Show more

Hot take on economics 

@o I suspect it's a similar issue to the widely varied definitions of "markets" and "capitalism" that people use. They might have been talking about the combination of macroeconomics and finance, in which case there's a reasonable chance I at least partially agree with them.

Hot take on economics 

@freakazoid So ...

Back on Google+, there were a set of self-described Libertarians (and @woozle will remember some of these conversations -- they're not one, but were a fellow participant) who I'd occasionally engage with mostly to try to understand what the hell they were on about.

This included a few rounds trying to suss out just what they meant by terms such as "markets" and "capitalism", in particular.

It's one thing to disagree with someone.

It's quite...

@o

1/

Hot take on economics 

@freakazoid ... tend to go quite poorly.

This includes reading and referencing their generally prefered sources (if you can even wrest these from them at all). Stuff like Hazlitt, Rothbard, and von Mises, if you're lucky.

There was one YT vid in particular @woozle had turned up at one point, I _think_ it was "Objectivist Girl", discussing something. Which we realised was basically word salad. Oh, on von Mises and "praxeology". Let me see if I can find that...

@o

/5

Hot take on economics 

@freakazoid OK, it's "praxgirl", not "objectivist girl", though I had the gist of it.

Warning: this *WILL* rot your brain:

invidio.us/watch?v=MoNU_-__LlQ

@woozle @o

6/end/

Hot take on economics 

@dredmorbius @o @woozle I've read Economics in One Lesson. I've also read Economics for Real People (Gene Callahan's intro to Austrian economics), Free to Choose, and Machinery of Freedom. I think a big issue with libertarians is that they don't realize just how much the framework in which markets exist matters. There's no such thing as a "free market".

Hot take on economics 

@freakazoid For a long time my trite dismissal of Libertarianism was: "It's a fundamental inability to understand or acknowledge that wealth is in fact power."

When I finally started reading Adam Smith and found his "Wealth, as Mr Hobbes says, is power", I was gobstopped. That had been a principle gripe about economics (Libertarian or otherwise), and Smith directly confronted and acknowledged it.

There's another error I see now that is deeper: Weber & NAP.

@woozle @o

Hot take on economics 

@freakazoid Akerloff's "Market for Lemons" addresses a *part* of this, but only in part, and only in some cases.

The dynamic ends up being a validation for establishing minimum standards which *must* be met for market entry in many instances. Ergo: fully unregulated markets fail, and spectacularly.

(So do *badly* regulated ones, another issues.)

And that's not the only problem, but I'll stop there for now.

@woozle @o

Hot take on economics 

@dredmorbius @o @woozle That's specifically about situations where there's heterogeneous quality and no reputation for the seller, though. People certainly sell high-quality used cars, and you can get used cars with warranties from dealers. I think we do see this phenomenon with some consumer electronics. Often it's not asymmetric information so much as lazy consumers, though.

Hot take on economics 

@woozle @o @dredmorbius It's a little different from Gresham's Law because in that case the "price" is dictated to the the same for all coins of a given denomination by law, whereas prices of goods in the coinage assume the coins with the lowest actual precious metal content.

(Now that I say this I realize Gresham's Law has nothing to do with non-use of cryptocurrencies, since relative prices can adjust.)

@freakazoid So, #GreshamsLaw dynamics can turn up in various forms. I've tried (unsuccessfully) to catalogue the in the past.

There's fiat or imposed value, as with coin. Also with transjurisdictional standards, such as divorce law and shipping registries ("flags of convenience"). Whatever the *minimum* acceptable *somewhere* is, is acceptable *everywhere*.

There's effective perceived value -- Mencken's "Brayard", or consumer technologies, or bicycles.

@o @woozle

1/

@freakazoid Underlying quality is difficult to communicate, so some *quality indicator* is substituted. Accent. Vocabulary. Cultural myths. Clothing. Food. Table manners. Branding. Musical tastes. Books read. Schools attended. Management fads.

These signal *both* quality *and* group alignment -- and the wrong set can easily get you killed in many cases.

*Changing* signifiers is highly traumatic: culture wars and value shifts.

This also leads to cargo culting.

@o @woozle

6/

@dredmorbius @woozle @o These fall into a few different possibly overlapping categories: implicit bias, laziness or ignorance (because the information is available but people don't bother to look or don't know it's there), and places where it's genuinely hard to know, like interviewing and managing (though there's a lot we do know about management and interviewing so laziness and ignorance applies there).

...

