Remaining answers:

> 1. Regulations on stock trading should factor in the decreased happiness
>   of the screwed-over ERIM employees.

We may be at a stale mate on this.  I feel that the ERIM employees, by 
voting with their feet, can better protect themselves, and with fewer bad 
side-effects, than the government can.

By the way, I feel that there should be no legal recognition of the 
concept of a corporation.  A corporation should be nothing but a
(contractual) agreement among the people who comprise it.

Kevin and Vishal and Matt and Franz and I are arguing pro-capitalism but I 
wonder if the differences between our position and that of rabid 
anti-capitalists is as severe as it seems.  We identify some of the same 
problems.  We just disagree about whether the solution is to get closer to 
or further from pure capitalism.


> 5. There is such a thing as bad profit when one party doesn't realize the
>   bad consequences of the deal they're making.

There's also such a thing as bad regulation when the government mistakenly 
thinks it knows better than you what deals are in your interest. Maybe we 
just have different intuition about the right trade-offs here. I'd go 
almost so far as to say that even if we identify a case where regulation 
helps, let's not suggest it to the government.	It will only encourage 
them.

I'm back to the war on drugs analogy.  Let's focus on direct harm. (And 
again, swindling I consider direct harm.)


> 4. Capitalism does not respect basic human rights.

Right, that's what laws are for.  I'm not an anarchist.

***
Capitalism is not an engineered system. Forcibly redistributing the wealth 
that people create is an engineered system. Capitalism is the rejection of 
such systems.
***

But you don't have to be a purist about it. I'm just saying that that's 
the world-improving direction from the status quo.

Anyone not clear on the Daddy Model of Wealth, I pasted below that section 
from Mind the Gap:  (http://www.paulgraham.com/gap.html)

Also, thanks to everyone who has told me off-list that they're following 
this debate with interest (or in a couple cases half-hearted interest!).

Danny


Excerpt from Mind the Gap:

When I was five I thought electricity was created by electric sockets. I 
didn't realize there were power plants out there generating it. Likewise, 
it doesn't occur to most kids that wealth is something that has to be 
generated. It seems to be something that flows from parents.

Because of the circumstances in which they encounter it, children tend to 
misunderstand wealth. They confuse it with money. They think that there is 
a fixed amount of it. And they think of it as something that's distributed 
by authorities (and so should be distributed equally), rather than 
something that has to be created (and might be created unequally).

In fact, wealth is not money. Money is just a convenient way of trading 
one form of wealth for another. Wealth is the underlying stuffthe goods 
and services we buy. When you travel to a rich or poor country, you don't 
have to look at people's bank accounts to tell which kind you're in. You 
can see wealthin buildings and streets, in the clothes and the health of 
the people.

Where does wealth come from? People make it. This was easier to grasp when 
most people lived on farms, and made many of the things they wanted with 
their own hands. Then you could see in the house, the herds, and the 
granary the wealth that each family created. It was obvious then too that 
the wealth of the world was not a fixed quantity that had to be shared 
out, like slices of a pie. If you wanted more wealth, you could make it.

This is just as true today, though few of us create wealth directly for 
ourselves (except for a few vestigial domestic tasks). Mostly we create 
wealth for other people in exchange for money, which we then trade for the 
forms of wealth we want. [1]

Because kids are unable to create wealth, whatever they have has to be 
given to them. And when wealth is something you're given, then of course 
it seems that it should be distributed equally. [2] As in most families it 
is. The kids see to that. "Unfair," they cry, when one sibling gets more 
than another.

In the real world, you can't keep living off your parents. If you want 
something, you either have to make it, or do something of equivalent value 
for someone else, in order to get them to give you enough money to buy it. 
In the real world, wealth is (except for a few specialists like thieves 
and speculators) something you have to create, not something that's 
distributed by Daddy. And since the ability and desire to create it vary 
from person to person, it's not made equally.

You get paid by doing or making something people want, and those who make 
more money are often simply better at doing what people want. Top actors 
make a lot more money than B-list actors. The B-list actors might be 
almost as charismatic, but when people go to the theater and look at the 
list of movies playing, they want that extra oomph that the big stars 
have.

Doing what people want is not the only way to get money, of course. You 
could also rob banks, or solicit bribes, or establish a monopoly. Such 
tricks account for some variation in wealth, and indeed for some of the 
biggest individual fortunes, but they are not the root cause of variation 
in income. The root cause of variation in income, as Occam's Razor 
implies, is the same as the root cause of variation in every other human 
skill.

In the United States, the CEO of a large public company makes about 100 
times as much as the average person. [3] Basketball players make about 128 
times as much, and baseball players 72 times as much. Editorials quote 
this kind of statistic with horror. But I have no trouble imagining that 
one person could be 100 times as productive as another. In ancient Rome 
the price of slaves varied by a factor of 50 depending on their skills. 
[4] And that's without considering motivation, or the extra leverage in 
productivity that you can get from modern technology.

Editorials about athletes' or CEOs' salaries remind me of early Christian 
writers, arguing from first principles about whether the Earth was round, 
when they could just walk outside and check. [5] How much someone's work 
is worth is not a policy question. It's something the market already 
determines.

"Are they really worth 100 of us?" editorialists ask. Depends on what you 
mean by worth. If you mean worth in the sense of what people will pay for 
their skills, the answer is yes, apparently.

A few CEOs' incomes reflect some kind of wrongdoing. But are there not 
others whose incomes really do reflect the wealth they generate? Steve 
Jobs saved a company that was in a terminal decline. And not merely in the 
way a turnaround specialist does, by cutting costs; he had to decide what 
Apple's next products should be. Few others could have done it. And 
regardless of the case with CEOs, it's hard to see how anyone could argue 
that the salaries of professional basketball players don't reflect supply 
and demand.

It may seem unlikely in principle that one individual could really 
generate so much more wealth than another. The key to this mystery is to 
revisit that question, are they really worth 100 of us? Would a basketball 
team trade one of their players for 100 random people? What would Apple's 
next product look like if you replaced Steve Jobs with a committee of 100 
random people? [6] These things don't scale linearly. Perhaps the CEO or 
the professional athlete has only ten times (whatever that means) the 
skill and determination of an ordinary person. But it makes all the 
difference that it's concentrated in one individual.

When we say that one kind of work is overpaid and another underpaid, what 
are we really saying? In a free market, prices are determined by what 
buyers want. People like baseball more than poetry, so baseball players 
make more than poets. To say that a certain kind of work is underpaid is 
thus identical with saying that people want the wrong things.

Well, of course people want the wrong things. It seems odd to be surprised 
by that. And it seems even odder to say that it's unjust that certain 
kinds of work are underpaid. [7] Then you're saying that it's unjust that 
people want the wrong things. It's lamentable that people prefer reality 
TV and corndogs to Shakespeare and steamed vegetables, but unjust? That 
seems like saying that blue is heavy, or that up is circular.

The appearance of the word "unjust" here is the unmistakable spectral 
signature of the Daddy Model. Why else would this idea occur in this odd 
context? Whereas if the speaker were still operating on the Daddy Model, 
and saw wealth as something that flowed from a common source and had to be 
shared out, rather than something generated by doing what other people 
wanted, this is exactly what you'd get on noticing that some people made 
much more than others.

When we talk about "unequal distribution of income," we should also ask, 
where does that income come from? [8] Who made the wealth it represents? 
Because to the extent that income varies simply according to how much 
wealth people create, the distribution may be unequal, but it's hardly 
unjust.


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