Some thoughts on trade in general and world trade in particular.

[punkbass2000]

I may get to that sooner or later In any case, is your position comparable to philosopher kings, or would you say it's fundamentally distinct?

 

[betazed]

I may get to that sooner or later In any case, is your position comparable to philosopher kings, or would you say it's fundamentally distinct?

I do not know philosopher kings position. What is it?

 

[punkbass2000]

It was a government form put forth by Plato. Essentially, the rulers should be learned men who could make insightful decisions rather than democracy where too many fools had too much say or tyrannies where military rulers became political leaders and so forth.

 

[JerichoHill]

The inherent tendency of humanity is to expand and grow. I doubt that a "philosopher king" government would be in any way usefully more effective in stopping the growth and encroachment of government than a republic system.

@@G

G, I've brought facts to this thread. Your rebuttals are mainly what YOU think. Not be a smart-ass, but it really doesn't matter what you think.

If people did not behave approximately rationally, then economics, or any other mathematical study of the social sciences, would produce zero tangible results.

I *hope* that you will go and introduce yourself to Becker's complete works, and not just the small links that I've provided. I also recommend works by Judge Richard Posner (Sex and Reason being the foremost).

Because we as researchers cannot account for all information, our models will always be incomplete, and there will always be random errors. Because of locational, political, geographical, et. al. discrepanies, no economic system will function as efficiently as they do in a textbook.

I'm not going to debate personal opinion, because that debate is circular and goes nowhere. I will debate on the facts and merits of competing economic theories.

In economics, prices are *supposed* to function as efficient barometers of quality, quantity, taste, and preference. The price encompasses all of it (the invisible hand argument).

I can't do much more than point out that a healthy reading of Adam Smith, Joseph Schumpeter, Keynes AND Friendman would be in order.

I only get snippity when it feels like my actual expertise is being discounted. In that regards, I do have a superiority complex. And how economics is as a science is my one primary complex.

--Add
Please re-read Becker. He will essentially state that people will use all the information available to them, whether the information is true or false, and through a rational process, come to a decision based on their available information, expectations, and so forth. I'm not going to lecture on rational choice theory, since its readily available, and I already do that 2 nights a week anyways.

@@Ala
The big problems for the world is the dumping of wages and globolization. The American power over currency is also an issue.
--The big problem not that at all. The big problem is on anti-globalization, anti-free trade, and pro-barriers. The dollar's exchange rate floats, and therefore the foreign exchange market regulates its value (which by the way, having a strong dollar is not necesarily good, and having a weak dollar is not necessarily bad). And how does one dump wages?

As much as I would want a government run by economists and how much better I think the system would be, that system is also inherently corruptable. The republic/democratic idea has done the best at curbing corruption, but we are now seeing flaws develop.

Perhaps we should have taken Jefferson's advice...

@@All -- If anyone is interested, I would gladly supply my article on "rational dating investors". We behave very rationally in how we pursue dating/mating relationships.

 

[betazed]

It was a government form put forth by Plato. Essentially, the rulers should be learned men who could make insightful decisions rather than democracy where too many fools had too much say or tyrannies where military rulers became political leaders and so forth.

No, it is nothing like a philosopher king. A single human is fallible; however a large multitude of thinkers is far less fallible (which is the assumption I make).

@@All -- If anyone is interested, I would gladly supply my article on "rational dating investors". We behave very rationally in how we pursue dating/mating relationships.

Sounds interesting. Where can we see it?

 

[CartesianFart]

I do not know philosopher kings position. What is it?

Or enlighten despots as another term for philosopher kings.

One prime example:The most underated ruler of western christendom.



You should also read up the word 'physiocrats',which heavily influenced this incredible king economic policies.Trust me,i think USA already had one from Reagan.

 

[JerichoHill]

it *should* be up on the eRel site (economicsofreligion.com) in a few weeks, if I get my **** together. That's a big if.

Otherwise I have copies lying around. Since its journal-bound, I've got an old copy I can disseminate, but the actual polished article I can't.

 

[punkbass2000]

No, it is nothing like a philosopher king. A single human is fallible; however a large multitude of thinkers is far less fallible (which is the assumption I make).

I don't think there is anything implicitly singular about the concept, though I may be mistaken.

