Economics has met the enemy, and it is economics

[MikeH]

Maybe not perfect but gives us the result that you are better off being poor in 2010 than king in 1600, which is right.

[Kuciwalker]

By this reasoning, those on welfare are richer than the Queen Elizabeth 1.

One of the things which matters is social mobility, the ability to become wealthy/powerful, the ability to have more than you need, and so on. On these matters, society has been failing to improve the lives of the majority of it's constituents.

JM

JM, can you read? I am talking about the real value of annual incomes. I am not talking about "would you prefer to time travel to the 1970s". That's why I've explicitly constructed a choice between two sets of goods, not between "living in 2010" and "living in 1970". I am stripping out all of the ancillary details such as "gay people can now live openly in society without much trouble" because they are not part of the comparison being made!

Given all of that, yes, the real value of the annual income of people on welfare is almost certainly higher than that of Queen Elizabeth I. All of the reasons you might prefer to be her have to do with things other than her income.

[Jon Miller]

JM, can you read? I am talking about the real value of annual incomes. I am not talking about "would you prefer to time travel to the 1970s". That's why I've explicitly constructed a choice between two sets of goods, not between "living in 2010" and "living in 1970". I am stripping out all of the ancillary details such as "gay people can now live openly in society without much trouble" because they are not part of the comparison being made!

Given all of that, yes, the real value of the annual income of people on welfare is almost certainly higher than that of Queen Elizabeth I. All of the reasons you might prefer to be her have to do with things other than her income.

Wrong. It is directly related to her wealth/income.

You can not divorce wealth and the power that comes with wealth.

This has been one of my points. You do not include important aspects of real value in your metric.

JM
(And obviously I can read, I was not talking about that either.)

[Kuciwalker]

Wrong. It is directly related to her wealth/income.

You can not divorce wealth and the power that comes with wealth.

Queen Elizabeth's power didn't come from her money, it came from being the ****ing queen.

[Jon Miller]

Queen Elizabeth's power didn't come from her money, it came from being the ****ing queen.

OK, use one of the other extremely wealthy non-queens.

The situation would still be that the valuation of goods/etc is much higher for a person on welfare now, while the real valuation of the extremely wealthy non-queen would be much higher.

Think.

JM

[Jon Miller]

I wouldn't even need to go to the 16th century.

Think about Cecil Rhodes.

I would argue that by your 'real' valuation the wealth/income of a call center peon now is higher. By any rational real valuation the wealth/income of Cecil Rhodes is higher.

And he wasn't even a Queen!

JM
(At least not a queen of a nation.)

[Fake Boris]

True, HC is among the last ones who should be lecturing anyone on economics. But you are missing some fundamental attributes of economic theory and its models. Primarily, that they are empirically derived. From there, there are a vast array of criticisms you can make, but they still predict what they were designed for.

I am not missing this. You can only make empirical observations on the basis of constructed values and rules.

I am claiming that:

1) Some constructed values that we use are derived from expired material conditions
2) Some material conditions result in falsified constructed values

[Fake Boris]

1) I have hundreds (thousands?) of substantive posts on economics on this site, you dumb ****
2) I have no idea what question you're referring to, you dumb ****
3) even if I did, it is overwhelmingly likely to be either a question based on some kind of elementary misunderstanding of what economics is, how it proceeds in practice, or its conclusions, or some uninteresting question, or a question I've discussed previously multiple times. You dumb ****.

Oh, we've all seen what you consider an elementary misunderstanding of economics... Like the objections Adam Smith himself made to the foundations he was laying off.

You have never told us why is it that economy shouldn't account for the fact that the basic premise of greed is to reach a rent-seeking state. You have been asked an answer on this several times, by several posters.

Keep rockin'

[Fake Boris]

Moreover, my argument for the unsuitability of CPI was not from first principles; claims such as "it doesn't correctly account for the changing quality of goods" were explanations from the observed fact that CPI was unsuitable. We know CPI is unsuitable because it tells us that the real median household income has stagnated even though that is obviously false.

And here we have the proof that economy has devolved into hermetic scholastic.

Economic terms are the basis of public policy discourse, but economy refuses to be evaluated by the same standards we usually evaluate politics and morality. "You are just proposing economic analysis methods" - but you're doing much more than this.

Products are better, fine. But if better, more efficient products have failed at improving the availability of other products, that are, shall we say, more "baseline", it is a sign that distribution of efficiency gains is not being done fairly.

