Do you have any evidence of this? I think this might have been true in the 90's, but not any more.
Many of my friends attend an design school in the area(DASH), and I've heard numerous complaints whenever their school tried to have them use a Mac. Most of these kids were brought up with Windows, and want to stick with a platform that now has equal functionality and greater compatibility with peripherals(or at least that is how they perceive it, I don't want to start a flame war).
It's entirely possible that this is not representative of the population at large, but I'd like to see some statistics to overrule the anecdotal evidence I've observed.
"In short your model is in the same boat as that of the Commies: it works (sort of, if you squint, make a lot of wild, unproveable assumptions, and do not ask too many questions) on paper but it has a snowball's-in-Hell chance of remaining even remotely close to its "ideal" in the real world."
As I said before, our economy is just an approximation of a perfect market. But surely, we should pass laws and regulations that help make this approximation closer.
"Muahahaha! So you've abandoned your idols, the Hyaks, the Von Mises, the Friedmans, the Sachs etc who all claimed that Pareto-efficiency is the cornerstone of "free markets" and their defining feature"
No, let me explain this again. Every mutualy benificial transaction is done, and then the resulting allocation of resources that occur as an equilibrium are Pareto efficient.
"And so now you claim that, in effect, the supply always exceeds demand!"
No, I did not say that at all.
"they also claimed that the system continuously "moves about" its Pareto-efficiency point, thus being (ever temporarily) in Pareto-inefficent state, and that is where all the progress comes from!"
Actualy, "they" did not say this at all. The Free-Market is just a means of distributing resources. Progress is when the total number of resources increase, usualy as a result of new technologies. For more information, look up CGEs on wikipedia.
"Your definition of "free" means businesses are forced to behave the way you want them to. That is not free."
Freedom is rather arbitrary and difficult to define(mainly because the individual freedoms of different individuals often collide). As a society, we agree to forgo certain individual freedoms in exchange for prosperity, and in some cases, further "freedom".
"Sigh, yet another copout. "Voluntary" is a code word for "making a choice from an available list of choices" in which the major sociopaths (i.e. successful Capitalists) get to control what's on the list."
No, perfect competition dictates that individual actors do not have control over the "choices", or specificly, the prices of goods. When they do, rather bad things can happen. A certain degree of control is inevitable, but we should try and minimise that through relevent regulation. That was what I was originaly advocating.
Refering to your other complaint, transactions in which one person is made better off at the expense of the other, do not occur in a free-market.
"What?! Do you actually read your own theories? Pareto-efficiency is precisely a state where improvement of a position of one individual must be accompanied by a loss to others. You've now completely lost track of your own argument!"
Actions which help one person at the expense of another do not happen in Walrusian competition, as all transactions are volentary.
"You've lost it completely. Now you are arguing that free-markets are perpetually Pareto-inefficient! Which of course goes against all the Holy Scriptures of Ludvig Von Mises / Hayek / Milton Friedman! Not to mention your own statements just a few posts ago! Let me remind you:"
I'm not sure how I claim that at all, please elaborate.
"So as a service provider you should be forced to support anybody who pays the "going rate.""
Enforcement costs would most likely outweigh benifits if we extended it to all workers. But exclusivity should be banned for service providers above a certain size.
"Differentiation, should also be banned as it moves away from a perfectly competitive state, so all labor should be paid at the same rate."
Not at all. Bundling goods sometimes creates extra value, because of non-linear utility functions. If a cerial company wants to bundle their cerial with Star Wars toys, all the better for them.
But, this differentiation should not be on the basis of monopoly(patents might be an exception to this). These Star Wars toys must be available to purchase by any other breakfast company who wants them.
"Essentially you are arguing all markets should just be a bunch of interchangable parts with no economic profit."
No, I'm arguing that a narrow class of economic transactions(carrier lock-in and exclusivity contracts), should be banned.
"Just remember this: in a Capitalist system the player entities (consumers/suppliers) do not have to be individuals."
