Reinvigorating the most important battle in economics • Hacker News Board

Re: Reinvigorating the most important battle in economics

#51

Post by crdoconnor » Sun, Nov 24, 2019, 11:51 PM UTC

WalterBright wrote: post #41

Red_Leaves_Flyy wrote: post #39

Earlier quoted context omitted.

There's a lot more competition in the food market. Bananas too expensive? Just get oranges. Asthma meds too expensive? Take out a loan, drive to anthercountry, or roll the dice and maybe die.

Government interference has severely limited competition in health care. For just one example, after Obamacare passed my health insurance provider decided to exit the business, and there is only one provider left in the county. They have a monopoly. I pay far higher premiums now, and can only go to "network" doctors.

The whole idea behind Obamacare was that people like you would pay more so that others got coverage on pre existing conditions and HMOs could make a bit more profit.

Re: Reinvigorating the most important battle in economics

#52

Post by AnthonyMouse » Mon, Nov 25, 2019, 12:21 AM UTC

blotter_paper wrote: post #49

AnthonyMouse wrote: post #43

Earlier quoted context omitted.

In principle competitive bidding should result in cost savings because anyone who could do it for significantly less could profit by submitting a lower bid. The problem is some combination of corruption and regulatory requirements. If the bureaucrats write the contract in such a way that only one company can satisfy it, that company has no effective competition so they don't have to compete on price. Same thing if th…

Or, find new models that don't require a government to be involved in building things at all. The existing solutions (e.g. privately developed toll roads instead of public highways) have their own issues, but this is one potential solution space to explore.

Roads are the archetype of a natural monopoly. The private model that works best for that ends up looking a lot like what the government does -- the local citizens form an organization to build and maintain local roads and you pay an annual fee to get a membership plate for your car that allows you to use the roads as much as you want. (Flat rate is much more efficient because it doesn't discourage use of a resource dominated by fixed costs and doesn't require expensive and privacy-invasive usage metering infrastructure.)

The fact that it's a natural monopoly makes it susceptible to a lot of the same problems as a government, but making it an independent entity actually mitigates them somewhat by reducing the size of the bureaucracy. One of the big problems with elected governments is that the Republican wants to install a corrupt transportation board and the Democrat wants to install a corrupt school board and you have to pick your poison. If you get to elect the directors responsible for local transportation separately from the directors responsible for local schools, that doesn't happen as much.

It also helps quite a lot to move as much of the spending as possible to as local a level as possible, because then you don't get wasteful pork motivated by a desire for inter-region wealth transfers.

Re: Reinvigorating the most important battle in economics

#53

Post by WalterBright » Mon, Nov 25, 2019, 1:02 AM UTC

crdoconnor wrote: post #50

WalterBright wrote: post #27

Earlier quoted context omitted.

> Health care prices can be virtually as high as you like if you can make health care scarce enough, because pretty much everybody wants to live. Everybody needs food, too, but food is as cheap as dirt.

Meaning it's not scarce now and there's no easy way to make it scarce. Like oxygen. I can grow food in my back garden. I can't grow medical care.

> I can't grow medical care.

Because it's illegal (an awful lot of drugs are plant based).

Re: Reinvigorating the most important battle in economics

#54

Post by yyyymmddhhmmss » Mon, Nov 25, 2019, 1:50 AM UTC

thaumasiotes wrote: post #32

crdoconnor wrote: post #25

Earlier quoted context omitted.

>Does anyone really believe health care prices are correct? Yes. Market clearing prices are set by the intersection of desire/need and scarcity. Health care prices can be virtually as high as you like if you can make health care scarce enough, because pretty much everybody wants to live. The greatest profits are usually found where scarcity meets desperation. This is also why most large corporations spend half of the…

> The greatest profits are usually found where scarcity meets desperation. Chinese history records that the premodern government was often suspicious of market trade for a pretty interesting reason -- when a region experienced famine, the market directed food away from the afflicted region. [1] The problem, of course, was that in the premodern context, what most people produced was... food. A famine meant that everyo…

The United States is experiencing this same phenomenon. See ‘Food Desert’. Poor parts of cities and ppor rural areas have been losing their grocery stores for years now.

Re: Reinvigorating the most important battle in economics

#55

Post by randcraw » Mon, Nov 25, 2019, 5:47 AM UTC

thaumasiotes wrote: post #33

randcraw wrote: post #29

Earlier quoted context omitted.

You make the author's point for her. When any model for valuation disregards the vast good arising from a fountain of youth, that (margin-based) model is corrupt. (Obviously I'm disregarding all the derivative concerns that inevitably would arise from introducing immortality. After all, it's simply one possible example of a vastly undervalued innovation.)

