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."