No, those statements don't add up. There are many poor people in the world today who suffer various levels of famine. And there are many rich nations today (eg in the EU) which literally destroy surplus food for economic reasons (destroying food keeps prices high, giving food away lowers prices).
The case for taking food by force is as strong today as it was in the past, and the ability of the poor in the world to do so is as limited today as in the past.
If I say my car won't start and someone says "for what reason?" they aren't implying that the darn heap of
junk has become sentient and made a conscious decision to go on strike.
Correct. They are implying that you (a human being) can supply a logical explanation that will satisfy their curiosity.
It doesn't matter what they reply, the choice is yours. If you refute their claim (counternotice), then the dispute must go to court or you get your stuff put back, according to the DMCA.
I'm sorry, I'm having a second discussion in parallel which interferes
with this one. The calculation of prices in the other comment depends
on some assumptions which aren't met in this example. The allocation
of units is unaffected, but the common price paid by all the
individuals who receive a unit of wheat, assuming they each only buy one
unit, is of course the lowest amount payable here, $14.95. (Imagine that the seller of
wheat reduces prices repeatedly until there are exactly 15 buyers).
I never claimed she is dumb. I claimed she is more worthy than
Hognoxious. I admit it was a bit snarky, but you are saying exactly
the same thing in a more sober way. She is more worthy than you or
I. Well, certainly more worthy than I, maybe your bank account is
bigger than hers.
if it's important for you then you pay xxx amount of money for it.
Well, I'm happy to pay $2 million for a car, but the snag is I don't have $2 million. But it's sufficiently important to me, so do you think I can get the car?
(AND in such a case that
it would cause riots it would be just as well to just distribute everyone equal amounts of _money_ in
the first place rather than distribute the goods to people by some system, that however crashes the
value of the money, but it does make the rich less rich if their wealth is based purely on money, and
in such case butter etc. replace the money in payments).
Yes, that's another alternative system. The first thing you'll need to do is prevent inheritance and gifts.
Once you die, all your money and assets get taken away. Your kids get an allowance, the same allowance everybody gets, and we all spend that allowance however we wish. Periodically, say once a year, the
amounts in everybody's bank accounts are reset, and we all spend the same initial allowance again.
How much they have in their bank accounts is irrelevant, it's how much they're willing to spend on
getting a unit of wheat.
They're *all* willing to pay what it takes to get a unit. They might even be willing to pay for more than one unit, but I've simplified it.
And of the farmers are the producers of the wheat so if crazy guy really does
want to spend $39.50 on a unit of wheat a farmer can profitably pay even more
(and covering the interest if he needs to borrow to do so) - since he'll take
the unit and turn it into multiple units one of which he can sell to the
craxy guy...
No. The crazy guy doesn't spend all his money on a single unit. He is *willing* to spend all his money,
but he spends at most the amount that his nearest rival is willing to spend.
With the numbers I gave, the top artist with $200.95 competes with the top farmer who has $50.65. The price rises until it reaches more than $50.65, and the farmer drops out. Now there's no competition, so the artist purchases his unit for $50.70, the lowest price he can.
Next, the artist has $150.25 left and he's still the richest individual, so he could beat the farmer for a second unit at $50.70 again, but I'm pretending that the artist is happy with a single unit. So
now the farmer is the richest individual, and he's competing with the next one down, which is a baker with $45.85. They compete until the baker drops out, and the farmer pays $45.90 for his unit. Now his bank acount has $4.80 and he's out of the race. The baker has $45.85 and competes with the crazy guy who has $39.50. So the baker wins a unit for the price of $39.55$, and drops out. Then the crazy guy competes with the storer who has $34.95, and the crazy guy pays $35.00 and drops out. Etc.
Your second idea about taking a loan doesn't help. Suppose the farmer with $15 wants to compete with the crazy guy with $39.50. If the farmer can take out a loan, then the crazy guy can too. And the crazy guy has more collateral, so his interest rate on repayments will be lower than the farmer's. If they compete on loans, the total amount (bank account + borrowed amount) for the crazy guy beats the total amount for the farmer.
