CurtHowland:Pray tell, oh Great and Powerful One
Relax man, I really didn't mean this in the tone you may have taken it.. Just throwing out my views and interested in others views, thereby further developing my own. I do still believe in what I said though.
In any case, to clarify what I mean. I don't mean in terms of central planning, I meant the above in terms of people's willingness to take their opinion of what is best for the whole into consideration (in addition to their opinion of what is best for themselves) when they decide what to do. I don't mean enforcing anything against the will of others, I mean avoiding doing things you know are bad for others or advancing yourself (relative to others) at any costs to others. e.g. instead of growing market share by making a more suitable product, using vendor lock-in tactics that prevent the choice of the customer from picking the best product (and preventing the optimum development of that particular field). There are many situations where one knows that a particular action is detrimental for "the whole" and one still chooses to do it because to a large extent we are conditioned by society to believe that we have to be this way.. that its a "dog-eat-dog" world. Of course the extent to which this is true depends from circle to circle and individual to individual. Its this lack of thinking of the whole that ("in my opinion" - so you don't think I'm being dogmatic here ;) gives us gems like the federal reserve, wars on false pretexts and a lot of other unfortunate things. You've also got the issue that even those who do care more about the whole may in many cases feel alone and/or power-less to do anything about it. If you're a really nice, best-intentions kinda guy or girl (as many start off early in their career) and you're thrown into a very harsh corporate environment where sincere behavior is abused as a weakness, very often it can understandibly be difficult to keep playing fair. You see it as a risk to play nice unless you could be more sure that others would follow and that you playing nice won't be punished. If there are more in the company who feel like you (and think the corporate culture is lets say unhealthily selfish) it would help if you are aware of each other so you may be able to leverage each other and feel more confident about taking risks for the good of everyone.
Another question I would be very interested in feedback: I've been thinking about the free market thing and the comments here. There's one thing that doesn't make sense to me: I assume the better an economic environment caters for the sum needs of its population, the more successfull one could consider it. In simple terms it should as best as possible make its people happy and avoid its people pain. The challenge I see is this: You may have one wealthy person with 20$ and 9 poor people with 1$. The wealthy person may have a desire to build a (I'm gonna pick random things here) skate park in the city square so that they can skate in the evenings and weekends. They will get a certain amount of happiness from that. If they were not to have that skate-park, they would not feel any grave pain though. The poor people want to build a market in the square so that they can trade food goods to be able to eat. If they don't get the market they will feel much worse than the wealthy person would should they not have a skate-park. Not only would each poor person get more than the wealthy person in terms of happiness if the market were built instead of the skate park, but you have 9 of these poor sods affected. The wealthy person and and the 9 poor people bid for the square, the wealthy person has more leverage for their needs and hence the skate park gets built. This is a situation that happens often in life. The amount a wealthy person can spend on a little whim may be much more than a poor person can on a much graver need (hence affecting their happiness a lot more), but the wealthy person "vote" has a lot more force behind it. Therefore resources and services may not always be distributed in a manner that best serves the greatest need(s) of the economy as the needs of the wealthy have a greater voice. Thoughts/answers/comments?
It seems in many cases like the wealthier one is, the more one can leverage one's wealth despite (or even against) the interests of the less wealthy. Aside from that one's own desires/needs have a louder voice, one can leverage one's wealth to unlevel the playing field to one's own advantage. Which can lead to an increasing disparity between rich and poor - and not necessarily towards greater sum happiness of the people within the economy.
CurtHowland:There is no "whole", there are only individuals. As each individual chooses what is best for them, everyone benefits.
This sounds great in theory. But in practice I don't see this as 100% accurate. If people act as if the whole does not exist, you have detrimental effects to others by the actions of the individual and hence "everyone suffers". If the whole does not exist, why not pee on the toilet-seat if you're not coming back? It may not affect you, but it affects the next person. The other example (more business relevant :) is in assessing risks. When considering an action, companies may assess the risk of ill effects to themselves, but not to the rest of the economy (other businesses, consumers, environment). Companies may then act according to such assessments and by thinking the whole doesn't exist (or matter), negatively affect everybody else (the Bayer aids contaminated pills incident in Zeitgeist is a stark example of this - if you imagine they didn't get caught). Such ill effects to others may not always be measurable or traceable back to the company. The point is that if you have a culture of everyone acting in this manner (that the whole does not exist or matter) you have everyone actually suffering from it. And this has nothing to do with central planning or dictating.
pedward:If people act as if the whole does not exist, you have detrimental effects to others by the actions of the individual and hence "everyone suffers".
This is the excuse for labeling "selfishness" as evil. Actually, it's arrogance, and a disdain for others.
Get used to it, lots of people have it at all socio-economic levels.
If the whole does not exist, why not pee on the toilet-seat if you're not coming back?
Can you tell me how that doesn't happen now? Oh, wait, it does. In fact, every public toilet I go into has the very real likelihood of having had someone pee on the seat, no matter how recently the place was cleaned.
However, the more obviously the place is "private property", the less likely it is.
When considering an action, companies may assess the risk of ill effects to themselves, but not to the rest of the economy (other businesses, consumers, environment). Companies may then act according to such assessments and by thinking the whole doesn't exist (or matter), negatively affect everybody else.
I am very much interested in how the state is somehow exempt from this motivation. Actually, this explains how the vast majority of the most polluted places on earth are government installations. It is just to much easier to de-ice the B52 and not give any thought to the run-off, especially when no one can sue you for polluting because you're the government.
The point is that if you have a culture of everyone acting in this manner (that the whole does not exist or matter) you have everyone actually suffering from it. And this has nothing to do with central planning or dictating.
But what you present as an answer is to make everyone behave as you want them to. Thus both dictating and centrally planning.
The reason you have difficulty grasping the viability of a free market is that you have no concept of property rights.
Consider the guy who pisses on the toilet seat: if it was his, obviously it doesn't matter what other other people think because when they acquire his permission to its usage they must take the bad with the good (viz. having to use a pissed on toilet but being able to relieve themselves); if it was someone else's then they have the right to hold him responsible to clean it up.
Your accusation of capitalism causing overconsumption because of scarcity is paradoxal, as it is precisely because of scarcity that property rights, and hence capitalism, exist: any time that anyone 'overconsumes', the only person to suffer is the overconsumer (so in a free market there is a built-in incentive for people to save). Essentially your claims against capitalism only show your complete ignorance of it. This (in conjunction with rampant collectivism like your own) is the stuff tyrants are made of.
Diminishing Marginal Utility - IT'S THE LAW!
