Re: Economic and politics (Was: Comparing Lisp conditions to Java Exceptions)

Sorry, long.

Robert Marlow wrote: 
On Fri, 06 May 2005 23:35:56 -0700, Don Geddis wrote:


You're confusing the price of a manufactured product (which we were
talking about), with the hourly wage given to a laborer (which is another
interesting issue where your theory breaks).



No I'm not. I'm simply recognising that the only way to add value to
something is with labour and consequently the value of any good or service
is equivalent to the amount of labour put into it.

One is cost. What you sell it for is price (which is driven by demand, as Don argues, and shouldn't be artificially fixed). The difference (that you want to abolish, it seems) is profit. That's the reason why people produce something in the first place, or why they invest capital in developing tools to produce something better or faster.

Price-of-labour is the value of one hour of an average worker's labour and
is a constant. Since most people would be concerned about individual
[...]
Just like prices of goods *will* be demand-driven (by the people demanding them; if society doesn't allow this, a black market will appear), prices of labor will be demand-driven as well. I don't see any reason to do anything about this.

Investments such as R&D need popular support before they're taken on. Such
an investment would need to be proposed with projected budgets etc by an
interested group of individuals who see the need, just as a group of
individuals seeking a grant might do now. Then everyone who would have

It can be a group of individuals funding a not-for-profit research endeavor, or a company doing it for profit (R&D). If a company invents the wheel, soon after that others will follow. Patents would only hurt here. See how competitors followed Henry Ford in producing cars (to the good of everyone), just because they were allowed to (no patents on cars, I don't know about parts...).

a hand in paying for it has the option to vote for or against this
investment according to how needed they consider it to be. Should an
investment get the go ahead, R&D labour and production materials
are paid according to the requirements of the investment just as any other
production is. The source of this labour would come from banks similar to
what we have now but would differ in that they would not participate in
any form of interest.

Those who want to pay, pay. If its a company, the results belong to the group of investors, and know-how could be delivered to paying clients, as consulting. Thus, the investment cost is later spread out among users of the research.

But you admit that a manufactured item should cost less if it takes less
hours to make?  Even if the difference is that a skilled master can make
it faster than a new trainee?



Not quite. I said that an item should be valued according to average hours
it takes to produce the item multiplied by the cost of labour per hour and

What is the cost of labor per hour? Isn't this cost only determined *after* you see how productive a worker is? Certainly in a market this would be the case.

added to any other costs gone into making the item. Who actually makes
the item doesn't affect the cost. If skilled masters produce quicker then
it's they who are rewarded for their effort, not the consumer.

The producing company would probably choose workers, so that their salary doesn't affect the cost, yes. For certain tasks, however, (coding) one good developer should be preferred to two twice-as-bad ones, as mistakes are usually expensive, and as design from one mind is (usually) better than committee design.

The company would reward good workers by paying them more, so that they don't run away. This actually happens in our world, because companies don't want everybody to leave just because they are cheapskates with salaries.

I sketched over details so I can see how it looks like I'm being
inconsistent, but there's several alternatives to the system I propose,
and in my view I see them all capable of coexisting and cooperating with
eachother. Essentially, the market I mentioned is the "Black Market"
mentioned by you and other people. Only it's not something illegal so
"Black Market" is a useless term. Such a marke t would be people who
aren't really interested in the particular layout I have in mind and would
rather continue to use a market. And as I've said, there's no reason to
stop them so long as they don't participate in capitalist methods of
extortion like interest or rent.

Harhar. You want to forbid me to lend my super-tool to your worker, so that he could be much more productive? The same if I lend him money for buying a supertool?

I'd certainly want to have the possibility to take a credit to pay for grad school if I want to, or to buy some cool Lisp implementation. Other people might too, because they want be able to invest in their future.

I never suggested anything about demand having anything to do with labour
hours put into production. What I said was markets that don't have huge
gaps between rich or poor (attainable, according to its advocates, by
simply abolishing interest and rent while leaving the market to work
everything else out) are less likely to result in excessively rich people
there it is: 
who go about denying poor people of access to scarce resources by
out-purchasing them. In other respects, the scarcity principle in this
particular alternative (not the one I have been mostly advocating,
but not one I oppose) would be solved in the same way any other market
solves it - by prices.

