Thomas Eshuis, my basic argument is that it's a problem that voting is used despite the fact that there's no evidence that it's more effective than spending at ranking things.

Do you agree that this is a problem? If so, then how do you think this problem should be solved?

Xerographica wrote:I sure love a high quality steak. Let's say that right now I could either have... X: a high quality steak or... Y: a book about the Invisible Hand that's even better than the WON. It wouldn't even be a difficult choice. I'd definitely choose Y. Admittedly, I'm not even a little hungry.

Right, ok.

But if you're assuming that those things cost roughly the same, then because a steak is a consumable item and a book is not. Then your spending habits will not reflect your preferences over time. You'll buy the book this time. But next time, you'll choose the steak, and the next, and the next, and the next.

What we're discussing here is "Voting vs. Spending - which is more effective?". And your example illustrates perfectly a situation in which spending completely fails to capture what you describe as your true preference.

Xerographica wrote:How I divide my dollars between steaks and books about the Invisible Hand should reflect how I want society's brainpower to be divided between these two types of goods. Right now I'm far more concerned with improving the supply of books about the Invisible Hand than I am about improving the supply of steaks. Unlike my stomach, my brain is starving for very high quality food.

Yeah, this definitely isn't how economic theory works. Take that Samuelson paper you linked, which used a far more orthodox economic conception of "success" by means of Pareto efficiency.

He clearly states that economics goes only as far as (in theory - in practice it can't even do this much) finding the frontier of Pareto-efficiency, that is the set of points where nobody can gain without someone else losing. So if there's even one other person whose preference differs from yours (they have no interest in more, better, or cheaper books about the invisible hand) then economics has nothing to say about which model is better - that's a job for normative ethics.

The other issue here is that economics is about the efficient distribution of limited resources, and again, there are all sorts of factors that stem from that - most people who make steaks cannot write a book that's a better treatise on neoclassical economics than Adam Smith's. There is zero gain from reallocating those resources. Similarly prices are a reflection not just of preferences, but also costs. The steak vendor and the book vendor are both interested in maximising profits (in the economic model at least, and that will largely be true in the real world). The price of a book is (in theory) the point it can be sold for maximum profit, not the point at which it reflects the subjective or normative value individuals place upon it.

Xerographica wrote:In this thread I've already shared Smith's most important passage as well as Samuelson's. Maybe it will help to juxtapose them...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society.  — Adam Smith, Wealth of Nations

But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. —  Paul Samuelson, The Pure Theory of Public Expenditure

The problem with false signals is that they prevent faulty distributions from being naturally corrected.

That is an extremely out of context quote of Samuelson, to the point that honestly, it's a quote mine. I'll look into the Smith quote. I can't see from the part you've linked any mention of false signalling.

Xerographica wrote:Right now it's Netflix's job to identify and correct faulty distributions. If there's a shortage of nature shows, then Netflix should know this and correct it.

Let's be clear though, "faulty" here can only mean "not maximising their own profits". It certainly doesn't mean "perfectly matching Xerographica's (or Thommo's) personal preferences" and it certainly doesn't mean "considering demand with no account for costs".

Xerographica wrote:Let's pretend that this is Netflix's current ranking of its content...

1. action
2. romance
3. sci-fi
4. comedy
5. horror
6. history
7. nature
8. UFOs

If nature should actually be ranked 5th, then Netflix should realize this and add more nature. Here's the thing. If Netflix is even remotely good at improving rankings, then what would be the point of markets? Why in the world should everybody spend so much time and energy ranking food, clothes, furniture, computers and a gazillion other things if all of them could be decently ranked by a relatively small group of people? Except, command economies haven't really done such a good job of ranking food or anything else. The only reason that you think that Netflix is doing a decent job of ranking the content is because you can't see how the content would be ranked by over 100 million subscribers.

Why do you attribute that opinion to me? I haven't said a word about whether Netflix is doing a good job of ranking content by genre. Netflix aren't in the business of ranking genres. They certainly aren't expending any significant amount of time, energy, food, clothes, furniture, computers et al doing it. The vast, vast majority of their physical resources go into supplying content and obtaining subscribers.

Netflix are in the business of selling subscriptions to access digital content. That's it. If they could make more money by slightly shifting their emphasis to host more nature shows, then that's something they should do to grow their business. Is that actually true? I've not a clue.

If they should do that and don't then that's simply a market failure (hardly surprising where they have minimal competition due to the regulatory structure that surrounds the online content market), and in turn if that contradicts (your interpretation of) Adam Smith, then what that means is that in that way (that interpretation of) Adam Smith is wrong - it fails to accurately model reality. This happens rather a lot in economics (and not just in economics).

Xerographica wrote:Nobody benefits if Netflix supplies too many, or too few, nature shows.

That's almost certainly not true and does not follow from Adam Smith's or anyone's economic theory. Individuals have a distribution of preferences, there will be many individuals who want more (or fewer) nature documentaries than the market taken as a whole, just as your demand for Adam Smith books is an outlier. Those individuals will still benefit from an over (or under) estimation of the overall market position, even as the company's bottom line suffers.

Xerographica wrote:If Smith was correct, then the optimal supply of nature shows depends on the Invisible Hand ranking the content. It should be up to each and every one of the 100 million subscribers to decide for themselves whether Netflix has too many, or too few, or the right amount of nature shows.

No. Smith was talking about markets. Netflix consumers are not in a market with one another. Within that environment economic market assumptions do not hold.

