perfect competition—if it wasn’t, then it would, contradicting our assumption, have contributed to determining consumer preferences.
Consumer surplus isn’t directly wiped out—that’s not the argument being made, although with sufficiently widespread perfect competition any consumer surplus is then captured from them by the Iron Law of Wages. Producer surplus under perfect competition is only that they make zero economic profits, which with only PC markets available soon means zero or worse profits.
But that’s not what I meant by destroys all value. Value != profit. We are asserting the Value is Fragile claim, and pointing out that the act of sufficiently powerful optimization will optimize against all Ys where Y is a value that is not helping in efficiently producing the perfectly competitive good set X. And we claim that at least one such Y will be destroyed and this will destroy all value (e.g. at the end of the original Meditations on Moloch, the Y is our consciousness itself, but there are many other possible choices for Y.)
If you can compactly define the set of optimization targets Z that allow said production of X, then it is easy to see that there must exist important value Y not in X and that this Y will be destroyed.
A reasonable response to this is to claim that value is not fragile, or that no proof of this has been offered. If you do not accept the Value is Fragile claim, we can go about this via the Iron Law and the inability to survive shocks or sustain reproduction of people slash social capital, or what have you, and be more concrete that way, or go to a specific Y that you can accept, such as Scott’s example in Moloch.
(Also, of course, one can make any claim one likes, even false claims. That’s how claims work.)
Zvi, okay, I’m seeing the discussion much better (I think). I still don’t think it is a correct position—economic profits and their pursuit as only one of the margins humans will maximize on so other values will also persist. But this is perhaps something of biased view for me. I came to the view long ago that some see economics as explaining all human and social actions, which I reject. I think this discussion seems to include that underlying assumption/belief (economics encompasses all that is human/social).
Still, I suspect there are still some interesting thought to be expressed and discussions about how we think about the world and it’s workings. I just hope the economic models and metaphors don’t hide too much that is important.
I did enjoy your parenthetical comment! lol.
Fragility of value is used correctly only to make very different points from what you are stating here, that must result from how different the preference orderings you obtain are from the original preference orderings if you make changes to the complex computation that the values are. Consumer preferences in general equilibrium theory are a real-valued function whose domain is the consumption set, a subset of a full commodity space. This function can be used to define an order relation that represents the consumer’s preferences, each represented by any of an infinity of functions since you can compose them with any strictly increasing function. Consumer preferences are not the same thing as agents’ preferences or values, which are not at all related to commodity bundles, and don’t have a consumption space as domain, even though they too can be used to define order relations. You cannot make this argument confusing goods and values. The values that are fragile are not the consumer preferences. As far as the actual preferences determine consumer preferences over commodity bundles, they determine the customer’s demand function according to prices and consumer endowments or wealth and translate into buying and selling decisions, and that is relevant to perfect competition. The rest of the preferences is entirely orthogonal to perfect competition—if it wasn’t, then it would, contradicting our assumption, have contributed to determining consumer preferences.