Tweet
http://lesswrong.com/lw/2h9/one_reas...much_maligned/
I found it a okay read. What is your people's take on zero sum biases and their role in anticapitalist feelings?
Also:
I actually now agree with KH (KH please correct me if I mauled your stance on this) and the author: It is selfish to earn less than you could be earning.
The author's refrences to his past opinions mirrors many of my own changes of heart during the past decade or so (climbing from early teens to early 20's and growing up in the procces). Has anyone else on this forum shifted to a more promarket view over the last few years?
(One reason) why capitalism is much maligned
...
There are multiple sources of irrational bias against capitalism. Here I will argue that a major factor is zero-sum bias, or perhaps, as hegemonicon suggests, the "relativity heuristic." Within the post I quote Charles Wheelan's Naked Economics several times. I believe that Wheelan has done a great service to society by writing an accessible book which clears up common misconceptions about economics and hope that it becomes even more widely read than it has been so far. Though I largely agreed with the positions that he advocates before taking up the book, the clarity of his writing and focus on the most essential points of economics helped me sharpen my thinking, and I'm grateful to him for this.
A striking feature of the modern world is economic inequality. According to Forbes Magazine, Amazon founder Jeff Bezos made $7.3 billion in 2009. That's more than the (nominal) 2009 earnings of all of the 10 million residents of Chad combined. Many people find such stark inequality troubling. Since humans exhibit diminishing marginal utility, all else being equal, economic inequality is bad. The system that has given rise to severe economic inequality is capitalism. Does it follow that capitalism is bad? Of course not. It seems very likely that for each positive integer x, the average world citizen at the xth percentile in wealth today finds life more fulfilling than the average world citizen at the xth percentile in wealth 50 years ago did. Increased inequality does not reflect decreased average quality of life if the whole pie is getting bigger. And the whole pie has been getting a lot bigger.
...
The case of trade
Trade and globalization are key features of modern capitalism. These practices have received criticism both from (1) people who are concerned about the well being of foreigners and (2) people who are concerned about the well being of Americans. I'll discuss these two types of criticism in turn.
(1) I remember feeling guilty as an early adolescent about the fact that my shoes and clothes had been made by sweatshop laborers who had been paid very little to make them. When I heard about the 1999 WTO protests as a 14 year old and I thought that the protesters were on the right side. It took me a couple of years to dispel the belief that by buying these things I was making things worse for the sweatshop laborers. I implicitly assumed that if they were being paid so little, it must be because somebody was forcing them to do something that they didn't want to do. In doing so, I was anchoring based on my own experience. It didn't initially occur to me that by paying very little for clothes and shoes, I could be making life better for people in poor countries by giving them more opportunities. I eventually realized that if I restricted myself to buying domestic products I would probably make things better for American workers, but that in doing so, I would deny poor foreigners an opportunity.
And it was only much later that I understood that giving a country's citizens' the opportunity to work in sweatshops could ultimately pave the way for the country to develop. It took me many years to internalize the epic quality of economic growth.
...
...
There are multiple sources of irrational bias against capitalism. Here I will argue that a major factor is zero-sum bias, or perhaps, as hegemonicon suggests, the "relativity heuristic." Within the post I quote Charles Wheelan's Naked Economics several times. I believe that Wheelan has done a great service to society by writing an accessible book which clears up common misconceptions about economics and hope that it becomes even more widely read than it has been so far. Though I largely agreed with the positions that he advocates before taking up the book, the clarity of his writing and focus on the most essential points of economics helped me sharpen my thinking, and I'm grateful to him for this.
A striking feature of the modern world is economic inequality. According to Forbes Magazine, Amazon founder Jeff Bezos made $7.3 billion in 2009. That's more than the (nominal) 2009 earnings of all of the 10 million residents of Chad combined. Many people find such stark inequality troubling. Since humans exhibit diminishing marginal utility, all else being equal, economic inequality is bad. The system that has given rise to severe economic inequality is capitalism. Does it follow that capitalism is bad? Of course not. It seems very likely that for each positive integer x, the average world citizen at the xth percentile in wealth today finds life more fulfilling than the average world citizen at the xth percentile in wealth 50 years ago did. Increased inequality does not reflect decreased average quality of life if the whole pie is getting bigger. And the whole pie has been getting a lot bigger.
...
Will the poor always be with us, as Jesus once admonished? Does our free market system make poverty inevitable? Must there be losers if there are huge economic winners? No, no, and no. Economic development is not a zero-sum game; the world does not need poor countries in order to have rich countries, nor must some people be poor in order for others to be rich. Families who live in public housing on the South Side of Chicago are not poor because Bill Gates lives in a big house. They are poor despite the fact that Bill Gates lives in a big house. For a complex array of reasons, America's poor have not shared in the productivity gains spawned by DOS and Windows. Bill Gates did not take their pie away; he did not stand in the way of their success or benefit from their misfortunes. Rather, his vision and talent created an enormous amount of wealth that not everybody got to share. This is a crucial distinction between a world in which Bill Gates gets rich by stealing other people's crops and a world in which he gets rich by growing his own enormous food supply that he shares with some people and not others. The latter is a better representation of how a modern economy works.
Trade and globalization are key features of modern capitalism. These practices have received criticism both from (1) people who are concerned about the well being of foreigners and (2) people who are concerned about the well being of Americans. I'll discuss these two types of criticism in turn.
(1) I remember feeling guilty as an early adolescent about the fact that my shoes and clothes had been made by sweatshop laborers who had been paid very little to make them. When I heard about the 1999 WTO protests as a 14 year old and I thought that the protesters were on the right side. It took me a couple of years to dispel the belief that by buying these things I was making things worse for the sweatshop laborers. I implicitly assumed that if they were being paid so little, it must be because somebody was forcing them to do something that they didn't want to do. In doing so, I was anchoring based on my own experience. It didn't initially occur to me that by paying very little for clothes and shoes, I could be making life better for people in poor countries by giving them more opportunities. I eventually realized that if I restricted myself to buying domestic products I would probably make things better for American workers, but that in doing so, I would deny poor foreigners an opportunity.
And it was only much later that I understood that giving a country's citizens' the opportunity to work in sweatshops could ultimately pave the way for the country to develop. It took me many years to internalize the epic quality of economic growth.
...
Also:
It's a great irony that there are people who have rejected high paying jobs on the grounds that they must be hurting someone because the pay is high when they could have helped people more by taking the high paying jobs. To be sure, some people do make their money by taking money away from other people (the case of some of the behavior of the "too big to fail" banks comes to mind), but on average making money seems to be good for society, not bad for society.
The author's refrences to his past opinions mirrors many of my own changes of heart during the past decade or so (climbing from early teens to early 20's and growing up in the procces). Has anyone else on this forum shifted to a more promarket view over the last few years?
Comment