I consider my challenge unanswered!  Read on...

> How about establishing the environmental protection agency?

The value of saving a forest or preventing x tons of pollution can and 
must be valued in dollars.  Refusing to quantify it leads to more 
environmental damage.

So the EPA, if done right (levying pollution taxes!), always increases 
wealth by incentivizing the right trade-offs.  [See also Kevin's response]

> All the national museums in downtown DC?

If a museum can't cover its costs through donations and admissions (or 
admissions that people would have been willing to pay even if you choose 
not to actually charge admission) then is it good for society to have that 
museum?  Not at all clear.  If the answer is yes then where do you draw 
the line between what's worth it for the good of society and what isn't?

But perhaps a museum that we expect future generations to have a lot of 
value for could be an example.	The real point of my challenge was to 
assert that wealth and welfare are the same thing (as far as public policy 
is concerned).	This museum example doesn't refute that but may be an 
example of when we should take a leap of faith and do something for the 
sake of future wealth that there is no way to measure yet.  But in fact, 
it's not so hard to measure.  How much do we currently value museums our 
ancestors maintained?

> Abolishing slavery?

Ah, good one.  But this doesn't count because the principle of freedom 
trumps both wealth and welfare.  (Kevin's point was that abolishing 
slavery doesn't necessarily increase net welfare -- maybe the utility of 
the slave owners increased more than the slaves' utility decreased.)
Slavery is just intrinsically immoral.	Let's stick to the universe of 
policies that respect basic human rights.

> The CEO who got rich destroying the non-profit research company was a 
> snake oil salesman at every step of the way. [...] got rich while the 
> illusion lasted, and now is in California on the beach and people here 
> are looking for new jobs. [...] Encouraged supported and enabled by the 
> way the stock market works.

We agreed that swindling is stealing and should be illegal.  I still don't 
follow your argument that the stock market shares any blame.  I second 
Kevin's request for the name of this company.

An extreme form of your position would seem to be "no selling things 
because sometimes it might be snake oil" or perhaps "no selling oils 
because they might be from snakes".  To restate my point from before: laws 
that limit the consensual behavior of individuals do more harm than good.

Also, it's unamerican!



> 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.  I see no analogy with short-sighted stock trading or 
>> overcompensating CEOs.  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   
>> - 50 + 0 - 5 - 5 = -10.  If that 0 were more than 10 then wealth would have 
>> been created.)
>> 
>> 
>> --- \/   FROM Dave Morris AT 07.08.27 14:54 (Today)	 \/ ---
>> 
>>> 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.	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.  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.
>>> 
>>> Dave
>>> 
>>> On Aug 24, 2007, at 11:51 PM, Daniel Reeves wrote:
>>> 
>>>> You're thinking in terms of more government interference.	I think the 
>>>> answer is less.  Telling people how much they can pay each other or what 
>>>> they can buy from who when is dangerous territory.  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.  Not that I deny that something went awry in that instance.
>>>> The prospect of getting bought out is what motivates many brilliant 
>>>> startups.	That's why we have flickr and youtube.	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:  thinking of the economy as an engineered system to be 
>>>> tweaked (or in Trixie's case reengineered altogether).  Trying to 
>>>> conceptualize it that way leads to the dark side! :)
>>>> Consider 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."	And of course 
>>>> even that turns out to be an incredibly bad idea.	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.  Well said.
>>>> --- \/   FROM Dave Morris AT 07.08.24 13:58 (Today)   \/ ---
>>>>> 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.	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.
>> 
>> -- 
>> http://ai.eecs.umich.edu/people/dreeves  - -  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/
>
>

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

Absurdity, n.:
	 A statement or belief manifestly inconsistent with one's own
opinion.
		 -- Ambrose Bierce, "The Devil's Dictionary"