 

[CartesianFart]

I don't think there is anything implicitly singular about the concept, though I may be mistaken.

Unless you state philosopher kings, not philosopher king.

 

[JerichoHill]

The original concept was a council of philosopher kings...

 

[jonatas]

The original concept was a council of philosopher kings...

I think it would be more accurate to call the concept in broader terms a social class, which theoretically would be open to anyone who qualified. However the class was supposed to mix with itself.

 

[punkbass2000]

Perhaps we should take this to the thread betazd linked... my apologies for the tangent.

 

[Gothmog]

JerichoHill wrote:

I've brought facts to this thread.

Heh, I think a quote from my first in this thread post works well here.

"But obviously you have taken the economist tact of assuming things are as simple as they need to be for you to propose a solution."

So let's take a second to look at the 'facts' that you've brought to this thread.

you wrote

Because of the existence of prices, we can make estimates of relative worth to the economy. If a teacher makes 30K and a professional athlete 100K, then it must follow that the economy values the professional athlete 3.3 times as much.

And as I already stated, this is tautology not fact.

Then you brought up:

you say that the quality of service is not tangible in the price. This is flatly wrong

Of course I didn't dispute that quality was a factor in price, just that it was the only factor. But again, you did not try and back up your position, or respond to punkbass who also questioned this 'fact'.

Then:

In a perfect economic world, the wage disparity would account for this productivity differential.

In a perfect economic world... yeah, where is that?

It seems that you are talking about a theoretical world where the invisible hand rules all. That's nice, but only marginally relevant IMO. Economics is not the hard science you wish it was.

Then you finally condescended to bring up "adaptive expectations" where you did admit that trend, prestige, and culture are indicators of price. Hmm, isn't that what I originally said?

Then you went with an appeal to authority, well done.

Then again discussed the invisible hand, 'market mechanism', and the theory of human capital. But refused to discuss what you meant by rational behavior and how it relates to feelings and value assessments.

In fact you dismissed feelings while implicitly lumping them with rational behavior.
As I felt I brought out in the discussion of discrimination I quoted from Dr. Becker.

You apparently will not condescend to discuss that with me. I was hoping to learn a few things about this interesting intersection between value, emotion, and rationality from an economists perspective but I guess not.

Because we as researchers cannot account for all information, our models will always be incomplete, and there will always be random errors. Because of locational, political, geographical, et. al. discrepanies, no economic system will function as efficiently as they do in a textbook.


...

In that regards, I do have a superiority complex. And how economics is as a science is my one primary complex.

Well look. I am a physical scientist and I currently work developing 'predictive' models. Let me say that even when we know the behavior of the thing being modeled (e.g. a hard sphere, an electron, EM radiation) from first principles, down to parts per trillion accuracy, and we spend years studying the stability and pitfalls of various numerical techniques used to solve the relevant differential equations; we still always have more than random errors. I'm not going into it here unless someone wants to hear it, but it would be silly for you to say that random errors are your only source of uncertainty - that is far from the truth.

I do understand that to get anywhere you must assume this 'rational actor', but that doesn't make it true and it would have been nice for you to at least have addressed what you think 'rational' means. To shed some light on what you think the limitations of this assumption is. Dr. Becker certainly did so in the quote I provided on discrimination and value calculations.

In the physical sciences we spend a large percentage of our time pondering just that - the limitations of our assumptions.

But I guess you don't want to discuss that.

Please re-read Becker. He will essentially state that people will use all the information available to them, whether the information is true or false, and through a rational process, come to a decision based on their available information, expectations, and so forth.

This is as close to a definition of rational as I've been able to get from you, and as I said a number of times implies 'people want what they want and act to get what they want'. It does implicitly include emotions. I've been arguing that they are at the crux of the issue.

So is it rational to want a gay interior decorator, or a white school teacher, even if the quality of their service is demonstrably less?

 

[Gothmog]

@punkbass2000

I agree that economics are not the primary driver of happiness. I believe that human relationships are.

In fact from my experiences with the wealthy (those who do not need to work) suggests that they often have problems with relationships because of their money. They also often believe that their wealth should be making them happy, and berate themselves if they are not - a vicious cycle.

@betazed

I know I've discussed the education/policy decisions link with you, but not in the thread you linked to. It does come down to us imposing our analysis on the world. Using a guiding hand and incentive schemes is not the same as increasing relative voting power, the latter does smack of force to me.

