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James,=0A=0AThanks for offering to end this thread, though I'm sure plenty of
others out there are hoping to keep it going, but I'm ready to put down my
keyboard too. So you know, I have agreed with almost all of the specific
statements you've said. I had been trying to focus the argument on my
disagreement with the narrowly defined statement: "when someone creates wealth
, it takes away existing (not future, speculative (i.e. expected income))
wealth from someone else." =0A =0AI had no interest in a socialism vs.
capitalism debate, but since it was a big part of your last email, I'll make a
few comments on both sides of the issue: =0A=0AI believe that social welfare
programs are moral and will always be a necessary part of every society . I
hope that none of us are put in a position where we are jobless or homeless .
Capitalism is amoral, unless you see freedom to trade your wealth with
whomever you want for whatever you want a moral issue. Capitalists often
assume that because every small decision in a society is freely made, and
advances all parties' personal utility; then the aggregate result of all those
decisions must also be positive for everyone, though unbalanced. I essentially
agree. =0A =0AThough capitalism offers the most freedom of choice and
maximizes total wealth, it does not require that the excess wealth is spread
evenly. Whether that freedom outweighs the unbalanced allocation of increased
wealth is a judgment call with no right answer. There are many examples of
how the public's choices made in a free market have led to painful corrections
to certain unwanted industries. However, there were also countless
unfortunate experiments in the 20th century which showed how free -market
countries flourished, and socialistic countries wained. In general , when a
country learned to guarantee four things: rule of law, an education based in
logic and science, property rights (not just real estate), and free markets;
the rich got richer and the poor got richer. It is the lack of one or more of
these key factors that can keep a given country's populous 10 times poorer
than the poorest 10% of Americans. =0A =0APersonally, I am very risk-averse,
and would also choose a significantly-lower (not 10x lower ), guaranteed income
than a fluctuating income with the potential for huge gains. However, I feel
very strongly (strong enough that you might call it a moral issue) that we do
not have the right to take that freedom of choice away from someone
else.=0A=0AI'm done too, I hope. Thanks for the fun .=0A=0A =0A----- Original
Message ----=0AFrom: James W Mickens =0ATo: improvetheworld Æ
umich.edu=0ASent: Sunday, September 9 , 2007 8:49:03 PM=0ASubject: Re: mind the
gap=0A=0A=0A> Huge thanks to Melanie , Kevin, and Cam for responding to James
better =0A> than I could. The response I was working on is pretty much
obsolete =0A> now, fortunately for everyone. :)=0A=0AI am not convinced by any
of these arguments, and as far as I'm concerned, =0Athe debate is still open
:-P. However, for the sake of everyone's inbox =0Asize, this will be my last
post on the matter.=0A=0A =0A=0ATo Melanie:=0A=0A> Even though there is
technically a finite number of people out there,=0A> when we're talking about
# of people willing to pay for a service, it=0A> may as well be infinite.
Computers were once something very few could=0A> afford... that's not the case
anymore. They've become more affordable=0A> and the "number of people willing
to pay for" them has essentially=0A> become infinite.=0A=0AThis is
spectacularly untrue ;-). There are a lot of Americans who are=0Apoor and who
cannot afford computers . Even if everyone could afford a =0Acomputer, it
doesn't make business sense to model your customer base as =0Aunbounded. This
is why market research is useful---there are a finite set =0Aof consumers
whose interests are constantly shifting, and you have to =0Atailor your
business practices to them , lest they defect to another =0Abusiness. When we
hear descriptions about the health of a company or a =0Anation's economy, we
always get bounded, non -infinite statistics (X =0Adollars of profit or Y new
jobs created). One of my core disagreements =0Awith Daniel is that I believe
that infinity should never show up in =0Aeconomic calculations. It should
never show up because it does not have a =0Acorrespondence with anything in
the physical economic system.=0A=0A=0A> Are you saying that it's bad when my
widget business does better than=0A> someone else's and therefor increases
wealth while theirs declines?=0A=0ANot at all. I'm just pointing out that an
increase in one business' wealth =0Amay induce a decrease in another's wealth.
