tag:blogger.com,1999:blog-1883567827950405204.post1366496597719173814..comments2023-10-24T11:53:12.980-04:00Comments on Meadowsweet & Myrrh: Voluntary PovertyAlihttp://www.blogger.com/profile/01738190874181111086noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1883567827950405204.post-80125081505431218622008-10-21T11:42:00.000-04:002008-10-21T11:42:00.000-04:00Ali,Hmmm... Well, first off, in the situation of ...Ali,<BR/><BR/>Hmmm... Well, first off, in the situation of buying the apple at the store, I very carefully did not say that both sides of the economic transaction benefited *equally*. In fact, measuring which side benefits more is basically impossible, since there are all sorts of subjective factors at play. It's probably the case that you (the purchaser of the apple) benefit a lot more than the grocery store, since an apple can keep you alive for a few hours, but the sale of one apple is only of miniscule benefit to the store. So really, there is no such thing as "real-world cost of production", since every individual and every company places different values on things.<BR/><BR/>Nevertheless, it IS possible to say that both sides benefit; otherwise the transaction (which is, after all, voluntary) would not have taken place.<BR/><BR/>If you're making a dollar a day and apples cost $.79, what is necessary is charity. Since it's so expensive to get apples to these unfortunates, feeding the people in this situation will be an economic drain on the rest of us -- a drain we should eagerly embrace. But it's worth noting, I think, that a company is designed to make a profit via a set of mutually-beneficial economic transactions, so it's not really fair to criticize it for not engaging in charity. It's like criticizing a hammer for doing a rotten job reaping wheat. <BR/><BR/>I'm afraid I had to chuckle when I read about your water example. You're basically describing the situation as it exists in the United States already. We all have to pay the government for our water; and the water is polluted by industries that have the full backing and blessing of the US government. If the government (ie judicial system) were doing its job, we would be able to bring a class-action lawsuit against businesses that pollute our water.<BR/><BR/>Given that water is a limited resource, I have no problem paying someone for it. I would be delighted to contribute to charities that distributed water to those who couldn't afford it. But the current system is a lot closer to what you describe.<BR/><BR/>Finally, concerning bubbles: a bubble occurs when lots of people make similar bad investments. Everyone cares about their money, and no one wants to make a bad investment. People try to check their investments to make sure they're good, but sometimes they don't have good information, or they make bad assumptions. There's no way around that, especially when governments fiddle with the interest rates or publish distorted economic figures. When a bubble occurs, it's best to allow the investments to fail, so that the money can be redirected into good investments. I'm not sure what this has to do with charity.Jeff Lillyhttps://www.blogger.com/profile/04863295594209617987noreply@blogger.comtag:blogger.com,1999:blog-1883567827950405204.post-69890752608286117742008-10-20T16:09:00.000-04:002008-10-20T16:09:00.000-04:00Jeff, You are right, and I don't really believe ec...Jeff, You are right, and I don't <I>really</I> believe economics is a zero-sum game, though it's a very easy explanation to fall back on. Kind of like my response to wealthy individuals who complain about paying taxes: want to pay fewer taxes? Easy: make less money. Obviously their real complaint is about having less money <I>for themselves</I>, so that making less is not really a reasonable solution to propose. However it does help to illustrate their unspoken belief that their wealth is something they have earned and thus deserve, regardless of the systemic inequalities that enabled them to earn it.<BR/><BR/>But anyway--I'm more concerned about resources and remaining grounded in their reality (and their very real finiteness). In order to claim that both me and the store/employer/whoever benefit from economic transactions, notice that you've already had to step back one level of abstraction and bring in the idea of money. But money, especially now that it's no longer tied to actual stores of gold, is merely an imaginary way of participating in the game, and different players may have different ideas of how money "translates" in terms of real resources, material goods and labor. Someone who makes less than a dollar a day, for instance, (because some company based oversees has a different evaluation of the monetary value of that person's labor) may not consider a 79-cent apple as "worth the price," but if there is simply no viable way to provide apples, or any food, for less (if the real cost in resources and time, to grow, ship, and/or package the apple, simply cannot be accomplished for less than, say, 77 cents and the company simply cannot stay in business without some marginal profit)--then the person making a dollar a day has the choice to spend more on the apple than they can truly afford, or they'll starve. In a world where everyone is paid fairly for their labor and goods are priced fairly according to their real-world cost in terms of production, etc., then we might say that economic transactions benefit everyone involved. But that is not how the real world works.