Your right, they do not. They do on the other hand, have to satisfy certain requirements, outlined in the welfare theorem, that the Soviet Union did not.
I do not think that we are arguing about the same thing. You are refering to plutocratic darwinism, where the people in power actively work to screw over those who are not. These groups sometimes claim that they are capitalist, but they are not. These groups will fight capitalism, because in a true free-market system, power is meaningless.
"Clearly a desire to starve other poeople so that you can own a galaxy or two falls into the category of insanity, no? You can backtrack from there."
Right, but such an outcome is not Pareto efficient. Starving people to own a galaxy makes one person better off, while making someone else worse off. This is not allowed.
"Define "bigger"! 5 rooms? 1500 rooms? 25000 rooms and a staff of 5000?"
In a true free-market system, this person made his money by creating resources, not by hurting anyone. If he wishes to build a giant house with a large staff, that is his perogotive. I couldn't care less, assuming that he did not hurt anyone by getting the money,
I realise that this criterion is not always satisfied, but that should be what our goverment focuses on. Ensuring that individuals do not fuck over society in the process of enriching themselves.
"Some people have the desires I just outlined. And we should dismiss them. Because they are simply insane. By any definition except of those of the Priests of the Religion of Unlimited Greed."
If they harm anyone they can go to jail. Otherwise, I really couldn't care less how they spend the money.
"There are inefficiencies, but it is the most natural state. Perfect competition is an ideal - Barriers for entry will always exist, and suppliers will distinguish between their goods and those of others"
The perfect market is an ideal, but one we should strive for. Prohibiting these kind of transactions helps our economy more closely approximate a perfect one.
"What about a company offering to pay you a large bonus to sign a 1 year exclusive deal for your services, should that be banned also?"
"What you describe are tactics used in monopolistic competition, which occurs in almost all markets for non-commodity products."
Just because it is widely done does not make it right. I can not see why the outcomes of such actions are pareto-efficient, and I think the overall economy would be better if we banned such activities.
"It's not much different than General Mills signing an exclusive deal to put plastic Star Wars toys in their cereal boxes."
"Dude, Capitalism is an economic system, while Fascism is a political one."
One of the principles of fascism is corporatism. Corporatism is a anti-competitive form of economic organization for political purposes. This is incompatible with capitalism.
"Even the "communist" Soviet Union was in fact an example of an extreme case of capitalism, with only one capitalist allowed to function: the state. Hint: in a true communist system there is supposed to be no money"
No, it's not. Your confusing plutocracy with capitalism. None of the outcomes you have mentioned are the results of Walrusian competition, but of government intervention.
"Which part of satsifying individual physical wants to the point where sane people do not want any more is somehow translating to "less"?"
I don't take it upon myself to judge other people's desires as "sane" or "insane", without a doctor. I don't see what is insane about preferring to live in a bigger house, or desiring to drive a nice car. I don't have these desires, but I can't dismiss other people for sharing them.
I'm using this as an example of a greater problem. I do not believe that carrier lock-in or exclusivity contracts should ever be allowed.
For example, look at the market for Soda Machines. Right now, Soda Machine installers only place machines if they can get a legal exclusivity deal to protect them from competition. This is why Soda costs $3 at theme parks, and $2.50 at universities. Without such regulations, we'll see prices fall drastically to prices seen in other countries with better anti-trust law(I've seen $0.25 cans).
"AT&T spent a lot of time and cash upgrading various network elements to support iPhone features like Visual Voicemail and 'improved' Safari web browsing. No carrier would have made those investments if it weren't in an exclusive deal, because it wouldn't have justified the cost."
I doubt that. Visual voicemail could have been carrier independent at negligible cost(If you cant think of how, just tell me and I'll post it). I have not seen any evidence that AT&T has upgraded their networks as a result of Iphone sales., and I certainly have not seen evidence that they wouldn't have upgraded anyway if it were not for Iphone customers.
But that is besides the point, this AT&T deal constitutes a subsidy, which distorts Iphone sales from market equilibrium. Economic theory dictates that this distorts the overall economy, and that aggregate utility is lower when these kind of transactions are allowed.
