Sawdust- The conversation breaks down for me when I am trying to get at basic understandings of what we are talking about and am then told to go look it up in encyclopedias. Different people carry different ideas of what these very complex issues mean to them, and I believe it a mistake to assume that we all carry the encyclopedic version with us. That being said I am not interested in trying to coax anyone into a discussion that they are not interested in.

After considering this issue a little more, I believe my basic instincts are correct. The zero-sum game is just another way to deny any kind of fact based assesment of our economy, though perhaps Parmindes and Heraclitus was going too far. The only fact for you guys is big government infinging on the individuals freedom, and you are not willing to look at any considerations beyond that.

I do actually agree that when measuring standard of living there is room for people to have different criteria, but your assertion that "oppurtunity" is the real goal is another example of what I am talking about. You want to leave "oppurtunity" as some endless realm of potential that could never be measured or quantified, and then you claim that I am an idealist not connected to reality

Matt, you asked a very simple question about communism and capitalism and their definitions. Not much to discuss there, look up the definitions, question answered.

quote:

The zero-sum game is just another way to deny any kind of fact based assesment of our economy, though perhaps Parmindes and Heraclitus was going too far.

Your instincts, it seems to me, should lead you to an undersanding if you can answer a simple question. Is our economy zero sum, or non zero sum?

quote:

You want to leave "oppurtunity" as some endless realm of potential that could never be measured or quantified, and then you claim that I am an idealist not connected to reality

Here are some more questions for you. Do you believe that human potential has limits? Do you think everyone has the ability to fulfill their personal potential? How do you measure that ability

As an aside, I think you are an ernest guy looking for answers. The only place I see where you are disconnected from reality is about the Trade Centers. You can respond to my wise crack but keep it short. I won't respond and give you the last word if you feel you need it.

There is more to human potential than becoming the wealthiest kid on the block.

Retired Monk
"Ideology is a disease"

Who said there wasn't?

Sawdust- As I have said before I have respect for the way you go about discussions, and am trying my best to stay away from urges like getting the last word in. What would you consider more socialist, an economy that had a low total of private enterprises, or one that had almost exclusively private enterprise but excessive tax rates? As I said I will not coax you further than this, but I most strongly disagree that comminism and capitalism are measured on a neat continuim.

As for human potential it has limits, but that is not really what I am arguing against. I am arguing that using the idea of that potential to ignore realities on the ground renders those potentials quixotical. What we can do, needs to be guided by what we need to do.

As for WTC, I am not sure if it is the "contolled demolition" aspect, or just questioning 9-11 in general that you find objectionable. If it is CD , I was not really willing to seriously consider it for quite some time, so I do have some understanding of how far it stretches what seems reasonable. If it is the overall 9-11 question, I would hope you would see that there is more involved than just who is right and wrong. There is the publics belief as to how much they trust their governments, to what degree they have access to information, and to what degree the media is open about the discussion. My greatest disappointment on the issue is not that people believe the government could not be involved, but rather their lack of concern that a proper discussion take place.

We're getting a little scattered here. I'd still like to know whether you think our economy is zero sum or non zero sum.

quote:

What would you consider more socialist, an economy that had a low total of private enterprises, or one that had almost exclusively private enterprise but excessive tax rates?

I'll try to answer your question although the assumptions in it are so broad and the details so lacking it's difficult in the time I have to allocate to it. I associate socialism with excessive tax rates. The United States is partly socialist. Socialism is defined by the amount of money the government collects to spend on social programs and what those programs are. Socialism also allows for public ownership of some means of production. I think of it as communism lite depending on degree. The social democracies of Europe collect so much in tax from it's citizens I would find it stifling. On the other hand, they take on so much of what I find as my personal responsibility to care for myself and my family, I fine that thought of it oppressive.

Communism and capitalism on the other hand are defined by the way they treat private property and the means of production. A Communist country can incorporate capitalism into their economic strategy but when they do, they create class strata. Capitalism rewards risk takers. It can punish them as well but the risk is worthwhile.

Republicans play zero sum economics, the only way to win is if there is a loser. Europe is not socialist, they are social democracies, democracy being the key word...they vote, they're allowed to vote [all of them] and their votes are counted [all of them]. No one I know is loafing, taking care of the family [we have family leave, yes, for dads of newborns] is not loafing, and diy is a major factor of most of my neighbors' free time. The amount of the national revenue spent on 'social' expense does include national health, true, but the roads, bridges, rails, ports, schools, bike paths and more are only considered socialist by those countries that don't have them, and won't pay for them. Tax rates are misleading in the states, since as long as you call it something else, it's not a tax. CA tax rate is 10% state + 8% fica + 25-33% income tax + sales tax, so total 'tax burden' can be 60%, and for that 60%, you get debt, and bombs, and hatred in the eyes of the world, but you get opportunity. Europeans have opportunity, but they have to honor human rights standards accepted by most of the rest of western civilization. Homo economicus [no it's not gay economies, it's 'economic man'] is discussed in this link.A side bar covers trust and betrayal, kind of like the last 30 years of US economic, or Reaganomics, and it's latest manifestation, Texonomics.

quote:

Republicans play zero sum economics, the only way to win is if there is a loser.