@o @woozle @dredmorbius Volume also contributes to this a lot: for cheap things, the cost of research can be a significant fraction of the cost of actually buying it. This is probably why for many things there's not much of a "middle ground", just super cheap and super expensive things.

You can also get seemingly paradoxical effects where the brand with the better reputation has lower quality at a higher price point. I've noticed in general an inverse correlation between marketing and quality.

@freakazoid @dredmorbius @woozle @o

Mature markets tend to end up with two market leaders and a bunch of also-rans. In that kind of market, the #1 is often complacent and of poor quality, but the #2 tends to be better because it wants to knock the leader off the top spot.

e.g. VHS vs Betamax, Windows vs macOS, VW vs Toyota for cars, etc.

(Obviously there are counterexamples, and I think the trend is becoming less clear as markets fragment.)

@mathew @o @woozle @dredmorbius Two of the three examples you cite have strong network effects, where that's certainly true. But car manufacturers don't have this problem. Globally, in 2014 (the year I can easily find data for), the number 8 automaker by number of cars (Honda) sold almost 43% of the number of cars of the number one (Toyota). In the US, the number 7 manufacturer, Kia, sold 43% as many passenger cars as the top manufacturer, GM. And number 3, Toyota, has almost 83% of GM's sales.

@freakazoid @dredmorbius @woozle @o Cars may not be a two-player market, but I still maintain that VW has gotten lazy (and indeed downright criminal), lets its quality slip and failed to invest in new tech, while Toyota has focused on making better cars, even if they did make a disastrously bad move betting on hydrogen rather than battery storage. (There's probably an interesting case study there on why they went the way they did.)

@mathew @o @woozle @dredmorbius No case study needed: they did it because hydrogen is heavily subsidized in Japan.

VW's failure to invest in new tech is the case with car makers across the board. Their cheating was to try to avoid losing a bunch of car sales as diesel was essentially getting regulated out of business. Which IMO was a stupid move on the government's part since diesel has lower CO2 emissions than gasoline.

@freakazoid Incidentally, two cases of dyanamics I've been describingl

Toyota's forray into hydrogen fuel cells is based on government policies and incentives, creating a localised specialisation.

Volkswagon's diesel emissions fraud is a #GreshamsLaw dynamic: trying to substitute a lower-value quality for a higher-value one, through fraud.

@woozle @o @mathew

@dredmorbius @mathew @o @woozle It seems like this is also the case with software. People pick software on the basis of features or price, because they have no idea how to measure quality. So there's no market for high-quality software.

A "Consumer Reports for software" might help. It could track historical bugs, usability/accessibility problems, vulnerabilities, attacks, and the maker's response to them, etc.

@freakazoid "The Tyranny of the Minimum Viable User"

old.reddit.com/r/dredmorbius/c

Since users' _capabilities_ also vary strongly, the problem goes beyond this.

You see similar types of dynamics in, e.g., "audiophile" gear, much of which seems principally engineered to separate rich idiots from their lucre.

A better comparison might be precision or highly-skilled equipment, also somewhat affected.

@woozle @o @mathew

@dredmorbius @mathew @o @woozle This is why I think that products should lift up the user, not descend to the user's level.

@freakazoid The problem, given the dynamic, is that users don't _want_ to be lifted. They want to be comforted. You can try going against the grain. The market will punish you.

I'm not saying the market is right. The market and I disagree violently.

But the market is bigger than me.

@woozle @o @mathew

@dredmorbius @mathew @o @woozle Will it? I can think of plenty of examples of brands marketing how dumb their products are ("You already know how to use it" being a well-known example), but not of the market punishing products that are self-teaching. Do you know of some?

@freakazoid P.T. Barnum's dictum isn't an absolute universal, but it's close.

You can swim upstream, but you're going to find yourself in niche space. That *may* be a *profitable* niche, but it's still a niche.

The useful thing to do is look for cases of exceptions to the rule -- where is coplex, respectful, high-information-density content (or products or services) found?

Quality literature, news, education, music, information gear, etc.

@woozle @o @mathew

@freakazoid To counter that, you've got to raise the bound on that minimum.

You can gatekeep the users (certification). Or you can make sufficient degrees of incompetence nonviable -- harms or at least does not help the incompetent user is one route. This will still limit the scope of the market, but at least won't dilute the product. Call it a talent bar.

This also means a noneconomic motivation. You're not profit-maximising, but maximising for individual benefit.