But weren't you just saying that rich people shouldn't outbuy the poor? That's what happens with prices, according to your theory.

In my theory:
If rich people start to buy all those iPods that students would like to have, too, then production will expand and become cheaper. That's because profit gives producers an incentive to produce more.

Abolishing interest (which is a natural consequence of getting something back for lending your money instead of buying a Ferrari with it) only quenches investment and reduces economic growth.

You can't build an economy on consumption alone. Investment is important.

The other is a scarcity index. Each production site simply maintains an
index of their supply relative to demand. When a consumer notices one of
it's suppliers scarcity index drop indicating less supply (eg unexpected
drop in natural resources) or increased demand, it simply takes that
into account in its orders. It can check with the supplier to get an
idea of whether the change is likely to be temporary or long term and
determine if it can get by on reserved stock or it needs to investigate
the feasibility of alternative supplies.


The problem you're not fixing, is the one when a supplier simply chooses
not to make any more items.  People want a lot more, but nobody has an
incentive to make one.



How's that worse than an item getting taken off the market in the current
system for the same reasons? It's not a problem unique to any system; it
doesn't matter what system you use, if people aren't producing an item
then nobody's going to be able to consume it.

If nobody buys it, the product *should* be taken off market, as its production costs are bigger than what people are willing to pay. If it is profitable, production will continue. If people *want* to have the product, they should be willing to pay more, so that production *is* profitable.

If people want an item that's not produced, then someone will found a company, or invest money in it, because there is a profit to make. Sooner or later this opportunity will be discovered. You might even suggest it to investors, or do it yourself, to accelerate this.

Or if what you mean is not that nobody is making any of the items, but
that less people are making the items then the solution to that's no
different to the ones I've already described. It basically would require
rationing. The market's no different, by raising prices to lower demand
it's just rationing in a manner that favours people who are wealthy enough
to afford the new prices. Personally, I consider such discrimination
against the underprivileged to be one of the bad qualities of a market.

No, if I can sell all 100 supertools I made at a good profit margin, I'll produce more. Competitors will appear and try to make some profit too. Supply rises up to demand. Prices (and margins) shrink due to competition. Take the PC industry: dirt cheap, almost no profit margins left. Overproduction means that HP and others might consider leaving the business to Dell.

It is as you say like the Intel CPU problem; it's a problem of
investment. And it's solved the same way. The society may choose to
sponsor peoples' education in the same way other forms of investment are
considered. So someone wishing to be a MD simply needs to request entry
into education as a MD and fulfill whatever prerequisites are required for
that entry.

But as MDs are rarer than burger flippers, and because their job involves life and death, they are paid more. So everybody wants to get on MD (in Germany '99, the chancellor cried "we need more CS people, and it pays well"; suddenly *everybody* started studying it). Who pays for all those students getting an education? Half of them probably suck and quit halfway through their degree.

Scholarships work better: good students that want an MD get some money from those people who care (the ones you mention above). Everyone else has to pay themselves; decide if they want to make the investment (take a credit; save for it; whatever).

I don't think an average MD should earn any different rate than an
average burger flipper. In my society investment costs of education are
absorbed by the system so it's not like a qualified MD has any claim
that they should be repayed for their investment in education. In the end,
an MD is still putting hours of labour in like a burger flipper is. They
should be rewarded according to their productivity in their task, not
according to their societal rank.

Then people will flip burgers, as it doesn't involve studying hard stuff for years and years, but pays immediately. You won't have any doctors (well, some few). There are different salaries for a reason! This isn't societal rank, but Return On Investment. If you invest more, you might gain more.

Some people study a lot, some students don't care. Your choice how much you invest, what lifestyle you lead, if pop music, booze, and girls are your priority at 16, or if you choose to be the best in your field, or want to discover how the world works.

It's ridiculous if people consciously choose one lifestyle and later come begging because they suck and need money or a job.