Consumer's have a single binary, Hobson's choice facing them: Is this product worth the asking price? Should I take it, or leave it?

Xerographica wrote:Samuelson's reasonable concern about false signals isn't applicable to Netflix subscribers earmarking their subscription dollars.

It's not applicable because he's not talking about that at all. He's talking about distribution of government expenditure on collective consumption goods:

Samuelson wrote:The new element added here is the set (2), which constitutes a pure theory of government expenditure on collective consumption goods. By themselves (1) and (2) define the (s – I)-fold infinity of utility frontier points; only when a set of interpersonal normative conditions equivalent to (3) is supplied are we able to define an unambiguously “best” state.

Samuelson wrote:Since formulating the conditions (2) some years ago, I have learned from the published and unpublished writings of Richard Musgrave that their essential logic is contained in the “voluntary-exchange” theories of public finance of the Sax-Wicksell-Lindahl-Musgrave type

Samuelson wrote:Now all of the above remains valid even if collective consumption is not zero but is instead explicitly set at its optimum values as determined by (1), (2), and (3). However no decentralized pricing system can serve to determine optimally these levels of collective consumption. Other kinds of “voting” or “signalling” would have to be tried. But and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really, has, etc. I must emphasize this: taxing according to a benefit theory of taxation cannot at all solve the computational problem in the decentralized manner possible for the first category of “private” goods to which the ordinary market pricing applies and which do not have the “external effects” basic to the very notion of collective consumption goods.

(Note, the section in red is the out of context fragment you've been using, the "but" and "all of the above" encapsulates the referents of the other sections I've quoted, as well as the context surrounding the red section)

There are other situations in which false signalling might be incentivised (e.g. Metacritic user rankings scores - 0s and 10s abound, Amazon user review scores 0s and 5s abound as well as author sockpuppets and hired reviewers or activist groups). But Samuelson is not talking about any and all situations, nor saying that spending can solve the problem - indeed he says the opposite.

Xerographica wrote:

Thommo wrote:

Xerographica wrote:If you're an atheist, would you be cool with some, or any, of your money to be given to the Catholic church? Imagine having to try and persuade somebody that you should be free to not give any of your money to the Catholic church. That's how I feel having to try and persuade you that I should be free to not give any of my money to content that really doesn't match my preferences.

But you don't have to? You can just not subscribe to Netflix.

Imagine if groceries were sold in super bundles. Sure, you could tell vegetarians that they could just unsubscribe from grocery stores that included meat in their bundles.

Ok, I imagine it. That grocer would go out of business tomorrow, because he does not have a monopoly on the supply of vegetables, since the vegetable market is very different to the TV market - vegetables are cheap, interchangeable, abundant and require minimum special or technical skills to produce.

So what?

Xerographica wrote:Imagine if clothes were also sold in super bundles. You could tell short skinny guys to unsubscribe from clothing stores that included woman's clothes, kids clothes and clothes for not short/skinny guys in their bundles.

Again, they'd be out of business instantly. So what?

Xerographica wrote:The selection pressure put on the supply of food and clothes wouldn't be even remotely close to the true diversity of people's preferences. Therefore, the supply would be far less diverse than the demand. Not only would everybody get many things they really didn't want, they would also not get many things they did want. Unfortunately I don't have the words to effectively articulate just how defective this system would be.

If the optimal supply depends on true signals, then bundles are bad.

I don't think the antecedent is true and I don't think the implication is true. You've not established (or even explicitly argued for) either.

You're clearly overlooking factors like economies of scale. I don't necessarily lose by Netflix having a suboptimal mix of programming (genres) relative to my preference. I don't watch 99% of the content on Netflix. If they can add 100 more shows and generate enough subscriptions to cover their costs, so my subscription fee does not rise, I lose nothing. It's no less (Pareto) efficient, there's no cost to me. But you're insisting I'm worse off.

That's not the case.

The recent change in the music market is actually a far better example. It used to be that if you wanted several tracks from an artist, you bought an album. Now you can buy individual songs (note this is largely driven by technological change which has altered market conditions). But the price you pay for a song from an album with 11 tracks is not simply 1/11th the cost of the album. Depending on the user's preferences this can end up being better, worse or indeed neutral (although I imagine it ends up being more consumer friendly on the whole, I have no proof of that, merely an expectation from the improved infrastructure and reduced costs surrounding distribution).

If the online video streaming market were restructured to be more like the music market would the consumer be better off? It's not readily apparent, you can already buy box sets or stream box sets on Amazon, but prices aren't lower for that purchase model.

Ultimately I would accept that more competition would be better for the consumer, but that's not really possible with the regulatory framework surrounding copyright that exists, and altering that framework would have a lot of an impact on content suppliers which could outweigh the gains (certain types of content might become economically non-viable).

But I don't think any of this has any connection whatsoever to "voting vs. spending" and categorically not when it comes to whether buying votes in elections would be a good idea.

Xerographica wrote:Let's imagine a group of people stranded on a deserted island. It's a concrete fact that all their potential activities aren't going to be equally useful for their survival. The more correctly they rank the usefulness of potential activities, the greater their chances of survival. Should they use voting or spending to rank their potential activities? My best guess is that they should use spending. Of course my best guess might be wrong.

Pretty clearly they shouldn't use either. They should attempt to work out how good everyone is at the things that need to get done. Like, if there's a guy with a broken leg, give him a task to do while sitting, don't send him tree climbing and looking for fruit. It's hard to imagine there'd be disagreement that what they need is water, food, shelter, a fire and an attempt to get help.