Doug, I don't know what to say other than if you understand zero sum and non zero sum, you are wrong by definition.

Europe operates under a higher level of socialism than the US. Both entities operate a degree of socialism. Europeans have more of the means of production under government control than do Americans. Both societies are capitalist. You can't look at any economy and say that it is fully one system or another. They are all hybreds.

Sawdust, I was going by thiswhich does include constant sum, but zero sum example being chess, I thought winner and loser [though I've been advocating stalemate for Iraq]

As far as I know, everyone agrees that Chess is zero-sum (as well as most board games) and Politics. For the Democrats to have more power than Republicans then Republicans have to have less. And thus one reason we live in a Liberal Democracy.

quote:

Many games studied by game theorists (including the famous prisoner's dilemma) are non-zero-sum games, because some outcomes have net results greater or less than zero. Informally, in non-zero-sum games, a gain by one player does not necessarily correspond with a loss by another.

Doug, if you believe that economies never expand or contract with variables in populations, you can apply the terms zero sums and constant sum to your description of economies. If you believe that. Do you?

Sawdust, of course economies expand, but not always translated to standard of living increases to the majority that created the expansion.

quote:

Constant sum games correspond to activities like theft and gambling, but not to the fundamental economic situation in which there are potential gains from trade. It is possible to transform any game into a (possibly asymmetric) zero-sum game by adding an additional dummy player (often called "the board"), whose losses compensate the players' net winnings.

The dummy hand would be a)saftey regulations, b)infrastructure maintenance [and expansion], c)tariffs and fines for basic labor law violations, d)all of the above [and more]. The largest growth for US was '40s - late '60s. One thing about measuring economic growth, sometimes productivity is the key measurement, other times gdp [which also includes leveraged govt. expenditures, like fema outlays for formaldehyde,] then gnp. This is where the 'Ultimatum' economic game theory comes in, if the majority of the country are only offered 10% of the expansion benefits, they can say shove it, then the offerer [republicans] doesn't get their 90%....0 is a lot less than 90 than it is of 10. Don, to add a bit of balance to our discussion [I'm trying to wean off statistics] Cliffs notes for jobs, or money is where I'm coming from [forwarded it to Robert too], when the rate of success is determined by how many you fire [in raw numbers, not percentages, see not stats ] seems like zero sum to me.

quote:

But the company also invested in making its domestic operations more efficient, and Ayers took special care to preserve jobs and facilities in New Britain, Connecticut, where Stanley had been a major employer for more than a century. By the mid-1990s, revenues had stabilized, profits were up, and Ayers could reasonably tell himself that his "evolutionary" approach had worked.

Wall Street, however, was not impressed. Securities analysts, comparing the jobs eliminated by Ayers with the layoff numbers at other old-line companies—Scott Paper (11,000), Sears (50,000), General Motors (94,000)—suggested that Stanley's key problem might be leadership rather than imports. At age fifty-five, according to Louis Uchitelle's The Disposable American, Ayers concluded that he did "not have the stomach" for any more job-cutting.

from the link, Stanley Tools is company, a book by Bogle [Vanguard index funds] is also reviewed, Capitalism has had a soul.

This message has been edited. Last edited by: douglaslee,

To further illustrate the thieves that game the system , in Bogle's book [Bogle started before Eliot Spitzer- another of my heroes- was even in law school]

quote:

"Managers' capitalism," then, is Bogle's shorthand for a system of rules, practices, and standards of behavior designed to bring quick and sure rewards to a few at long-term cost to many. Executives are not the only suspects here, and shareholders are not the only victims.

Often, Bogle observes, workers and shareholders get defrauded together. That is obviously true when managers cook the books; it can also be true when they cook up dramatic "restructuring" plans entailing mass layoffs. As Uchitelle points out, these plans often generate smaller-than-anticipated savings and bigger-than-anticipated costs—in morale and trust, especially. The point of many recent layoffs has been to free up capital for the repayment of debt incurred in mergers and acquisitions; those deals have a notably bad track record of their own. To understand why so many mergers continue to occur—$3.79 trillion worth in 2006—Bogle suggests that we consider the consequences for the executives who arrange them: not just the bonuses and the increased pay and power, but the ability to "take huge writeoffs—largely ignored by market participants—and create 'cookie jar' reserves"—paper assets created through mergers—"available at the beck and call of management to inflate future earnings on demand."