@woozle @o @mathew

6/

@dredmorbius @mathew @o @woozle I don't agree with that, because it assumes that the reason for incompetence is lack of ability or desire to become competent. If it's lack of desire, let's exclude them not just from products, but from the planet, since they're ruining humanity. And I suspect lack of ability represents only a tiny fraction of the population.

But I think the real answer is that our system selects for people who are shitty at teaching.

@freakazoid So ... well, current use of idiots notwithstanding, I try to avoid prejudiced language, and the whole long first part of the Reddit essay goes into detail about why simple tools are often a net win.

The problem is where the dynamic directly impedes development of useful tools, systems, goods, services, etc.

And I really _don't_ think it's something you can chalk up only to pedagogy. Put another way: we're at the end of a phenomenal 300 yr ramp up in literacy.

@woozle @o @mathew

@freakazoid ... actually, if you look at it, changes in either who's included in classes or testing. Increased access => falling test scores. Rising test scores => falling access. That points to some population-level intractability.

(With exceptions. "Stand and Deliver".)

But trying to make all the children above average is a Sysiphean task, and a doomed premise for progress. You've got to work with the talent you've got.

My point is to not get in its way.

@woozle @o @mathew

4/

@dredmorbius @mathew @o @woozle Replying mid-thread because I think a lot of your reasoning farther down hinges on what I believe to be a mistake in this post. The fall in test scores from "increased access" is not necessarily because the larger group is not learning as well, but because the test wasn't actually testing how effectively the students were being taught. Most of our standardized tests are really indirect tests of socioeconomic class, not of how much students are learning.

@woozle @o @mathew @dredmorbius I think that the real problem is that "education systems" are super bad at educating. They can take a subset of students who have the right background and right set of parents and get them to do well on standardized tests, but they cannot take a random person out of a population of, say, English speakers, and on net provide them significant benefit.

@dredmorbius @mathew @o @woozle The reason students at "elite schools" tend to do better is that the school only allows in students who are going to be successful no matter what. They're *filtering*, not teaching. But they're not really filtering for innate skill. They're filtering for what the student has already absorbed from the world, largely due to the circumstances of their birth.

@woozle @o @mathew @dredmorbius And the problem isn't really that teachers are incompetent, though a bureaucracy isn't capable of hiring competent people; it's that it's not possible to be competent at teaching a class of 30+ randomly selected students.

@dredmorbius @mathew @o @woozle The fundamental problem IMO is that almost all societies treat teaching and learning as just one function among many, and something that's confined to particular institutions and particular phases of a person's life.

IOW it's not just Americans who are anti-intellectual but most of human society. And the reason is that we have entrenched groups who have a vested interest in a stupid population.

@woozle @o @mathew @dredmorbius Politicians don't want an educated population because they want people to be swayed by their emotional arguments. Pretty much every skilled profession has a vested interest in everyone else being stupid (or at least not knowing THEIR skill) because that's how they make their money. And the victims of this "uneducation system" want everyone else to be stupid because otherwise THEY feel stupid.

@freakazoid @dredmorbius @mathew @o @woozle This is the strongest argument I have heard against the long term use of democracy.

@feonixrift @freakazoid @dredmorbius @mathew @o

Democracy-as-we-know-it(-Jim), anyway.

Current implementations are tilted heavily (if not always obviously) towards protecting existing power-structures.

It's pretty easy to imagine small improvements that would significantly undercut this tendency, and not hard to design improvements that would do more than that.

@woozle @o @mathew @dredmorbius @feonixrift I think the big problem with democracy is that we treat it as if it has some magical power. Instead of fighting for human rights and rule of law, we fight for "democracy", even though the only rights democracy can protect by itself are the rights of the majority of the enfranchised, i.e. the people who least need it, and people will almost always vote *against* rule of law as long as it gets them what they want.

@feonixrift @dredmorbius @mathew @o @woozle I see democracy as a tool for implementing rule of law, because it allows succession of governments in a way that's always governed by law, whereas hereditary succession has always ended up with edge cases and conflicts. And of course can produce rulers who are so incompetent or evil that it causes revolutions where none were necessary (cf. the French and American revolutions).

@woozle @o @mathew @dredmorbius @feonixrift Randomly selecting representatives from among the population may well produce as good of or better results than having the population at large vote. You couldn't pick someone with as much power as the US President has that way, but those randomly selected representatives could certainly choose someone. And they'd probably do a better job since they'd be more visible and have some feeling of responsibility for their choice.

Sign in to participate in the conversation
Toot.Cat

The social network of the future: No ads, no corporate surveillance, ethical design, and decentralization! Own your data with Mastodon!