But the good arising from a fountain of youth really is negligible if there are a hundred other identical fountains right next to it. It's only outrageously useful if you make the additional assumption that it's hard to replace.

Rarity is not the only possible basis for value. Public good is another.

Re: Reinvigorating the most important battle in economics

#56

Post by thaumasiotes » Mon, Nov 25, 2019, 6:02 AM UTC

randcraw wrote: post #55

thaumasiotes wrote: post #33

Earlier quoted context omitted.

But the good arising from a fountain of youth really is negligible if there are a hundred other identical fountains right next to it. It's only outrageously useful if you make the additional assumption that it's hard to replace.

Rarity is not the only possible basis for value. Public good is another.

The 101st fountain of youth in a line is not producing any significant public good. I just said this. If it was destroyed, we would be no worse off.

Re: Reinvigorating the most important battle in economics

#57

Post by skybrian » Mon, Nov 25, 2019, 6:03 AM UTC

nixpulvis wrote: post #37

skybrian wrote: post #6

A fundamental assumption of mainstream economics is that market prices are approximately correct. This is more for pragmatic reasons than anything; you need some sort of prices to compare unlike things and it's often easy to get some consensus on what the market price is. If you want to calculate GDP some other way then you will need to decide what millions of prices "should" be and persuade others with your argument…

If my understanding of the math is correct, a carbon tax is somewhat more fundamentally meaningful than UBI vs other forms of welfare. A carbon tax is in a way trying to model a previously external factor in the market, i.e. the environment or earth itself.

Right, but there are no prices on an uninhabited planet. The prices placed on environmental changes is something humans decide on. It's a subjective, arbitrary number.

It's good to avoid environmental degradation but the prices we use to do that are going to be arbitrarily set by government.

Re: Reinvigorating the most important battle in economics

#58

Post by skybrian » Mon, Nov 25, 2019, 6:06 AM UTC

kgwgk wrote: post #36

crdoconnor wrote: post #25

Earlier quoted context omitted.

>Does anyone really believe health care prices are correct? Yes. Market clearing prices are set by the intersection of desire/need and scarcity. Health care prices can be virtually as high as you like if you can make health care scarce enough, because pretty much everybody wants to live. The greatest profits are usually found where scarcity meets desperation. This is also why most large corporations spend half of the…

It's not obvious what "scarcity" is in health care: demand is infinite because everybody is going to die.

Are people willing to spend their entire fortunes avoiding death, leaving nothing to their descendants? Sometimes, but it seems this isn't always true.

Re: Reinvigorating the most important battle in economics

#59

Post by AmpsterMan » Mon, Nov 25, 2019, 6:32 AM UTC

hogFeast wrote: post #30

AmpsterMan wrote: post #23

Earlier quoted context omitted.

>The US is an extreme example of a system that optimizes totally for choice...and it achieves that aim. I'm not sure this is true, or at least, I don't understand what pre-requisites for this to be true the U.S. posseses. Insurance is not allowed to trade across state lines, the private marketplace has a small selection of plans, most people get their insurance from their jobs meaning they only know the details of th…

> I'm not sure this is true Have you been to a place that doesn't optimise for this? The US is one of the only places in the world where if you are sick, the medicine (if it exists) is 100% available. I have a relative who lives in a place that doesn't have this aim...she is sick, medicine exists but "policy" is not to cure people who have that illness because the return on investment isn't high enough...in fact, she…

Wait. You've moved the goal post. Your original statement was about optimizing for choice. I'm not sure the United States optimizes for choice and so provided some counter-examples. The topic of availability of drugs or treatments didn't come into play at all. Furthermore, there is no "complaining" as you put it.

Moreover, I also contend that the U.S. has 100% availability. There are many rural areas which lack access to more specialist care. Many states are limiting Planned Parenthood services beyond abortions which is itself a form of care. Some medicine is too expensive to be affordable, and so on.

Re: Reinvigorating the most important battle in economics

#60

Post by WalterBright » Mon, Nov 25, 2019, 7:21 AM UTC

littlestymaar wrote: post #47

AnimalMuppet wrote: post #45

Earlier quoted context omitted.

> Remember, the free market model comes from an era when chemistry was modeled with the 4 elements ! I fail to see how the age of the model has anything whatsoever to say to its validity. Not everything old is stupid; not everything new is right. If you want to disprove the free market model, you have to do a lot better than pointing out that it's old. It is true that perfectly free markets don't exist in the world.…

The complete inability to predict anything useful[1] is a clear marker of the failure of this model though… [1]: crisis for starter…

I predict that when I go to the supermarket, the free market has apples for sale there. My prediction has never turned out to be false. It's a useful prediction.