I'm not going on about tyranny, or even that capitalism is "evil". Most probably each system tried in the past has its disadvantages even in theory. I'm quite clear about the issues in communism and dictatorship. I'm not here to promote that, actually I'm not even thinking in some polar or boxed fashion about free market versus communism with all its implications. I'm just expressing some of the issues I see with the free market model and am curious whether it has answers or explanations to these. Yes, I'm ignorant in this subject, less ignorant in others. This really isn't meant to be an attack of anyone's beliefs or intelligence. Just explain me this (and please don't assume that I'm pushing central governance with this question):
It was discussed earlier in this thread that one can "vote" with one's wallet. I pointed out that a wealthier person's needs have greater leverage than a poor person's. A wealthy person can out bid a poor person to satisfy a little whim whilst the poor person might have a much stronger need unsatisfied. In this instance, if the poor person were satisfied they would gain a lot more happiness than if the rich person were satisfied. However the rich person's need will be satisfied because their wallet has a stronger "voting" voice. My assumption is that the goal of an economic model is for it to in total make the people as happy as possible and avoid as much pain as possible. Is there a free market explanation, answer or acknowledgement (as in, its an unfortunate limitation of the system but its still the best we have) of this? (this is the skatepark vs. market example I mentioned in my previous email)
pedward:In this instance, if the poor person were satisfied they would gain a lot more happiness than if the rich person were satisfied.
Prove it.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
GilesStratton:Prove it.
In India (say Bombay), you have expensive hotels catering to the wealthy whilst extreme poor people are living on land made out of dirt dumped in the water. Resources are spent to cater for the needs of the wealthy, such needs go beyond basic shelter, clean water and food, but waiters , deserts, spa-facilities, room service etc.. The wealthy residents of the hotel have more money and hence steer the use of resources towards them rather than the poor who have basically no "voting" power on the use of resources because they have no money. If those resources were used to get basic shelter, clean water and food for those extremely poor, the difference in happiness experienced would be much greater than the slight disappointment those wealthy would experience if they had to go down to grab their food themselves, or didn't have a spa etc..
I'm guess when you said "prove it", you were asking to prove that such situations exist. In fact such situations in our society constantly exist. In some countries more than others. If you are asking me to prove that those starving would feel a bigger difference in their happiness if they were to be given food than the rich would feel if they were given extra luxuries, my response is that of course each person can only feel what they themselves feel. But honestly, there is no reason for us to believe that a poor person feels less than a wealthy person. And if that wealthy person feels some irritation in loosing (or not getting) a luxury, you can be confident they would feel much more if they were deprived of food (and I doubt you will find many wealthy who claim otherwise). And this deprivation of food is the state that these poor are in. So we could go into the theoretical realm of "how do you know what I feel", but that would be a cop-out. I think its pretty clear that in general, basic necessities for life such as food, shelter, medication make a bigger difference to a person's happiness than spas.
And btw, if the free market model doesn't address this question much (do you guys know if it does?), it might be cool to hear people's own thoughts on this... Do you even perceive this as an issue/limitation to how our societies run? Do you think its an unfortunate "necessary evil"? Do you think a system could be invented or an existing system could be modified to reduce the impact or eliminate this issue (especially thinking outside of the everythings somewhere between free market and communism boxes)? Or would a free market model if implemented correctly (according to your views) actually address this and if so how?
pedward:I think its pretty clear that in general, basic necessities for life such as food, shelter, medication make a bigger difference to a person's happiness than spas.
And btw, even if one argues that above basic amenities only the individual can decide whats important to them (and I fully agree with this), the point is that a poor person simply has less leverage and voting power to affect resources to satisfy their needs. Hence, even if those poor people felt an extreme need to wear flip-flops more even than the need to get fed, they're not gonna get that need satisfied either - whilst the rich in the hotel are given complementary bathroom flip-flops although they could very easily do without because they most likely have an existing choice of foot wear.
pedward:actually I'm not even thinking in some polar or boxed fashion about free market versus communism with all its implications.
Why not? This would seem an excellent time and place to consider the free market versus communism with all its implications. But then, that's been done many, many times already.
A wealthy person can out bid a poor person to satisfy a little whim whilst the poor person might have a much stronger need unsatisfied. In this instance, if the poor person were satisfied they would gain a lot more happiness than if the rich person were satisfied.
So if I rank a big-screen TV with happiness 8, compared to someone else ranking a year of private school with happiness 4, I win?
This is the insanity of trying to rationalize different people's wants in order to "plan" the greater good.
You can't.
The only alternative is to leave it up to each individual to dispose of their means as they see fit, to achieve the greatest good they individually choose to. But then, we're right back to "free market capitalism" again.
However the rich person's need will be satisfied because their wallet has a stronger "voting" voice.
Prove it. How can you know that the wealthy person is any happier than the less affluent? Many lottery winners end up broke and suicidal, which directly refutes your premise.
My assumption is that the goal of an economic model is for it to in total make the people as happy as possible and avoid as much pain as possible.
Your assumption is demonstrably false. Your assumption requires central planning, in that you are attempting to make a model which will "make the people as happy as possible". You cannot make someone happy. I learned that a looong time ago.
May I recommend some texts by the Dalai Lama? Such as The Art Of Happiness.
Is there a free market explanation, answer or acknowledgement (as in, its an unfortunate limitation of the system but its still the best we have) of this?
Yes.
So your stated goal of the greatest good for the greatest number has the greatest chance of succeeding only if you leave people alone.
May I again recommend some reading? How about any of the works of L. Neil Smith, where lots of speculative circumstances are presented where "common" good is answered by each individual pursuing their own satisfaction.
pedward:In India (say Bombay), you have expensive hotels catering to the wealthy whilst extreme poor people are living on land made out of dirt dumped in the water. Resources are spent to cater for the needs of the wealthy, such needs go beyond basic shelter, clean water and food, but waiters , deserts, spa-facilities, room service etc.. The wealthy residents of the hotel have more money and hence steer the use of resources towards them rather than the poor who have basically no "voting" power on the use of resources because they have no money.
India is a socialist country. This is why the bulk of the population is so poor. In a socialist country, wealth is acquired by theft. Such wealthy pigs would not exist. In a free market economy, wealthy people are those who serve the community.
pedward:. But honestly, there is no reason for us to believe that a poor person feels less than a wealthy person.
No, you're correct, there isn't. However, there's no way to measure and compare the difference between the utility "rich" person gets from the room service and the utility a "poor" (whatever that actually means) person gets from any food whatsoever.
pedward: I think its pretty clear that in general, basic necessities for life such as food, shelter, medication make a bigger difference to a person's happiness than spas.
Once again, prove it.
pedward:Or would a free market model if implemented correctly (according to your views) actually address this and if so how?
The only way individuals can demonstrate their individual preference scales is through action, this simply isn't possible unless an entirely free marke exists.
CurtHowland:May I again recommend some reading?