Doug, I appreciate the reading you've done to bring us these snippets. What do they have to do with what we're talking about?

Sawdust- On the question of whether the U.S is zero sum gain or not. I don't really know how to even begin measuring this. Apparentley one of the premises of nonzero sum gain is that both traders are receiving something that benefits them, yet there is no consideration of whether the item or service they are receiving is done so at the lowest cost to them possible. Additionally we have the problem of such strong marketing campaigns that convince people of needs for commodities that are beyond rational analysis of necessity.

I imagine your answer is that we are non zero sum since everyone is partaking freely in an open and transparent system that allows them to pursue there own interests. I would of course strongly object to this on the two points from the previous paragraph. One no consideration of whether goods and services could be delivered at less cost in other systems. Two- Whether marketing can establish desires in consumers that are outside of objective standards of necessity.

Equal value for equal value is zero sum. It isn't done this way.

Retired Monk
"Ideology is a disease"

Who defines value?

Economics. Say's Law of Value.

Unfortunately, the law makes no allowance for profit....and the law itself is valid and irrefutable. That's why efforts are made to keep it in balance through monetary policy and social programs. Monatetarist policy doesn't work very well. It ultimately collapses upon itself...like our current credit bubble.

Retired Monk
"Ideology is a disease"

Sorry could not resist, Matt. A couple of points...

quote:

On the question of whether the U.S is zero sum gain or not.

It is not just the US but any economy that has elements of free markets.

quote:

Apparentley one of the premises of nonzero sum gain is that both traders are receiving something that benefits them, yet there is no consideration of whether the item or service they are receiving is done so at the lowest cost to them possible.

Yes, it is assumed that there is perfect knowledge (which of course is not always true) and that the customer chooses the highest value to him based on what his marginal utility curves indicate. Asymmetrical information models are widely studied in economics lately-even Joseph Stiglitz has done some research in that area.

quote:

Who defines value?

Who ever is the customer.

No comment on whether marketing establishes need?

Does the market establish need for medical care, food, water, shelter? Nope.

Need/wants are two very different things. Wants are generated, need isn't.

You can bid up the price on products, and economically, it doesn't change their actual value. It distorts markets and creates conflict within Say's Law of value. Booms and busts.

Production cost/wages/money supply = aggregate...balance. Production costs and wages determine the base value of a commodity. When the money supply is in balance with values produced there is no inflation/deflation. No over-production/under-production of goods and services.

Profit is taken from the money supply portion of the equation. Throws it out of balance. It's replaced by the Fed or through social programs.

Retired Monk
"Ideology is a disease"

Matt, we have had discussions before on this and honestly I think Sawdust gave the best answer. But let me try.

quote:

No comment on whether marketing establishes need?

No amount of marketing can drive "needs" but that does not mean that advertising has no effect. First is making aware of customers of needs they may not be aware of. I have a need to be loved, right? So if a toothpaste will make me feel better about my self then so be it.

Secondly it creates a top of mind awareness. Got milk may be one of the best marketing plans possible. Everyone buys milk and that is one reason it is at the back of the stores. But not everyone thinks about it on a daily basis so they want people to keep that need at the top of their minds when shopping.

Toothpaste is a need unless you don't care if your teeth fall out.

In elementary school, I was taught to brush my teeth as a physical maintenance necessity...not to generate kisses by the opposite sex. Ditto milk in nutrition studies. Primary school stuff.

Needs/wants are very different. One basic for human health, one generated by psychological campaigns...which in turn become reflected in cultural values..."shop till you drop".

None of this has anything to do with "zero sum economics" which is the exchange of equal value for equal value..

Retired Monk
"Ideology is a disease"

With all due respect Polycarp, You could argue that Say's law actually is only a tautology and says nothing in defining value

Polycarp - I am not able to understand your argument. You apparentley feel a transaction defines all the complexities of human psychology only in the simple details of the transaction itself. Do you not believe that the educational milieu that feeds a mind is not causitive in the economic propensity of said mind? If transaction takes place it proves a transparency of process? Is the theory of externalities considered irrelevant in Say's law?

You seem to suggest that needs and wants are different from maintaince of health. Am I understanding that correctly?

Sorry for the consecutive postings, but my thoughts are still evolving and I want to try to explain clearly. The heart of the matter is the analysis of the economic transaction itself. Equivalency of values is granted simply by the fact the transaction takes place. Say and free marketeers do not wish to acknowledge the framework in which the transaction takes place, only that since it takes place that it must be the best choice possible. The real question is whether we can build a framework that allows for choices that result in higher levels of satisfaction for mankind in general.