"Bullshit. Economic systems do not operate in a vacuum (or in some make-believe never-never-land located somewhere up Milton Friedman's at this point imaginary rectum), they are a piece of larger societal order and subject to factors such as the overall political structure of the society. If the feudal lords come to be again, capitalism will not stand in their way. As it did not stand in the way of Fascism."
Fascism is not capitalism, it's Fascism. Capitalism is rather incompatible with feudalism, though it sadly seems to work very well with authoritarianism.
"The point of course would be to maintain the Pareto-inefficiency until for all practical purposes the point is reached where the physical wants of individuals were satisified to a level where other, intellectual pursuits take their place."
So a world with less stuff, at no extra cost(time or otherwise), is better?
"A feudal system in which one small group of individuals owns everything and all other people are their slaves with no property or economic power is also Pareto-efficient"
The equilibria produced by perfect competition are Pareto-efficient, but there are many restrictions on the equilibria that are reached. These tend to eliminate singular cases like what you mentioned.
"The holy grail of science of economics would be a system that can never become Pareto-efficient, and thus gains are possible to individuals without others losing anything."
Ok, suppose such a system existed, and there are actions that improve utility without any cost. Let us keep applying these actions until we cannot do so anymore (clearly such a point exists, otherwise we have infinite resources). Won't this state we just reached be Pareto-efficient?
Ok, ensure that the resource allocation is Pareto optimal, that no person can be made better without another being made worse. In other words, all mutually beneficial trades occur.
There are actually many Pareto optimal equilibria, infinitely many sometimes. So you want to achieve the Pareto equilibria with the greatest aggregate utility. See the Welfare Theorem for more details.
As long as we ensure that individual players in an economy pay the cost they incur on society(to avoid tragedy of the commons situations), then the previous goals are made much easier to reach.
"I would be genuinely interested in seeing some citations. I'm not an expert on economics by any means, and this seems critical to the entire conversation."
I'm not one either, I'm a math major. But I'm taking some upper division classes in Economics to fill time, and my professor mentioned the theorem during class. Most economics journals are gated, so I'll ask my professor about it tomorrow in class.
While I agree with you that these kind of laws can be difficult to craft, in this case, it would be simple. We need to ban certain types of market practices, that are not new or unique to technology markets by any means. Loss leaders, the creation of artificial shortages to create buzz, vendor tie in, and exclusivity contracts.
Other problems, like net nuetrality and software patents, are much trickier, and require much deliberation. But all of these things have been around for centuries, its about time we acted.
"That's all the 'free market' ever promises, and it doesn't try to protect the 'collective well-being of society' either, it's purely and simply a model of trade."
Yes, of course it is a model of trade among many. Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life. The Free-Market, properly defined (no transport costs, perfect information, contract enforcement, etc.), ensures that our economy will be Pareto-Efficient, in other words, it ensures the "collective well being of society".
"Carrier lock-in" (a con) may translate to lower cost-of-entry (a pro) for the customer. Allowing companies to do this maximizes the choice available to the consumer."
Yes, but at the cost of the productivity of the overall economy. Exclusivity deals are exogenous subsidies; these distort production levels and consumer demand from "market" equilibrium positions, creating deadweight loss.
The effects of corporate subsidies are exactly as the ones done by the government.
By the way, how do explicit restrictions on consumer actions lead to greater choice?
"Then look at the numbers themselves. If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be? Prohibitive is my guess, and it isn't like you can force them to make it cheap without grossly overstepping the bounds of what a government should be able to do when it comes to product pricing."
I recall my Micro teacher proving that these kind of transactions lead to non-efficient outcomes. Aggregate utility is better off if carrier lock-in is banned.
If the Iphone is supposed to be $700, it should be, as otherwise we artificially inflate demand and distort the economy. Subsidies from companies have the same effect as subsidies from government.
No, all of those things are still variables. It is fully possible that there will be cheaper phones that provide better coolness/$ than the Iphone(like all of those Chinese knockoffs).