But in fact, the farmer with $15 will never compete with the crazy guy. If that was the case, the
cost for this particular unit of wheat would be at least $39.50 and probably more. There's a much better way, which is that the crazy guy competes with the storer and the crazy guy wins. Then the storer competes with the next guy and so on, all the way down to the farmer with $15 who competes for one of the last few units. In this case, the farmer will only pay $14.95 or so to beat the next guy in line, which is much more efficient than taking a loan and paying $39.50 or more.
But yes, your point is correct - market economics to assign resources really only works once you reach
a big enough scale. At small sizes the communist/feudalist method of the guy in charge telling everyone
what they will do works better (especially for the guy in charge) - at least until you get a cray buy
at the top...
Just to be clear, I'm not trying to argue in favour of communism or a dictatorship, I'm merely pointing out that the invisible hand of the market doesn't provide goods at the lower edge of the wealth scale. This shortcoming is fixed in modern society by welfare, government grants and tax breaks, social networking and preferential treatment, etc. This is so the poor can eat, the poor scientists can send rockets to Mars, the nephew can get a job as a journalist, etc. But those mechanisms aren't formally taken into account in pricing, so we don't really understand theoretically what makes the economy work or not, and whether the results are optimal or not.
Yes, the scheduling algorithm computes the priorities. This would implement a scheduler using some form of currency and a supply and demand based pricing mechanism.
The key point is that supply isn't guaranteed. I know we're reaching the
realms of fantasy here, but imagine that a factory gets destroyed by a
natural disaster.
In addition, if there wasn't a shortage, why would we need your cockamamie
lottery anyway?
Supply is never 100% guaranteed. Distribution is not evenly guaranteed
in a free market. Instead it is skewed towards those who have the most
money to spend. Other systems, such as a lottery, have different properties, like
a distribution without wealth bias.
That's because
it's cheaper than the black market prices.
Why is it cheaper? Because the lottery is free to enter?
No. Because the purpose of the black market is to resell goods at a higher price.
The actual price in the lottery system is irrelevant. The black market price is always higher.
Finally, what use is a cheaper price if there aren't any available? If there
are 500 people wanting disks and there's only 300 disks, then 200 people
aren't going to be affected by the price in any way.
There's no claim whatsoever that a lottery system would give a cheaper price than
a free market price. It might for reasons outlined earlier, but there's nothing
forcing such an outcome. Higher or lower prices are really not the issue at all.
The issue is distribution.
To take your beer example. Say the pub has only 10 glasses (I know...), and there are
11 thirsty customers that come every afternoon at 5. Each day, only 10 people get to have a drink, and
it's always the same 10 people. Why? Because the barman tells them: the guy who pays the most gets the first glass. The next guy who pays the most gets the second glass, and so on. Every day, the poorest customer gets no drink, and that customer is always the same.
Now you might say that isn't fair. Maybe one of the other customers won't drink one day to give the last guy a chance. But they're all thirsty, every day, and it never happens. Well, the 11th guy never gets a drink unless something happens. Maybe the barman takes out some matches and everybody has to pick one. The guy with the short one goes without a drink on that day. Maybe some other method gets used. Anything's possible.
OK, so everyone in the world should have their own personal Boeing 747.
Let's not be hasty. *You* aren't worthy to have one. Paris Hilton however, is.
In short: resources are finite, therefore it's impossible for everyone to have everything.
No, in short: the opposite of "there are some experiences in life that [you] can never
have because the number of zeros in your bank account is too small" is "there are some experiences in life that you can only have if your bank account is sufficiently large".
It's ok to believe that last sentence is fair, and that you aren't worthy like Paris. It's a free country and everyone's opinion counts, more or less.
We have 15 units of wheat seeds. In order to not starve to death
(and replinish seed stocks) we need to plant at least five.
There
are 6 farmers who could each plant a unit. They have $10, $12.5, $7.45, $15, $50.65, $13.20 respectively in their bank accounts.