[Kuciwalker]

I am not missing this. You can only make empirical observations on the basis of constructed values and rules.

I am claiming that:

1) Some constructed values that we use are derived from expired material conditions
2) Some material conditions result in falsified constructed values

I am going to rephrase this and you're going to tell me if what I say has the same meaning.

Economists have some models for how the economy works. They have used empirical studies to estimate some of the parameters of those models. Since some of those parameters were estimated, the economy has changed such that if we re-estimated those parameters with a new study, we would get a different answer.

Is that your claim?

[Fake Boris]

I am going to rephrase this and you're going to tell me if what I say has the same meaning.

Economists have some models for how the economy works. They have used empirical studies to estimate some of the parameters of those models. Since some of those parameters were estimated, the economy has changed such that if we re-estimated those parameters with a new study, we would get a different answer.

Is that your claim?

I am willing to concede that this is part of my point, but reserve the right to retract from some of it if you're trying to go too far in your expected attempt of "ex concessis" refutation.

[Kuciwalker]

Moreover, my argument for the unsuitability of CPI was not from first principles; claims such as "it doesn't correctly account for the changing quality of goods" were explanations from the observed fact that CPI was unsuitable. We know CPI is unsuitable because it tells us that the real median household income has stagnated even though that is obviously false.

And here we have the proof that economy has devolved into hermetic scholastic.

Is this a fancy way of saying "ivory tower"?

Economic terms are the basis of public policy discourse, but economy refuses to be evaluated by the same standards we usually evaluate politics and morality. "You are just proposing economic analysis methods" - but you're doing much more than this.

Um, economics tries to be evaluated by the same standards as physics and chemistry. Those also have plenty of policy implications - "why don't we build a space elevator out of bricks?" is shot down on the basis that it is physically impossible. They are just so thoroughly amenable to the scientific method that in almost no cases can anyone legitimately challenge their policy implications. But even there it happens - see climate change. But obviously we should not stop trying to achieve scientific rigor in climate science and instead subject it to the same standards as politics and morality.

Products are better, fine. But if better, more efficient products have failed at improving the availability of other products, that are, shall we say, more "baseline", it is a sign that distribution of efficiency gains is not being done fairly.

You are essentially claiming that the basket of goods consumed by the poor is different from the basket of goods consumed by the middle class and the rich, and thus they face different rates of inflation.

1) This is true over short intervals but virtually disappears over long ones - the inflation rate faced by the rich and the poor over, say, a 100-year span are necessarily similar.

2) The typical argument is over the stagnation of median household income - but we can show that stagnation didn't happen without resorting to arguments about the correctness of CPI. We can show it from a direct comparison. That is the evidence that CPI is flawed. "Product quality is incorrectly measured" is a hypothesis to explain how it might be flawed. "The employees at the Bureau of Labor Statistics are all incompetent and did the surveys wrong" is another [much less plausible] hypothesis.

3) We can, of course, do the same process to directly compare e.g. the 10th percentile of household income - but I bet it would give the same answer, that the real value of the 10th percentile of household income in 2010 is greater than the real value of the 10th percentile of household income in 1970.

[Kuciwalker]

I am willing to concede that this is part of my point, but reserve the right to retract from some of it if you're trying to go too far in your expected attempt of "ex concessis" refutation.

OK fine. My question is, then, so what? Economists know that these parameters can change over time. It's not a big deal, largely because econometrics aren't yet sophisticated enough to estimate those parameters well in the first place. Physicists can measure the speed of light with many significant digits. Economists frequently can't get more than zero.

[Kidlicious]

No they weren't. They took up loads of space, they were unreliable.

It was really hard to share music with your friends, it was really hard to hear new music, you were limited to the radio.

It sucked.

I mean, they are quite cool to look at, but modern times are SO much better for kids.

I didn't notice, and neither did anyone else, so it's not real.

[Sava]

Maybe not perfect but gives us the result that you are better off being poor in 2010 than king in 1600, which is right.

Well... King of what? Maybe England... since that urine ridden country had a dreadful life expectancy in the 1600's. But before the Black Plague, life expectancies in Europe (on average) were higher than they are today for the "poor". The "poor" being, well, Sub-Saharan Africa.

It also seems as if that period, 1200-1300, was much healthier than the more "modern" early 20th century... which apparently had lower life expectancies. But again, we're looking at urine ridden Britain. I'd have to find stats for a non-urine ridden country.