This could not have less to do with voting or spending if it tried.

I'm as puzzled by this example as I am by the AKU one, in which you specifically find an example in which spending does not work, at all (according to you) in deciding your preferences and then explain that this is a good reason to conclude that spending is the best system for deciding preferences.

This island example actually seems more like psychology than economics. It reminds me of the work of Kurt Lewin and his division of leadership into distinct categories of autocratic/democratic/laissez faire.

I can't find the particular study right now, but I recall that experiment shows that the best leadership style can vary with circumstances. In situations (note - small group situations like work oriented tasks) in which a group has little cohesion or superb cohesion democratic leadership often wastes time trying to build a consensus that either can't be found, or already exists. It's the centre ground where there's limited cohesion that causes democratic leadership to shine.

Xerographica wrote:Of course it's a basic fact that members of this forum are not equally wealthy. Some members have a lot more money than other members. This clearly is an issue for you, but how, exactly, would wealthy inequality adversely affect the thread rankings? Why would the biggest donors be inclined to elevate less useful threads? And which threads would fall into this category?

You must think that the biggest donors have terrible taste in threads... but you need to show us their terrible taste.

That scenario does not apply because an important ingredient is missing: return on investment. That, is what counts rather than taste. Or do you really think the money spent on lobbying is in any fashion a method for rationally ranking stuff in terms of worthiness?

Also, please stop telling me what I must believe or think. I do not believe that voting is more useful than spending at ranking things and I don not think that the biggest donors have terrible taste. Your either/or fallacies are getting tiresome.

Hermit wrote:Also, please stop telling me what I must believe or think. I do not believe that voting is more useful than spending at ranking things and I don not think that the biggest donors have terrible taste. Your either/or fallacies are getting tiresome.

This is one of the things I just mentioned, and was in the process of looking for a particular study on. I can't actually find the specific one I was looking for, but the basic point is that this has been an active area of study in psychology (it's not really economics at all), and a lot of the research has shown, perhaps unsuprisingly, that there is no single best leadership style - success depends on leadership style plus circumstances.

https://en.wikipedia.org/wiki/Leadershi ... y_theories

The Fiedler contingency model bases the leader's effectiveness on what Fred Fiedler called situational contingency. This results from the interaction of leadership style and situational favorability (later called situational control). The theory defined two types of leader: those who tend to accomplish the task by developing good relationships with the group (relationship-oriented), and those who have as their prime concern carrying out the task itself (task-oriented).[43] According to Fiedler, there is no ideal leader. Both task-oriented and relationship-oriented leaders can be effective if their leadership orientation fits the situation. When there is a good leader-member relation, a highly structured task, and high leader position power, the situation is considered a "favorable situation". Fiedler found that task-oriented leaders are more effective in extremely favorable or unfavorable situations, whereas relationship-oriented leaders perform best in situations with intermediate favorability.

https://en.wikipedia.org/wiki/Fiedler_c ... urableness

According to Fiedler, the ability to control the group situation (the second component of the contingency model) is crucial for a leader. This is because only leaders with situational control can be confident that their orders and suggestions will be carried out by their followers. Leaders who are unable to assume control over the group situation cannot be sure that the members they are leading will execute their commands. Because situational control is critical to leadership efficacy, Fiedler broke this factor down into three major components: leader-member relations, task structure, and position power (Forsyth, 2006). Moreover, there is no ideal leader. Both low-LPC (task-oriented) and high-LPC (relationship-oriented) leaders can be effective if their leadership orientation fits the situation.

There are also offshoot ideas like this:
https://en.wikipedia.org/wiki/Group_decision-making

The decisions made by groups are often different from those made by individuals. Group polarization is one clear example: groups tend to make decisions that are more extreme than those of its individual members, in the direction of the individual inclinations.[1]

That are quite interesting.

Anyway, the point is that, as Hermit has said, there's absolutely no either-or-ness about this. One is not in any way compelled to assume that either voting is better or spending is better. Voting could be better at picking political leaders without being better at selling cola.

What any of this has to do with the actual proposal that we still just use a vote, but restrict voting to those willing and able to pay I'm still, despite the extensive exchange not all too clear on. Restricting franchise by wealth has definitely already been tried in the real world (feudalism and the subsequent systems were explicitly predicated on it).

Xerographica wrote:Thomas Eshuis, my basic argument is that it's a problem that voting is used despite the fact that there's no evidence that it's more effective than spending at ranking things.

Do you agree that this is a problem? If so, then how do you think this problem should be solved?

Why is it a problem? And is your opinion here your heart speaking, or your wallet?

I have a hunch that you're preparing a particular thesis and have hit a brick wall. What I object to most is that not all ranking choices are made within the subjective parameters you have limited us to assess.

Hermit wrote:

Xerographica wrote:Of course it's a basic fact that members of this forum are not equally wealthy. Some members have a lot more money than other members. This clearly is an issue for you, but how, exactly, would wealthy inequality adversely affect the thread rankings? Why would the biggest donors be inclined to elevate less useful threads? And which threads would fall into this category?

You must think that the biggest donors have terrible taste in threads... but you need to show us their terrible taste.

That scenario does not apply because an important ingredient is missing: return on investment. That, is what counts rather than taste. Or do you really think the money spent on lobbying is in any fashion a method for rationally ranking stuff in terms of worthiness?

If I were completely fucking clueless about what I really valued, and depended on ratings to inform me as to what I should buy, see, listen to, wear, drive, or sniff, I might envision a system for attempting to enact my taste until what I liked turned into what everybody else liked. This might feel a little like the hive mind for the individual who didn't really want to be one.

