Thread: I found this to be quite fascinating...

http://www.prageruniversity.com/Econ...-Morality.html

Some compelling reasons why a free market economy is morally superior to a socialist one. I really like this guy.

"Prager University is a virtual on-line non-profit organization founded in 2009 that produces five minute video courses on a variety of subjects, ranging from economics to philosophy."

Well that sold me right there to listen to it!

" The organization was created by Dennis Prager, an American syndicated talk show host, and Allen Estrin, screenwriter and radio show producer, to teach fundamental concepts and right-wing values."

Even better!

"As Prager University is not an accredited university that grants degrees, some claim that the name is misleading."

Some claim? I'd say anyone who knows anything about universities would claim that.

I can see why you like him Lazarus. You lost all respect I could have given you after the election results.

Did you even watch it?

I'm sure in 5 minutes he will try to force feed me information and hope I just accept it. I'd rather take an actual semester and think for myself.

Furthermore, morality is a subjective topic. Let's just follow the worlds morality.

What he says at one point is it isn't moral for one person to gain from your gain by a hand-out because they gain and you lose. Well that isn't true at all. You gain but your fellow man also gains from your gain, you just don't gain as much as you could have with out him also gaining.

I don't know about you but lets say I gain a dollar. Now I can keep that dollar all for myself, sure. I can say fuck you to the child down the street to me living on the street begging for food. That may seem moral to you but it isn't moral to me.

I'd rather earn a dollar and have 20 cents taken out to make my life a little worse so that the child down the street from me gets a slightly better life. I guess my beliefs just aren't religious enough though.

Originally Posted by gehn

Furthermore, morality is a subjective topic. Let's just follow the worlds morality.

What he says at one point is it isn't moral for one person to gain from your gain by a hand-out because they gain and you lose. Well that isn't true at all. You gain but your fellow man also gains from your gain, you just don't gain as much as you could have with out him also gaining.

I don't know about you but lets say I gain a dollar. Now I can keep that dollar all for myself, sure. I can say fuck you to the child down the street to me living on the street begging for food. That may seem moral to you but it isn't moral to me.

I'd rather earn a dollar and have 20 cents taken out to make my life a little worse so that the child down the street from me gets a slightly better life. I guess my beliefs just aren't religious enough though.

No Gehn. That's not what he says. He says that redistribution, government giving to someone with no requirement of service to their fellow man means they gain while someone else loses.

Charitable contribution of course is different because the individual has the liberty to decide what cause his money goes to. That .20 on the dollar you were talking about... You should decide where it goes. Not some beaurocrat.

Originally Posted by gehn

I'm sure in 5 minutes he will try to force feed me information and hope I just accept it. I'd rather take an actual semester and think for myself.

Taking a semester and thinking for yourself sounds like a great plan.

I watched it, and most of what he said are basic economic fundamentals. The primary point was about a type of social justice that rises from free exchange.

[aside: I'm not sure "moral" is the right word. If you want economics as moral philosophy then read Adam Smith]

The type of exchange he's talking about is called a Pareto exchange, after one of my heroes: Vilfredo Pareto.

[that's: pare Ate oh ... sounds like potato, unless you're one of those pinky-out quiche-eaters who says "Poh Tah To"]

[full disclosure: I actually like quiche, but my pinky works normally]

[... and let's try to have fewer of these asides.]

Pareto looks at the basic building block of an economy: I have a thing, and you have a thing, and we're thinking about trading.

He then states the obvious: if I want your thing more than mine, and you want mine more than yours, we should trade. If we trade, we will both be better off. This is an Improvement.

If I want yours more than mine, and you want either thing equally, we should trade since I'll be better off and you'll be the same. This is also an Improvement.

There is more going on here than it seems. First, "better off" is something that's measured by each person. There is no objective assessment of what's better for you. YOU decide what you like. There is no State making a value judgement. This is a purely liberal idea (old school liberal) and fits in perfectly with the idea of individual rights. It all seems obvious to us now, but don't underestimate the extent to which Pareto's idea is a profound political statement.

Second, there is no money. This is pure exchange. If we use money it still works the same way, but it's important to note that it works without money.

So that's the basic building block of an economy: an exchange between two willing parties.

If we take a bunch of people with things, and put them in a room, we'll get a mini-economy. Exchanges will start to take place. Each exchange makes both parties better off. Each exchange shifts the distribution of things. That will keep going on until we reach a state where there are no exchanges that will make both parties better off. No more trades will happen. At this point, every possible trade that could be made will result in at least one person being worse off. We have reached a Pareto Optimal (or Pareto Efficient) outcome.

A Pareto Optimal state is NOT unique. It's not "the best outcome" (which is a social judgement), it's just a limit. If we reset the things and play the game again, and people meet in a different order, the game will still end at a Pareto Optimal state but the things may be distributed very differently than the last time we played.

The game also doesn't care much about the initial distribution of things. If one player starts with all the things, then the game ends when it starts. There are no trades that make both parties better off. The starting state is already Optimal as far as Pareto is concerned.