Your life is a business: you have limited time and money, and you do with those scarce resources how you choose to do.

I think one of the beauties of this is that it gets rid of a lot of crap
MDs. Crap MDs are almost always MDs who are soley in it for the money.

If you are a crap MD (yes, I hate them) then you won't last, I hope. That's what good institutions are for. If someone sucks, they deserve to fail their studies, no matter how much fees they pay. In their own interest, other MDs will usually discover the sucker quickly. After all it hurts *their* business and their reputation.

The best MDs are almost always the ones who are MDs primarily because they
find it personally fulfilling. Not only does the financial incentive to
become a MD result in crap MDs, but it also means people who would
otherwise make excellent MDs are denied the opportunity because the money
chasers lower supply of MD education opportunities. The same goes for any
profession.

Those who find it fulfilling will end up the best. Not the other way. A bad MD will have trouble finding customers, I'm sure. How often and how long do people keep buying at "the crappy-used-car dealer in town"?

I'm crying for higher standards in CS education, because coders that suck hurt my reputation. The "diploma" becomes inflationary, it loses value, just like the originally good Gymnasium (high school) degree isn't worth anything anymore, because most people get it, even if they are totally unable to study at a university.

Russia had lines of toilet paper, groceries etc because people were
rewarded according to rank rather than productivity so there was less
incentive for individual productivity. Also, supply was decided centrally
by a government. Of course that's going to result in misallocation of
resources. It's the producers themselves who need to figure out how to
meet demand, not some egotistic government.

True, I can see the difference btw. Commie Russia and your system. But the above flaws remain.

In my system, there's no "enforcing" of rules. Black markets would just be
ordinary markets of people attempting their own version of my system.
There'd be no political powers to get favours from. Under the table
illegal payments is an interesting one I hadn't thought of and I'd myself
be interested to see how the people of my society figure a solution.

People would flock to the black, legal, market, and abandon your system I suppose, mainly because the market offers more incentives for people who want to deliver.

But look, you mentioned 3 problems in capitalism resulting from scarcity,
yet my system only potentially suffers from 1 of them. Who's got the
bigger problem with scarcity?


Your system, see above.

Consensus probably wouldn't be the best tool for something as
controversial and necessary a decision as rationing. I'd say simple
democracy would work better for something like this. It'd only be needed
in the very worst case scenarios anyway, and it's pretty clear by
looking at scarcity now that problems of scarcity need not get so bad as
to need that kind of systematic rationing very often.

But why force people into rationing with democracy (tyranny of the majority), when a free market expands production until demand can be met?

1000 people want toilet paper.  The guy who makes it only wants to make
500 rolls (at the "agreed on" price).  Nobody else wants to start making
it (for that price).  Yet there's an continual imbalance.



What you're arguing only makes sense in a restricted market where
someone's fixed prices too low. But I'm not talking about a market
remember? If a guy's hired to make toilet paper at a 1000+ roll quota as
determined by average toilet paper productivity, he's not going to get
paid his full "agreed on price". And what exactly is this about the price
being "agreed on"? Labour price is simply a static value given to average
productivity in my system. It doesn't even matter what that value is since
it's the same for everyone and is the only value which affects prices.
There's nothing to agree on.

But why would he produce more TP if he doesn't make a profit? If he only gets money for labor he puts in? I guess in that system I would be a productive (fast-working) burger flipper, because that's the easiest to do and would pay well. Nobody would build that TP factory.

Lastly, I've already explained how scarcity is solved in my system. Why do
you think your example is any different to any other kind of scarcity? If
there's a scarcity of toilet papers, consumers need to adjust their
consumption habits or find an alternative from say the facial tissue
industry. Since the problem is that only one guy wants to make toilet
paper, then perhaps investment into researching how to increase toilet
paper production through machinery needs to be discussed or researching
how to decrease the unpleasantness of the task of creating toilet paper so
more people are willing to do the job.

You suggest people buy facial tissue instead of TP? Come on! A free market gives you just as much TP as you need. No need to upset consumers.

