Today
10:14Jose
Hi, Erik.
10:14Me
hey
10:14Jose
How's your trip going?
10:15Me
good so far, I wanna get to the beach soon =)
sorry about my friend, he can be a little confrontational when it comes to economics and politics
10:15Jose
I can see that
10:15Me
he's a good guy though
10:16Jose
I'm sure he means well
10:16Me
yeah
so what are you up to?
10:17Jose
I try really hard to take people at their word and give the benefit of the doubt. It really helps avoid confrontation. Oh, you, know, at work. I haven't really been swimming all summer.
10:18Me
I think that is what is most important. Regardless of differences, people need to try and understand where others are coming from and respect their positions
10:20Me
That is what gets me about people like Beck and Limbaugh, their goals are to help drive the wedge further between the different sides
10:21Me
Or at least that is the result of bashing the opposition as much as they do.
10:23Jose
the funny thing is, it was really conservative commentators that drew me further towards more consistency - as I thought more and more about issues I became more principled - eventually it lead me to see the particular flaws with the republican and conservative movement. I became more of a purist than Limbaugh himself. It led me to adopt some views that are not considered conservative at all...
such as being very open to migrant workers and being anti-war
10:23Me
and to not view corporations as perfect entities that are a natural part of the free market
10:24Jose
true. That's one of the tenets of Limbaugh's gospel.
He doesn't see the flaw in confusing defense of free-market capitalism with defending corporate players in the market.
10:26Me
But that fact is what bothers me the most when it comes to "free-market" economics. If there is an entity in the system that is given special treatment, it can grow so big and powerful that the power it wields can sometimes do a significant amount of harm to other economic players.
10:27Me
And since these entities exist, I have a hard time seeing that they should be allowed to act with out some kind of system to keep them in check.
10:29Me
I certainly understand your apprehension, given the history, but maybe the problem wasn't government involvement, but how it was involved.
10:29Jose
That's exactly what I mean by the Problem of Economic Calculation
The "how?" is the big question.
Those of the "Austrian" school of economics feel it's theoretically impossible to get it right.
I got a phone call. We can talk more later if you're still around.
10:31Me
It is a huge question, but one that needs to be constantly sought after. It is like any challenging problem. Just because an answer hasn't been found, doesn't mean it doesn't exist
ok
10:42Jose
Hey, still there?
10:46Me
yeah
10:46Jose
ok, cool, you bring up a very interesting question - which problems can be abandoned. Have you ever heard of Fermat's last theorem?
10:46Me
no
10:48Jose
Ok, it's a problem from the world of mathematics which I can use as an example. Fermat was a great math guy - in his notes when he died he left a theorem about numbers behind - he said that he could prove that there was no possible solution to a certain set of problems (it doesn't really matter what the problem is, but just for your interest, it's solving an equation of the form: a^n + b^n = c^n, for any integer values of n greater than 3)
10:49Me
ok
10:50Jose
It was a great challenge of math to find the proof (since he didn't actually leave that in his notes) and someone actually proved it recently. So, in other words, there are certain types of problems known to math and science that are not just challenging, but can actually be proven to have no solution. The Problem of Economic Calculation is one of them, and I can help you understand why it's said to be so, if you're interested in understanding the theory behind that statement.
10:51Me
sure
I think the problem with asking a question is that people want a perfect answer
10:53Me
The problem when dealing with humans is that perfection isn't possible.
10:54Jose
To the question of economics, i.e., "who should produce what and who should consume what to make things as good as they can possibly be?" I don't think we can reach perfection as mere mortals.
10:54Me
exactly
10:54Jose
However...
The Austrian school point of view is that government intervention is always worse than the free market.
That's a bold claim.
It should be backed up by some sound theory.
10:55Me
it certainly is
10:55Jose
Ok, it should start with the question of: what are we actually trying to figure out?
10:56Me
and don't forget the question of: what do we mean by better?
10:56Jose
exactly
that's a key question.
10:57Me
that question is where our differing opinions hinge.
10:57Jose
Let's agree that one situation can be universally considered better than another if everyone feels better with the one situation than with the another.
10:58Me
ok
10:58Jose
Isn't unanimity a fair measure? I hope so.
10:58Me
sounds good to me
10:59Jose
Cool. Now, isn't it true that people have different opinions about what has value? I may love my stamp collection - you may assign it an actually negative value if it's nothing more than clutter to you.
10:59Me
true
11:00Jose
So, for example, if an exchange were proposed where you get rid of your junk stamps, and I take them and add them to my collection, couldn't we say that there is a net increase in happiness in our society? Two people have become happier than they were before. Who could argue with us?