I understand that the incentive =0Ato build wealth drives competition and
often leads to better goods and =0Aservices.=0A=0A=0A=0A=0ATo Kevin:=0A=0A>
I'd like to chime in for just a second on this one. The fact that =0A>
companies prefer to represent some of their data in a pie chart doesn't =0A>
automatically validate the daddy model, you're going to have to work a =0A>
little harder than that:=0A> =0A> company A builds 90 widgets=0A> company B
builds 90 widgets=0A> =0A> the total "market" for widgets is 100.=0A> =0A>
Both comapanies have still created wealth of 90 widgets, they're just =0A>
going to have to reduce their prices for widgets in order to sell their =0A>
inventories . Widgets have now become cheaper because of the extra =0A>
"widget wealth " that has been created. Pie charts are only reflecting =0A>
the fact that companies restrict production to maximize prices.=0A=0AEvery
definition of wealth that I've encountered includes money as a type =0Aof
wealth. Thus , when I purchase an object, I exchange wealth for
=0Awealth---money for an object. Given a finite amount of monetary wealth
=0Athat people will exchange for widget wealth, the decision to give money to
=0ACompany A is a direct loss of wealth for Company B. The only time that
=0Athis won't be true is if Company A has already sold its full capacity of
=0A90 widgets. In this case, it has no surplus supply, so a sale to Company
=0AB is not stealing an opportunity for Company A to generate additional
=0Amonetary wealth. =0A=0AAn over-supply of widgets may indeed force both
companies to reduce their =0Awidget prices, but this doesn't change the fact
that both companies are =0Achasing after a constrained set of dollars. As with
Melanie's example , =0Athere are not an infinite number of dollars waiting to
be exchanged for =0Awidgets.=0A=0A=0A=0ATo Daniel and Cameron:=0A=0A> The
factory worker example doesn't make sense to me though. The factory =0A>
owner pays the worker the market price for the labor/expertise they are =0A>
contributing. No problem there.=0A=0AWhy is the market price of the wage
relevant to whether the worker's =0Awealth is decreasing? Your income counts
as part of your wealth. Thus, if =0Ayour wage decreases, your wealth
decreases, independently of whether your =0Anew wage is closer to or further
from the "market price" of your labor. I =0Aagree that the economy as a
*whole* may have produced extra wealth, but =0Athat doesn't mean that
*everyone's* wealth increased ---in fact, some =0Apeople's wealth may have
decreased. This contradicts Daniel's claim that =0Ahis wealth generation
cannot negatively impact my own wealth. When I say =0Athat the worker with the
cut salary has less wealth , I'm not making "an =0Aappeal to emotion" as
Cameron claims. I'm making an objective statement =0Aabout that worker's
ability to purchase goods. =0A=0A=0A=0A> Capitalism is at its core fair and the
injustices, even if so big as to =0A> cast a shadow over the whole system, are
nonetheless at the periphery =0A> and not the other way around.=0A=0AIt's
absolutely heartbreaking to read this. Billions of people are =0Astarving,
despairing, and dying around the world precisely because of =0Acapitalism's
failures. Their welfare should not be at the periphery of the =0Aeconomic
debate; it should be one of the focuses of the debate. I dare you =0Ato go
into disease-ravaged Africa and say that capitalism's approach =0Atowards
pharmaceutical patents is a peripheral issue. I dare you to go =0Ainto the
inner city of an America metropolis and tell the jobless, =0Ahopeless youths
that they shouldn't worry because capitalism is on its =0Away. It's very
convenient for us to say that capitalism is the answer when =0Awe are reaping
its rewards. It's not quite so easy when you're on the =0Aother end. It's not
so easy when you 're the person who's dying because you =0Alack access to cheap
medicine. It 's not so easy when you've been laid off =0Aor had your wages cut
in the name of "ultimate efficiency." Capitalism is =0Anot inherently immoral,
but it is amoral. It is driven by profit, not =0Acompassion. I agree that
capitalism has many fine features, but we have no =0Areason to think that a
system designed to maximize earnings will optimize =0Amoral outcomes as well.