There 5 bakers who would
rather just use the wheat as is to make food. They have $20.10, $14.90, $45.80, $19.15, $25.55 respectively in their bank accounts.
There are 5 artists
who would like to make some wheat seed art. They have $6.30, $4.10, $200.95, $1.60, $3.80 respectively in their bank accounts.
There are 15 storers who
would like to store the seeds for future planting. They have $7.80, $15.30, $8.35, $19.80, $12.60, $17.00, $11.70, $9.90, $16.45, $29.10, $4.70, $18.55, $14.00, $34.95, $14.20 respectively in their bank accounts.
There's one crazy
guy who wants to burn them. He has $39.50 in his bank account. We should randomly allocate them? We
should use a round-robin so this year we'll make some art, and next
year we'll grow some food?
No, that's just crazy!
We should give one unit to an artist, one unit to
each of the five bakers, one unit to the crazy guy, one unit each to
two farmers, and the remaining six units each go to a different storer.
Given that this is a discussion, it seems obvious that I'm likely to disagree with your position and that I shall argue against your explanation. But I assure you this isn't personal, I'm only interested in the ideas. Although perhaps the AC has already said most of what should be said.
Well, no, there are just some things I will never be able to afford. A hard
drive isn't likely to be one of those things, courtesy of Moore's Law, but if
it turns out that large hard drives always cost more than I want to spend,
then I suppose I won't buy any large hard drives.
Are you saying that you believe it is fair that there are some experiences in life that can never have because the number of zeros in your bank account is too small?
No, it need not do that at all. If you're talking about starvation, then I
would be totally on board with providing a food subsidy to people who can't
afford to eat - but I want to be honest about it. Price controls are a way
for governments to screw over people who own valuable assets. Subsidies are a
way to let those people reap the benefit of their good investment decisions.
Leaving aside the starvation issue on which we agree, I consider price controls an allocation mechanism.
In fact, I dislike the term price control for this, as it suggests that "price" is somehow an important part of all allocation mechanisms. It is really only important in a free market context, which is only one of many resource allocation models. Similarly, when you say that people who are being subsidised reap the benefit of (I assume you meant the others') good investment decisions, you are implicitly setting up prices or investment returns as a central concept for resource allocation, which I disagree with.
My point is really that, while human beings need resources to exist and pursue their goals, there's no reason why some resource allocation methods are off the table, let alone all allocation methods that don't happen to be based on an ordering derived from the number of zeros in an individual's bank account.
I think you are too quick to simplify the system down to an ordinary market system.
If you'll allow me to paraphrase your comment: the lottery system implies that some goods end up in a secondary market. Now assume that the secondary market is the full economy, and apply the usual supply and demand dynamics and claim this is all that matters (because the market is the full economy and the lottery system is being ignored).
Let's take the steps again, but more slowly and carefully. The lottery system is the official market for the HDDs (or if you like, whoever administers the lottery system has a long term contract with the manufacturers already). What does this imply? It means that during contract negotiations, the manufacturer was guaranteed to get a certain number of orders, and the lottery operator (it might be the state) can rely on a guaranteed supply for a number of years, thereby ensuring bulk pricing.
Since the manufacturer knows what's going to be required for a long time, his factory is built, fixed and/or upgraded to satisfy the expected orders, money for operating expenses is set aside, and the rest is guaranteed profit.
What if demand for HDDs skyrockets in the lottery system? Since the manufacturer already knows how much profit will be available, this can be used for increasing output without the risk involved in large free market price fluctuations. So the manufacturer talks to the lottery and they amend the contract. In the lottery, the supply goes from 50 to 100, and the manufacturer still has a guaranteed number of orders and associated profit.
Now in the lottery system, the increasing demand might be legitimate, ie people who really need the HDDs, or it might be intended for the black market. If there's real demand anywhere in the country, that demand will go into the lottery system, where it is visible by the operator, who can plan contract amendments with the manufacturer. That's because it's cheaper than the black market prices. The arbitrageurs find that the black market is relatively small and limited, and there's no explosion in demand at high prices.