Thanks for the reading tips, it will be interesting for me to check out. I won't bombard you with too many remarks or questions before doing so. My only remarks about about my current impressions are:
It sounds to me like we are too easily jumping to conclude a dictatorship is always implied. I mentioned earlier in this thread that the "answer" to some of the problems pointed out in Zeitgeist may very well be a sociological one. What I mean with that is the way people choose to view, interact and treat each other. Within any single economic system (free market, socialist, communist) the way people treat each other makes a difference. Yes, I've mentioned that I think it would be beneficial for people to consider the whole when acting. That does not mean I am advocating dictatorship to enforce people to "think about the whole" or act in a specific manner (as thats impossible to calculate, determine or agree upon). I'm saying that if people evolve to culturally do that by their own accord, we as a whole will benefit from that. Of course each individual is different, each day you are different (some times you are in a right rotten mood and at others you shine to the world) but I'm saying in general terms from circle to circle, family to family, school to school, community to community, there are differences in cohesion. Even within company's you sometimes get one department or sales person out-bidding another which leads to unnecessary loss in sales revenue.
So my point was never about forcing others to do something. However, each of us has an influence over the whole, whether we like it or not. We may end up evolving to form a more cohesive society or a less cohesive society. If we do end up being more cohesive its not because we are dictated to do so, its because we have influenced each other in that direction. Of course there's a million things that affect it. But we can (if we believe cohesion is a good thing), choose to do things or act in ways that will lead in that direction. I know there are strong views in this forum, but I also know that (possibly outside this forum) I'm not the only one who thinks that its a good thing for us to work on the health of our society and that will ultimately be beneficial to us as a group.
Regarding central planning, if it is true that that would truly get rid of all war like activities, hey, I'm all for it.
Regarding property, I get the idea that owning something makes you care for it and you can theoretically hold people accountable for damage to it. In practice though, you can't always hold a person accountable because to track accountability has a cost in itself. Any society or community needs a level of trust to function. The less trust there is, the more expensive it becomes to account for everything (just think of companies where you've had to track each conversation to CYA because people are so willing to use things against you versus healthier environments where you can just focus on being productive).
The interesting question that Zeitgeist raised for me is: do our economic systems (with their assumptions) promote un-cohesive behavior because you are taught that the best and only thing you should do is fight for yourself and not worry about damages to others.
With regards to selfishness versus aberrant behavior. Yes, I agree there's a difference. My view is that with a more cohesive society you get less aberrant behavior.
The reason I think there's value in not gunning for a strict free market versus communism argument is because that closes out any other truly new solutions, or novel mutations of these that examine aspects other than just whether it is centrally governed or not. Sounds cliche but it prevents you thinking outside the box: If its not free market, it must be dictatorship etc.. etc..
looks like I have bombarded again
pedward:Hence, even if those poor people felt an extreme need to wear flip-flops more even than the need to get fed, they're not gonna get that need satisfied either - whilst the rich in the hotel are given complementary bathroom flip-flops although they could very easily do without because they most likely have an existing choice of foot wear.
Thank you. Now I finally understand what motivates your questions:
Envy.
GilesStratton:The only way individuals can demonstrate their individual preference scales is through action, this simply isn't possible unless an entirely free marke exists.
I mentioned in the next email that regardless of what needs an individual has, the poor person has a weaker voice to request satisfaction from the economy than the richer person. If money were to accurately reflect utility or happiness gained, then by that logic a wealthy person paying a million for a 3rd super-car gets more happiness than a poor person for paying 20 dollars for a vaccine to save their own or their children's life. You yourself mentioned that rich people are not always happier than poor people. I fully agree with you. In fact its often the opposite. But if expenditure of money accurately reflected need in the economy, then the more a person spends in money, the more they are satisfying happiness. Since we are all human beings, statistically speaking, we have to assume each person has the same breadth for feeling happiness and pain. The greatest need of a poor person will still be out-bid by the lowest need of a wealthy person. If you still say prove it, in my opinion we are avoiding the crux of this item with going overboard on the theoretical.
But yeah.. maybe there is no solution, I don't know. I do recognize it as a limitation though.
pedward:Regarding central planning, if it is true that that would truly get rid of all war like activities, hey, I'm all for it.
I meant "that not having it would truly get rid of all war like activities"
CurtHowland: Thank you. Now I finally understand what motivates your questions: Envy.
Are you joking? Yeah, I'm a poor indian with no flip-flops or food earning 6 digits as an IT specialist in the netherlands. Comon, is it really that hard to have an open debate without paranoia? Lets just leave it mate..
pedward: CurtHowland:Envy. Are you joking?
CurtHowland:Envy.
Are you joking?
No, not at all. I've been reading your "questions" and trying to figure out what was underneath. Your words were many times contradictory, such as not wanting to discuss dictatorship while all the while saying what people "should" be doing.
But this "rich/poor" thing has finally showed what really motivates you: Some rich person gets slippers while someone else doesn't even get clean floors.
Comon, is it really that hard to have an open debate without paranoia? Lets just leave it mate..
Paranoia? Hardly. The vast majority of progressive legislation is based upon envy. Progressive income taxes, property taxes &etc, all "punish" success. "The rich pay more since they make more." It's all just envy, the assumption that life is a zero-sum game and if someone wins it's because someone else loses.
When it was suggested that you were a latent dictator, wanting to tell other people how to live, was that paranoia? So it turns out you have a case of slipper-envy. So what? The important thing it so identify those motivations and address them honestly.
That's called "open debate".
pedward: I mentioned in the next email that regardless of what needs an individual has, the poor person has a weaker voice to request satisfaction from the economy than the richer person. If money were to accurately reflect utility or happiness gained, then by that logic a wealthy person paying a million for a 3rd super-car gets more happiness than a poor person for paying 20 dollars for a vaccine to save their own or their children's life. You yourself mentioned that rich people are not always happier than poor people. I fully agree with you. In fact its often the opposite. But if expenditure of money accurately reflected need in the economy, then the more a person spends in money, the more they are satisfying happiness. Since we are all human beings, statistically speaking, we have to assume each person has the same breadth for feeling happiness and pain. The greatest need of a poor person will still be out-bid by the lowest need of a wealthy person. If you still say prove it, in my opinion we are avoiding the crux of this item with going overboard on the theoretical. But yeah.. maybe there is no solution, I don't know. I do recognize it as a limitation though.
You miss the point, utility cannot be measured and compared. It is only possible for individuals to rank their preferance ordinally and these preferance scales cannot be compared to those of others, the only possible way for individuals to demonstrate their preference is through action.
GilesStratton:You miss the point, utility cannot be measured and compared. It is only possible for individuals to rank their preferance ordinally and these preferance scales cannot be compared to those of others, the only possible way for individuals to demonstrate their preference is through action.
Ok, I get what you're saying and it may well be the dilemma.
