I notice that some stories (I am talking about fiction) are fallicious in their treatment of economics. For instance, I read a story about a girl who was gifted in terms of producing precious gemstones out of her mouth whenever she spoke. Apparently, after she did this, at the end, she gave the gemstones to poor farmers, who suddenly became wealthier, and her husband, a prince, who built an elaborate castle. Does the author have any idea that suddenly producing more gems reduces their exchange value, unless people are crazy and want tons of gems? Why did it seem that the farmers were able to get some capital goods, who produced them? Where else does economic fallacy exist in literature?
I thought the book was interesting in its treatment of theft, greed, and the state. People, especially the prince, kept taking gems from her, even though she produced them.
The best example is without a doubt, Star Trek. The ‘replicator’ acts as post-scarcity plot device, yet for some reason it can not replicate star craft (IE or other things that would render the show uninteresting).
Here is a good rundown of the economic fallacies of Star Trek:
I agree with the author’s points although he is incorrect on patents.
I read a lot of Science Fiction and broadly speaking, it’s successful authors are mostly left wing. They may often be quite knowledgable about science in general but when it comes to economics, they are usually as ignorant as the masses.
You need look no further “1984” by George Orwell for instance that espouse popular fallacies about capitalism leading to over-production.
Another interesting book was “The Dispossessed” by Ursula Le Guin which explores and contrasts a communist-anarchist and a state-capitalist society. In this story, the main character, Shep, who was brought up on the communist-anarchist society travels to the other and studies it. He picks up an economic text book (it doesn’t say which) but soon throws it down in disgust, dismissing it as mere rationalisation by people defending their own interests. Such is the disdain for economic law that pervades the thoughts of many SF writers.
Another common fallacy is in the many visions of our future society in which we have completely used up and exhausted one resource or another. This is invariably blamed on unrestrained markets and a lack of institutional controls. Obviously this ignores the way markets enforce the economisation of resources as they become increasingly scarce with the price mechanism.
Still, I love SF and just force myself to overlook these fallacies when I read them.
I wonder how much of it is Baby Boomer “gatekeeper” editors. I have been reading Gardner Dozois’s anthology for a number of years and it just keeps getting worse as he gets older and softer.
BTW, Dalrymple wrote an article a couple of years ago tearing Orwell up. Orwell had a serious cognitive disconnect about socialism.
The continual argument that WW 2 cured the depression. How could the production of war materials , that produce nothing and are destroyed increase the wealth of a country. Yes the individual does have money but where did it come from. Their employer, who contracted with the government who gets its money from the individual in taxes, bonds and inflationary printing of money. Agree that the war brought about a confidence in the country and the spirit of Nationalism was never more high.
Some fallicies don’t go over the top to being fallicious, but they don’t make sense from an economic standpoint. For instance, it does not make sense that there appears to be no black market in Harry Potter, when wizards and muggles (normal people) do no trade. Many services that the wizard can provide are extremely useful: repairing broken objects to their flawless state, good transportation, killing people with no trace of death, muffling the sound of an object to 0, etc. It does not make sense, why don’t they trade when there is a huge incentive to?
In addition, in D&D (Jon Irenicus, I know that you play this) it apparently costs some amount of gp (gold pieces) to buy a magic item, when it can be produced for half of that amount (and some experience points). In addition, you can only sell magic items for half of the amount. Why is this true? Wouldn’t magic item shops lower their prices to stay competitive? Wouldn’t people try to sell them for higher since the shops sell the items for so high? Someone needs to make an expansion book for D&D 3.5 titled “Building a realistic economy”.
Well, to be completely honest, modern economic textbooks (Keynesian, neoclassical, etc.) are in large part rationalizations defending the interests of the powerful. And Orwell’s conception of capitalism is what we would call state-capitalism or corporatism, of which over-production can indeed be a problem. He does conflate “really-existing-capitalism” with a true free market, but that’s nothing new. Many intelligent leftists are spot on with their critiques of modern state-capitalism;, but semantics (surprise!) gets in the way of understanding.
D&D is merely using rules of thumb, since ultimately the price is at the DM’s discretion, and it does allow for modifying prices upwards or downwards according to supply and demand factors. Plus there is the possibility of haggling, and there is the appraise skill. In MMOs pricing can be left entirely to a market, so those rules of thumb need not even be used (I will ignore the abomination called 4e that was in many ways modelled of MMOs.) Why an item should sell for much less than the going market rate is beyond me. Much of D&D is built on incredibly simplistic politics and economics.
4e is great fun, but definately informed by contemporary RPGs like WoW. It’s a step back in terms of complexity, but all the important (to me) aspects of older additions seem to be retained.
There should be an incredible amount of inflation in a D&D economy. Adventurers suddenly dig out thousands of gp out of the ground, and they go about spending their fortunes without thought as to what happens when 100 gp are spent in a little hamlet that only sees sps most of the time. Its a Keynesian dreamland.