As a result, the demand in the lottery reflects the real demand in the country fairly well, and the lottery is justified in allowing/requiring increased supply by talking with the manufacturer some more.
Your other post approved round-robin. That just pushes the competition into the secondary market,
Not at all. There's nothing inevitable or deterministic in your suggestion. The secondary market
isn't relevant to all the participants of the primary round-robin system. Most participants will use the hard drive they got for their own projects (that's why they joined the round-robin queue in the first place). A small fraction only will decide to defer their projects, and sell their drive on a secondary market.
The secondary market is more expensive, but clearly it's a fallacy to postulate that the secondary market somehow overrides or replaces the primary round-robin allocations.
Rationing for survival is not more "fair" than a market. It means that the state provides goods at a
price lower than their actual cost in order for the poorest to be able to purchase them. It's just
another form of welfare, and is no more or less legitimate or fair for being so.
Heh. Let me decode what you seem to be saying. The state ensures that all the population is able to obtain access to goods, and that is exactly as fair and legitimate as letting people die in the streets? Moreover, your argument seems to confuse the meanings of price and cost. In a free market, the price is determined by supply and demand, so actual cost is irrelevant. Why should the actual cost be suddenly such a big deal in a rationing system? You can't have it both ways. If you criticize rationing on the grounds that prices don't reflect actual costs, then you *must* criticize free markets on the same terms, namely that the prices determined by supply and demand don't reflect actual costs either.
Finally, if *survival* is at issue, I'd say that rationing is a lot more rational than a free market alternative, irrespective of fairness, welfare or legitimacy.
Slashdot Mirror
See? That's why I use Debian! With 5 years out of date software, I don't have to worry about those problems until 2017 :)
The case for taking food by force is as strong today as it was in the past, and the ability of the poor in the world to do so is as limited today as in the past.
Combat doesn't occur in a vacuum (or a nice empty plain with neat rows of soldiers in colourful uniforms).
I would replace the first example by "she is infertile because ovarian cancer destroyed her ovaries".
Correct. They are implying that you (a human being) can supply a logical explanation that will satisfy their curiosity.
The word reason implies some mental process or justification, an explanation or rationale for an event.
The word cause is neutral, and is appropriate to describe factual relationships.
Oh, it's *very* effective. That's how we knew just in time that Saddam had hidden chemical weapons and WMDs all over Iraq...
No. Evolution does not operate by reason or intelligence.
Thanks, someone ought to mod you up.
If the copyright madness isn't solved, then we won't be innovating enough to leave the solar system.
It doesn't matter what they reply, the choice is yours. If you refute their claim (counternotice), then the dispute must go to court or you get your stuff put back, according to the DMCA.
The Uranus Experiment [nsfw]
I'm sorry, I'm having a second discussion in parallel which interferes with this one. The calculation of prices in the other comment depends on some assumptions which aren't met in this example. The allocation of units is unaffected, but the common price paid by all the individuals who receive a unit of wheat, assuming they each only buy one unit, is of course the lowest amount payable here, $14.95. (Imagine that the seller of wheat reduces prices repeatedly until there are exactly 15 buyers).
I never claimed she is dumb. I claimed she is more worthy than Hognoxious. I admit it was a bit snarky, but you are saying exactly the same thing in a more sober way. She is more worthy than you or I. Well, certainly more worthy than I, maybe your bank account is bigger than hers.
Well, I'm happy to pay $2 million for a car, but the snag is I don't have $2 million. But it's sufficiently important to me, so do you think I can get the car?
Yes, that's another alternative system. The first thing you'll need to do is prevent inheritance and gifts. Once you die, all your money and assets get taken away. Your kids get an allowance, the same allowance everybody gets, and we all spend that allowance however we wish. Periodically, say once a year, the amounts in everybody's bank accounts are reset, and we all spend the same initial allowance again.