It pretty much starts off with utter nonsense, so I couldn't bring myself to watch much further. The connection and resemblance between the stories of Horus and Jesus are so overblown as to be farcical. The very images the film shows in Luxor have a written story they illustrate right next to them, and that story describes anything but what the Abrahamic anti-sexual pathology would describe as an "immaculate" conception.
Yes, the story is one of a god impregnating a woman, but quite in the old fashioned way. Indeed, at one point the woman complements him on the godly size of his member. The ancient pagans, apparently, were not prudes. The movie relies on general ignorance for acceptance and to make its points. It's trash.
http://en.wikipedia.org/wiki/List_of_virgin_births
JCFolsom: It pretty much starts off with utter nonsense, so I couldn't bring myself to watch much further. The connection and resemblance between the stories of Horus and Jesus are so overblown as to be farcical. The very images the film shows in Luxor have a written story they illustrate right next to them, and that story describes anything but what the Abrahamic anti-sexual pathology would describe as an "immaculate" conception. Yes, the story is one of a god impregnating a woman, but quite in the old fashioned way. Indeed, at one point the woman complements him on the godly size of his member. The ancient pagans, apparently, were not prudes. The movie relies on general ignorance for acceptance and to make its points. It's trash.
Agreed.
Indeed, it completely ignores the more well-known version of the myth whereby Horus is the son of Isis and Osiris... posthumously on Osiris' part. See, Osiris' brother, Set, was pissed off at him for breaking his X-Box or some such thing, and so he hacked him into 13 easy pieces. His genitals were eaten by a fish. So, the grieving widow, Isis, gathered up all the chunks and proceeded, Frankenstein-like, to stitch them back together, complete with a brand new golden schlong (doubtless "ribbed for her pleasure"). She then proceeded to have sex with his mangled corpse, and thereby conceived Horus.
Virgin conception. Yeah.
pedward:It was discussed earlier in this thread that one can "vote" with one's wallet. I pointed out that a wealthier person's needs have greater leverage than a poor person's.
Sure, to an extent, otherwise city centers would be full of big houses, instead of high buildings. And car factories would spent their time fulfilling the eccentric orders of the elite.
But the problem here is you are limiting yourself to consumption. The only reason why the car factory investors and its workers are providing that service is because they value what the customers are providing them in return more than what they have to put in. If they're being paid in money, what they really value is the goods and services that money can buy -- therefore, the people paying the rich guy are the ones saying what he provided them warrants him a given fraction of car output, because what the people are giving up is not pieces of paper, but claims of product, like cars, which they obviously considered of less value. If the rich guys was trying to capture more of the car output, he would find himself with reduced input streams as well.
You could say that the people would be better off if the rich guy resources were turned over to the state (unless we're talking of his labor, that would be creepy -- let's say he found oil on his wheat field) -- but that's not what you were originally claiming. Your original claim was that the rich person was actually making people worse off, which is patently false. By the people's actions, it is patent they are better off with him exploring his oil field than if the oil was never found, otherwise they wouldn't be paying for it.
The problem of redistribution is not to discourage people from investing and laboring. Money is only seen as wealth because it can buy stuff; the producers are the ones putting that wealth into pieces of paper. Thomas Sowell makes a good point that after people invest so much into their professions they may support significant levels of taxation (the investments are not only in education, and in the capital goods or building the client base, but social and emotional ones as well). You will probably be able to take a good chunk of their income before they decide to switch to something else. The real consequences of your policies will only come to surface though in years to come, as the next generation is building character and values, and is yet to invest its lives.
Throughout the European Union, the idea of redistribution has long lost its strength. Today, the biggest slice in the tax revenue is from VAT. Consumption taxes in all contribute to at least 2/3 of the revenue in most countries, while production taxes have been reducing (the wealth tax has eventually been eliminated in all EU countries). The USA, it seems, is still under an income-based progressive tax system, but their tax targets are much lower -- much of the USA is financed by selling IOUs and through monetary inflation, so the consequences of their redistributive tax system are still to be seen as income taxes rise to cope with their limited ability to finance government through other means.
Indian people selling their farm land so foreigns can build hotels in them is not why they are poor. In fact, they were much poor some decades ago after independence, suffering of severe famines (dead tolls in the millions), when state control was much tighter -- not that it's a free market now (Heritage economic freedom index puts it in 115th place out of 157 countries). Either way, it's conceptually obvious that if the people were willingly selling off their lands for hotels resorts, that means they are better off now -- and for the foreigners to pay for their land, it would mean they would be selling other Indians more productive capital goods than what they have -- which would mean, in turn, other people want the production that capital makes possible -- and etc.
Equality before the law and material equality are not only different but are in conflict with each other; and we can achieve either one or the other, but not both at the same time. -- F. A. Hayek in The Constitution of Liberty
I just want to add that if what the Zeitgeist promotes really is the best way to organize a society, then people don't need a Big Brother imposed on them; they'll adopt it. A free market doesn't mean people are out there like lonely wolves. People organize themselves in firms, mutual aid societies, condominiums and all kinds of organizations to improve the common good. Some of them very totalitarian ones like some commune groups. As David Friedman puts it, capitalism is a beach full of socialist sand. The free market position is the most centrist position one can take: people can build whatever social structure they want under it.
I thought Part one of Zeitgeist was pretty good. Parts two and three was nothing new to me.I just saw Zeitgeist today and I could stay awake long enough to finish Zeitgeist addendum.
To those interested in history I recommend you read:
Return to Eden: How an Ancient religious myth inspired a modern political movements
Below Is part of the preface of Return to Eden
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This is a book about the utopians, what their visions entail, and how they try to make them real. Since by definition utopia cannot be made real, the utopians are on fools' errands, in the same sense that traditional religious adherents are. Nonetheless, the history of their campaigns and programs is not just a sorrowful tale of futility but also one of very serious destruction. Explaining the appeal and various forms of human utopian aspiration is an involved and difficult enterprise, neither started nor finished by the book before you. But perhaps this contribution will be of some practical use to someone.
Those who are already, or who go on to become, familiar with my other work will no doubt be confused by apparent self-contradiction. In this book I excoriate utopian socialism and fundamentalistic libertarianism, and by apparent implication radicalism, but a clear-eyed analysis of my platform reveals what might be seen as a sort of bourgeois socialism (albeit aligned with none of the ten point Marx and Engels allege are “pretty generally applicable” “in most advanced countries”). Also featured in my program are consensual eugenicalism and pragmatic environmentalism. I'm an aficionado of sustainability (with a view to sustaining technological growth), a proponent of de facto natural aristocracy, a revolutionary radical, indeed an “idealist” in the layman's sense of the term though emphatically not in the jargon sense, even while I am obviously an ardent free marketeer and individualist, and a dogged opponent of unbridled democracy (tyranny of the majority), not to mention an iconoclast (as will shortly become patently obvious). I make no apologies, for there are no real contradictions here, beyond those inherent to economic and biological reality. In my policy proposals I aim to exploit as many of the salutary institutions of libertarianism and socialism as possible, to as great a degree as possible, while utterly expelling utopianism. In this book, the term “socialism” generally refers to utopian socialism, even when the qualifying term is absent.
