Reinvigorating the most important battle in economics • Hacker News Board

Re: Reinvigorating the most important battle in economics

#31

Post by randcraw » Sun, Nov 24, 2019, 9:10 PM UTC

hogFeast wrote: post #7

Ididntdothis wrote: post #5

Earlier quoted context omitted.

The US health system had managed to merge bad attributes from different systems into a system that’s incredibly bad. Highly regulated, tons of unaccountable bureaucracy, lots of barriers for market entry , protectionist, lack of consumer choices and also highly capitalistic. The problem is that the US can’t decide what it wants so we have a system where a lot of people make a lot of money whole being protected from c…

I think that is largely a misconception from people who live in the US and think the US is the worst of all possible worlds (based largely on the politics of the last decade or so)...it isn't. Not even close. The US is an extreme example of a system that optimizes totally for choice...and it achieves that aim. The UK is an extreme example of system that optimizes totally for access. They both achieve their aims but t…

When a third of the population is disenfranchised from choice by outright exclusion, choice as it applies to everyone is clearly NOT well served by that system.

Re: Reinvigorating the most important battle in economics

#32

Post by thaumasiotes » Sun, Nov 24, 2019, 9:11 PM UTC

crdoconnor wrote: post #25

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…

>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 everyone needed food, but it simultaneously meant that everyone had just been impoverished, such that there wasn't much profit available to be had in selling them the food they needed.

[1] It goes without saying that they were also suspicious of market trade for the standard other reasons.

Re: Reinvigorating the most important battle in economics

#33

Post by thaumasiotes » Sun, Nov 24, 2019, 9:13 PM UTC

randcraw wrote: post #29

Nasrudith wrote: post #11

Really valuation as a pursuit was abandoned for a damned good reason - it took a lot of time to get it through most of humanity's thick heads that value is circumstance based. Even something outragously useful like a fountain of youth would become relatively worthless if it was nearly ubiquitous like oxygen. Likewise the public sector section is annoyingly simplistic in that it doesn't grasp the difference between ne…

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.

Re: Reinvigorating the most important battle in economics

#34

Post by WalterBright » Sun, Nov 24, 2019, 9:19 PM UTC

> Rather than lean and efficient services, privatization appears to have led to administrative bloat, price inflation, and a gutting of state capacity.

Privatization of government services is not the same thing as a free market, and hence free market forces are not applying to it.

In a free market, when a business contracts for services from another business, it is motivated by value received and price paid. When the government contracts for services, price and value are of much lesser concern. The bureaucrats negotiating the contracts have little care for what it costs, whereas political and social concerns are paramount.

It's not in the least surprising that privatizing who provides government services does not result in cost savings.

Re: Reinvigorating the most important battle in economics

#35

Post by randcraw » Sun, Nov 24, 2019, 9:19 PM UTC

Stiglitz weighs in on this very topic in today's Guardian:

”It's time to retire metrics like GDP. They don't measure everything that matters time to retire metrics like GDP. They don't measure everything that matters”

https://news.ycombinator.com/item?id=21623150

Re: Reinvigorating the most important battle in economics

#36

Post by kgwgk » Sun, Nov 24, 2019, 9:24 PM UTC

crdoconnor wrote: post #25

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…

>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.

Re: Reinvigorating the most important battle in economics

#37

Post by nixpulvis » Sun, Nov 24, 2019, 9:33 PM UTC

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.

Re: Reinvigorating the most important battle in economics

#38

Post by nixpulvis » Sun, Nov 24, 2019, 9:34 PM UTC

crdoconnor wrote: post #25

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…

>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…

You're assuming we actually have rational actors in the "free market", which depends on free access to information. Something I find issue with today.

Re: Reinvigorating the most important battle in economics

#39

Post by Red_Leaves_Flyy » Sun, Nov 24, 2019, 9:36 PM UTC

WalterBright wrote: post #27

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…

> 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.

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.

Re: Reinvigorating the most important battle in economics

#40

Post by hogFeast » Sun, Nov 24, 2019, 9:38 PM UTC

randcraw wrote: post #31

hogFeast wrote: post #7

Earlier quoted context omitted.

I think that is largely a misconception from people who live in the US and think the US is the worst of all possible worlds (based largely on the politics of the last decade or so)...it isn't. Not even close. The US is an extreme example of a system that optimizes totally for choice...and it achieves that aim. The UK is an extreme example of system that optimizes totally for access. They both achieve their aims but t…

When a third of the population is disenfranchised from choice by outright exclusion, choice as it applies to everyone is clearly NOT well served by that system.

You don't understand. Nothing is free. Systems that guarantee access have to make the same choice. They have to chose not to treat some people with expensive conditions too. The thing the US gets right is a mixed private/public healthcare system, the issue is that the balance is wrong, not that the system is wrong.