They're *all* willing to pay what it takes to get a unit. They might even be willing to pay for more than one unit, but I've simplified it.
No. The crazy guy doesn't spend all his money on a single unit. He is *willing* to spend all his money, but he spends at most the amount that his nearest rival is willing to spend.
With the numbers I gave, the top artist with $200.95 competes with the top farmer who has $50.65. The price rises until it reaches more than $50.65, and the farmer drops out. Now there's no competition, so the artist purchases his unit for $50.70, the lowest price he can.
Next, the artist has $150.25 left and he's still the richest individual, so he could beat the farmer for a second unit at $50.70 again, but I'm pretending that the artist is happy with a single unit. So now the farmer is the richest individual, and he's competing with the next one down, which is a baker with $45.85. They compete until the baker drops out, and the farmer pays $45.90 for his unit. Now his bank acount has $4.80 and he's out of the race. The baker has $45.85 and competes with the crazy guy who has $39.50. So the baker wins a unit for the price of $39.55$, and drops out. Then the crazy guy competes with the storer who has $34.95, and the crazy guy pays $35.00 and drops out. Etc.
Your second idea about taking a loan doesn't help. Suppose the farmer with $15 wants to compete with the crazy guy with $39.50. If the farmer can take out a loan, then the crazy guy can too. And the crazy guy has more collateral, so his interest rate on repayments will be lower than the farmer's. If they compete on loans, the total amount (bank account + borrowed amount) for the crazy guy beats the total amount for the farmer.
But in fact, the farmer with $15 will never compete with the crazy guy. If that was the case, the cost for this particular unit of wheat would be at least $39.50 and probably more. There's a much better way, which is that the crazy guy competes with the storer and the crazy guy wins. Then the storer competes with the next guy and so on, all the way down to the farmer with $15 who competes for one of the last few units. In this case, the farmer will only pay $14.95 or so to beat the next guy in line, which is much more efficient than taking a loan and paying $39.50 or more.
Just to be clear, I'm not trying to argue in favour of communism or a dictatorship, I'm merely pointing out that the invisible hand of the market doesn't provide goods at the lower edge of the wealth scale. This shortcoming is fixed in modern society by welfare, government grants and tax breaks, social networking and preferential treatment, etc. This is so the poor can eat, the poor scientists can send rockets to Mars, the nephew can get a job as a journalist, etc. But those mechanisms aren't formally taken into account in pricing, so we don't really understand theoretically what makes the economy work or not, and whether the results are optimal or not.
Yes, the scheduling algorithm computes the priorities. This would implement a scheduler using some form of currency and a supply and demand based pricing mechanism.
Supply is never 100% guaranteed. Distribution is not evenly guaranteed in a free market. Instead it is skewed towards those who have the most money to spend. Other systems, such as a lottery, have different properties, like a distribution without wealth bias.
No. Because the purpose of the black market is to resell goods at a higher price. The actual price in the lottery system is irrelevant. The black market price is always higher.
There's no claim whatsoever that a lottery system would give a cheaper price than a free market price. It might for reasons outlined earlier, but there's nothing forcing such an outcome. Higher or lower prices are really not the issue at all. The issue is distribution.
To take your beer example. Say the pub has only 10 glasses (I know...), and there are 11 thirsty customers that come every afternoon at 5. Each day, only 10 people get to have a drink, and it's always the same 10 people. Why? Because the barman tells them: the guy who pays the most gets the first glass. The next guy who pays the most gets the second glass, and so on. Every day, the poorest customer gets no drink, and that customer is always the same.
Now you might say that isn't fair. Maybe one of the other customers won't drink one day to give the last guy a chance. But they're all thirsty, every day, and it never happens. Well, the 11th guy never gets a drink unless something happens. Maybe the barman takes out some matches and everybody has to pick one. The guy with the short one goes without a drink on that day. Maybe some other method gets used. Anything's possible.
Let's not be hasty. *You* aren't worthy to have one. Paris Hilton however, is.