We currently cannot technologically replace a redwood, but it is certain that there are various services provided by nature that we will eventually be able to take over and relatively soon.

I mean don't you think we could eventually build a space station?

 

[JerichoHill]

So is it rational to want a gay interior decorator, or a white school teacher, even if the quality of their service is demonstrably less?

@@G
--I'm not going to get into this battle with you. I will answer your question. We, as rational choice theorists, would say that an actor will take into account all information that they currently have when they must make a decision. This includes their own internal and external preferences (which could easily be different). In and of themselves, the actor is assumed to be acting rationally. By that I mean that given the choice between 2 "things" the actor will choose that which provides the most utility to themselves. (and I assume one isolated event, not a series...getting to that)

Is it rational to play the lottery when my expected value is less than 1? Well, if the expected value is .60, and my emotional value is .50, then yes, it is a rational act.

However, economics really has yet to be able to quantify emotions. We generally take taste and preferences as givens because of this.

Generally speaking, over the long haul, individually rational decisions that are not utlity/profit maximizing in either the long-run or to society as a whole eventually diminish. New branches always take their place though.

I *hope* this answers your question.

In summary
1) Most people do behave approximately rationally
2) People's decisions would be different with different information
3) Not every rational decision is a maximizing decision.

 

[punkbass2000]

I do understand that to get anywhere you must assume this 'rational actor', but that doesn't make it true and it would have been nice for you to at least have addressed what you think 'rational' means.

Also, I wonder if we can easily distinguish between being rational from being able to rationalize. To give a very easy example, you may ask someone why they bought a particular item when there's an identical item beside it which is cheaper. They may say it's because it's better, but it may be that the "actual" (if we may use such a term) reason is entirely different, perhaps resulting from some bias or another.

 

[punkbass2000]

@punkbass2000

I agree that economics are not the primary driver of happiness. I believe that human relationships are.

I know you do I disagree, but I think it's getting closer. By which I mean I think one can better sustain happiness via human relationships than via economics.

In fact from my experiences with the wealthy (those who do not need to work) suggests that they often have problems with relationships because of their money. They also often believe that their wealth should be making them happy, and berate themselves if they are not - a vicious cycle.

Quite true. I tend to think expecting happiness to be brought about through external factors will ultimately fail.

 

[Gothmog]

@JerichoHill - thank you for an honest, non-condescending, answer with some content.

It is interesting the extent to which economists mix rationality with emotion. I tend to think to rationality as 'pertaining to reason', and reason as 'deduced logically'. That's my bias though, your definition is equally correct.

It seems then that the short answer to "So is it rational to want a gay interior decorator, or a white school teacher, even if the quality of their service is demonstrably less?" is "yes". I would have thought "no".

Is this

Generally speaking, over the long haul, individually rational decisions that are not utlity/profit maximizing in either the long-run or to society as a whole eventually diminish. New branches always take their place though.

an axiom or is there any way to back it up?

It is obvious why you want to make this assumption from a modeling perspective, you want a local minimum to approach.

Edit: Oh, I thought I'd mention that while I am not up on modern economic theory I have studied quite a bit about utilitarianism, as Mill and Beckham are favorites of mine. It's in the background of most of what you say.

 

[Gothmog]

@punkbass2000

I've had to accept that people are happy if they think they are, and that people are made happy by what they think makes them happy.

It doesn't really matter that I think human relationships are the key to happiness, other than to myself.

This relates to me 'imposing' my views on others, even if I believe I have the 'correct' answer.

 

[punkbass2000]

@punkbass2000

I've had to accept that people are happy if they think they are, and that people are made happy by what they think makes them happy.

This I can agree with.

It doesn't really matter that I think human relationships are the key to happiness, other than to myself.

I mostly agree. It matters to me because I care about you, however, and though I don't know the answers, I think you can find better.

This relates to me 'imposing' my views on others, even if I believe I have the 'correct' answer.

See, the thing to me is, no matter what, you cannot "impose" your views on others. You can do many things (including highly despicable and coercive things) to influence them, but not control. I also maintain that you cannot, ultimately, refrain from exacting some measure of influence (the decision to not "impose" your views is a decision and thus in some senses influence, for example), thus you may as well do your best to help them.