The problem in focus is the overwhelming amount of content that is on offer. I like the old story about Theodore Sturgeon, the SF author. At a convention somebody challenged him, "Mr. Sturgeon, 90% of science fiction is crap." To which Sturgeon replied, "90% of everything is crap."

There's a side issue lurking that might want to be front and center, and that is the issue of who should be enfranchised, and how. It's been mooted before that only wealthy property owners really know what to do with their stake in governance, and even representative democracy ultimately just gets in the way of that.

Xerographica wrote:Thomas Eshuis, my basic argument is

I know what your argument is.
I don't know how your defining your crucial terms like 'effective'.

Xerographica wrote:Do you agree that this is a problem?

I don't know since you won't define what you mean by 'effective'.

Xerographica wrote: If so, then how do you think this problem should be solved?

Doing research into better alternatives to democracy, that are not focused on only one alternative.

Thommo, I think you're missing the point of this quote...

But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. —  Paul Samuelson, The Pure Theory of Public Expenditure

Samuelson's paper basically makes the case that taxation should be compulsory because of the free-rider problem. Do you regularly donate to this forum? If so, and your donations are true signals, then you must be the exception rather than the rule. Because if you were the rule, then taxation could be voluntary.

What makes a signal true or false? A signal is true when it equals the valuation. Let's say that your true valuation of this forum is $7 dollars/month, but you only donate $1 dollar/month...

valuation = $7/month
payment = $1/month

Your payment is a false signal. Let's say that you donate $2/month... the signal would still be false, but it would be marginally less false. What if you donate $10/month? This would also be a false signal because it doesn't equal your true valuation.

When pacifist taxpayers end up paying for war, then this is an example of the forced-rider problem. Their contribution to war is more than their true valuation of it.

Samuelson was critiquing Hayek's 1945 Nobel essay... The Use of Knowledge in Society. Hayek made the case that command economies fail because, since they don't have prices, they are unable to utilize all the relevant and necessary knowledge that is dispersed among all the consumers and producers. Samuelson's critique was that prices don't work for public goods.

In 1963 the Nobel economist James Buchanan critiqued Samuelson's paper...

Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes

Let me hedge my bets by sharing how other people have explained this concept...

One strand of this approach-initiated in Buchanan’s (1963) seminal paper-argues that the voter who might have approved a tax increase if it were earmarked for, say, environmental protection would oppose it under general fund financing because he or she may expect the increment to be allocated to an unfavored expenditure such as defense. Earmarked taxation then permits a more satisfactory expression of individual preferences. — Ranjit S. Teja, The Case for Earmarked Taxes

Individuals who have particularly negative feelings concerning a publicly provided good (e.g. Quakers on military expenditures, Prolifers on publicly funded abortions) have also at times suggested that they should be allowed to dissent by earmarking their taxes toward other public uses. — Marc Bilodeau, Tax-earmarking and separate school financing

The discussion looks basically like this...

Adam Smith (1776): Consumers should have the freedom to spend their money to help rank goods.
Friedrich Hayek (1945): It's true, the market is the only way to utilize all the dispersed knowledge.
Paul Samuelson (1954): While the market does work for private goods, it fails for public goods.
James Buchanan (1963): Actually, with earmarking the market would work equally well for public goods.

This is economics in a nutshell. We all should have learned this in school. Why didn't we? Well, schools aren't markets. So of course there's a big disparity between what students learn, and what they should learn. This is assuming that Smith, Hayek and Buchanan weren't full of shit.

Right now Netflix isn't a market either. So, if the above assumption is true, it means that there's a big disparity between what Netflix supplies, and what it should supply.

The point of an organization is to serve people's needs. Naturally this depends on the organization actually knowing people's needs. Does Netflix know my needs? No. It really doesn't. In order to know my needs, Netflix would have to give me the freedom to earmark my fees. Then, and only then, would Netflix actually know my needs.

Like I've repeatedly acknowledged, it's entirely possible that spending isn't always the best way to rank things. The most important thing is to scientifically test and compare different ranking systems. Unfortunately, this really isn't being done.

My hope was that, given that you folks are particularly concerned about rationality, you would recognize the enormity of the economic problem and we'd pool our knowledge and combine our strengths to solve the problem. But so far you folks have been primarily interested in defending the status quo rather than acknowledging that it isn't founded on evidence. There's absolutely no evidence that Netflix's command economy is more effective than a market economy. The same is true of the government's command economy (ie congress spending everybody's taxes). Plus, there's absolutely no evidence that ranking by voting is more effective than ranking by spending. The amount of evidence that should be there, but isn't, is astounding.

Xerographica wrote:Thommo, I think you're missing the point of this quote...

But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. —  Paul Samuelson, The Pure Theory of Public Expenditure

Samuelson's paper basically makes the case that taxation should be compulsory because of the free-rider problem.

I don't think I need to argue with that, but that's not how you were portraying his quote. Which is the point I was making.

The situations you're applying it to are not examples of false signalling at all.

Xerographica wrote:The point of an organization is to serve people's needs. Naturally this depends on the organization actually knowing people's needs. Does Netflix know my needs? No. It really doesn't. In order to know my needs, Netflix would have to give me the freedom to earmark my fees. Then, and only then, would Netflix actually know my needs.