If people want to cooperate in TP production, as you suggest above, they can do that in a free market too. They can found a company (and share the shares), or finance a non-profit TP producer, with all the risk of a company and no profit in it for them. Go ahead ;)

There's no need for a state to enforce the rules. All it needs is a bunch
of people willing to work together to make it happen. In my system if
other people want their market economy then they can have it so long as
they're not exploiting labour through interest or rent or participating in
other forms of coercion.

The other way round: In a market economy, you can have your system; it already exists. People can cooperate as much as they want. Non-profits are even tax-exempt in some (most?) countries (well, if there are no profits anyway, taxes would be pointless :D).

There's nothing unnatural about a bunch of people getting together and
agreeing to cooperate in a certain way.

No, it is even encouraged. Capitalism is not against people fighting for their food. It's about intelligent, profitable cooperation. Usually they only cooperate, if that is worth it for all involved parties.

Organizations are stronger than individual people.

Black markets don't fix scarcity problems in capitalist societies.  Prices
rise so that demand drops to the level of what can be supplied in the
short term.  That's how capitalist allocation comes back into balance.



Oh? So why are there black markets in capitalist societies if not to
fulfill demand by supplying goods and services that would otherwise be
scarce?

In a truly free system you wouldn't need a black market. We have black markets because of *price-fixing* and contract constraints. High minimum wages (well, this one's subjective) and regulations (like in Germany) make people do under-the-counter deals, like asking the plumber to fix your sink for $50 cash, instead of doing all the paperwork and paying taxes, health insurance etc. It happens because both parties profit from it. The government is angry, because it's absolute power isn't acknowledged, and because nobody pays them for their useless non-work (bureaucracy).

You also forgot to mention problems of unemployment, labour
exploitation, and irrational inequalities of wealth and power to name a
few.


It's a matter of great debate whether those are even problems to be fixed.

It's far from obvious that anything needs to be changed on those topics. 


I'm tempted to see how on earth you could possibly debate that they aren't
problems. But if you're that blind to your own system's problems that's
obviously going to be too long, tiring and fruitless a tangent.

We don't have a free market, so it's hard to say, how much unemployment there would be. Currently there's way too much governmental involvement in the economy, so markets aren't really balanced. How can you compete against a government?

It doesn't matter how they get wealthy, what matters is that it's only
wealthy people and people sponsored by wealthy people who rule the US and
most countries who ruled by representatives. And that *is* how US
elections work. So what if many people who attempt to buy their way into
office don't make it? What matters is that all the ones who get into
office are the few remaining people who attempted to buy their way into
office.

Hmmm. Don't know. I generally don't trust others who want to make decisions for me, and force me to abide by them. If some law is paid for, instead of the will of the mob or majority that only makes it slightly worse.

(Most Germans who vote read BILD, the more-than-stupid magazine (not even newspaper; I've heard that they aren't allowed to call themselves that anymore :D). I don't expect them to remotely understand the issues, as they don't really spend time thinking about them. Generally, I have trouble to be ruled by people less smart than I am; for that reason I refused military service.)

You're getting confused about a representative democracy vs. a "full"
democracy.  That isn't the issue.  "Tyranny of the majority" isn't a
concern that a small group will somehow take power and screw the average
guy.



Who said that's what tyranny of the majority was? That wasn't my point. My
point was a simple statistical proof that minority rule leads to tyranny
more often worse than majority rule. As such full democracy is superior in
preventing tyranny than any form of rule by minority and "Tyranny of the
majority" is the least evil.

A majority is less harmful than bought laws, yes. But I don't like it nonetheless.

A citizen-democracy that would vote not on party-packages, but on *individual issues* would be MUCH better than the status quo, as it would be very decentralized.

What, you think it's EASIER to convince 51% of the total population to do
something evil than it is to convince a small group of people much smaller
than 51% of the total population?

No, of course if the *population* would ever vote on individual laws, we'd be much better off. Say, every two months we could vote on all laws that were to be passed.

I don't like the majority, but it would be better than having 300 bribed policitians decide what they think is the will of the people.

--
No man is good enough to govern another man without that other's consent. -- Abraham Lincoln
.

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