Since the time of Rousseau, utopianism — particularly, of the socialist variety — has been eroding and undermining Western civilization like so many angry ocean waves. Utopian socialism — by which I mean chiefly the idea that human welfare can be divorced from economic and biological reality — has for so long been a part of the political landscape of the West that most people have accepted it as the cultural embodiment of an idea that is fundamental to the world. In fact, it is just so much inherited wishful thinking and confabulated flapdoodle, sewn together from fragments of ancient mythology, chiefly those relating to the Eden of the Hebrew Bible and its inspirations. While its roots are ancient, a program that recognizably constitutes a form of modern socialism was first assembled by the Sozzinis of sixteenth century Italy, whose ethic became known as “Socinianism” and set the stage for the utopian aspects of the Enlightenment.
This treatise dissects the psychological, cultural, and historical anatomy of the modern utopian movement, presenting it in ten parts: an overview, an investigation of ancient roots, a survey of biblical parallels, some meditations on the Eden motif itself in modern settings, a discussion of the phenomenon of cargo cultism, a survey of population control programs, meditations on egalitarianism, meditations on environmentalism, a survey of the main players in the invention and institutionalization of socialism, and a survey of occult Edenism.
My purpose is simple, and I don't pretend impartiality. This book is descriptive, not prescriptive, but by way of description and explanation I seek to guide the liberal-minded toward classical liberalism, and away from the utopianism that infests modern liberalism. This book should perhaps be viewed first as a warning to those who, like myself, envision radical progress in the human condition. In the minds of mere mortal men, the perfect all too easily becomes the enemy of the good.
We have likely already seen the high water marks of radical utopian socialism — in the West, 1933-1945, and in the East, 1949-1968. Now it is creeping, moderate socialism that presents the greatest threat to human prosperity and advancement, because the utopian aspirations (and attendant tendency toward totalitarianism) largely remain, concealed within.
It is chiefly on the Enlightenment that this history of utopianism pivots, and the view of the Enlightenment as (at least in part) more religious and less reasonable than advertised, is not new. In 1932, Carl L. Becker (a historian at Cornell) took just such a view, in The Heavenly City of the Eighteenth-Century Philosophers. Here, from pg. 29-31 in the 2003 Yale Nota Bene printing, is the essence of his thesis:
who will protect/defend the Venus Project Utopia and who will run the courts and ect? Will it be a govenrment, a dictator (Jacque Fresco)?
Have a happy Winter solstice/ rise of the sun/Pagan Christmas!
Michael S:Since by definition utopia cannot be made real, the utopians are on fools' errands, in the same sense that traditional religious adherents are.
Because of the planned and tightly run nature of "Utopia", I was unhappy with L. Neil Smith's use of the word in this essay. But I am very pleased to pass it on since the subject of "utopian ideals" has come up:
Unanimous Consent and the Utopian Vision or I Dreamed I Was a Signatory In My Maidenform Bra by L. Neil Smith
http://www.ncc-1776.org/tle2008/tle497-20081214-04.html
Subscribing
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
Mark
------------------
Listen to both sides and I will be enlightened
Jon Irenicus: Anyone seen this? Seems a bit conspiratoid, but I haven't watched it yet. -Jon
Anyone seen this? Seems a bit conspiratoid, but I haven't watched it yet.
-Jon
I am on the zeigtgeist movement site, ready to comment.
First, technology:
"The notion of "leisure" is a monetary invention, created because of the oppressive, fascist basis of the employment institution itself."
Nope! The notion of work and leisure are created by the process of human action.
"In a true society, there would be no such thing as the separation of "work and "leisure", for humans should be allowed to pursue whatever they feel is relevant."
Self-contradictiory. If humans were allowed to pursue what they felt was relevant (such as anarchno-capitalism), there would still be a difference between "work" and "leisure".
"He or she doesn't even know what money is...Do they need to be motivated by money to go out and explore/create? No. They have a personal interest and they pursue it without reward. In fact, the greatest contributors to our society, such as Einstein, Newton or Galileo, pursued what they did without any regard to money. They did it because they wanted to. The act of doing and contributing was their reward."
Wealth can be a motivator for action, an end that an actor seeks to achieve. Anyways, this seems to assert that money as a reward is wrong, without providing adequate justification.
"The point here is that money is not a true incentive for anything"
Which contradicts with observation that certain actors prefer more over less money. That, in itself, is an incentive.
"and to think as such is to assume that humans are inherently lazy and corrupt."
It does not logically follow.
"Laziness and corruption are products of the conditioning our social system creates."
Prove it! Laziness is simply preferring work to leisure. I am still unsure about corruption.
"At the same time, technological development is brought about by a particular train of thought, or process... this could be called "The Scientific Method"."
Nope. It is brought about by the entreprenuer with the right entreprenuerial idea, which may or may not have used the scientific method in its development.
"It seems obvious that technology improves our lives and serves as the greatest liberator of human life in the material realm... so why aren't its methods applied to society as a whole?"
I smell FALLACY.
"It is this interest that has created the concept of a 'Resource Based Economy'. The Venus project has been working on this concept for a long time and its foundation is very simple. We survey, preserve and maximize our use of planetary resources in conjunction with open information and technological development."
I smell more FALLACY!
Schools are labour camps.
I actually talked to VTV on skype once before who was mentioned on another thread but this all has to do with zeitgeist. VTV meets with the Venus Project founder in person, so he told me. I was questioning him about its intentions and so agreed to a skype call since it was getting lengthy and typing was becoming inadequate. We also had other issues that were irrelevant which initiated the call, which had to do with a professional dispute and I was trying to smooth relations between a bunch of individuals involved in the dispute. Anger is something that I find to be very abundant amongst zeitgeist followers.
What it came down to is opinions are heavily demonized. Creativity would near suffocate, though he would disagree of course. They advocate reinventing and thus mass re-educate society even our spoken language to include only scientific terminology. It all boiled down to science should be our only thoughts. I didn't like it. Asked if I would be left alone if this technological city was to be established. He said yes. I was happy.
