@thelion
I'm sorry, but your post is too long for me to justify the tradeoff of reading it... I'm legit sorry :(
@Gotlucky
But he is worse off than he would have been if B had not traded. Because B traded with A, C is worse off than he would have been if B had not. My point was originally addressed at this:
"Wealth increase is increase of the number of wants satisfied by some people without causing wants of other people to be not satisfied."
This is clearly false in the above scenario and through the entire economy. Because everyone doesn't bow to the will of one man in a world of scarcity satisfying the wants of one person always come at a tradeoff of not satisfying someone else's.
As I tried to indicate in my previous post the dispute was too small to continue much discussion on it.
My point with ending the recession is that if there is a way to clap your hands and make the economy return to healthy non-recession conditions, then most everyone would be better off because of this and the physical wealth of society increases as does the wealth of the great majority.
Inevitably some will profit from a recession and be worse off when it ends, yet I've never heard anyone refer to the recession as being a "healthy" economy except as a means of getting to a non-recssion economy. A process, not an end.
Neodoxy:"A and B hold X and Y. A gives X to B. B gives Y to A. A is happier and so is B, otherwise they wouldn't do it. Nothing else changed." Person C can still be worse off becuase if B had not exchanged with A then C would have been able to exchange with A at his critical price.
Person C can still be worse off becuase if B had not exchanged with A then C would have been able to exchange with A at his critical price.
@ Neodoxy
In less rigorous words:
A and B trade, they both gain. C wanted A to trade with him or her, but that is foregone due to existence of B. You say C has extra cost by A NOT trading with him or her.
That is not true. Because C must use violence to get A to trade with C. Now, you say, welfare has decreased (because C gains at expense of B and partly at expense of A), but C more satisfied than otherwise.
Actually, no. Violence is not compatible with division of labor, because that is cooperative behavior where the common goals are set by preferences demonstrated through voluntary trades -- no fighting allowed. Yet division of labor is more productive in satisfaction of every want than isolated labor.
If C uses violence, then C gets X from A, sure, but every other want of C shall be less satisfied than if C did not use violence, because division of labor directed by preferences is broken if people initiate violence.
Thus C prefers not initatiating violence over initatiating violence, since the cost of violence is less satisfaction of every other want besides that satisfied by X gotten from A.
Thus, C foregoes nothing by doing nothing while A and B trade. But A and B gain from trade. Thus, no one is hurt and A and B gain, and welfare increases. This is the only way more wants rather than less can be satisfied in society. Once division of labor goes, conditions become significantly worse than otherwise possible.
Cost = regret of next best foregone opportunity for pleasure. C has no next best opportunity: everything else involves violence and ultimately makes C less satisfied than C standing in place or better yet going out to try to make something A wants more than what B can offer, because that would result in trade AND would not interrupt division of labor.
@myhumangetsme
And therefore...?
Neodoxy:And therefore...?
And therefore you made no sense?
Hint to Neodoxy:
In myhumangetsme's case, there is no next best foregone opportunity, and so no cost to C, too, ... hence ...
Answer:
Pareto Improvement
"And therefore you made no sense?"
You made no sense.
Neodoxy, review what "cost" of something is.
Pain of regret of next best foregone opportunity in order to get that something. Reflect on this in the case of A, B, and C.
P.S. You're not an economist by chance? In my intermediate micro and advance micro classes (which were actually not bad although neoclassical), just about everyone (except two people who got A's -- guess who) got Cs and Ds. Primarily because they could not find their asses in their pants. Of course, they graduated anyway and now have government jobs or teach other people. If you are one of their students, I apologize. It's not your fault.
Neodoxy: But he is worse off than he would have been if B had not traded. Because B traded with A, C is worse off than he would have been if B had not.
But he is worse off than he would have been if B had not traded. Because B traded with A, C is worse off than he would have been if B had not.
You are still mixing up your counterfactuals. If C's condition does not change, then he is neither better nor worse off. He remains the same. We can say that C would be better off if he trades with A. But if C does not trade with A, he is not worse off. His condition is unchanged.
What you are doing is similar to politicians calling a reduction in the increase of spending the same as budget cuts.
Neodoxy: My point was originally addressed at this: "Wealth increase is increase of the number of wants satisfied by some people without causing wants of other people to be not satisfied."
My point was originally addressed at this:
I agree that this is false. There can be a net increase of physical wealth even if some people lose wealth.
Neodoxy:You made no sense.
You're putting one strange assumption on top of another to disprove a hypothetical that wasn't even the point to begin with, and I'm the one not making sense.
Okie dokie then.
@gotlucky
"I agree that this is false. There can be a net increase of physical wealth even if some people lose wealth."
Nope. Incorrect.
Preferences are ________ (fill in the blank).
Answer: ordinal.
Can you add or subtract non-quantitative elements? Show me, if you think you can.
Welfare of a group only increases if everyone gains or some gain with none losing. Which is precisely the case with trade between any two people who actually do trade things. Or division of labor versus isolated labor. DoL is more productive invariant of what preferences it is being used to satisfy and thus for all preferences.
My happiness increases for whatever reason, that does not decrease your happiness, because utility is not material. Secondly, when people trade, at least two people gain and no one suffers additional costs, because to change who trades with whom requires use of violence, but that interrupts division of labor and causes all other preferences to be less satisfied, and so, violence is less preferred relative to doing nothing.