=0A=0AI'm extremely dispirited by the outcome of this debate. I strongly
believe =0Athat many of the economists on this email list are out of touch
with the =0Areal-world impacts of their economic theories. As I mentioned
above , this =0Awill be the last public post that I make on this subject.
However , I'm =0Astill available for private dialogue.=0A=0ADefiant,=0A ~j
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James, =0A =0A Thanks for offering to end this thread, though I'm
sure plenty of others out there are hoping to keep it going, but I'm ready to
put down my keyboard too. So you know, I have agreed with almost all of the
specific statements you've said. I had been trying to focus the argument on
my disagreement with the narrowly defined statement: "when someone creates
wealth, it takes away existing (not future, speculative (i.e. expected
income)) wealth from someone else." =0A =0A I had no interest in a
socialism vs. capitalism debate , but since it was a big part of your last
email, I'll make a few comments on both sides of the issue: =0A =0A I
believe that social welfare programs are moral and will always be a necessary
part of every society. I hope that none of ;us are put in a position
where we are jobless or homeless. ;Capitalism is amoral, unless you see
freedom to trade your wealth ;with whomever you want for whatever you want
a moral issue. Capitalists often assume that because every small decision in
a society is freely made, and advances all parties' personal utility; then the
aggregate result of all those decisions must also be positive for everyone ,
though unbalanced. I essentially agree. =0A =0A Though capitalism offers
the most freedom of choice and maximizes total wealth, it does not require
that the excess wealth is spread evenly. Whether that freedom outweighs the
unbalanced allocation of increased wealth is a judgment call with no right
answer. There are many examples of how the public's choices made in a free
market have led to painful corrections to certain unwanted industries.
However, there were also countless unfortunate experiments in the 20th century
which showed how free-market countries flourished, and socialistic countries
wained. In general, when a country learned to guarantee four things: rule of
law, an education based in logic and science, property rights (not just real
estate), and free markets ; the rich got richer and the poor got richer. It is
the lack of one or
more of these key factors that can keep a given country's populous 10 times
poorer than the poorest 10% of Americans. =0A =0A Personally, I am very
risk-averse , and would also choose a significantly-lower (not 10x lower),
guaranteed income than a fluctuating income with the potential for huge
gains. ; However, I feel very strongly (strong enough that you might call
it a moral issue) that we do not have the right to take that freedom of choice
away from someone else. =0A =0A I'm done too, I hope. Thanks for the fun.
; =0A ----- Original Message ---- From: James W Mickens <jmickens
Æ eecs.umich.edu> To: improvetheworld Æ umich.edu Sent: Sunday ,
September 9, 2007 8:49:03 PM Subject: Re: mind the gap =0A > Huge thanks
to Melanie, Kevin, and Cam for responding to James better > than I could.