He said he was a frequent visit to this website before. Yet when I talked about the free market he insisted that we should rid the free market. I asked why? He said it depends on what you mean by free market. I said it means freedom. It means I can do as I want without mandatory institutions dictating to me how I can live my life. Of course this was before the days of my use and very basic ableness to converse in property rights lingo. So I described the free market to mean if people want money they can. If I want to live a self-reliant lifestye, then I can. If I want to go and get a job for a couple months to earn money to buy something I can't make or don't want to make myself. Then I have that option too. That's a free market. He agreed with it, but still had a hard time with calling it a free market for some reason. I don't know why. He said what I called a free market is what Austrians don't believe in. I've been here for some weeks now and thus far I find nothing here that would navigate the free market from meaning freedom in the way I just described it. So I don't know what his problem was. He was always very angry and had a lot of spite about how the Venus Project was not going anywhere. I had the feeling that to implement this Venus Project if given the numbers, they would fight and kill to achieve this dream of theirs. Though he never verbalized such an event. So I'm not saying he advocated this at all. It was the impression I had, but admittingly impressions lie at times.
Lots of anger. Might have been due to his own admittance to resist emotions. That usually causes friction in ones life, but I obviously can't say for sure. My impression after repeated online discussion in a certain forum and then that one skype call and having conversations and hearing others that advocate zeitgeist is their repeated attacks on opinion and their eruption into anger quite suddenly. My assessment of the whole experience put together - danger and take with a grain of salt - meaning I'll see it when it happens. I know he, VTV, ran for a political office, but he tried to assure me that he wouldn't use the State to implement his Venus desires. I had a hard time seeing him separate the Venus Project from his political office cause that's all he talked about, Venus Project this and that 99% of the time on any given occasion. What else didn't make sense was they promise they can get rid of scarcity all together. They would change the whole landscape of the earth if they had to he professed. They would change the culture of people if they had to. I didn't like these ideas either.
I like their effort to support technology. Their perspective is technology is being suppressed by the State and others. But it was how they professed their intentions and that whole scientific way to approach life even if it means to reinvent language to make it purely scientific terminology. I didn't like it at all. But hey, it's just my opinion and I'm glad he said he would leave me alone if I didn't want to join their community. But I don't know if their intentions as a whole would play out that way or not. I became even more leery of zeitgeist after any of those conversations for sure.
So, basically just let them build the society under all current societies...
if a movement gets started in each country, they buy land from the local government
and start building their society, if it works out then it may eventually over take the host
society.
.... I hence forth call it the Zeitgeist Virus
From what I understood from the movie, the movement does not want any government or monetary
system. This implies that some sort of A.I. needs to be set up to handle all the functions that a
government would normally handle, and things like automatic farming and housing fabrication along
with automatic fabrication of any high volume items (wind turbines, house amenities, clothing, ect...)
People could do what ever they want, explorer science and mathematics, philosophy, or just be lazy...
as long as machines take over the necessities of life then the only thing left is to occupy your mind and
let it wonder down paths that it would have otherwise discarded due to the need to work and provide.
I do not agree that the Zeitgeist movement has any relation to Communism or even socialism. Yes the
citizens will probably wear the same (or nearly same) clothes and live in similar style houses... but
everything else if up to them. They are still human and still led by the invisible hand self interest,
however there self interests will not be in making the most profit or getting the most material items but
int what really does interest them... if it is being lazy and not being productive, then fine go ahead,
but many many other people will work towards improving the human knowledge base or improving
themselves physically and or mentally.
Clearly I am for the Zeitgeist movement, however I do appreciate opinions on the subject and
have talked to other peers instigating many different discussions... When people get too wrapped
up in a movement that they feel (not know) is right, they often resort to "I know its right, your wrong!"
attitude and become defensive, most others are open for modification.
I have seen it. I only like the religion part of it. To me it sounds like some kind of technology based, communistic, utopian society.
You guys might be interested in checking out this article from Robert Murphy on the Venus Project: Venus Needs Some Austrians.
caustic says: When people get too wrapped up in a movement that they feel (not know) is right, they often resort to "I know its right, your wrong!" attitude and become defensive, most others are open for modification.
I don't know if the Venus Project is good "Austrian Economics" or not. I started learning economics from this website, a few years ago, because of its many online resources. I have since evolved to mainstream stuff, and find most of their stuff either uninteresting or antiquated. I only occasionally visit Bob Murphy's blog now. (He throws the Austrian word a lot, but I think, in general, he is just a good economist, period) I don't have a dog in this fight. Your comment was sent to my email box, since I had previously commented in this thread, as of a few years ago.
If you want you can run some of their assertions by me. Anyhow, let's, for instance, review this essay from one of the Venus leaders:
Consider the following examples: At the beginning of World War II the US had a mere 600 or so first-class fighting aircraft. We rapidly overcame this short supply by turning out more than 90,000 planes a year. The question at the start of World War II was: Do we have enough funds to produce the required implements of war? The answer was no, we did not have enough money, nor did we have enough gold; but we did have more than enough resources. It was the available resources that enabled the US to achieve the high production and efficiency required to win the war. Unfortunately this is only considered in times of war.
This example is unfortunate because this is was during the Great Depression. There were lots of idled resources (most disturbingly, lots of people unemployed), due mainly to the mismanagement of the monetary base. But that doesn't seem to be what the author is alluding to. He seems to provide the example as an illustration of how you can easily increase output beyond the production possibility frontier.
Let's then say that the economy was healthy during this period. The military has a war to fight: resources must be mobilized from both private production and governmental non-defense oriented production. Whether the economy is heavily built on the use of money, or not, it doesn't matter. In the United States, it means increasing taxes people, because the government budget was not big enough to support, by itself, a war. But in the Soviet Union, war was financed by reorienting the government budget, because there was little private enterprise to tax. If you do that, it's not surprising that you can easily go from "600 or so first-class fighting aircraft" to "90,000 planes a year". North Korea has lots of weapons too, and the country is dirt poor.
Check the article I linked to from wikipedia for more info on PPF re-orientation.
At present, we have enough material resources to provide a very high standard of living for all of Earth's inhabitants.
What does the author mean with this? Is he saying the underdeveloped countries have the resources to become great countries, or does he mean that developed countries should help underdeveloped countries?
If the first, I agree. Those countries just have poor economic systems. Over Asia a lot of countries (Japan, Singapore, Korea, Taiwan, Hong Kong) have gone from abject poverty to plenty in a couple of generations. China and India have grown spectacularly. Many people there are still dirt poor today, and may live only a little better than cavemen, but people were once dying in mass in those two countries. In 1974, when Paul Ehrlich was publishing The Population Bomb, in a time when the USA was sending lots of food to India, and this guy said that it was an utopia to consider Indians would ever be able to feed themselves. That same year, India was finally able to put a stop to mass starvation by allowing the growth of a new stripe of wheat (artificially selected), together with better agricultural and economic policies.
With regard to rich countries countries helping poor countries, the literature we have on that is that foreign aid is actually counter-productive. You inevitably induce fights for power. Either way, those aid programs have only been increasing.
Only when population exceeds the carrying capacity of the land do many problems such as greed, crime and violence emerge.