11:00Me
ok
11:02Jose
So each person is the only one who can assign an ordering of preferences for himself, and those orderings can be very different - it's why economics doesn't have to be a zero-sum game. There are many win-win scenarios.
...coming to a point soon, don't worry
11:02Me
=)
11:03Jose
So, here's the consequence of all I've laid out so far -
11:04Jose
How can the very clever social/economic planners we are dreaming of set up a situation where they can encourage or block certain economic transactions that will make one situation that is better than another?
Forget for a moment whether it's morally right or wrong for a planner to help decide how we spend our money...
I'm not talking about that - I'm just talking about whether it's feasible or not.
11:05Me
ok
11:05Jose
So let's imagine a new scenario...
The Planner sees a potential economic transaction - an exchange between two people that he wants to facilitate...
If he merely points it out and then the two parties recognize the benefit - that's not forcing anything on them, right?
11:06Me
right
11:07Jose
But what if he forces them to do it? By definition, if he has to force them, then he is taking action to rearrange the preference-ordering that one or both of them assign to certain things.
11:08Me
true
11:08Jose
Therefore, by definition of our situation, one or both of these people is less happy then he was before, according to his own personal standards.
And the above also? I recognize that it might be seen to "justify the means" as it were.
11:09Me
The reality is you can't make everyone happy.
11:09Jose
Correct. but here is a major point - there is no way to measure an amount of happiness...
11:10Me
But for me I can't get over the fact that people are allowed to attain so much power that they can eliminate opportunity for others
11:11Jose
In other words, if you see one person's happiness decreases by "x" amount but the other person's increases by "more than x".. that can be seen as a net win, even though it technically violated the first person's private property rights, which are not necessary for this discussion- that would be apriori rejection of social planning
I'm not "starting with what I want to prove" so social planning is still on the table so far.
11:11Me
ok
11:12Jose
However... there really is no way to measure quantities of happiness. What are the units? you can't even say that you like one thing "twice as much" as another.
Twice as much of what?
It doesn't make sense.
11:12Me
this is true
11:12Jose
And now I see that you're saying that there could be a consequence of this that you don't like...
power eliminating opportunity
11:13Me
exactly
when someone has gain so much power and wealth to the point that they could never spend all the money they have, there is something wrong
gained*
It is this greed that removes opportunity.
11:15Me
granted, since I am having such a hard time finding work in my field I could try to produce things on my own and sell them, but I have limited resources, and a family that needs production now.
11:15Jose
I hear you, I definitely understand that
11:15Me
There is always opportunity in theory, but is it practical?
Is having the cheaper product really worth the loss of opportunity?
11:16Jose
I hear you saying that you agree my model world with just a couple of people in it, but when society is larger, does the theory still hold?
11:16Me
for the CEO yes
right
that is my problem with most free market examples. They occur in a vacuum
11:18Me
If some of someones net gains can be rerouted in a way that doesn't significantly impact their lifestyle, but can greatly impact a whole group of people's, I have a hard time seeing that as a bad thing
as we live in society, we agree that we need to make sacrifices to allow for peace and prosperity to exist
that is where laws and taxation come in
11:19Jose
Here is one area where we see apparent problems with the free-market, that are actually the result of government manipulation markets that's already happening...
11:19Me
I think the view for most Conservatives is that any redistribution of wealth automatically leads to the gulag
11:20Jose
If you mean "instantly" then, no
11:20Me
no
I mean inevitably
Road to Serfdom makes that point
11:21Jose
Right.
Here's a problem with solving government involvement with more government involvement...
it has everything to do with my analogy about the ring of power
11:21Me
ok
11:22Jose
You may have just cause for government to get involved and solve a real problem - it might even be an approximate solution that is a lot like what the market would do, only gradual and not shaking things up.
the problem is that government power does not go away.
11:22Me
That is where the solution lies
11:23Jose
The gulags were a result of soviet power, redirected at people it was never intended to harm
11:23Me
changing government so that it can't get stuck
11:23Jose
The Constitution was supposed to be that.
Rules about what rules government could crate.
11:23Me
electoral reform, and maybe some kind of rotating citizen watchforce
11:23Jose
*create
11:24Me
right, but it needs to be updated again
it is a living document
11:24Jose
Suppose we did update it. Who would listen to it?
11:24Me
but this will only happen if the left and right stop bickering and decide on changes we can agree on and make them amend the constitution
if we can enact a citizenry monitoring system, they would be forced to,
11:26Jose
Why would they listen to us?
Guilt? Would growing tyrants feel badly about their usurpations?
I can't picture it.
11:26Me
the only problem is the amount of military power we have let our country achieve might severely impact our ability to make them
Voting
11:26Jose
You're not advocating militas, are you?