The response I was working on is pretty much obsolete > now, fortunately
for everyone. :) I am not convinced by any of these arguments, and as far as
I'm concerned, the debate is still open :-P. However, for the sake of
everyone's inbox size , this will be my last post on the matter. To
Melanie: > Even though there is technically a finite number of people out
there , > when we're talking about # of people willing to pay for a service
, it > may as well be infinite. Computers were once something very few
could > afford... that's not the case anymore. ;They've become more
affordable > and the "number of people willing to pay for" them has
essentially > become infinite. This is spectacularly untrue ;-). There are
a lot of Americans who
are poor and who cannot afford computers. Even if everyone could afford a
computer, it doesn't make business sense to model your customer base as
unbounded. This is why market research is useful---there are a finite set of
consumers whose interests are constantly shifting, and you have to tailor
your business practices to them, lest they defect to another business. When
we hear descriptions about the health of a company or a nation's economy, we
always get bounded, non-infinite statistics (X dollars of profit or Y new
jobs created). One of my core disagreements with Daniel is that I believe
that infinity should never show up in economic calculations. It should never
show up because it does not have a correspondence with anything in the
physical economic system. > Are you saying that it's bad when my widget
business does better than > someone else's and therefor increases wealth
while theirs
declines? Not at all. I'm just pointing out that an increase in one
business' wealth may induce a decrease in another's wealth. I understand that
the incentive to build wealth drives competition and often leads to better
goods and services. To Kevin: > ; I'd like to chime in for just a
second on this one. The fact that > companies prefer to represent some
of their data in a pie chart doesn't > automatically validate the daddy
model, you're going to have to work a > little harder than that: >
> company A builds 90 widgets > company B builds 90 widgets > >
the total "market" for widgets is 100. > > Both comapanies have still
created wealth of 90 widgets, they're just > going to have to reduce their
prices for widgets in order to sell their > inventories . Widgets have now
become cheaper because of the extra
> "widget wealth" that has been created. Pie charts are only reflecting
> the fact that companies restrict production to maximize prices. Every
definition of wealth that I've encountered includes money as a type of
wealth. Thus, when I purchase an object, I exchange wealth for wealth---money
for an object. Given a finite amount of monetary wealth that people will
exchange for widget wealth, the decision to give money to Company A is a
direct loss of wealth for Company B. The only time that this won't be true is
if Company A has already sold its full capacity of 90 widgets. In this case,
it has no surplus supply , so a sale to Company B is not stealing an
opportunity for Company A to generate additional monetary wealth. An
over-supply of widgets may indeed force both companies to reduce their widget
prices, but this doesn't change the fact that both companies are chasing
after
a constrained set of dollars. As with Melanie's example, there are not an
infinite number of dollars waiting to be exchanged for widgets. To Daniel
and Cameron: > The factory worker example doesn 't make sense to me though.
The factory > owner pays the worker the market price for the
labor/expertise they are > contributing . No problem there. Why is the
market price of the wage relevant to whether the worker's wealth is
decreasing? Your income counts as part of your wealth. Thus, if your wage
decreases, your wealth decreases, independently of whether your new wage is
closer to or further from the "market price" of your labor. I agree that the
economy as a *whole* may have produced extra wealth, but that doesn't mean
that *everyone's* wealth increased---in fact, some people's wealth may have
decreased. This contradicts Daniel's claim that his wealth
generation cannot negatively impact my own wealth. When I say that the
worker with the cut salary has less wealth, I'm not making "an appeal to
emotion" as Cameron claims. I'm making an objective statement about that
worker's ability to purchase goods. > Capitalism is at its core fair and
the injustices, even if so big as to > cast a shadow over the whole
system, are nonetheless at the periphery > and not the other way around.
It's absolutely heartbreaking to read this . Billions of people are starving,
despairing, and dying around the world precisely because of capitalism's
failures. Their welfare should not be at the periphery of the economic
debate; it should be one of the focuses of the debate. I dare you to go into
disease-ravaged Africa and say that capitalism's approach towards
pharmaceutical patents is a peripheral issue. I dare you to go into the inner
city of an America
metropolis and tell the jobless, hopeless youths that they shouldn't worry
because capitalism is on its way. It's very convenient for us to say that
capitalism is the answer when we are reaping its rewards. It's not quite so
easy when you're on the other end. It's not so easy when you 're the person
who's dying because you lack access to cheap medicine. It's not so easy when
you've been laid off or had your wages cut in the name of "ultimate
efficiency." Capitalism is not inherently immoral, but it is amoral. It is
driven by profit, not compassion. I agree that capitalism has many fine
features, but we have no reason to think that a system designed to maximize
earnings will optimize moral outcomes as well . I'm extremely dispirited by
the outcome of this debate. I strongly believe that many of the economists on
this email list are out of touch with the real-world impacts of their
economic theories. As
I mentioned above, this will be the last public post that I make on this
subject. However, I'm still available for private dialogue. Defiant , ~j
=0A
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