Samuelson points out that in fact, earmarking (within the specific constraints he's talking about) would not tell them your needs, because that is a situation in which you're incentivised to send false signals. If there's an area where you want something, but less than the general market does, then you can say that you value it less than you do in order to be able to say that you value some other area more than you actually do in order to shift Netflix's understanding of the market.

Xerographica wrote:Like I've repeatedly acknowledged, it's entirely possible that spending isn't always the best way to rank things. The most important thing is to scientifically test and compare different ranking systems. Unfortunately, this really isn't being done.

Nobody is preventing that research being done. There's always more room for research in everything. When to start early years education, what the best new techniques for heart patients are, how to make trains run on time. Millions and millions of things. Clearly more research is better, but that doesn't mean this is the most productive area of research.

And it certainly doesn't tell us what we should do in the absence of such research. The best we can do is use the best system we have found up until now, because we need a government. And that's what we do - it's democracy.

One of the key problems here (and it's one that plagues economics in general) is that a true scientific experiment is not possible. You cannot keep all variables the same and vary one other to test how well a country performs under two different electoral systems.

The only kinds of situations in which electoral systems vary also vary in profound conflicting ways too numerous to count. They do provide some sort of statistical basis for an analysis - societies that disenfranchised people based on wealth do show some sorts of patterns, relative to those that don't. But it certainly doesn't look favourable for your hypothesis.

In the particular situation we've been discussing (production of books on neoclassical economics) one of the big problems is that you've rather fixated on an outlier, that is atypical in the most important regard - book prices are largely influenced by copyright law, so you can get Adam Smith's works for free, but not a new work, and then generalised from there, instead of generalising from a representative example.

Xerographica wrote:My hope was that, given that you folks are particularly concerned about rationality, you would recognize the enormity of the economic problem and we'd pool our knowledge and combine our strengths to solve the problem. But so far you folks have been primarily interested in defending the status quo rather than acknowledging that it isn't founded on evidence.

I guess that shows that people disagree with you.

That might be to do with the way you present your argument, which isn't to raise the question "what is the best voting system?", but to suggest you have a strong feeling that disallowing people from voting based on wealth would be a good idea. You clearly have a search for one particular answer in mind, rather than an attitude of open enquiry.

Now it could be that you're right, but that's not actually a scientific or sceptical method.

Xerographica wrote:There's absolutely no evidence that Netflix's command economy is more effective than a market economy.

Ok, I'm not sure there are any consequences for this as far as I'm concerned.

Xerographica wrote:The same is true of the government's command economy (ie congress spending everybody's taxes).

This is pretty clearly a political statement towards a particular conclusion. It's neither scientific, nor economic. The US isn't a command economy (not that I live there).

Xerographica wrote:Plus, there's absolutely no evidence that ranking by voting is more effective than ranking by spending. The amount of evidence that should be there, but isn't, is astounding.

Why? How much evidence is there and how much should there be? How have you quantified that?

I will point out a third time that I (and Hermit, and I believe others) have explicity said we don't advocate the idea that either "ranking by voting is more effective than ranking by spending" or that "ranking by spending is more effective than ranking by voting". Speaking for myself it is vastly more likely that differing schemas have differing strengths and weaknesses and the best choice depends on circumstance.

PS: Can I just say I think it's a bit weird to give a "story of economics" that doesn't even mention Keynes?

Thomas Eshuis wrote:

Xerographica wrote:Thomas Eshuis, my basic argument is

I know what your argument is.
I don't know how your defining your crucial terms like 'effective'.

Xerographica wrote:Do you agree that this is a problem?

I don't know since you won't define what you mean by 'effective'.

Let's say that a ranking systems elects a president who starts WWIII. Would you consider this system to be effective? I personally wouldn't. Here's what we should have learned from history...

Expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market. A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom. — Loren Lomasky, Democracy and Decision

People are far less rational in the voting booth than they are in the market. Is this a fact? Well, it's certainly a fact that, unlike spending, voting doesn't have a cost. Then it's a matter of deciding whether or not costs are needed in order for people to make rational valuations.

The people feeling, during the continuance of the war, the complete burden of it, would soon grow weary of it, and government, in order to humour them, would not be under the necessity of carrying it on longer than it was necessary to do so. The foresight of the heavy and unavoidable burdens of war would hinder the people from wantonly calling for it when there was no real or solid interest to fight for. - Adam Smith, Wealth of Nations

Clearly Smith perceived that costs were needed in order for people's valuations to be rational.

Thomas Eshuis wrote:

Xerographica wrote: If so, then how do you think this problem should be solved?

Doing research into better alternatives to democracy, that are not focused one only one alternative.

Can you be more specific?

Xerographica wrote:
Clearly Smith perceived that costs were needed in order for people's valuations to be rational.

This sort of approach clarifies neither 'valuation' nor 'rational', when you specify each one in terms of the other. The fact that 'rational' is itself only a valuation, unless you have a metric (which would be empirical), is why I think your entire complaint is vacuous.

Thommo wrote:Samuelson points out that in fact, earmarking (within the specific constraints he's talking about) would not tell them your needs, because that is a situation in which you're incentivised to send false signals. If there's an area where you want something, but less than the general market does, then you can say that you value it less than you do in order to be able to say that you value some other area more than you actually do in order to shift Netflix's understanding of the market.

Let's say that your true valuation of this forum is $30/year. Do you have an incentive to not pay this? Yes, you could spend the $30 bucks on a nice steak. If you did so, you'd still continue to enjoy the forum, but you'd also enjoy a nice steak.

