Economics and efficiency

Why does efficiency seem to be hailed as the ultimate, #1 goal of economics? It seems that
the underlying assumption is “Producing more goods and services is good.” Why does it matter more that we can produce more goods/services than that we can fulfill the needs of the species/our planet/other species? After all, the purpose of producing goods/services is to fulfill needs/desires.

So sure, producing more things can be useful, when we have need of those things. But what if the production of those things results in a net reduction in the intelligence of the population or damages our environment?

It seems that there’s a blind acceptance that “more production/more efficient production is inherently good”. The real question is whether or not we’re meeting our needs as a society/planet, not whether or not we’re only producing more goods/services.

The scariness of Trump

This election cycle in the U.S., Donald Trump is running for president. He has managed to bring in large rallies of supporters. Normally, I wouldn’t be bothered (just another clueless politician), but this is starting to scare me. Why?

  1. Trump is using racism to pit Americans against each other. This is used to justify preventing Muslim [Islam is a religion, so it’s not technically racism, but you get the idea] immigration and support deportation of Mexicans. Supporters will say “but we’re trying to prevent terrorist attacks.” I have no problem with that goal. The way to do that, though, is not to say “Stop immigration for all Muslims.”
  2. Trump brushes off/crushes any dissent to his views. If a legitimate criticism is brought up about a statement he makes, Trump will ignore it. If protesters show up to an event of his, he demands that they be silenced/taken out of the venue, and seems to stoke his supporters’ anger towards the protesters. Look up “trump protesters” on YouTube if you want to check it out.
  3. Trump is gaining a lot of popular support. Look up “trump rally” on YouTube to see.

Now, I can agree to disagree with politicians about their policies – no problem there. However, the combination of 1) and 2), with the popular support in 3), means that the U.S. is supporting a candidate who uses racism to divide the population, and actively ignores/suppresses opposing views.

Conclusion? Trump = Hitler.

This should not be something the U.S. people stand for. A question for supporters: Do we want to put a racist, “infallible” politician in charge of probably the most powerful country on Earth?

A side note: Why isn’t Trump proposing that we build a wall along the Canadian border? My guess is that white Americans harbor anger towards Mexicans, but not Canadians, because Canadians are (usually) white.

An extra, pragmatic reason why the wealthy should pay more in taxes

This specific argument doesn’t seem to be used very often, from what I can tell.

Another reason it makes sense to increase taxes on the wealthy: the wealthy make more use of the country’s infrastructure. An average, non-wealthy person usually uses the basic parts of our country’s infrastructure. Roads for travel, police services for safety, schools for education, etc.

A very wealthy person is likely to own one or more businesses. A person with a business benefits more from the use of public services than a person without a business. For example:

  • Roads [for shipping goods]
  • The population’s education [for hiring labor]
  • The population’s finances [for finding buyers]
  • Fire departments [for protection against…fires]
  • Police [for investigating crime/protecting property]

A person with a business is highly likely to put more strain on these services than a person who just works a normal job, by causing shipments that wouldn’t otherwise be created, requiring extra police patrols, etc.

Thus, it makes sense to tax more highly people/groups that use a lot of a public resource than people/groups who use less of the resource.

The limited freedom of employer/employee relations

Note that most of the below is basically re-hashing ideas from Richard Wolff/other sources.

I’ve recently been doing some reading on political systems (especially socialism/communism). One striking thing I’m seeing, that I think would upset a lot of people if they thought about it, is the nature of the employer/employee relationship.

In current society (and presumably capitalism as a whole), employees are employed by an employer. A common argument is made that, “In capitalism, I have the freedom to choose where I work. I can pick my specialization, and if I disagree with a company’s practices, I can quit. This is freedom, because I can choose what I do.”

The counter-argument to this is: picking where you can work is a good thing. However, in current society, that’s virtually all you can do, unless you are an owner/shareholder in a company. When working, the manager/owner/board of directors make the decisions of: what should be created, how it should be created, where it should be created, etc. In other words: workers have no control over what they do at work or why. A statistician hired by a company has to create reports/analyses that management thinks are valuable, rather than what the statistician thinks is valuable. The statistician might have freedom to produce the reports in whatever manner they desire, but they don’t have the freedom to produce reports about something their superiors aren’t interested in. The statistician can choose to independently do work that they think is beneficial to the company, but it will (likely) only be accepted/implemented if it aligns with the decision-makers [managers/owners/shareholders] of the company.

Which leads to the counter-argument. Sure, in capitalism I can pick where I want to work at. But if I’m not in control of what I do/why I do it, what’s the big deal? The employee is, quite literally, a slave to the desires of the employer. The employer determines what is to be done. The employee implements the employer’s will. The employee has (largely) no control over what they can do at work, other than quit if they disagree with what’s going on.

This is accepted as “just the way things are”. There’s little/no discussion about the possibility that: workers should have partial ownership of their workplaces and, as a result, they should have influence in the decision-making process RE: what is to be done. If a person contributes to the success of an organization, they should have influence on how the organization operates. Currently, only owners have influence on how organizations operate, regardless of how much they’ve contributed to the organization.

That’s all for now.

An argument against the notion that raising the minimum wage increases prices by the same amount.

I’ve heard an argument by business owners that, “If the minimum wage is raised, then
prices will have to raised/less people will be hired, which defeats the purpose.”

The argument makes sense in a way: if expenses go up, something has to compensate for that.

