Economics Questions

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 17:33:20 GMT

Stranger:
The market is unfair?

Take a look at my answer headed "A thought experiment about land..." on page one of this thread. I think that the system I propose in that answer is a "market" system and is fairer.

Re: Mortgages

Stranger — Wed, 24 Mar 2010 17:16:21 GMT

mickanomics:

Stranger:
Well yes, since before the oil was spotted, nobody knew that there was this wealth there. Bringing the wealth to market is what enriches the millions of poor people, so those who bring wealth to market should be rewarded.

Ok, I was being flippant about the Nigerians... the point is that I think your answer here is actually so self evidently unfair that it needs no further exposition.

The market is unfair?

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 17:13:38 GMT

Stranger:
Well yes, since before the oil was spotted, nobody knew that there was this wealth there. Bringing the wealth to market is what enriches the millions of poor people, so those who bring wealth to market should be rewarded.

Ok, I was being flippant about the Nigerians... the point is that I think your answer here is actually so self evidently unfair that it needs no further exposition.

Re: Mortgages

Stranger — Wed, 24 Mar 2010 17:07:34 GMT

mickanomics:

Stranger:
Bringing the wealth to market is what enriches the millions of poor people

Try telling that to a Nigerian.

Why?

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 17:06:34 GMT

Stranger:
Bringing the wealth to market is what enriches the millions of poor people

Try telling that to a Nigerian.

Re: Mortgages

Stranger — Wed, 24 Mar 2010 16:54:53 GMT

mickanomics:

Well it would take a while (months?) to set up both. So what happens in the first few days when both guys are on the beach doing their surveying.. they spot each other milling around. Mr House says to Mr Dump, "What are you doing here?", Mr Dump replies "I'm just looking for the best place for the nuclear waste boats to come to shore so they can dump their stuff"... what are you doing here?". Mr House replies "I'm looking for the best place to build my holiday home". Please tell me how the conversation proceeds.

In that case, both are considered to have a property right. But the right to the home takes under consideration the presence of the nuclear waste dump, since the home builder knew that there was going to be one when he built his home.

If he doesn't like that, he can always pay the nuclear waste dumpers to go away. Then he will have the whole island to himself.

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 16:52:28 GMT

Stranger:
Depends on who is first. Would you build a home on the island if a nuclear waste dump was already under construction? No. Would someone who has a home on the island allow you to build a nuclear waste dump there? Of course not.

Well it would take a while (months?) to set up both. So what happens in the first few days when both guys are on the beach doing their surveying.. they spot each other milling around. Mr House says to Mr Dump, "What are you doing here?", Mr Dump replies "I'm just looking for the best place for the nuclear waste boats to come to shore so they can dump their stuff"... what are you doing here?". Mr House replies "I'm looking for the best place to build my holiday home". Please tell me how the conversation proceeds.

Re: Mortgages

Stranger — Wed, 24 Mar 2010 16:35:35 GMT

mickanomics:

1. What if it wasn't just volcanic rocks, but a gargantuan oil well underneath the island, that was easily visible because it was oozing out of the ground. Does the first person to spot the oil get to become a multi-billionaire, with no incentive to enrich the millions of poor people on the mainland?

Well yes, since before the oil was spotted, nobody knew that there was this wealth there. Bringing the wealth to market is what enriches the millions of poor people, so those who bring wealth to market should be rewarded.

mickanomics:

2. Yes, it may be just a dumb island, but what if someone wanted to build a house or a hotel on it? What if one person wanted to build a holiday home on it whilst someone else wanted to use it as a nuclear waste dump. How could that get sorted out? It seems like a recipe for a big fight.

Depends on who is first. Would you build a home on the island if a nuclear waste dump was already under construction? No. Would someone who has a home on the island allow you to build a nuclear waste dump there? Of course not.

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 16:29:14 GMT

Stranger:
So in the case of a new island appearing, there might be a race to the island to grab some very interesting volcanic rocks. Once the rocks are gone however, it's just a dumb island.

Two questions:

1. What if it wasn't just volcanic rocks, but a gargantuan oil well underneath the island, that was easily visible because it was oozing out of the ground. Does the first person to spot the oil get to become a multi-billionaire, with no incentive to enrich the millions of poor people on the mainland?

2. Yes, it may be just a dumb island, but what if someone wanted to build a house or a hotel on it? What if one person wanted to build a holiday home on it whilst someone else wanted to use it as a nuclear waste dump. How could that get sorted out? It seems like a recipe for a big fight.