"The iPhone isn't intended for everyone, and if you have to jump through hoops to get it on your terms, it certainly isn't meant for you. Wait a little while so the market can come to terms with how to create appropriate competing products, and buy something that actually fits your needs."
Or, we could ban carrier lock-in. That would be faster and better for our economy.
"A business doesn't have to cater to what's BEST for the customer."
Your right, I don't expect a business to act in any way that does not maximize their own profit. Nevertheless, we need to pass laws and regulations to ensure that the actions of profit maximizing corporations do not interfere with the collective well-being of society.
Property laws, Anti-trust legislation, and contract enforcement are all examples of such laws. Without such measures, free markets would barely function, let alone be optimal.
Certain types of actions, such as carrier lock-in, creating Monopoly power, and exclusivity contracts, are very often the most profitable courses of action for a company (An extreme example would be forced enslavement and wide scale theft). However, these actions leave society poorer than it would have been had these actions been illegal.
The Free Market is a mathematical ideal, described precisely in the first Welfare theorem. It is a great ideal, and one that we should strive for as an utmost priority. However, the model assumes that these kinds of transactions do not exist.
So to support a business model based on depriving consumer choice is not free-market, it's Plutocratic.
Slashdot Mirror
So how prevalent is KDE usage in Israel?
Many of my friends attend an design school in the area(DASH), and I've heard numerous complaints whenever their school tried to have them use a Mac. Most of these kids were brought up with Windows, and want to stick with a platform that now has equal functionality and greater compatibility with peripherals(or at least that is how they perceive it, I don't want to start a flame war).
It's entirely possible that this is not representative of the population at large, but I'd like to see some statistics to overrule the anecdotal evidence I've observed.
I don't see why, see http://en.wikipedia.org/wiki/Economic_calculation_problem .
As I said before, our economy is just an approximation of a perfect market. But surely, we should pass laws and regulations that help make this approximation closer.
"Muahahaha! So you've abandoned your idols, the Hyaks, the Von Mises, the Friedmans, the Sachs etc who all claimed that Pareto-efficiency is the cornerstone of "free markets" and their defining feature"
No, let me explain this again. Every mutualy benificial transaction is done, and then the resulting allocation of resources that occur as an equilibrium are Pareto efficient.
"And so now you claim that, in effect, the supply always exceeds demand!"
No, I did not say that at all.
"they also claimed that the system continuously "moves about" its Pareto-efficiency point, thus being (ever temporarily) in Pareto-inefficent state, and that is where all the progress comes from!"
Actualy, "they" did not say this at all. The Free-Market is just a means of distributing resources. Progress is when the total number of resources increase, usualy as a result of new technologies. For more information, look up CGEs on wikipedia.
Freedom is rather arbitrary and difficult to define(mainly because the individual freedoms of different individuals often collide). As a society, we agree to forgo certain individual freedoms in exchange for prosperity, and in some cases, further "freedom".
No, perfect competition dictates that individual actors do not have control over the "choices", or specificly, the prices of goods. When they do, rather bad things can happen. A certain degree of control is inevitable, but we should try and minimise that through relevent regulation. That was what I was originaly advocating.
Refering to your other complaint, transactions in which one person is made better off at the expense of the other, do not occur in a free-market.
Actions which help one person at the expense of another do not happen in Walrusian competition, as all transactions are volentary.
"You've lost it completely. Now you are arguing that free-markets are perpetually Pareto-inefficient! Which of course goes against all the Holy Scriptures of Ludvig Von Mises / Hayek / Milton Friedman! Not to mention your own statements just a few posts ago! Let me remind you:"
I'm not sure how I claim that at all, please elaborate.
Enforcement costs would most likely outweigh benifits if we extended it to all workers. But exclusivity should be banned for service providers above a certain size.
"Differentiation, should also be banned as it moves away from a perfectly competitive state, so all labor should be paid at the same rate."
Not at all. Bundling goods sometimes creates extra value, because of non-linear utility functions. If a cerial company wants to bundle their cerial with Star Wars toys, all the better for them.
