5201

Magnet, i wrote up a reply earlier but apparently didn’t post it. I’ll hit reply tomorrow, but Dan’s explamation does indeed capture it will.

My reply to you was mainly disputing your notion of value. I may just rewrite it later if i get bored enough. Otherwise I’ll post it tomorrow. I think i wrote it up and then got pulled into a meeting

5202

I think you can “Go Advanced” and pull up possibly saved posts. It has worked for me a few times.

5203

The market is good at determining some values, particularly the value of goods. And as an algorithm, it generally converges. But it’s not as effective in determining the value of other things, like clean air. Or helping others in need. Or patriotism. When the market fails, other methods of determining value become necessary, including religion, philosophy, and civics.

As though those things are less likely to fail? Those are the things that led to the inquisition, and the holocaust.
The idea that the market somehow fails to derive the “true” value of things really falls apart when you are forced to face the question of what the alternative is. It’s easy to imagine some magical benevolent ruler who knows “truth” and makes his determinations based on a pure sense of justice, and an omniscient view of the future. But that ruler doesn’t exist.

People aren’t robots, they can sort out the conflicts on their own.

The market IS PEOPLE. It’s like the soylent green of value determination!

You seem to be thinking that the market is some kind of robotic entity. The market is simply the emergent intelligence of the people as a whole.

The Soviet Union did not have a free market economy.

Yes, exactly.

Again, you seem to be claiming that all free market economies are, by definition, meritocracies. If so, then “meritocracy” is not a useful term. If not, then provide an example of a free market economy that is not a meritocracy.

Well, it’s useful for identifying why free markets are good compared to other solutions, which are not meritocracies.

5204

The market is good at determining some values, particularly the value of goods. And as an algorithm, it generally converges. But it’s not as effective in determining the value of other things, like clean air. Or helping others in need. Or patriotism. When the market fails, other methods of determining value become necessary, including religion, philosophy, and civics.

As though those things are less likely to fail? Those are the things that led to the inquisition, and the holocaust.
The idea that the market somehow fails to derive the “true” value of things really falls apart when you are forced to face the question of what the alternative is. It’s easy to imagine some magical benevolent ruler who knows “truth” and makes his determinations based on a pure sense of justice, and an omniscient view of the future. But that ruler doesn’t exist.

People aren’t robots, they can sort out the conflicts on their own.

The market IS PEOPLE. It’s like the soylent green of value determination!

You seem to be thinking that the market is some kind of robotic entity. The market is simply the emergent intelligence of the people as a whole.

The Soviet Union did not have a free market economy.

Yes, exactly.

Again, you seem to be claiming that all free market economies are, by definition, meritocracies. If so, then “meritocracy” is not a useful term. If not, then provide an example of a free market economy that is not a meritocracy.

Well, it’s useful for identifying why free markets are good compared to other solutions, which are not meritocracies.

5205

The free market does not account very well for externalities though. Things like environmental damage or the societal benefits of educating people. These costs and benefits are usually pushed by governments by taxing certain products more, given rebates, or outright banning things. The ‘free’ market isn’t all that free, at least not if we want to run it effectively.

5206

You are implying here that creating and maintaining political connections is not a merit. [note: I am not judging that, just listing it here] And somewhat defining merit based on market value, that is a weird definition, because then in scenes without a market, merit can’t exist. I can imagine a post-scarcity society where everything is build and mantain by robots, and humans are doing the fun parts and art. It will still be a society where cool roles can be asigned following human qualities. Like… New New York mayor to the guy with better management skills…

5207

Ok, tell me the “true” value of these things using only the market:

  1. Good sportsmanship
  2. Clean air
  3. The right to protest your government

The market only works when there are buyers and sellers in competition. But some things lack buyers, sellers, or competition. Those things have value but the value cannot be properly determined by markets. They are market failures: the algorithm breaks and their value must be determined in other ways. Whether you like it or not, that’s when people use moral reasoning and other types of abstract thinking.

5208

You can buy sex, but you can’t buy love*, so love is worthless.

5209

Timex would you say in Saudi Arabia that the market has determined that women have no merit in the workplace?

5210

You keep saying this… “The market can’t determine the value of these things!”
But then you skip the next, obvious implication of that statement. What CAN determine the value of those things? You have no real answer to that. You simply handwave it away, and assume that some government bureucrat somehow can determine such a value. I would argue that you have ZERO empirical data to support such a notion. You cannot, in any way, support the idea that he somehow knows what such value is.