Is this applicable to Netflix earmarking? No it isn't. You don't have the option to earmark your fees to a steak. There are no private goods in this scenario. Whether you earmark your fees to nature shows or horror movies, the content you contribute to will be enjoyed by others. It was a really different story with the steak. The steak was only for you to enjoy. This is what makes it a private good.

Samuelson was talking about a scenario that involved individual consumption (ie a steak) versus collective consumption (ie this forum). In this contest, it's generally the case that individual consumption will win, which means that collective consumption will lose.

Samuelson was not talking about an earmarking scenario. How could he? His paper was published in 1954... while Buchanan's earmarking paper wasn't published until 1963. In the Netflix earmarking scenario it's collective consumption (ie nature shows) versus collective consumption (ie horror movies). Can individual consumption win this contest? Obviously not, it isn't even a contestant. Whatever you earmark your fees to, other people are going to be able to benefit from your contribution. There's no way for you to earmark your fees to something that you, and only you, will be able to benefit from.

Thommo wrote:

Xerographica wrote:Like I've repeatedly acknowledged, it's entirely possible that spending isn't always the best way to rank things. The most important thing is to scientifically test and compare different ranking systems. Unfortunately, this really isn't being done.

Nobody is preventing that research being done. There's always more room for research in everything. When to start early years education, what the best new techniques for heart patients are, how to make trains run on time. Millions and millions of things. Clearly more research is better, but that doesn't mean this is the most productive area of research.

How could it not be the most productive area of research? Right now all research is ranked by voting. Each citation a paper receives is essentially a vote. Clearly the priority should be to test this ranking system and compare it to the alternatives.

If voting is less effective than spending at ranking papers by usefulness, then this would mean that right now a huge amount of society's limited resources are wasted on research that isn't very useful. Nothing could be more important than researching the system that ranks research.

Thommo wrote:And it certainly doesn't tell us what we should do in the absence of such research. The best we can do is use the best system we have found up until now, because we need a government. And that's what we do - it's democracy.

The point is to be very concerned about the absence of research/evidence. There's a problem if you aren't very concerned.

Thommo wrote:One of the key problems here (and it's one that plagues economics in general) is that a true scientific experiment is not possible. You cannot keep all variables the same and vary one other to test how well a country performs under two different electoral systems.

The only kinds of situations in which electoral systems vary also vary in profound conflicting ways too numerous to count. They do provide some sort of statistical basis for an analysis - societies that disenfranchised people based on wealth do show some sorts of patterns, relative to those that don't. But it certainly doesn't look favourable for your hypothesis.

In the particular situation we've been discussion (production of books on neoclassical economics) one of the big problems is that you've rather fixated on an outlier, that is atypical in the most important regard - book prices are largely influenced by copyright law, so you can get Adam Smith's works for free, but not a new work and then generalised from there, instead of generalising from a representative example.

In the OP I described a relatively simple book ranking experiment to test the difference between voting and spending. Would this experiment be perfect? Of course not. Does it need to be? Nope. The disparity between the rankings would provide at least some evidence either for or against the effectiveness of voting compared to spending.

Thommo wrote:That might be to do with the way you present your argument, which isn't to raise the question "what is the best voting system?", but to suggest you have a strong feeling that disallowing people from voting based on wealth would be a good idea. You clearly have a search for one particular answer in mind, rather than an attitude of open enquiry.

Now it could be that you're right, but that's not actually a scientific or sceptical method.

Of course I'm biased toward a particular answer. How could I not be? This is the inevitable consequence of doing enough homework. But in any case, all the experiments that I've proposed can prove me wrong. If voting ranks the Wealth of Nations higher than spending does... well... then... this is pretty strong evidence against my bias. To be clear, it's strong evidence against markets in general, which is no small thing. Thanks to the experiment we could potentially end up living in a world with no markets. People would vote on everything.

What I'm not seeing from you is a strong interest in this experiment being conducted. Why is that?

Thommo wrote:

Xerographica wrote:The same is true of the government's command economy (ie congress spending everybody's taxes).

This is pretty clearly a political statement towards a particular conclusion. It's neither scientific, nor economic. The US isn't a command economy (not that I live there).

The dogs at a show are ranked by a small handful of experts. What kind of ranking system is this? The dogs aren't ranked by voting... they aren't ranked by spending... which leaves... what?

ranking by committee = command economy
ranking by voting = democratic economy
ranking by spending = market economy

Congress is a committee that ranks all the goods supplied by the government. Sure, congress is elected, but it doesn't change the fact that a committee, rather than democracy or the market, ranks all the goods supplied by the government.

Thommo wrote:

Xerographica wrote:Plus, there's absolutely no evidence that ranking by voting is more effective than ranking by spending. The amount of evidence that should be there, but isn't, is astounding.

Why? How much evidence is there and how much should there be? How have you quantified that?

I will point out a third time that I (and Hermit, and I believe others) have explicity said we don't advocate the idea that either "ranking by voting is more effective than ranking by spending" or that "ranking by spending is more effective than ranking by voting". Speaking for myself it is vastly more likely that differing schemas have differing strengths and weaknesses and the best choice depends on circumstance.

You might be correct. But my main point, which you really haven't embraced, is that there's no serious effort to scientifically test and compare the different ranking systems. It's not like $5 billion dollars would have to be spent to build a particle accelerator. It would be relatively inexpensive for dogs at a show to be ranked by voting and/or donating to see how the rankings compare to the ranking by committee. This is just one of countless relatively inexpensive and super safe economic experiments that could be, and should be, conducted.