Re: Mortgages

Stranger — Wed, 24 Mar 2010 16:19:01 GMT

mickanomics:

Imagine that due to some volcanic activity a new island appears just off shore from some mainland (this is no thought experiment - this has actually happened several time in the past few decades)... Presumably if the mainland was an anarchist state then a swimming race will ensue and the first man to the island gets to claim the entire island as their own... is that right? ... what about in Haiti after the earthquake, on one side of the island new land that was previously under water, rose up. Should/could the first person to step on to that land claim it as their own?

You're misconstruing what a claim to property is. You can only claim property if some other activity is conflicting with yours. For example, if you own a forest where you hunt, you can't complain that airplanes fly overhead unless it affects the animals in the area.

So in the case of a new island appearing, there might be a race to the island to grab some very interesting volcanic rocks. Once the rocks are gone however, it's just a dumb island.

Re: Mortgages

mickanomics — Wed, 24 Mar 2010 08:58:30 GMT

ChroMattic:
If he has a legitimate property claim on that tree (i.e. its not someone else's tree)

This is the crux of the matter. How do people ever get a claim to a natural resource in the first place. In some societies (native American Indians?) The entire concept of owning land was nonsense.

What if the people in the land with the banana tree had the same attitude as the indians and just casually picked off the odd banana as and when they wanted... but then one day one of the indians said to himself "nobody appears to have claimed this tree, I think I will call it my own, put a fence round it and then start charging a fee for the bananas". Would that be reasonable? I suspect he would be lynched.

Imagine that due to some volcanic activity a new island appears just off shore from some mainland (this is no thought experiment - this has actually happened several time in the past few decades)... Presumably if the mainland was an anarchist state then a swimming race will ensue and the first man to the island gets to claim the entire island as their own... is that right? ... what about in Haiti after the earthquake, on one side of the island new land that was previously under water, rose up. Should/could the first person to step on to that land claim it as their own?

Re: Mortgages

ChroMattic — Wed, 24 Mar 2010 00:50:03 GMT

mickanomics:

If I saw the sculptor selling his artwork, I would not feel very inclined to complain about the fact that he's used up a rock that could perhaps be said to belong to everyone. Rocks are a dime a dozen, I don't care about rocks. But if I saw someone standing under the tree, claiming to be the tree's owner, selling the bananas to passers by (at a high price because it is the only banana tree for miles around), then I may be thinking, "hang on, that guys contribution to the banana is almost nothing, he's just pulling it off the tree", I fancy a banana myself - I don't want to pay him (a fight may break out at this point).

Maybe all natural resources should be considered as belonging to everyone and the benefits of them should be distributed amongst the population via a free market mechanism. i.e. the people who want the most of the resource pay compensation (in labor) to those that are willing to use/consume less of it.

Does his contribution matter? If he has a legitimate property claim on that tree (i.e. its not someone else's tree) he can do whatever he wants with the bananas. He can take them all, put them in a pile in front of a soup kitchen with homeless people outside and stamp them into the dirt. If he wants to exchange them, he is free to do so. To say it has a "high" price is meaningless. "High" compared to what? Your willingness to pay? Fair enough, but there is no objectively "high" price, only the amount someone is willing to accept to give up something.

Re: Mortgages

mickanomics — Tue, 09 Mar 2010 16:43:43 GMT

Stranger:
I'm not convinced there is such a good as "land" in the first place.

You'll have to explain that one to me.

Re: Mortgages

mickanomics — Tue, 09 Mar 2010 16:41:30 GMT

I don't have a certain answer... but thinking out loud... I guess that goods tend to be comprised from two components (in widely varying proportions):

1. The skill and labor of the "maker".

2. Mother nature.

I guess there is a continuum of ratio's from at, one extreme, a banana that was plucked form a tree that had been growing naturally for years without any help from man, to at the other extreme, an exquisite and detailed carving, painstakingly made from a lump of rock.

If I saw the sculptor selling his artwork, I would not feel very inclined to complain about the fact that he's used up a rock that could perhaps be said to belong to everyone. Rocks are a dime a dozen, I don't care about rocks. But if I saw someone standing under the tree, claiming to be the tree's owner, selling the bananas to passers by (at a high price because it is the only banana tree for miles around), then I may be thinking, "hang on, that guys contribution to the banana is almost nothing, he's just pulling it off the tree", I fancy a banana myself - I don't want to pay him (a fight may break out at this point).

Maybe all natural resources should be considered as belonging to everyone and the benefits of them should be distributed amongst the population via a free market mechanism. i.e. the people who want the most of the resource pay compensation (in labor) to those that are willing to use/consume less of it.

Re: Mortgages

Stranger — Tue, 09 Mar 2010 16:16:52 GMT

mickanomics:

BobT:
It means that it was stolen from the original owner (who did not steal it).

How could/should anyone legitimately come to be the original owner of some land?

I'm not convinced there is such a good as "land" in the first place.