For things like clean air, a big part of the reason why the market doesn’t determine that value is because it’s not governed by the market at all. It’s simply outside the market. You can’t fault a market for not attributing cost to environmental pollution when it’s not something which is actually traded.

Certain things, like in this case, dumping crap into the air… they are essentially enabled by the fact that certain things, like the air, are considered communal. When things are considered communial, then you are removing all of the market forces from the equation. When things are free, the market’s natural tendency towards equilibrium between supply and demand completely break down. Demand goes up to infinity, so whatever that action is becomes super attractive.

Dumping carbon into the sky? That costs nothing, because it just “disappears”! Trapping carbon and then burying it in the ground? That’s crazy expensive. So NO ONE is gonna do it. But the problem that you’re seeing here isn’t because of some failure in a market… it’s merely due to the fact that things like dumping into the atmosphere is essentially outside any market. It’s not a market failure. It’s a market non-existence.

Here’s an analogy… Way back when I was in junior high, we did one of those bridge building competitions. You know, where you glue toothpicks together to make bridges, and then test the weight?

You had a budget, with toothpicks and glue and string all costing stuff.

But the thing was, the glue only cost a fixed price per day. You basically paid a dollar per day, and then got all the glue you wanted.

So my team decided, “We need to exploit the crap out of this!” So our design ended up making frames out of toothpicks, and then using glue as a primary building material by just pouring it into the frames and making what amounted to plastic panels. Worked very well. The problem wasn’t some kind of market failure… it was that the glue wasn’t goverened by the same market forces as everything else.

5211

If so, then “merit” is redundant.

For “merit” to be a useful construct at all, it has to express something more than what the market has determined. Originally, it meant innate ability, academic performance, etc.

5212

We all do, of course. Instead of the market, we use abstract reasoning.

Timex, do you value your right to carry arms? If so, why? It cannot be bought or sold. There is no market value. According to your argument, it has no value. We can discard it without consequence.

You can’t fault a market for not attributing cost to environmental pollution when it’s not something which is actually traded.

I don’t “fault” the market. I am pointing out its limitations, which most economists also acknowledge.

The problem wasn’t some kind of market failure… it was that the glue wasn’t goverened by the same market forces as everything else.

If the glue isn’t governed by market forces, then using the market to determine its value will result in failure.

Maybe you are taking “failure” too personally? But it’s the term used by economists. If it helps, think of it as a computing error: eg “invalid arguments for market.value()”. Use a different method.

5213

Right, so smart regulation like https://en.wikipedia.org/wiki/Pigovian_tax that price in emissions to the market, that will make for a more efficient market right? But in a market without those things, someone who invents a brilliant way to avoid emissions isn’t rewarded for their merit.

The part that bothers me is that it seems like you define things such that whatever is, is optimal. As if we live in the best possible of all possible markets.

5214

Bingo.

Anyone who wants to define merit as “What society values, no matter how skewed or flawed or prejudiced that may be” can defined the idea that any society is a meritocracy. But it’s just empty wordplay.

A meritocracy that doesn’t reward inherent gifts and give equal opportunities to all isn’t.

5215

Is it possible to have a true meritocracy in a capitalist society? It seems like accumulation of wealth and meritocratic society seem at odds.

IOW it’s pointless to encourage wealth while condemning the advantages of wealth.

5216

Is it possible to have a true meritocracy in a capitalist society? It seems like accumulation of wealth and meritocratic society seem at odds.

IOW it’s pointless to encourage wealth while condemning the advantages of wealth.

5217

We all do, of course. Instead of the market, we use abstract reasoning.

Saying “we all do” doesn’t actually solve the problem though.

Ok, so when I engage in economic trade in a market, my personal values are reflected in my buying decisions, and are combined with everyone else’s, which then results in value being depicted as a price. That price is the reflection of the values of EVERYONE participating in the market.

The question I’m asking you isn’t how can an individual come to some personal perception of value. That’s easy.

The question is how do you establish what the REAL value is, when everyone’s individual perception is different.

That is why the market is the best system for deriving value for commodities and services.

Timex, do you value your right to carry arms? If so, why? It cannot be bought or sold. There is no market value. According to your argument, it has no value. We can discard it without consequence.

The reason you’re struggling with this is because you’re picking progressively more and more abstract concepts, which are not things which are bought and sold. That’s fine, but it doesn’t really have much bearing on the discussion.