But, this differentiation should not be on the basis of monopoly(patents might be an exception to this). These Star Wars toys must be available to purchase by any other breakfast company who wants them.
"Essentially you are arguing all markets should just be a bunch of interchangable parts with no economic profit."
No, I'm arguing that a narrow class of economic transactions(carrier lock-in and exclusivity contracts), should be banned.
I always hoped we could just leave him tied up on an intersection in Anbar.
Your right, they do not. They do on the other hand, have to satisfy certain requirements, outlined in the welfare theorem, that the Soviet Union did not.
I do not think that we are arguing about the same thing. You are refering to plutocratic darwinism, where the people in power actively work to screw over those who are not. These groups sometimes claim that they are capitalist, but they are not. These groups will fight capitalism, because in a true free-market system, power is meaningless.
"Clearly a desire to starve other poeople so that you can own a galaxy or two falls into the category of insanity, no? You can backtrack from there."
Right, but such an outcome is not Pareto efficient. Starving people to own a galaxy makes one person better off, while making someone else worse off. This is not allowed.
"Define "bigger"! 5 rooms? 1500 rooms? 25000 rooms and a staff of 5000?"
In a true free-market system, this person made his money by creating resources, not by hurting anyone. If he wishes to build a giant house with a large staff, that is his perogotive. I couldn't care less, assuming that he did not hurt anyone by getting the money,
I realise that this criterion is not always satisfied, but that should be what our goverment focuses on. Ensuring that individuals do not fuck over society in the process of enriching themselves.
"Some people have the desires I just outlined. And we should dismiss them. Because they are simply insane. By any definition except of those of the Priests of the Religion of Unlimited Greed."
If they harm anyone they can go to jail. Otherwise, I really couldn't care less how they spend the money.
The perfect market is an ideal, but one we should strive for. Prohibiting these kind of transactions helps our economy more closely approximate a perfect one.
"What about a company offering to pay you a large bonus to sign a 1 year exclusive deal for your services, should that be banned also?"
Yes.
Just because it is widely done does not make it right. I can not see why the outcomes of such actions are pareto-efficient, and I think the overall economy would be better if we banned such activities.
"It's not much different than General Mills signing an exclusive deal to put plastic Star Wars toys in their cereal boxes."
That should not be allowed either.
One of the principles of fascism is corporatism. Corporatism is a anti-competitive form of economic organization for political purposes. This is incompatible with capitalism.
"Even the "communist" Soviet Union was in fact an example of an extreme case of capitalism, with only one capitalist allowed to function: the state. Hint: in a true communist system there is supposed to be no money"
No, it's not. Your confusing plutocracy with capitalism. None of the outcomes you have mentioned are the results of Walrusian competition, but of government intervention.
"Which part of satsifying individual physical wants to the point where sane people do not want any more is somehow translating to "less"?"
I don't take it upon myself to judge other people's desires as "sane" or "insane", without a doctor. I don't see what is insane about preferring to live in a bigger house, or desiring to drive a nice car. I don't have these desires, but I can't dismiss other people for sharing them.
I'm using this as an example of a greater problem. I do not believe that carrier lock-in or exclusivity contracts should ever be allowed.
For example, look at the market for Soda Machines. Right now, Soda Machine installers only place machines if they can get a legal exclusivity deal to protect them from competition. This is why Soda costs $3 at theme parks, and $2.50 at universities. Without such regulations, we'll see prices fall drastically to prices seen in other countries with better anti-trust law(I've seen $0.25 cans).
I doubt that. Visual voicemail could have been carrier independent at negligible cost(If you cant think of how, just tell me and I'll post it). I have not seen any evidence that AT&T has upgraded their networks as a result of Iphone sales., and I certainly have not seen evidence that they wouldn't have upgraded anyway if it were not for Iphone customers.
But that is besides the point, this AT&T deal constitutes a subsidy, which distorts Iphone sales from market equilibrium. Economic theory dictates that this distorts the overall economy, and that aggregate utility is lower when these kind of transactions are allowed.