<BR/><BR/>Another example is water. A friend was telling me recently about a situation he heard of in some countries (and possibly soon here in the U.S.) of companies "owning" water and charging for its use and consumption. Their justification was that they do the service of cleaning and purifying the water, so they should be allowed to charge people for that service in compensation. As my friend pointed out, however, these companies are often the <I>very same companies</I> causing such high concentrations of pollution in the water to begin with. But rather than viewing the clean-up of their own waste as part of the "cost" of the original production process, they are able to abstract and compartmentalize to such an extent that they can profit even more from a service that is actually damaging to the environment and the people they claim to "benefit." But people <I>need</I> clean water in order to survive--just as they need food, and air--so whatever these companies end up charing will <I>have</I> to be worth paying, since survival itself can never be less dear than one's material wealth (i.e. what good is money if you're dead?). Thus, companies are able to "work the system" of abstract economic justification in order to profit twice over from something that used to be a freely available resource to all living creatures on earth. And they'll get away with it, because people have gotten so focused on economic double-talk that they've forgotten that water used to be naturally clean and apples used to grow wild.<BR/><BR/>And <I>that</I> is the sense in which I mean that personal profit too often comes at the cost of someone (or something) else. The history of capitalism is riddled with burst bubbles, because its natural tendency is to run away with itself, dreaming and abstracting and projecting future profits that just cannot be sustained by finite real-life resources. As above, so below. Individuals are just as much at risk of this delusional chasing of ever-increasing wealth as are economic systems as a whole (after all, it is the individual pursuit of such wealth upon which these economic systems are based). So even if the apple is worth more to you than 79 cents, do you really want to pay that 79 cents to a company who values 79 cents more than a life-giving apple, and the pesticides it uses to grow that apple, and the creatures who all depend on the now-polluted water in order to survive. In other words, do you want to benefit from a transaction with a company who values an abstraction like money so highly, at the expense of real life? Doesn't that make you party to your own exploitation?Alihttps://www.blogger.com/profile/01738190874181111086noreply@blogger.comtag:blogger.com,1999:blog-1883567827950405204.post-85645879168171315242008-10-20T12:53:00.000-04:002008-10-20T12:53:00.000-04:00I do agree with 99.9% of this post, but it seems t...I do agree with 99.9% of this post, but it seems to me you are making a core economic assumption that is very common, but misguided. You assume that in order for other people to have more abundance, you have to give up some of yours; i.e. you assume that economics is a zero-sum game, like chess. If you win, someone else has to lose. But that's not the case at all.<BR/><BR/>In fact, economic transactions are almost always win-win. If you go to the store and buy an apple for $.79, who wins -- you, or the store? The answer is, BOTH of you. After all, you now have an apple, which you value more than the $.79. (Presumably you value the apple more than $.79, or you wouldn't have paid the money.) And the store now has the $.79, which it valued higher than the apple (otherwise they would have charged a higher price).<BR/><BR/>Similarly, when you go to work, you value the money you receive higher than the time you're giving up. Otherwise, you'd keep your time for yourself. Right? So both you and the place you work are winning in this transaction.<BR/><BR/>So I would offer just this: don't choose poverty so that other people will have more. Choose poverty for other reasons, sure. But the economy isn't zero-sum.Jeff Lillyhttps://www.blogger.com/profile/04863295594209617987noreply@blogger.com