Land is not the only thing that's scarce: labor, capital, women, attention, etc all are scarce. They must all be allocated somehow, and all are sources of violence. When millions of people live closely together, you can't have some benevolent dictator find the welfare maximizing allocation. It's just not feasible: besides, it would be contra-productive because then power over others would become tangible, and you'd have fights over it. In modern economies, we apply general rules administered by courts, and otherwise let people sort themselves. It will create inequalities of course, since we are not all born equally. For instance, nobody will pay me billions to play soccer. Nor will I marry a woman of the beauty of Megan Fox. What's the alternative? Not letting people pay so much to watch people playing soccer? Then, the sport would become dull. (Price Ceiling) Oh, we could tell good soccer players to perform, otherwise no supper. I don't think we want to go in that direction, nor do I think it's practical.
A resource-based economy would make it possible to use technology to overcome scarce resources by applying renewable sources of energy, computerizing and automating manufacturing and inventory, designing safe energy-efficient cities and advanced transportation systems, providing universal health care and more relevant education, and most of all by generating a new incentive system based on human and environmental concern.
Is the author seriously suggesting that more resources can be spent in health care without being taken from somewhere else? He wants to have more people going into doctors, more people going into technicians and engineers to produce those machines, more people going into educators, more people going into janitors I assume to make the place shiny, etc? What portion of private production, or portion of government budget is he reducing exactly?
If he is saying that if we sacrifice consumption now, in order to invest and produce more output in the future, then he has got a point. Of course. But there is a trade-off. Everybody knows they can eat less now, go fewer times to the movies, etc in order to save and consume a lot more of those things in the future. Many of us invest lots of years in college, lots of energy into creating a new business or a new product, etc in order to reap the future rewards. Is the author suggesting that the current system doesn't let people make the correct trade-off, or is he suggesting we should force people to save for their own good?
I actually don't think that guy believes in trade-offs at all. He seems to be living in the same fairy land, I myself was living before I started studying economics.
In a more humane civilization, instead of machines displacing people they would shorten the workday, increase the availability of goods and services, and lengthen vacation time. If we utilize new technology to raise the standard of living for all people, then the infusion of machine technology would no longer be a threat.
Okay. Let's say that we invent a vehicle that needs no motorist. The thing takes you to whatever they want. Is he saying that cab drivers, bus drivers, etc wouldn't need to find another line of work? Or is he saying we shouldn't invest in new technology? I'm confused.
Perhaps he is arguing for more governmental programs on job training and more generous unemployment insurance. Well, I don't see why in a free market, people couldn't choose to enroll in organizations that would provide those -- either way, he seems to completely ignore moral hazards. I am not an expert on this, but I'd think that people gaming the system would make it extremely costly to keep paying them what they used to earn for an undefinitive amount of time, while they find their new vocation.
A resource-based world economy would also involve all-out efforts to develop new, clean, and renewable sources of energy: geothermal; controlled fusion; solar; photovoltaic; wind, wave, and tidal power; and even fuel from the oceans.
I would like to see some numbers on cost-effectiveness. Those forms of energy already have a huge fiscal advantage in lots of countries, yet I don't know of any case where they produce most of the energy demands. I do think they'll be cheaper in the future, of course. If not because of technological improvements, at least in relative terms, as fossil fuels grow more expensive. Besides, they are no panacea: solar, for instance, require lots of land. Curiously, the best performing renewable source of energy (nuclear) is not listed.
What else would a resource-based economy mean? Technology intelligently and efficiently applied, conserves energy, reduces waste, and provides more leisure time. With automated inventory on a global scale, we can maintain a balance between production and distribution.
Look, people can have those, if they cut on other things. What bothers me is that the author seems to reject any trade-offs are needed.
Only nutritious and healthy food would be available and planned obsolescence would be unnecessary and non-existent in a resource-based economy.
People couldn't eat unhealthy food? That sounds disturbingly totalitarian.
About planned obsolescence, I doubt there's much of that. The idea is that companies produce products that will self-destruct well before the time the customer would expect. First, customers will go for another company if they find a product to be unexpectedly weak. Even if customers just buy arbitrarily, some knowledge of game theory, should tell you that, from the perspective of an individual company, it makes more sense not to purposeful invest in planned obsolescence, and instead try to free ride on others. Even if you have a monopoly, in a lot of scenarios, it makes more sense for the monopolist to raise prices and keep quality, than to sacrifice demand (but that depends on his ability to price discriminate).
There are market failures due to asymmetry of information, but that's another completely different line of argument, and it generally punishes both producers and consumers. Think of used cars: those who still have a good car will have to sell it as if it was a bad one (a lemon), or will not at all, because they cannot reliably transmit that information. We tend to see things as zero-sum, but actually, much of public policy either hurts both parties, or benefits both.
I think that American consumers simply like to replace, e.g., their car every few years. They want to impress or whatever. Anyway, that's not necessarily wasteful. It means that teens and poorer Americans can now afford a car: many used cars also get exported, which means us in poorer countries get a free bonanza.
As we outgrow the need for professions based on the monetary system, for instance lawyers, bankers, insurance agents, marketing and advertising personnel, salespersons, and stockbrokers, a considerable amount of waste will be eliminated. Considerable amounts of energy would also be saved by eliminating the duplication of competitive products such as tools, eating utensils, pots, pans and vacuum cleaners. Choice is good. But instead of hundreds of different manufacturing plants and all the paperwork and personnel required to turn out similar products, only a few of the highest quality would be needed to serve the entire population.
I didn't understand the reference to "eating utensils" and "vaccum cleaners". Is he saying that people won't want to have their own house after they see how much more cost effective it is to share a house. Well, that is true. AFAIK the size of households has decrease as people became richer. More families used to live together in the ages of yore, and students and poorer people still share house. But, as soon as they become richer, they want their own place. I don't think this is a matter of cost-effectiveness.
Anyway, this is by far the best paragraph on the article. It'll actually be persuasive for anyone who has not studied economics. More precisely, the economics of returns to scale.
This is also the old socialist argument for why "capitalism" is inefficient. If a bigger factory can produce more output, then we will outproduce you by having only one huge factory. It's why in part of Republican Spain during the Civil War, and in the Soviet Union, lots of factories were closed, and consolidated.
If this argument was true, then there will be increasing returns to increasing the size of your factory. That means, you'd be able to decrease prices while increasing profits the more you'd increase your factory. Non-stop. In the end, only one factory should be standing. If we take this argument to its logical conclusion, then that factory should be producing cars, airplanes, pots, panes, etc.
Well, as a matter of fact, there are increasing returns of scale. A factory of a thousand people may very well be more efficient than several ones with a hundred people. But there is such a thing as too many cooks in the kitchen: after a point, you hit the sweet spot, and returns of scale are actually decreasing. The more you grow, the less coordination ability you have, and start getting waste, etc. The more difficult it is for those in the top to coordinate the workers.