*militias
11:27Me
not if there is any other way to accomplish it
it would have to be the absolute last resort, and only as self defense
11:28Me
if people collectively came together and refused to vote politicians back into office until they enacted the amendment and honored it then we might see their tunes change
the problem is most people see their votes as electing the lesser of two evils
maybe this would be futile, but I'd rather die trying than allow things to get progressively worse
11:30Jose
I saw my votes wasted by trying to get conservative power over house, senate and presidency. what did they accomplish? practically nothing.
11:30Me
I want my kids and grandkids to have a better world than I do
it accomplished nothing in the short term, but might accomplish something eventually
I think the problem with most people is that they would rather have it easier than to sacrifice for future generations
11:31Jose
I don't disagree, I just don't really know if I can say I agree either.
11:32Me
That is where protesting and unity need to come into play
we need to realize that we all agree that things are broken, and have intelligent conversations on what basic solutions can satisfy both sides
11:33Jose
I don't really believe government will ever respect any constitution, no matter how clearly we write down the rules.
That's my point of view.
11:33Me
That is why we need to constantly stir up the pot
11:34Jose
Maybe you can't relate (I hope you can't) to the people without shame who seek power.
They're not ashamed to flout your opinions or violate your rights.
It's hard for normal people like us to imagine that.
11:35Me
If politicians see that they really have to work for our votes and are being held accountable for their actions, change might actually happen
the power is what they crave most
11:36Jose
Here's the trouble with that - each politician, while they may not enjoy their stolen power for long - will gradually transfer more power to the government - they may be out of a job, but their elite friends will be in office next
11:36Me
so if compromising on other aspects of their own self interest accomplishes retaining power, then they will be more likely to cooperate.
yeah, that is one huge problem, all the cushy positions they get from the corporations they help out
11:37Jose
Have you seen "food inc"?
11:37Me
no
have you seen "the corporation"?
11:38Jose
The way powerful elites moved back and forth between government regulation agencies and the outside entities that they were supposed to be regulating is ridiculous
11:38Me
If voting them out doesn't work, then we need to have criminal cases
11:38Jose
no, i haven't seen that
11:38Me
oh I agree
11:38Jose
Aha, but the government controls the courts, too.
Separation of powers slows things down, yes.
but the overall trend is for government to support itself and other parts of itself
11:39Me
well, the cases need to be decided by a jury
but the citizens need to initiate the law suits
11:39Jose
Juries are great for defending people against government, but I don't think the reverse is true.
It's easy to get a hung jury
That's works to the advantage of the defense.
11:40Me
because as has been evident recently, impeachment has been off the table
I never said it would be easy, these are just things we need to pursue.
because the plutocracy that exists at the hands of our current "elected" officials and their corporate co-conspirators is what is ruining our nation
Didn't T. Jefferson suggest frequent revolutions?
they don't necessarily have to be violent, but we need to shake things up either way
11:42Jose
he sure did
well, I agree with that
11:44Me
IF we can accomplish something that makes politicians feel like they have to watch what their doing, then I think we are more likely able to create rules that can allow opportunity to thrive to a greater degree
11:45Jose
Let's see if we can agree on at least a couple of things...
11:46Jose
First - even if planners getting involved in the market is contrary to individual property rights sometimes, you could imagine relying on that in practice if it's effective - agree so far?
11:46Me
yes
11:47Jose
Ok, and while we both recognize that it hasn't really been effective so far, I'm saying that I'm certain it can't be, while you still have some hope for that.
11:47Me
right
And I believe that the biggest reason it hasn't been effective is because we haven't been able to put a good enough check on the powers that be
11:49Jose
And I believe the reason it hasn't been effective is that, even though the model I laid out is hard to lay out for larger societies than just a village or clan, that the theory still holds and applies, no matter how large the group.
11:49Me
right
but these are all theories, since neither have been able to be proven
11:50Jose
Well, if you follow the logic of the economic theories I'm talking about, they are really pretty solid.
11:50Me
but the key is, neither can even get close unless we can enact significant change to the power structure
certainly
11:51Jose
yes, change is needed to try these things out.
11:51Me
but the reality of the haves and have nots still remains
11:51Jose
yes, it does
11:52Me
so this is why I think that our most important objective as citizens in this country is to do everything we can to convince each other to act, and then to act
11:52Jose
100% agree
11:52Me
it might take decades
we likely will never see the fruits of our labor, but the cause is still just
11:53Jose
I agree and I'm ok with that, though sometimes sad.
11:53Me
even if it never works, I can't see inaction as an option
it is downright depressing, but a somber reality nonetheless.
11:54Jose
(phone call)
11:54Me
yup
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