X-Spam-Status: No, score=-2.6 required=5.0 tests=BAYES_00 autolearn=unavailable version=3.2.2 Sender: -2.6 (spamval) -- NONE Return-Path: Received: from newman.eecs.umich.edu (newman.eecs.umich.edu [141.213.4.11]) by boston.eecs.umich.edu (8.12.10/8.13.0) with ESMTP id l7S4lend012399 (version=TLSv1/SSLv3 cipher=DHE-RSA-AES256-SHA bits=256 verify=FAIL) for ; Tue, 28 Aug 2007 00:47:40 -0400 Received: from jeffrey.mr.itd.umich.edu (mx.umich.edu [141.211.14.132]) by newman.eecs.umich.edu (8.14.1/8.14.1) with ESMTP id l7S4l3r9011958 for ; Tue, 28 Aug 2007 00:47:12 -0400 Received: FROM newman.eecs.umich.edu (newman.eecs.umich.edu [141.213.4.11]) BY jeffrey.mr.itd.umich.edu ID 46D3A8C0.CD1D9.14796 ; 28 Aug 2007 00:46:56 -0400 Received: from boston.eecs.umich.edu (boston.eecs.umich.edu [141.213.4.61]) by newman.eecs.umich.edu (8.14.1/8.14.1) with ESMTP id l7S4kCoY011811 (version=TLSv1/SSLv3 cipher=DHE-RSA-AES256-SHA bits=256 verify=FAIL); Tue, 28 Aug 2007 00:46:12 -0400 Received: from boston.eecs.umich.edu (localhost.eecs.umich.edu [127.0.0.1]) by boston.eecs.umich.edu (8.12.10/8.13.0) with ESMTP id l7S4kWnd012387 (version=TLSv1/SSLv3 cipher=DHE-RSA-AES256-SHA bits=256 verify=NO); Tue, 28 Aug 2007 00:46:32 -0400 Received: from localhost (dreeves Æ localhost) by boston.eecs.umich.edu (8.12.10/8.12.9/Submit) with ESMTP id l7S4kWmo012384; Tue, 28 Aug 2007 00:46:32 -0400 X-Authentication-Warning: boston.eecs.umich.edu: dreeves owned process doing -bs X-X-Sender: dreeves Æ boston.eecs.umich.edu In-Reply-To: Message-ID: References: <93EC811F-946D-4EA2-ADE3-5D43B46EA65E Æ umich.edu> <4CE28F9E-2B6E-4834-B3FA-1C3FBF2E7341 Æ umich.edu> <02548635-1F0E-4244-847D-8FA54DACAD4B Æ umich.edu> <1acf35a70708221835o75734aa2waa72f00b69632a18 Æ mail.gmail.com>

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MIME-Version: 1.0 Content-Type: TEXT/PLAIN; charset=US-ASCII; format=flowed X-Spam-Checker-Version: SpamAssassin 3.2.2 (2007-07-23) on newman.eecs.umich.edu X-Virus-Scanned: ClamAV version 0.91.2, clamav-milter version 0.91.2 on newman.eecs.umich.edu X-Virus-Scanned: ClamAV version 0.91.2, clamav-milter version 0.91.2 on newman.eecs.umich.edu X-Virus-Status: Clean Date: Tue, 28 Aug 2007 00:46:32 -0400 (EDT) To: Dave Morris cc: improvetheworld Æ umich.edu, Steven Reeves , reeves-hayos Æ umich.edu, reeves-kalkman Æ umich.edu From: Daniel Reeves Subject: Re: mind the gap 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 - 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."