The implied argument, it seems to me, is that, “If the minimum wage increases by $5 per hour, then $5 per hour worth of prices will be added for our products.” I’d argue that this
doesn’t make sense.

A business has many expenses. If a business sells cheeseburgers, they have to pay for many things to run the business. Examples: labor, ingredients, shipping of ingredients, advertising, legal services, janitorial services, etc. Only some of these things would be impacted by the increase in minimum wage. Theoretically, they would be:

Expense Type    Impacted?
Labor                   Yes
Ingredients       Probably – minimum wage workers might farm/work with the ingredients
Shipping            Probably – minimum wage workers might ship ingredients/handle logistics
Advertising       No – advertising work is usually paid more than minimum wage
Legal                   No – legal work is basically always paid more than minimum wage
Janitorial           Probably

So, let’s break this into a formula.

Cheeseburger cost = (a*labor)+(b*ingredients)+(c*shipping)+(d*advertising)+(e*legal)+(f*janitorial)

a-f represent multipliers of each source of cost.

Before adding a minimum wage change, a-f each equal 1, so the equation is:

Cheeseburger cost = (labor)+(ingredients)+(shipping)+(advertising)+(legal)+(janitorial)

After adding a minimum wage change, a-f vary, depending on if/how each cost was affected by the change:

Cheeseburger cost = (a*labor)+(b*ingredients)+(c*shipping)+(advertising)+(legal)+(f*janitorial)

So, after the minimum wage change, the cheeseburger does cost more.

The important point is that: if all prices were to rise by the same amount as wages rise [what is often argued], then the minimum wage worker would break even. Going by this equation, that’s not the case. All prices don’t rise by the same amount that wages rise. Certain costs are unaffected by the minimum wage change. As a result, a person earning minimum wage then can purchase more cheeseburgers, even though the price per cheeseburger is a bit higher.

All thoughts/discussion welcome.

Thoughts on [what I remember of] Ayn Rand’s ideas

I was recently talking to a friend on my thoughts about Ayn Rand. I figured I’d write them down here because: why not?

The reading I’ve done of Ayn Rand’s work includes: I’ve read The Fountainhead, Anthem, and watched some video interviews/read other snippets of her writing. So I certainly haven’t read everything she’s written.

From what I can tell, Rand’s conclusion is that, “All humans should do only things which improve themselves/make themselves better/push them to create wonderful things.” Every person should dedicate their life to being the best at the thing(s) they most enjoy, and as a result, society will be better off.

There’s an inherent judgement that only things that are great are worth doing. If everyone followed this philosophy, the only music that would be produced would be of the same quality as Mozart/Beethoven. All basketball players would be as good as Lebron James/Michael Jordan. All chefs would only cook extremely high quality meals.

My main issue with this philosophy is: “Why should everything that every human does be great?” Great works are enjoyable, and so are mediocre works. If I’m a great artist, it makes sense that I like great art. But a great artist might love pizza and ice cream. And I don’t think there’s anything wrong with that.

Basically, I don’t see any logical justification for the goal. The notion that “Everything that exists should be of the highest quality” may please you. But it might not please me, and sometimes I’ll want more greatness/sometimes less greatness. This is saying “I like it when people put a huge amount of effort into a field, and spend their life learning it. Everyone should do that, because I like it.” The only justification of why everyone should do that, is so that their works will please me personally. It doesn’t make sense.

Some consequences of these ideas:
Externalities
If I only care about my own interests, then by definition I ignore others’ interests. If my interests aren’t ethical, then it’s easy to ignore the welfare of the community/the environment. Others’ concerns don’t matter, and so if my actions negatively impact others, then that doesn’t matter.

Devaluing of others when you don’t like them
If my highest ethical standard is “create/consume things which please me”, then anyone who doesn’t create/consume things which I judge as valuable is effectively worthless. The value of a person is determined by how much they can please me. If the person produces masterpieces of film, they’re idolized. If they create crappy film, they’re demonized. Why? Because the person doesn’t please me. This is ridiculous.

Boring-ness
It can be fun to indulge in things that aren’t “The Greatest” sometimes. I’d rather live in a world where I had the option to consume/create work on a scale of quality from “crappy” to “masterpiece”, than a world where everyone should only consume/create “masterpiece”s.

The goal is meaningless
I can create a separate philosophy, where the goal is to get all people to create the most horrible, crappy work they possibly can, because that (for some reason) pleases me. And it would be just as valid as Rand’s philosophy.

The goal is limiting
Reality can be constructed in a near-infinite number of ways by re-organizing atoms in different configurations. This philosophy says, “We should only construct reality in this way. All other ways are worthless/a waste of time/not worth doing.” I think it’s more interesting to think of what can be done, and see what comes about, than to only focus on one thing. For example: in biology, an example of ‘mediocrity’ might be biologists who compile ‘Lists of fun facts about African insects.’ An example of ‘greatness’ might be biologists who discover fundamental biological knowledge – IE: the helix structure of DNA. I don’t think people who compile lists of fun facts about insects are worthless, because they’re not solving the world’s grand problems immediately. On the contrary, these things make life more fun and interesting.

A disconnect from reality
A person’s desires don’t really exist. A person is just a process of atoms moving in pre-determined patterns through space, over time. Stating “This set of atoms which are labeled as ‘I’ is more important than another set of atoms labeled as ‘other humans'” doesn’t make sense.