Fascism is not capitalism, it's Fascism. Capitalism is rather incompatible with feudalism, though it sadly seems to work very well with authoritarianism.
"The point of course would be to maintain the Pareto-inefficiency until for all practical purposes the point is reached where the physical wants of individuals were satisified to a level where other, intellectual pursuits take their place."
So a world with less stuff, at no extra cost(time or otherwise), is better?
The equilibria produced by perfect competition are Pareto-efficient, but there are many restrictions on the equilibria that are reached. These tend to eliminate singular cases like what you mentioned.
"The holy grail of science of economics would be a system that can never become Pareto-efficient, and thus gains are possible to individuals without others losing anything."
Ok, suppose such a system existed, and there are actions that improve utility without any cost. Let us keep applying these actions until we cannot do so anymore (clearly such a point exists, otherwise we have infinite resources). Won't this state we just reached be Pareto-efficient?
There are actually many Pareto optimal equilibria, infinitely many sometimes. So you want to achieve the Pareto equilibria with the greatest aggregate utility. See the Welfare Theorem for more details.
As long as we ensure that individual players in an economy pay the cost they incur on society(to avoid tragedy of the commons situations), then the previous goals are made much easier to reach.
I'm not one either, I'm a math major. But I'm taking some upper division classes in Economics to fill time, and my professor mentioned the theorem during class. Most economics journals are gated, so I'll ask my professor about it tomorrow in class.
While I agree with you that these kind of laws can be difficult to craft, in this case, it would be simple. We need to ban certain types of market practices, that are not new or unique to technology markets by any means. Loss leaders, the creation of artificial shortages to create buzz, vendor tie in, and exclusivity contracts.
Other problems, like net nuetrality and software patents, are much trickier, and require much deliberation. But all of these things have been around for centuries, its about time we acted.
Yes, of course it is a model of trade among many. Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life. The Free-Market, properly defined (no transport costs, perfect information, contract enforcement, etc.), ensures that our economy will be Pareto-Efficient, in other words, it ensures the "collective well being of society".
"Carrier lock-in" (a con) may translate to lower cost-of-entry (a pro) for the customer. Allowing companies to do this maximizes the choice available to the consumer."
Yes, but at the cost of the productivity of the overall economy. Exclusivity deals are exogenous subsidies; these distort production levels and consumer demand from "market" equilibrium positions, creating deadweight loss.
The effects of corporate subsidies are exactly as the ones done by the government.
By the way, how do explicit restrictions on consumer actions lead to greater choice?
I recall my Micro teacher proving that these kind of transactions lead to non-efficient outcomes. Aggregate utility is better off if carrier lock-in is banned.
If the Iphone is supposed to be $700, it should be, as otherwise we artificially inflate demand and distort the economy. Subsidies from companies have the same effect as subsidies from government.
No, all of those things are still variables. It is fully possible that there will be cheaper phones that provide better coolness/$ than the Iphone(like all of those Chinese knockoffs).
Sounds more likely that they will just drive these already shady companies further underground. Expect Iphones to "fall out of a truck".
Or, we could ban carrier lock-in. That would be faster and better for our economy.
Your right, I don't expect a business to act in any way that does not maximize their own profit. Nevertheless, we need to pass laws and regulations to ensure that the actions of profit maximizing corporations do not interfere with the collective well-being of society.
Property laws, Anti-trust legislation, and contract enforcement are all examples of such laws. Without such measures, free markets would barely function, let alone be optimal.
Certain types of actions, such as carrier lock-in, creating Monopoly power, and exclusivity contracts, are very often the most profitable courses of action for a company (An extreme example would be forced enslavement and wide scale theft). However, these actions leave society poorer than it would have been had these actions been illegal.
The Free Market is a mathematical ideal, described precisely in the first Welfare theorem. It is a great ideal, and one that we should strive for as an utmost priority. However, the model assumes that these kinds of transactions do not exist.
So to support a business model based on depriving consumer choice is not free-market, it's Plutocratic.