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Thanks for the edit. I understand what you mean - but then wealth is relative to your neighbour. In which case I don't understand how everyone in 1800s or today can be wealthy. EDIT: prosperity -> wealth
You're confusing 'wealth' and 'status'. Wealth is what you have, in absolute terms. Status is a relative ranking.
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That was not an ad hominem. I really hate that phrase thrown about. Seems full of questions rather than accusations, and I didn't see obscure mentioned anywhere.
"Isn't this just a capitalist supporting publication trying to justify that which it supports?" This is pretty close to ad hominem. No substance, just casting aspersions on the Economist's character.
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That was not an ad hominem. I really hate that phrase thrown about. Seems full of questions rather than accusations, and I didn't see obscure mentioned anywhere.
Oh please, for all intents and purposes, the gist of the GP is 'oh it's the Economist, they're a bunch of shills, so they're wrong'. I'm not going to argue nonsensical things like what exactly is an ad hominem, it's crystal clear that the GP intended to dismiss the message of the article by saying that because it's from the Economist, it's automatically wrong; i.e., that it's wrong because of who said it and their id…
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I mean the wealth of one person in 1800, is relative to the wealth of another person in 1800. Likewise for today. So perhaps comparing the wealth of people in 1800 to today isn't actually that productive, because the baseline has increased? I think maybe my view of economics is flawed. My basic premise was that traditionally cost has traditionally been defined by scarcity of an item / service and consumer demand. In…
That's why I included the example of the wheat and the pig - there is no time component there. It shows that there can be various levels of wealth even at the same point in time, and that wealth is not zero sum, i.e. it's not necessarily true that for person A to get more wealthy, person B has to become less wealthy. They can both become more (or less) wealthy). How do you conclude that a good with unlimited supply (…
If I can take an item of IP (a music download) and sell it indefinitely at fixed rate, and distribution costs are very low; what is the basis for pricing that item when it isn't linked to anything concrete in the physical world?
Could the attribution of money to virtual goods without any link to a physical resource lead to bubbles / economic breakdown, because there's no ceiling on the amount of wealth that can be generated from it?
> The whole point is that prosperity isn't measured relatively.
I'm (incorrectly) using 'prosperous nation' as a synonym of 'wealthy nation'.
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There is vast scientific evidence that 'happiness' is positively correlated with 'wealth' (both in quotes to indicate that they're broad concepts, I'm not interested in discussing specific definitions). The scientific history is broadly that in the 1970's, it was thought there was little correlation (the 'Easterlin paradox'), in the 1980's and 1990's it was thought there was correlation up to some point of wealth (e.…
Since you seem like you know a lot about this issue, is this consistent with other research that happiness plateaus for people who make 75k/year? http://blogs.wsj.com/wealth/2010/09/07/the-perfect-salary-fo...
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Well England wasn't a very rich country before 'Sun never sets on the British empire' era. And they aren't a very rich country now, after they lost all their colonies. I don't wish to be harsh here, but how much of west's wealth is their own hard earned through their sweat is a question to ask.
In terms of GDP, the United Kingdom is still the 6th or 7th richest in the world. That's still pretty rich. There are also a lot of wealthy European countries that had a minimal presence abroad in the 19th century. There doesn't appear to any correlation between the modern wealth of western countries and their past colonialist ambitions.
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No. The economy is, by and large, not a zero sum game. Otherwise, why are N billion people by and large better off than however many people there were 200 years ago?
There appear to be some non-infinite limits on some components of standard of living, though. For example, if you extrapolate the resources Americans and Western Europeans use per capita (water, electricity, oil, etc.) to the entire world's population, you at the very least have some serious technological challenges to avoid hitting limits. If technology isn't able to keep up fast enough, it could introduce a bit of…
I'm almost certain this is going to come off more Whiggish than I intend it to, but do you believe this was true in 1912/1812/1512/12AD? I'd be willing to bet it was.
