Economic (Mis)Education in Europe

[CaptainQuasar]

Well, it's not up to you to decide. The "value" of these professions have been worked out through numerous decision makers and markets processes. For you to sit back and say that you "disagree" with this outcome is to second guess the decisions made by a large amount of independent decision makers. And frankly it's arrogant and a bit elitist to think that you have the knowledge and judgement to be able to second guess this process.

Dude - you realize that you're almost literally saying "the Market is God" don't you? His wisdom is beyond human ken, hubris alone questions it.

"Pish! Value need have nothing to do with reality!" is the Enron mindset. By conflating market price with the general concept of value you are attributing far more insight to the Invisible Hand than is warranted or even rational. Urging that everyone surrender their personal judgment of value - and criticizing failure to do so as arrogance - demonstrates a fundamentally superstitious appraisal of reality.

Yeah, markets are handy tools economically, mathematically, and systemically, but they aren't some general magic wand and they don't have the oracular powers that you're attributing to them. You're granting authority to inanimate objects (or inanimate patterns, at least) and advancing a Shamanic Fetishist interpretation of economics.

 

[denverdoc]

Well, it's not up to you to decide. The "value" of these professions have been worked out through numerous decision makers and markets processes. For you to sit back and say that you "disagree" with this outcome is to second guess the decisions made by a large amount of independent decision makers. And frankly it's arrogant and a bit elitist to think that you have the knowledge and judgement to be able to second guess this process.

Well, OK. But when so much relies on powerful marketing tools, misinformation, and human foibles, I have to second guess. If the world were to suffer from some plague tomorrow, good luck with your market choices. I'll stick with mine.

 

[Economist]

Well I think it's arrogant and elitist of you to think you can second guess the complex historical processes involving millions of decision makers that resulted in the current economic ideas of Europe. HOW DO YOU KNOW it's not just part of a master plan leading us into an eternal utopia!? HUH HUH!?

I personally think there is a big difference between decisions made in a market context, where individuals voluntarily interact with one another, and decisions made in a political context were majority rules, and people can personally vote for policies that harm other people. Markets are not a zero-sum game, while politics and democracy on the other hand are.

The point is that prices (which includes wages) are very complex phenomenon that occur through large numbers of decision makers. One of the main reason that socialism doesn't work is that it's much to difficult for small numbers of individuals to correctly set prices. Hayek talks very intelligently about this, and if you don't know how important a role prices play I would suggest any introductory textbook on microeconomics.

Dude - you realize that you're almost literally saying "the Market is God" don't you? His wisdom is beyond human ken, hubris alone questions it.

"Pish! Value need have nothing to do with reality!" is the Enron mindset. By conflating market price with the general concept of value you are attributing far more insight to the Invisible Hand than is warranted or even rational. Urging that everyone surrender their personal judgment of value - and criticizing failure to do so as arrogance - demonstrates a fundamentally superstitious appraisal of reality.

Yeah, markets are handy tools economically, mathematically, and systemically, but they aren't some general magic wand and they don't have the oracular powers that you're attributing to them. You're granting authority to inanimate objects (or inanimate patterns, at least) and advancing a Shamanic Fetishist interpretation of economics.

I don't even think markets are God. If they were, they'd be perfect. The fact is, markets are far from perfect (although they do work pretty darn well). The real question is how well markets work compared to other realistic alternatives. Usually the most realistic alternative is politics, which is even less perfect than markets.

Well, OK. But when so much relies on powerful marketing tools, misinformation, and human foibles, I have to second guess. If the world were to suffer from some plague tomorrow, good luck with your market choices. I'll stick with mine.

Marketing plays a role, but everyone markets, so it probably generally works out were the best products are the ones that stick around. Do you realize how many companies (even ones that market) go out of business every year? Do you also realize that research has showed that advertising actually decreases prices (by increasing competition)?

What are you talking about with the plague? If a plague happened, most survivors would have a very tough life, specifically because many markets would probably break down.

 

[DrClapeyron]

Economist, you say prices are complex phenomena but you tend to throw around statements such as PPP, GDP, and GNP. These are simple tools given in intro econ courses to students to show them how an economist should think. You cannot measure two economies like the US and the UK simply by using these tools. Politics makes a world of difference and majority rarely is a deciding factor in business and politics where it is more about owning volume over votes or opinions.

 

[Economist]

Economist, you say prices are complex phenomena but you tend to throw around statements such as PPP, GDP, and GNP. These are simple tools given in intro econ courses to students to show them how an economist should think. You cannot measure two economies like the US and the UK simply by using these tools. Politics makes a world of difference and majority rarely is a deciding factor in business and politics where it is more about owning volume over votes or opinions.

Actually, things like controlling for inflation and PPP indexes are used in order to help one control for prices and draw insightful conclusions from the data. I am not saying they're perfect, but rather that they're pretty good and by far the best measures we have. What would be your measures to compare citizens across time, or to compare standard of living across the globe?

 

[CaptainQuasar]

Dude - you realize that you're almost literally saying "the Market is God" don't you?

I don't even think markets are God. If they were, they'd be perfect. The fact is, markets are far from perfect (although they do work pretty darn well). The real question is how well markets work compared to other realistic alternatives. Usually the most realistic alternative is politics, which is even less perfect than markets.

You didn't say anything about politics, you said that human judgment is an alternative that is inadequate to make decisions different from the results of arbitrage and price equilibriums in markets. You said that an attempt to do so would be "arrogant and elitist". That's regarding market outcomes as something akin to God's Law, which shalt not be questioned.

Knowing that you think this is quite significant to understanding the various views you've presented here and in other threads deriding anything outside of corporate competition as a solution to social problems.

I hate to break it to you, man, but your views literally do have the Enron mindset at their core. Have you seen http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the_Room" ? It's entirely apropos to this conversation.

But for the record, I would agree with you that "socialist" type efforts would do well to make more extensive use of market mechanisms as a tool. The California pollution control credit system is an example of a regulatory restricting-commerce-for-the-greater-good measure that leverages a market mechanism. I'm just not putting markets on quite the pedestal that you are.

(This is also what I meant by saying that the Soviet implementation of communism suffered from being drawn on an 1870's understanding of capitalism. If communism were implemented today it would use market mechanisms and active competition, I'm certain, while still keeping enterprise capital in the hands of the state.)