Thanks for the increasing quality of the discussion. We're past the bare assertion of value positions.
Jimdoria correctly refuted my "definition" of economics. His definition is undoubtedly more complete and correct than what I'd said. When I noted "As I see it, economics tries to understand (and predict) why a person, given a range of choices, will opt for a particular one.", I just intended to indicated that this was the aspect important to me, not that this is the totality of the concept.
Since my last post, several writers have voiced their dismay for the degree to which the electorate is informed, and the responsibility that corporate marketing may have for this. As it happens, some research has been done on "voter irrationality", and there's a recent book
The Myth of the Rational Voter: Why Democracies Choose Bad Policies that's quite accessible, dealing with the topic. Here's an intro to an excerpt:
In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained?
The influence of special interests and voter ignorance are two leading explanations. I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational—and they vote accordingly. Despite their lack of knowledge, voters are not humble agnostics; instead, they confidently embrace a long list of misconceptions.
Economic policy is the primary activity of the modern state. And if there is one thing that the public deeply misunderstands, it is economics. People do not grasp the "invisible hand" of the market, with its ability to harmonize private greed and the public interest. I call this anti-market bias. They underestimate the benefits of interaction with foreigners. I call this anti-foreign bias. They equate prosperity not with production, but with employment. I call this make-work bias. Finally, they are overly prone to think that economic conditions are bad and getting worse. I call this pessimistic bias.
In the minds of many, Winston Churchill's famous aphorism cuts the conversation short: "Democracy is the worst form of government, except all those other forms that have been tried from time to time." But this saying overlooks the fact that governments vary in scope as well as form. In democracies the main alternative to majority rule is not dictatorship, but markets. A better understanding of voter irrationality advises us to rely less on democracy and more on the market.
http://www.cato.org/...play.php?pub_id=8262
And here's another essay by the author, followed by some arguments
against its thesis:
http://www.cato-unbo...hives/november-2006/ Regarding my claim at the impossibility of (successfully) engineering an economy, I don't think that your counter-example of mercantilism is apt. This was not an attempt engineering from the ground up; it was tweaking the existing order. Your other examples (tariffs, fed interest rates, etc.) are more examples of making adjustments around the edges rather than a sweeping structural change, let alone whole-cloth construction.
Even so, it's still playing with fire. Look back to the biological analogy. We understand a lot about how our bodies operate, but it's still incredibly complex. Yet we attempt to hack the system through pharmaceuticals, etc. When we do, we're walking a fine line. Chemotherapy, for example, is a tightrope walk in killing a tumor without killing its host. We encounter unintended consequences all the time, a famous example being the handicapped babies born to mothers who used thalidomide to control morning sickness.
Attempts to steer the market run afoul of similar problems (and I'm struggling to tread lightly, staying clear of endorsing specific policies). The odd state of American healthcare insurance, for example, can be pretty much laid at the door of quirks in the tax code left at the end of WWII. Prior to that, health insurance wasn't normally provided by an employer, but wage controls during the war forced employers to compete on other benefits, and the tax code exemption for health insurance led to health coverage becoming an expected benefit from employers; without our current expectations of this, we may be more inclined to look in other directions to solutions to this current dilemma.
Grorgy wonders how one can discuss economics without involving public policy. It's a good question given the tenor of modern political discourse, but I think it's off base. Economics can tell us what to expect, but it can't provide the answer to moral and values questions. Much of science is like this; Robert Oppenheimer could help build the atomic bomb, but couldn't decide on whether its actual use was appropriate. More recently, there was debate over an increase in the federal minimum wage. Economists generally agree that increasing the minimum wage will lead to an increase in unemployment (although the degree of the effect is the subject of debate). Economists can warn us of this danger, but they can't tell us which option is "right" given our values as a nation.
I'm having trouble seeing where Jimdoria is coming from when he objects to my point about scarce bandwidth and Google playing for advertisers. First, contrary to his claim that "no such scarcity exists", there is most certainly a scarcity. The amount of information that can be displayed in any set of Google search results (or any other place from which we get information) is certainly limited; even if that part weren't limited, the amount that can be transmitted into our homes, or actually
read by us, is limited as well. And since it's scarce, there will be competition for access to the resource. Honestly, I get the idea that he's coming at the argument from the point of view that the movie's point is self-evidently correct, or at least so honorably intentioned as to be beyond challenge. So any viewpoint that has the temerity to challenge it must be,
prima facie, evil and not deserving of our attention. Perhaps you can explain why you're not put off by a film production company making money screening propaganda, but a search engine stating that they're happy to air counterpoints is unethical. Would it be OK if it were Yahoo! or Microsoft in the Google role? What if it were Disney or Sony in the movie production role?
Its curious that people would advocate governmental regulation as a means of curbing potential corporate abuses. It may be true that our system of checks and balances was intended from vesting too much power in one place, preventing corruption of the system. But those seeking the regulation generally also decry the use of deep corporate pockets in influencing political policy; so long as you acknowledge the possibility of this, why would you want to cede more control to the corruptible bureaucrats?
Jimdoria claims that there's no counterbalance to corporate power. On the contrary, the consumers hold far more power than the corporations. Imagine that the next edition of 60 minutes or 20/20 showed hidden camera footage of Nike sneakers being assembled from, say, the skin of babies purchased from their parents in India and Africa. Even ignoring legal issues, how long do you think Nike would survive? Contrast this with the political solution in a democracy, where you have to wait years for the next election, and then run afoul of laws preventing you from even a truthful ad exposing how Senator X has done some evil deed. The comparison is clear: free-market justice can be swift and complete, when it's dealing with something that the consumers care about.
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. Imagine that, selling a house and only walking away with $2000 because of your credit cards.
actually, the specs say it should go for 6 months without a recharge.
. K-Lite installs a consistent bunch of codecs -- all you're ever likely to need -- that are configured so that they all work.
).