In many political discussions, the following question arises “Is action X good for the economy”.
I used to hear the arguments out about whether or not X was good or bad for the economy, but now I am thinking the entire question is misguided.
Shouldn’t the question be abanonded, and be rephrased as “Does action X increase or decrease the liberty of individuals in the economy”
The biggest problem with the first phrasing is that it is exceedingly vague. What do you mean by “good for the economy”? Increasing GDP? Increasing tax revenue? Increasing real wages? Decreasing unemployment? The second problem which applies to both phrasings is the fact that the “goodness” of them is subjective. Even if you made a concise definition for the first phrase, what makes this “good” for the economy, and what makes “liberty” good or desirable in the second phrasing. The other problem with the second phrasing is that, once again, it is not concise. When you say liberty, do you mean number of uninhibited actions and number of choices? Or do you mean the ability of people to act without interference by the state? If it is the latter case, then it relates little to the first “question”, and the two have nothing in common and indeed the question does us little good in the first place.
At any rate, expound upon purpose and give a more precise definition of either.
It’s not completely invalid.
The structural problem in the question is that it treats the economy (an aggregate) as if it can valuate, which it cannot. Only individuals can valuate. However, it is clear that basically everyone in North Korea is in much worse shape than basically everyone in, say, the US or UK or any European country. So, there is some general sense in which we can “all” be better off or worse off.
The trouble arises when you try to apply this very crude differentiation to policy debates… “Will Americans be better off if those making $250,000 or more per year are taxed more heavily?” is a fallacious question. Those Americans who are subjected to the tax will definitely be worse off and some of those who are not subjected to the tax will benefit. The trouble is that we are asking a value question about an aggregate when aggregates cannot value things.
Contrast this with what you do when deciding whether to buy an apple or an orange with the $1.50 in your pocket. You’re hungry, you want to eat a piece of fruit and the question facing you is which piece of fruit you prefer to eat at this moment - an apple or an orange? This is entirely different than the question “do Americans prefer to tax those making more than $250,000 at a higher or lower rate?” even though the public policy discourse mistakenly plows ahead as if these two questions are of the same basic variety.
Clayton -
Thank you both for the replies.
Clayton, I think you have summed up what I was trying to get at. You are just far more articulate.
Let me play Devil’s advocate though: why can’t aggregates value things?
Perhaps it is not liberty but quality of life the indeviduals would like for themselves that should be answered. It is fairly obvious that the american public value security over liberty and luxury over freedom.
It is fairly obvious that “the american public” is made up of individuals who have different values that cannot be aggregated.
because valuation is an individual task. “value” is the ordinal rank that an individual assigns to something with respect to his perceived ability to use that thing to satisfy his wants. How do you propose to aggregate this phenomenon?
I am fairly certain “mainstream” and “average American” have made it into your lexicon. There is such a concept of standard deviation and mean as used in statistics. Aggregating a group of people based on nationality is possible in a scenario as there are are two polls with the majority of individiduals somewhere in the middle.
You can add the weight of a basket of fruit in grains to the number of seconds it takes for a slinky to climb down the stairs and it will tell you just as much about anything you want as the kind of statistics you are referring to.
noun
1.
relative worth, merit, or importance: the value of a collegeeducation; the value of a queen in chess.
i hope this may clear any confusion as to what i meant.
if basic communication is a challange maybe you should take it down a couple notches
misspelling and impropper are fine as long as the concept is understood.
you can understand what i am expressing but i belive you wish to obscure to make yourself feel a little smarter.
try to be a little more constructive
So when you find the statistical mean of the subjective valuations of a group of people, and sort it for “nationality” what are you really saying? “germans value bratwurst 37% more than they value sauerkraut, but only 7% more than lederhosen” do you somehow think you are going to produce lots of brats, several lederhosen, and a little sauerkraut and make more money than the man who focuses on sauerkraut? After you are finished with the the condescension and the arrogance, what is your point, sir? What do you intend to measure with these statistics?
to the original question
economics by definition deals with the material welfare of mankind
the goal for most countries is (by most opinion)
a. to provide everyone at least basic necessities (food,water,medical care,ect)
b. to improve the living standards of its citizens
c. to make life easier for everyone
a. if many people do not have work they do not have money
b. if they do not have money they cannot buy goods and services
c. if they cannot buy goods and services then people who seek to sell goods and services
d. thus the economic multiplier
The modern discussion focuses on whether Keynesian monetary policy can reduce unemployment and thus create and distribute more wealth.
(it can but the fed is screwed it up)
malachi
tell me in plain English
“you cannot group together the collective will of citizens in a nation”
i can’t believe you truly disagree
http://www.cbsnews.com/stories/2010/11/15/national/main7056945.shtml
polling data is an example of collective will of a nation
this is a clear example of how the public values security over liberty
I wasn’t polled…
i hate tsa more than anyone (figure of speech) i am simply disclosing the results to defend my position that.
values of a nation can be aggregated.
the tsa is a breach of liberty that the majority of people support because they value security over liberty.
i think that malachi simply wanted to argue for its own sake.
“the goal for most countries”
How can countries want things?
"The modern discussion focuses on whether Keynesian monetary policy can reduce unemployment and thus create and distribute more wealth.
(it can but the fed is screwed it up)"
Which one can? And how? I agree that in a perfect world a central bank could do a fair amount of good, but in the real world the most that can realistically be hoped is that it fixes its own mistakes.
here i define a countries “will” by the actions and motives of its govenment.
As for the distinction between keynesian theory and central banking monitary policy
i mean both togeather. it seems that like you say, good in theory bad in practice
the fed’s original goal was to maintain the value of the $. keynesian policy value favors what is coined the 99%. now the feds actions are influenced by a broke(n) govt.
So the will of Germans circa 1933-1944 was, clearly, to murder large numbers of Jews.
Clayton -