I mean, you want to know what the actual value of a right is? It’s how much people are willing to sacrifice in order to preserve that right. That’s the trade which takes place. Again though, it’s so abstract that it’s kind of meaningless from the perspective of a discussion of economic value… because it’s not an economic commodity at all.

And the fact remains, you have no alternative method for determining the value anyway, so it’s moot. You just say, “Well I can assign it value!” but that’s missing the real problem… because YOUR assignment of value is different from someone else’s. How do you reconcile those differences? A market can do that with economic commodities.

In some ways, a democratic electoral system essentially provides a market based system for assigning values to such things. People get votes as their “currency” and can then “spend” them on candidates who offer policies which reflect their personal values.

If the glue isn’t governed by market forces, then using the market to determine its value will result in failure.

Well… no, not quite.
The problem was that the prices for the objects used weren’t set by a market, but were instead fixed by the person running the competition.

If the prices had been determined by an actual market, the exploitation wouldn’t have been as easy. If we started consuming massive amounts of glue, the price of the glue would have gone up as a result, which would have naturally prevented using it as I did. But since the price was fixed, instead of being driven by market activity, it was possible to game the system and consume it in huge amounts, since the price was lower than its actual value.

Maybe you are taking “failure” too personally? But it’s the term used by economists. If it helps, think of it as a computing error: eg “invalid arguments for market.value()”. Use a different method.

No, the issue I’m pointing out is that you’re using the term failure incorrectly.
There are definitely certain established types of market failures that arise in certain situations. When monopolies form, for instance, this will cause a market failure because the forces no longer function correctly. But you’re kind of using the term “failure” to mean that you don’t think the market is setting a price correctly… but you’re not really able to establish a concrete and scientific basis for that, other than it doesn’t agree with your own personal opinions, and you can’t actually establish what the REAL value is, other than your own subjective opinion.

Now, there are cases where markets don’t actually form, or can’t operate. As I mentioned previously, in the case of a lot of environmental issues like air, part of the issue is that you don’t really own property rights to the air… Since it’s just owned by “everyone”, no one really interacts with it in an efficient manner, other than those folks who want to exploit it.

Right, so smart regulation like https://en.wikipedia.org/wiki/Pigovian_tax that price in emissions to the market, that will make for a more efficient market right? But in a market without those things, someone who invents a brilliant way to avoid emissions isn’t rewarded for their merit.

The part that bothers me is that it seems like you define things such that whatever is, is optimal. As if we live in the best possible of all possible markets.

I think that yes, intelligent regulation can in fact be beneficial in many ways.

Although, at the same time, you run the risk of screwing stuff up because you are allowing individuals to make value judgements which are not backed by the same kind of communal intelligence that a market based price is.

But yes, some things exist essentially outside the market and require external forces to deal with.

I honestly do not remember what we were originally talking about at this point.

5218

It’s better this way.

5219

There is no REAL value. Even market values are not absolute: they are a function of time. Other values, such as the value of the right to bear arms, are a function of time AND a function of who you ask.

This is not terribly surprising. What is the REAL human height? Again, there is not a single value, only a distribution that varies with time and the individual you measure.

That is why the market is the best system for deriving value for commodities and services.

Well, sure. But we are talking about “merit”, which is neither. And you made the claim that it cannot have any value unless it has a market value, which I dispute.

I mean, you want to know what the actual value of a right is? It’s how much people are willing to sacrifice in order to preserve that right.

Interesting, but that’s not how market value works.

The market value of a bottle of penicillin about ten bucks. This is far less than how much people are willing to pay for it.

In technical terms, market value is the intersection of demand and supply curves, but you just defined value as the peak of a demand curve.

Though we are getting somewhere… there really is more than one definition of value!

Again though, it’s so abstract that it’s kind of meaningless from the perspective of a discussion of economic value… because it’s not an economic commodity at all.

Bingo… And so is “merit”!

YOUR assignment of value is different from someone else’s. How do you reconcile those differences?

The same way I address “human height”. It’s not a single value. But it has meaningful statistics: a median, an interquartile range. And that’s useful too.

I honestly do not remember what we were originally talking about at this point.

Actually, it’s about ethics in game journalism.

5220

But those are values. I think there is confusion over prices and values somewhat. If you value something, you can put a price on it. And then engage in market transaction at that price. That is essence of Coase theorem.

Take right to bear arms. I want to wear a six shooter. You don’t want me to. If we can negotiate together we can agree upon a price that achieved a satisfactory outcome.

A major problem with gov regs is like of pricing mechanism.

Enjoyable discussion btw