In fact, I think I'd go further and be willing to guess that the further you go back, the more inconceivable equality of resource use becomes (again without the explicit implication this is an unbreakable line upwards).
Indeed. Couple of optimistic talks at TED that shows that on an 'average' it IS getting better. http://www.ted.com/talks/steven_pinker_on_the_myth_of_violen... http://www.ted.com/talks/hans_rosling_reveals_new_insights_o... However, the 24/7 news cycle drums up everything that is negative and hence most of "feel" that it is getting worse.
Part of me wants to accept this information, but I am worried that some kind of Freakonomics will come into play and we'll find that the reason why there appears to be less poor is because X is no longer being considered as Y.
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That's why I included the example of the wheat and the pig - there is no time component there. It shows that there can be various levels of wealth even at the same point in time, and that wealth is not zero sum, i.e. it's not necessarily true that for person A to get more wealthy, person B has to become less wealthy. They can both become more (or less) wealthy). How do you conclude that a good with unlimited supply (…
> How do you conclude that a good with unlimited supply (which is I suppose what you mean by 'no limit to scarcity') would lead to bubbles or economic breakdown? If I can take an item of IP (a music download) and sell it indefinitely at fixed rate, and distribution costs are very low; what is the basis for pricing that item when it isn't linked to anything concrete in the physical world? Could the attribution of mone…
The same basis that is used to price physical goods: demand, or rather, the maximum a consumer is willing to pay. Supply and demand are not a pricing strategy, they are macro concepts that gravitate towards equilibrium.
If I am Apple and I sell iPods, how do I set its price? Not by looking at how many I can produce, but by looking at what people will pay.
You are confusing two things: - limited supply: there are only a few items of something, and therefore they are valuable. - substitution options: people want to pay for this song because it's the one they want to hear, not some recording of my neighbor playing his ukelele.
"Could the attribution of money to virtual goods without any link to a physical resource lead to bubbles / economic breakdown, because there's no ceiling on the amount of wealth that can be generated from it?"
No, although I'm not quite sure how to argue because I don't understand the assumptions leading to this question. An economic 'bubble' is, generalized, a sociological phenomenon where people ascribe an unrealistic value (as in, real value) to a good (the 'irrational exuberance'), leading to a bidding war fueled by the prospect that this value will continue to rise. Then at some point, it becomes clear that the good is overvalued, and the people who at that point own the goods are left hanging, much like musical chairs. If they borrowed to pay for the goods, they're double screwed because now they can't pay on their debts, the effects of which can then ripple through the economy. Bubbles don't come from too much wealth being concentrated in one hand.
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The problem is that a skewed sense of what's going on in the world can give you a skewed sense of how to improve the world. Case in point: many people imagine that the developed world buying cheap goods and labor from the developing world is a kind of exploitation rather than a form of enrichment. It also tends to focus on exceptional events rather than on broad trends (positive or negative).
I think one would most reasonably hold that it is both a form of exploitation and a form of enrichment. The interesting part of the article is that the biggest benefit has been to those in abject poverty: "Most of the progress has been concentrated among the poorest of the poor—those who make less than $1.25 a day. The bank’s figures show only a small drop in the number of those who make less than $2 a day." One inte…
Sure. But that's how it works. If I pay a photographer to take my portrait then I am exploiting as well as enriching him, it's a 2 way street of trading things the other person wants. In an unequal relationship such as between the developed and developing world then sometimes the exploitation can seem a bit much compared to the level of enrichment. However, at present there is no known better way to enrich the developing world. In the short term it may seem like it's only exploitation but in the long run the overwhelming likelihood is that it pulls people out of poverty. And this has been true not just in recent times in the countries I've listed, and others, but also farther back in countries like Japan and the US.
However, I should make clear to differentiate trade from other kinds of work. It is very possible to make use of labor in the 3rd world without enriching the people there. There are certainly a good number of examples from the history of colonialism where that was the case. But manufacturing seems to be fundamentally different.