No, in short: the opposite of "there are some experiences in life that [you] can never have because the number of zeros in your bank account is too small" is "there are some experiences in life that you can only have if your bank account is sufficiently large".
It's ok to believe that last sentence is fair, and that you aren't worthy like Paris. It's a free country and everyone's opinion counts, more or less.
No, that's just crazy!
We should give one unit to an artist, one unit to each of the five bakers, one unit to the crazy guy, one unit each to two farmers, and the remaining six units each go to a different storer.
Given that this is a discussion, it seems obvious that I'm likely to disagree with your position and that I shall argue against your explanation. But I assure you this isn't personal, I'm only interested in the ideas. Although perhaps the AC has already said most of what should be said.
Are you saying that you believe it is fair that there are some experiences in life that can never have because the number of zeros in your bank account is too small?
Leaving aside the starvation issue on which we agree, I consider price controls an allocation mechanism. In fact, I dislike the term price control for this, as it suggests that "price" is somehow an important part of all allocation mechanisms. It is really only important in a free market context, which is only one of many resource allocation models. Similarly, when you say that people who are being subsidised reap the benefit of (I assume you meant the others') good investment decisions, you are implicitly setting up prices or investment returns as a central concept for resource allocation, which I disagree with.
My point is really that, while human beings need resources to exist and pursue their goals, there's no reason why some resource allocation methods are off the table, let alone all allocation methods that don't happen to be based on an ordering derived from the number of zeros in an individual's bank account.
Let's take the steps again, but more slowly and carefully. The lottery system is the official market for the HDDs (or if you like, whoever administers the lottery system has a long term contract with the manufacturers already). What does this imply? It means that during contract negotiations, the manufacturer was guaranteed to get a certain number of orders, and the lottery operator (it might be the state) can rely on a guaranteed supply for a number of years, thereby ensuring bulk pricing.
Since the manufacturer knows what's going to be required for a long time, his factory is built, fixed and/or upgraded to satisfy the expected orders, money for operating expenses is set aside, and the rest is guaranteed profit.
What if demand for HDDs skyrockets in the lottery system? Since the manufacturer already knows how much profit will be available, this can be used for increasing output without the risk involved in large free market price fluctuations. So the manufacturer talks to the lottery and they amend the contract. In the lottery, the supply goes from 50 to 100, and the manufacturer still has a guaranteed number of orders and associated profit.
Now in the lottery system, the increasing demand might be legitimate, ie people who really need the HDDs, or it might be intended for the black market. If there's real demand anywhere in the country, that demand will go into the lottery system, where it is visible by the operator, who can plan contract amendments with the manufacturer. That's because it's cheaper than the black market prices. The arbitrageurs find that the black market is relatively small and limited, and there's no explosion in demand at high prices.
As a result, the demand in the lottery reflects the real demand in the country fairly well, and the lottery is justified in allowing/requiring increased supply by talking with the manufacturer some more.
It does? How does that work?
Not at all. There's nothing inevitable or deterministic in your suggestion. The secondary market isn't relevant to all the participants of the primary round-robin system. Most participants will use the hard drive they got for their own projects (that's why they joined the round-robin queue in the first place). A small fraction only will decide to defer their projects, and sell their drive on a secondary market.
The secondary market is more expensive, but clearly it's a fallacy to postulate that the secondary market somehow overrides or replaces the primary round-robin allocations.
Heh. Let me decode what you seem to be saying. The state ensures that all the population is able to obtain access to goods, and that is exactly as fair and legitimate as letting people die in the streets? Moreover, your argument seems to confuse the meanings of price and cost. In a free market, the price is determined by supply and demand, so actual cost is irrelevant. Why should the actual cost be suddenly such a big deal in a rationing system? You can't have it both ways. If you criticize rationing on the grounds that prices don't reflect actual costs, then you *must* criticize free markets on the same terms, namely that the prices determined by supply and demand don't reflect actual costs either. Finally, if *survival* is at issue, I'd say that rationing is a lot more rational than a free market alternative, irrespective of fairness, welfare or legitimacy.