We can also play the game with both work and things. Now we can have trades like "I'll dig in your garden for a day if you give me your XBox 360." This makes the game much more complicated because (having added time) now the game doesn't end. We still want Pareto Exchanges to take place (because they still make both parties better off), but our simple model is gone and there are lots of other implications.

So I thought the video was good. Walter Williams lays it out very well (so watch that instead of reading everything I just wrote). This is part of the foundations of micro economics and welfare economics (no, not that kind welfare). This is the liberal tradition, and on this point you're likely to find agreement between nutjob-libertarians and market-intervening lefties.

Those two types diverge later in the process.

Cheers,


AetheLove

Originally Posted by AetheLove

Taking a semester and thinking for yourself sounds like a great plan.

I watched it, and most of what he said are basic economic fundamentals. The primary point was about a type of social justice that rises from free exchange.

[aside: I'm not sure "moral" is the right word. If you want economics as moral philosophy then read Adam Smith]

The type of exchange he's talking about is called a Pareto exchange, after one of my heroes: Vilfredo Parato.

[that's: pare Ate oh ... sounds like potato, unless you're one of those pinky-out quiche-eaters who says "Poh Tah To"]

[full disclosure: I actually like quiche, but my pinky works normally]

[... and let's try to have fewer of these asides.]

Pareto looks at the basic building block of an economy: I have a thing, and you have a thing, and we're thinking about trading.

He then states the obvious: if I want your thing more than mine, and you want mine more than yours, we should trade. If we trade, we will both be better off. This is an Improvement.

If I want yours more than mine, and you want either thing equally, we should trade since I'll be better off and you'll be the same. This is also an Improvement.

There is more going on here that it seems. First, "better off" is something that's measured by each person. There is no objective assessment of what's better for you. YOU decide what you like. There is no State making a value judgement. This is a purely liberal idea (old school liberal) and fits in perfectly with the idea of individual rights. It all seems obvious to us now, but don't underestimate the extent to which Pareto's idea is a profound political statement.

Second, there is no money. This is pure exchange. If we use money it still works the same way, but it's important to note that it works without money.

So that's the basic building block of an economy: an exchange between two willing parties.

If we take a bunch of people with things, and put them in a room, we'll get a mini-economy. Exchanges will start to take place. Each exchange makes both parties better off. Each exchange shifts the distribution of things. That will keep going on until we reach a state where there are no exchanges that will make both parties better off. No more trades will happen. At this point, every possible trade that could be made will result in at least one person being worse off. We have reached a Pareto Optimal (or Pareto Efficient) outcome.

A Pareto Optimal state is NOT unique. It's not "the best outcome" (which is a social judgement), it's just a limit. If we reset the things and play the game again, and people meet in a different order, the game will still end at a Pareto Optimal state but the things may be distributed very differently than the last time we played.

The game also doesn't care much about the initial distribution of things. If one player starts with all the things, then the game ends when it starts. There are no trades that make both parties better off. The starting state is already Optimal as far as Pareto is concerned.

We can also play the game with both work and things. Now we can have trades like "I'll dig in your garden for a day if you give me your XBox 360." This makes the game much more complicated because (having added time) now the game doesn't end. We still want Pareto Exchanges to take place (because they still make both parties better off), but our simple model is gone and there are lots of other implications.

So I thought the video was good. Walter Williams lays it out very well (so watch that instead of reading everything I just wrote). This is part of the foundations of micro economics and welfare economics (no, not that kind welfare). This is the liberal tradition, and on this point you're likely to find agreement between nutjob-libertarians and market-intervening lefties.

Those two types diverge later in the process.

Cheers,


AetheLove

Interesting points. I'm familiar with the concepts you discussed here. I noticed that you seem to be ignoring the part where Williams talks about the "zero sum game" where government intervention involving essentially forced trade is brought into the picture. Williams is not saying welfare economics works the same way at all, though in your comments you lumped that in - this confused me a bit. The idea that government should not intervene in free trade or redistribute wealth is a very conservative principle, not a liberal one.

You call Pareto Exchanges the Liberal tradition but I have to disagree with you. Pareto exchanges are not a zero sum exchange. In Pareto exchanges, both people "win", or there is a net "win". In a welfare exchange, there is a winner and a loser to a zero sum. One gets something without having to provide anything at the expense of the other. There are, I suppose, arguments that might be made about who can afford to have what taken from them, and those that need things, but that is beside the point.

Bottom line, welfare is different from charitable giving in this very distinct way. And this is primarily why I am against the type of welfare state we have developed, and why I hold to my conservative values. We have gone far beyond what it was originally designed to provide. This can also apply to most federal offices as well. I would like to see budgets cut dramatically across the board and to see government dramatically reduced, as well as to see government's role in our lives to be reduced dramatically. It is these principles which allowed the United States to become as powerful and economically strong as it has in the world in such a short amount of time.

What happened to my fellow Americans?