This debate boils down to coordination. Which is more efficient? Should your economy be based only on market transactions, or should it also be hierarchically structured? As it often happen in economics, there is a sweet spot. There are bargaining or transaction costs to market coordination, and there are also information costs and others to hierarchical coordination. That's why we have firms, instead of having everybody working for himself, but also why we don't have a single firm but many of them.
Sure, hierarchical control may demand less lawyers, sales people, etc, but it increases the demand for administrators, foremen, bureaucrats, etc. There may be market failures involved in the determination of the correct returns to scale, but surely the author's suggestion that a single firm is going to be the correct return to scale, for any modern city at least, much rather for a country like the USA, is absurd. Actually, the market failures I remember being documented worked mostly in the opposite direction: externalities (like pollution) are many times addressed within the market by firm consolidation: two managements will waste a common resource, so single ownership can greatly preserve and improve the gains from it, even if single management is less efficient in other ways. So, if anything, fixing market failures would spawn more firms not less. (I just remembered another popular example of transaction costs consolidating firms: eliminating risk when an industry is too vertical.)
--
Again, if you want to run through me some other arguments, feel free. Alternatively, I can also provide you with references to books and etc that I think will be enlightening. Cheers!
Addendum on planned obsolescence. Been thinking a little bit about this. I am a sucker for such things. According to the wiki page, planned obsolescence is when the producer actually goes into expense to reduce the lifespan of the product. One example they give is a water purifier machine that requires water filters being replaced every few months. Okay. Let's say the customer is shopping for a 5 month supply of water filters. He is willing to pay up to $25 for those suckers ($5 per month of clean water). To the producer, it costs $1 to produce a water filter that lasts 1 month, and $2 to produce one that lasts 5 months ($.4 per month of clean water). Let's say that the producer is a monopoly that has done its homework. The producer knows the customer is willing to pay up to $25 for the 5 month supply of water filters. Should he sell the customer 5 filters that last 1 month, or the 1 filter that lasts for 5 months? Profit = Price - Cost Price is $25. That's how much the customer is willing to pay, and that's what we are going to charge him, as evil monopolists. heh. The Cost is the variable we are free to choose as producers, based on our two alternative production methods. 5 filters that last 1 month: Profit = $25 - (5 * $1) = $20 1 filter that last 5 months: Profit = $25 - (1 * $2) = $23 Who'd say? It's more profitable to sell the most cost effective version, and I hadn't yet added the expensive obsolescence chip. --- Asymmetric information won't change things in the planned obsolescence direction. It just means that the customer won't trust the producer when the producer tells him that "yes, yes, the filter will last 5 month". What would happen is that our customer would only buy water filters if they are cheaper than $25. How much less depends on how much he trusts the producer. If he does not trust the producer at all, he won't be willing to pay a nickel for them obviously. Depending on Cost, the transaction may or may not incur -- if it does not, it is a loss to both parties. The wikipedia article is wrong on the economics here. Interestingly, there is no mention of ability of a monopoly to price discriminate. This is the one scenario where planned obsolescence is plausible. I will go into details if you want; needless to say, I have seen economists arguing that some computer hardware is intentionally handicapped due to imperfect price discrimination. The producer is trying to intentionally segment the market into its rich and poor constituency -- in order to raise prices over marginal cost for the rich, the producer tries to come up with a premium version -- sometimes creating a premium version just means handicapping the product so it now has two qualities of the product. However, I must add that the idea is not to decrease lifespan per se, the idea is to create two products of different quality out of one -- and one thing that people value is lifespan, which is probably also the cheapest to modify too. Software companies generally just stripping or combining features, like Microsoft spinning out "Basic", "Home", "Multimedia", "Pro", etc Windows editions out of the same code. Or a carrier of passengers or mail delivery having 1st and 2nd class, when the costs involved do not justify it. --- Anyway, the reason why I'm posting this is to suggest that our idea that things are getting weaker and weaker may be due to our brains being bad students of statistics. First of all, this is only a hypothesis. It's very well possible that things are getting in fact weaker and weaker. Maybe people actually favor low costs because they like to follow fashions, maybe there is a trade-off between energy efficiency and durability (ie. batteries that last a lot of hours without charge, but that break after a couple of years), maybe it is indeed intentional as a consequence of decreasing marginal costs coupled with imperfect price discrimination, etc. Okay. So, 50 years ago, people had a lot less of electronics, furniture, etc in their house. Let's say that Joe used to own 1 piece of electronic that lasted for 20 years. That means, he had a replacement rate of 5% per year. Now, people have a lot of electronics: washing machines (for both laundry and dishes), laptops, cell phones, more than 1 TV, etc. Let's say that Joe now owns 5 pieces of electronics, each lasting also 20 years. The replacement rate now is of 25% per years. Every 4 years, he has 1 electronic appliance that needs replacing, even if lifetimes are the same! In our illustration, electronics had to last 100 years in order to keep a constant replacement rate! I guess eletronics improved a lot, but maybe replacement rate hasn't keep up, giving people a false impression like "another thing broke! things are breaking all the time now! argh!". They don't realize they have a lot more stuff too. That doesn't apply only to appliances; people used to have less lighting bulbs around the house, furniture, they didn't use as many services, etc. 50 years ago, you may had electricity, water, and telephone. Now, you also have at least Internet and TV cable: even if each fails less, it's more potential points of failure. No surprise every other month, either the Net is down, or credit card wasn't accepted, or whatever. heh The inspiration for this hypothesis was Steven Landsburg explanation for consumer disappointment (which I think he credited to a friend). Psychologists, sociologists, and all the usual suspects say that consumers are disenchanted and disillusioned on the things they buy. They notice that when people are not given many choices, they actually seem to enjoy more the product they choose. They then say advertisement are alienating, that companies train people to not be satisfied with what they buy, so they will buy more and more, or whatever. Landsburg made a simple observation: the consumer, while shopping, evaluates the various books, or whatever products he is looking at. Eventually, from the many books he has looked at, he will buy the few (or one) he expects he will enjoy the most. Now, let's say that people tend to commit errors of evaluation: sometimes they over-estimate how good a book is, other times they under-estimate how good a book is. If you add 2 plus 2, you'll realize that he will buy, from all the books he has looked at, the books that he has most over-estimated! That's the one he regards in highest esteem. He obviously won't know he has over-estimated the quality of the book (otherwise, it wouldn't be an over-estimation), so no wonder he will be depressed and disappointed about the book's quality. Btw, this isn't applied to shopping narrowly defined. It applies to courses you choose at college, to the woman you propose to, etc.
Profit = Price - Cost
Profit = $25 - (5 * $1) = $20
Profit = $25 - (1 * $2) = $23
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