On Aug 28, 2007, at = 12:46 AM, Daniel Reeves wrote:

I challenge you to name a public policy that = increases net welfare (ie, utility) while decreasing total = wealth.

PS: The snake oil case is simple: no swindling -- = it's the same as stealing.=A0 = I see no analogy with short-sighted stock trading or = overcompensating CEOs.=A0 = Also, outlawing snake oil increases total wealth. (The snake oil = salesperson gets richer by $50, the sucker gets poorer by $50, sucker = gets 0 benefit, both parties lose $5 of time: total wealth =3D 50 - 50 + = 0 - 5 - 5 =3D -10.=A0 If = that 0 were more than 10 then wealth would have been created.)

--- \/ =A0 FROM Dave Morris AT 07.08.27 = 14:54 (Today) =A0 \/ = ---

=
I do agree that one should = err on the side of less government and less regulation as a general = rule, as a goal to be aimed for. But that shouldn't paralyze us from = action if we don't have a perfect or perfectly known solution but we = know we have real problems. No, the free market is not an engineered = system. But it is one we can influence, and one that many are trying to = influence all the time. The default is that people will try to influence = our system to maximize their ability to profit, which is not always in = line with maximizing social good. So we have many good regulations on = capitalism in place and should continue to. Even though they hurt people = sometimes, on the whole they're worth it.=A0 We don't allow snake oil = salesman to peddle their trade anymore (selling products claiming to = have one effect and really having none), even though it's consensual and = profitable. I think perhaps we should look at some stock deals and some = CEOs that way as well, perhaps requiring more openness about who makes = how much, etc., so that motivations are more clear when people take = charge of companies and start changing them around.

I'd = agree with reducing the level of corporate welfare and protection, which = starts with reducing the lobbying influence on our government. That = would be great, and I'm far more confident in the value/safety of this = action than any change to the stock market.

But = simultaneously, when a small number of people like those who took charge = of the not-for-profit research company I spoke of, are able to for = personal profit, manipulate the lives of a great number of people = without their consent or control- that needs to be regulated.=A0 To do this, like the war on = drugs which I agree has problems, you need to take a multi-pronged = approach to the sticky and difficult to resolve situation. Mostly you = target prosecution of the actual crimes (theft, by drug users or CEOs), = but also you increase awareness of the issue via education and email = chains like this one, and also you try to reduce the motivation for the = crimes to break the chain from the other side. (thus my proposal to look = at the stock market and maybe place some controls there- I don't have a = good war on drugs analogy here :-))

Sure there are some companies = that benefit from selling out. But I think there are also many that are = hurt by it. We could argue without resolution for days because there are = so many examples in both directions. But specifically with YouTube, I'd = argue that college students would put together sites like that for free = because they're sweet, without any motivation of profit. The open source = software movement is great proof of this. And I'd further argue that = while yes, venture capital and Google have provided the site with the = resources to handle the load it currently has, I personally would guess = that it would not be as good of a product if it had started off as a = corporate profit driven venture. There would probably be registrations = and more advertisements and more limitations to guarantee profits, and = less just free functionality.

There will never be a perfect solution. The balance = between capitalism and socialism will always lead to individual cases = where something is being over or under regulated. The real target is to = reach a point where we have just as many problems pointing towards a = need to go more capitalist as more socialist, and then we're at a pretty = good point. So don't be too afraid of a solution that might slow down = profit, slow down corporate growth, or slow down creation of wealth from = time to time and in some cases. Those things are not the end of the = world. Sure, creating wealth is good, and we should maximize that. But = we should prioritize maximizing the creation of social welfare = more.

So I think it would be worth the risk to look into = ways to tone down the stock market a bit.

On Aug 24, 2007, at 11:51 PM, Daniel Reeves = wrote:

=
You're thinking in terms of = more government interference.=A0 = I think the answer is less.=A0= Telling people how much they can pay each other or what they can = buy from who when is dangerous territory.=A0 Even if you don't have a = philosophical problem with it (I kind of do) it simply tends to = backfire. Getting rid of corporate welfare and legal privileges for = corporations is a better place to start.
And I = just don't buy the point of your not-for-profit company example, = Dave.=A0 Not that I deny = that something went awry in that instance.
The = prospect of getting bought out is what motivates many brilliant = startups.=A0 That's why we = have flickr and youtube.=A0 = Certainly it motivated them to add the polish and scale to = support millions of users.
I feel there = is a fallacy implicit in proposals along the lines of Dave's and = Trixie's:=A0 thinking of = the economy as an engineered system to be tweaked (or in Trixie's case = reengineered altogether).=A0 = Trying to conceptualize it that way leads to the dark side! = :)
=A0Consider the fundamental = difference between a law like "no stealing" and a law = prohibiting/limiting consensual behavior, in Dave's case buying and = selling stocks from each other or paying each other to run companies. = Laws like that require a very careful argument. For example, "no buying = drugs because you'll become an addict and turn to crime."=A0 And of course even that turns = out to be an incredibly bad idea.=A0= Focusing our enforcement effort on actual crime (as opposed to = behavior that may or may not cause indirect harm to society) would be = far more effective.
Dave, I do concede the meta = argument about falsifiability.=A0 = Well said.
--- \/ =A0 FROM Dave Morris AT 07.08.24 = 13:58 (Today) =A0 \/ = ---

I guess = disagreement with that would be my whole point. The CEOs benefit hugely, = but the company is less effective than it was before at providing = valuable research to society, and the individuals involved are less well = off too, so how does society benefit by the company getting screwed? The = example I speak of was a small research company that was doing its job = very well as a not-for-profit entity, not a failing company or one that = was getting left behind by the changing times. It was a valuable entity = that no-one was getting rich off of, that one person saw the opportunity = to get rich off of because of how the stock market works, and so they = did so, without thought for long term benefit to the company or society. = The stock market enabled this.
In support of = capitalist society, ways to regulate this such as controlling CEO = salaries or stock deals could benefit long term shareholder value, and = thus benefit society in the long run by optimizing value/wealth creation = over time. (the ideas created by this company ended up being used by = government programs, DoD, and others, so the value was getting out to = society when it was being created, even if no one individual was getting = rich because of it)
Extended point- the = maximization of profit and shareholder value is not synonymous with the = maximization of benefit to society, and in fact is often quiet opposite. = But I guess we'd be doomed in coming to any useful conclusions if I = expand this thread into that other conversation as well. :-)
I don't have a solution- I haven't come up with = specific suggestions that would improve the stock market really, and I'd = readily acknowledge that our system works better than any that anyone = else is using at the moment. I just see a potential for improvement to = occur.=A0 Figuring out how = to do it is the whole point of this list, yes? :-)
Dave
On Aug 23, = 2007, at 12:16 PM, Kevin Lochner wrote:

but you're forgetting my point, = which was that even if some companies are getting "screwed over", said = screwing may benefit society on the whole.
=

--=A0
http://ai.eecs.umich.edu/= people/dreeves=A0 - = -=A0 search://"Daniel = Reeves"

"As far as I know, this computer has never had an = undetected error."

=

Dave = Morris

cell: 734-476-8769

http://www-personal.umich.= edu/~thecat/