Thommo wrote:PS: Can I just say I think it's a bit weird to give a "story of economics" that doesn't even mention Keynes?

His main "contribution" was that sometimes the economy needs to be stimulated. But he never addressed, or even acknowledged, the possibility that the economic problems were caused by allowing a committee to rank all the goods in the public sector. If it is truly the case that committees are far less effective than markets at ranking things, then this will prove that Keynes' contributions were worthless.

Of course we should be able to see and compare how economists are ranked by voting and spending.

Cito di Pense wrote:

Xerographica wrote:
Clearly Smith perceived that costs were needed in order for people's valuations to be rational.

This sort of approach clarifies neither 'valuation' nor 'rational', when you specify each one in terms of the other. The fact that 'rational' is itself only a valuation, unless you have a metric (which would be empirical), is why I think your entire complaint is vacuous.

My argument is that costs are necessary in order for valuations to be rational. For example, let's say that it's up to me to decide whether you donate a kidney. How rational will my valuation be?

Bob votes for war knowing there's no chance that he will be drafted. Frank, on the other hand, votes for war knowing that he will almost certainly be drafted. All else being equal, whose valuation was more rational?

Xerographica wrote:Let's say that your true valuation of this forum is $30/year. Do you have an incentive to not pay this? Yes, you could spend the $30 bucks on a nice steak. If you did so, you'd still continue to enjoy the forum, but you'd also enjoy a nice steak.

Is this applicable to Netflix earmarking? No it isn't. You don't have the option to earmark your fees to a steak. There are no private goods in this scenario. Whether you earmark your fees to nature shows or horror movies, the content you contribute to will be enjoyed by others. It was a really different story with the steak. The steak was only for you to enjoy. This is what makes it a private good.

But there's a clear error here. Saying the same incentive to lie does not exist does not say an incentive to lie does not exist. In fact it does, if your preferences differ from the general market then you are incentivised to overestimate in some areas and underestimate in others, whether or not that is indicative of your true feelings.

That is false signalling.

And aside from which, again, the earmarking is simply a kind of vote anyway and is not an example of spending outperforming voting.

Honestly, I think we're at an impasse here, you clearly fundamentally reject my analysis and I fundamentally reject yours. I think we should move on and discuss what exactly it is you're proposing, so I'll skip ahead.

Xerographica wrote:In the OP I described a relatively simple book ranking experiment to test the difference between voting and spending. Would this experiment be perfect? Of course not. Does it need to be? Nope. The disparity between the rankings would provide at least some evidence either for or against the effectiveness of voting compared to spending.

Right, but one of my very first posts was to go and look for data. It has received zero replies. You've restated your expectation that the results of a "best sales" list would be quite disparate to the results of a "favourite books" list, and that's about it.

Superficially they don't look profoundly different, but what we'd actually need is an experimental methodology. First and foremost a criteria for determining which ranking was better.

Perhaps you could describe that criteria and a proposed research methodology.

Xerographica wrote:Of course I'm biased toward a particular answer. How could I not be? This is the inevitable consequence of doing enough homework. But in any case, all the experiments that I've proposed can prove me wrong. If voting ranks the Wealth of Nations higher than spending does... well... then... this is pretty strong evidence against my bias. To be clear, it's strong evidence against markets in general, which is no small thing.

There are a lot of problems with this. Firstly spending on the Wealth of Nations is virtually nil, and certainly places it lower than voting does. Secondly although you say it's evidence, there appears to be no reason to say that. It's certainly not "evidence against markets", because specific claims don't necessarily generalise.

There are areas in which markets don't seem to work all that well (e.g. the US Healthcare market), and others where they do (e.g. the US tomato market). The evidence can point in different directions for different markets - generalisation fails.

Xerographica wrote:What I'm not seeing from you is a strong interest in this experiment being conducted. Why is that?

I guess the main reasons were that I perceive very little value from economic research in general and have been largely unpersuaded by your argument that this research is crucial in specific.

I'm not opposed to the experiment, in some vague sense, the more the merrier. But I'd be more enthusiastic about a solid experimental design and clear definitions, which although I asked for them haven't been forthcoming.

Perhaps we should move the conversation on to those things?

Xerographica wrote:The dogs at a show are ranked by a small handful of experts. What kind of ranking system is this? The dogs aren't ranked by voting... they aren't ranked by spending... which leaves... what?

ranking by committee = command economy
ranking by voting = democratic economy
ranking by spending = market economy

Congress is a committee that ranks all the goods supplied by the government. Sure, congress is elected, but it doesn't change the fact that a committee, rather than democracy or the market, ranks all the goods supplied by the government.

That's just an analogy, let's skip it and stick to the experiment you're proposing.

Xerographica wrote:You might be correct. But my main point, which you really haven't embraced, is that there's no serious effort to scientifically test and compare the different ranking systems. It's not like $5 billion dollars would have to be spent to build a particle accelerator. It would be relatively inexpensive for dogs at a show to be ranked by voting and/or donating to see how the rankings compare to the ranking by committee. This is just one of countless relatively inexpensive and super safe economic experiments that could be, and should be, conducted.

But there's a major problem here, we don't have a scientific experiment to conduct because we have no objective standard to measure against. There are already lots and lots of research papers into this area of psychology and sociology, I linked to a couple of examples of well known theories in the area above in #66 - Lewin, Fiedler.

The problem is the results don't really generalise all that well and aren't terribly informative. They aren't even decisive in the way experiments in a particle accelerator are.