(Anyway, I finished reading my book on the internet archive, so I'm logging off for now. Refer to Rothbard's 1956 paper or Pareto's 1905 book in english translation from the 60's)
You couldn't be more wrong. If there are 100 cars for a given group of people, and then there is an increase to 120 cars, there is a net increase of physical wealth. This is true if no cars were destroyed or if some cars were destroyed. The total amount of cars has increased. So in terms of the group, there is a net increase in physical wealth. But in terms of individuals, some people gained cars, some people didn't, and some people lost cars.
I'll also add that it is interesting that I talk about physical wealth and you move specifically to utility. Sure, we can't measure interpersonal utility, but we can still measure how many cars there are. For some people, a car does not add to their utility. It does for others. Either way, a society that has 120 cars has more cars than a society that has 100.
Also interesting, according to your statements, in a society of 300 million people, if A mugs B, then no matter how much wealth C, D, E, F, etc. produce, there cannot be a net gain in wealth for that society.
I'm just gonna lol at that claim.
"It's not about increasing wealth. It's about stimulating the economy in a recession."
Okay, I'm going to preface this happy little message with this, so that everyone can understand where I'm coming from. Over the past week I've continually talked to fine folks on the internet who, despite being rather intelligent people, can't actually bother reading whatever others have to say. They immediately proceed to talk past me and talk about whatever the hell they already want to talk about or they just lump me in with a group and attack that group instead of actually talking about what I am saying. This is fucking insufferable. Unlike myself, the only unbiased and open minded person on the internet, everyone else just likes to talk and attack. No one understands me. I wish that people would actually read and base what they are writing upon what they are supposedly responding to.
The second disclaimer is that there's a god damn reason that I tried to drop this discussion, what I was picking up on after thelion's first quoted passage which was WRONG the discussion and any actual problems I had was so minor and trivial that it wasn't actually worth discussing. So here goes
"You are still mixing up your counterfactuals. If C's condition does not change, then he is neither better nor worse off. He remains the same. We can say that C would be better off if he trades with A. But if C does not trade with A, he is not worse off."
"But he is worse off than he would have been if B had not traded. Because B traded with A, C is worse off than he would have been if B had not."
These two passages do not contradict one another. As I said before, the conflict here is pedantic and not really worth fighting over. If people weren't pissing me off (not you gotlucky, love you <3) I probably wouldn't respond at all.
@human
No. Every individual would be better off if the price of the goods they wanted to consume was lower. Because every purchase of a good (with the exceptions of economies of scale) increases its price. One person's consumption of a good directly conflicts with another person's consumption of that good. What I stated is by no means an insane hypothetical in a world of scarcity, nor is yours. Whether or not this was the main point is irrelevant to what the discussion becomes. I did not have a problem with the brunt of the post. I stated that the dispute was "pedantic".
This indeed shows that the market economy will maximize human happiness relative to what it would otherwise have been. You could bother trying to understand what I am stating before you respond.
1.
"P.S. You're not an economist by chance? In my intermediate micro and advance micro classes (which were actually not bad although neoclassical), just about everyone (except two people who got A's -- guess who) got Cs and Ds. Primarily because they could not find their asses in their pants. Of course, they graduated anyway and now have government jobs or teach other people. If you are one of their students, I apologize. It's not your fault."
Can't tell if this is an insult or not
Anyway. I am currently an economics student yes, but I am also primarily Austrian in education, and I really can't believe that you are implying I don't understand economics well when I was talking about f***ing capital theory on the last page.
2. You keep addressing things which I am not talking about. I never said that C would be better off using violence (I find your explanation of why he is to be inadequate), nor that a cost was inflicted, merely that he would be better off if B didn't make the exchange. Once again this is a small dispute that is not worth arguing about. Unless we are A. Post scarcity or B. All of society gets together and says "Hey, you know what? Person B, what a guy. We should base our entire production structure around that guy to satisfy his every need" then most, although not quite all, consumption of materials come at the expense of B's wellbeing. I realize that this is relatively unimportant given the utter impossibility of this happening (although ultimately a relevant insight), yet it is still true. We live in a world of scarcity, and therefore even though more can be produced, the consumption of materials by some come at the expense of what others might have enjoyed.
Neo out.
Neodoxy: @Gotlucky "You are still mixing up your counterfactuals. If C's condition does not change, then he is neither better nor worse off. He remains the same. We can say that C would be better off if he trades with A. But if C does not trade with A, he is not worse off." "But he is worse off than he would have been if B had not traded. Because B traded with A, C is worse off than he would have been if B had not." These two passages do not contradict one another. As I said before, the conflict here is pedantic and not really worth fighting over. If people weren't pissing me off (not you gotlucky, love you <3) I probably wouldn't respond at all.
Somehow I missed the "than he would have been" in this post. I guess my point only applies to your post that I first replied to. I missed your clarification in your response to me. I think I read the word "but" and assumed you were not clarifying.
@Neodoxy
So now you've gone from taking an off-handed swipe at me to a high-minded umbrage (and suddenly attributing to me a stance in an argument I wasn't a party to, to boot).
I'm sorry that you can't seem to tolerate that you made an error, but you did, so how about you actually deal with it instead of insisting on weaseling out of it by any means necessary? It's childish and unbecoming of you. The first step is admitting you have a problem.
1. What?
2.
3. I will admit openly and appologetically that I am wrong the moment that I am convinced of the fact that I am wrong and I have done as much in the past. Until that point I will follow whatever other conclusion I have logically reached, and at the moment it is that you are an arrogant and hypocritcal fool. Sorry bro.