Xerographica wrote:His main "contribution" was that sometimes the economy needs to be stimulated. But he never addressed, or even acknowledged, the possibility that the economic problems were caused by allowing a committee to rank all the goods in the public sector. If it is truly the case that committees are far less effective than markets at ranking things, then this will prove that Keynes' contributions were worthless.

Yeah ok, you like laissez-faire economics. We could say that hypothetically Adam Smith was worthless.

But omitting key economists in a summary of economics is really just an indulgence of our own biases. If we're going to do that, we have to drop any pretense of behaving rationally or doing science.

Thommo wrote:

Xerographica wrote:Let's say that your true valuation of this forum is $30/year. Do you have an incentive to not pay this? Yes, you could spend the $30 bucks on a nice steak. If you did so, you'd still continue to enjoy the forum, but you'd also enjoy a nice steak.

Is this applicable to Netflix earmarking? No it isn't. You don't have the option to earmark your fees to a steak. There are no private goods in this scenario. Whether you earmark your fees to nature shows or horror movies, the content you contribute to will be enjoyed by others. It was a really different story with the steak. The steak was only for you to enjoy. This is what makes it a private good.

But there's a clear error here. Saying the same incentive to lie does not exist does not say an incentive to lie does not exist. In fact it does, if your preferences differ from the general market then you are incentivised to overestimate in some areas and underestimate in others, whether or not that is indicative of your true feelings.

That is false signalling.

And aside from which, again, the earmarking is simply a kind of vote anyway and is not an example of spending outperforming voting.

Honestly, I think we're at an impasse here, you clearly fundamentally reject my analysis and I fundamentally reject yours. I think we should move on and discuss what exactly it is you're proposing, so I'll skip ahead.

I love nature shows and economics shows. Right now Netflix has a lot more nature shows than economics shows. Is it false signalling if I don't earmark any money to nature shows and instead earmark all my money to economics shows? If you think it is, then you're misunderstanding false signalling. It really isn't false signalling if I use my fees to try and strengthen the weakest links.

Thommo wrote:

Xerographica wrote:In the OP I described a relatively simple book ranking experiment to test the difference between voting and spending. Would this experiment be perfect? Of course not. Does it need to be? Nope. The disparity between the rankings would provide at least some evidence either for or against the effectiveness of voting compared to spending.

Right, but one of my very first posts was to go and look for data. It has received zero replies. You've restated your expectation that the results of a "best sales" list would be quite disparate to the results of a "favourite books" list, and that's about it.

Superficially they don't look profoundly different, but what we'd actually need is an experimental methodology. First and foremost a criteria for determining which ranking was better.

The book ranking experiment that I described in the OP would not involve buying. When bees spend their precious calories dancing in order to help rank the flower patches by usefulness, they aren't buying the patches. Bees don't buy a patch of Aloes. Bees don't buy a patch of Kalanchoes. They spend their precious calories solely to help elevate the most valuable flower patches. The higher ranked a patch is, the more bees that will visit it.

The book ranking experiment that I described with AKU would also not involve buying. Subscribers would solely spend their fees to help elevate the most valuable books. The higher ranked a book is, the more people that will read it.

The bees and AKU subscribers would both be using spending to help construct a treasure map. My best guess is that this treasure map is far more accurate than any treasure map created by voting.

Thommo wrote:Perhaps you could describe that criteria and a proposed research methodology.

What makes one treasure map better than another is accuracy. The bees certainly don't benefit when many of them visit a flower patch that isn't very valuable. Neither do humans benefit when many of them read a book that isn't very valuable.

Thommo wrote:

Xerographica wrote:Of course I'm biased toward a particular answer. How could I not be? This is the inevitable consequence of doing enough homework. But in any case, all the experiments that I've proposed can prove me wrong. If voting ranks the Wealth of Nations higher than spending does... well... then... this is pretty strong evidence against my bias. To be clear, it's strong evidence against markets in general, which is no small thing.

There are a lot of problems with this. Firstly spending on the Wealth of Nations is virtually nil, and certainly places it lower than voting does. Secondly although you say it's evidence, there appears to be no reason to say that. It's certainly not "evidence against markets", because specific claims don't necessarily generalise.

There are areas in which markets don't seem to work all that well (e.g. the US Healthcare market), and others where they do (e.g. the US tomato market). The evidence can point in different directions for different markets - generalisation fails.

I'm not sure where the source of confusion is. First, as I hopefully clarified, none of my proposed experiments have anything to do with buying. So, in this sense, it isn't at all relevant how many people currently buy the Wealth of Nations.

In the experiment that I proposed in the OP, nobody would buy the books. One group of students would simply spend their money to help sort the books by usefulness. The students in this group could spend as much, or as little, money as they wanted. All the money they spent would be used to crowdfund the experiment.

This experiment would result in two rankings... voting and spending. If the Wealth of Nations was placed higher in the voting rankings than in the spending rankings, then for me personally this would be strong evidence that voting is more effective than spending. For me personally it would be strong evidence against markets in general. And I'm saying this as the biggest proponent of markets in the world.

Let me hedge my bets by trying to explain the buying versus spending issue somewhat differently. With buying... Harry Potter is covered by copyright, while the Wealth of Nations is not. If people legally want to own Harry Potter, they have to buy the books. So of course, in terms of buying, Harry Potter is going to be ranked a lot higher than the Wealth of Nations. The playing field isn't level. It's a private good versus a public good. You should appreciate what this means.

It's a very different story with the OP book ranking experiment. In this case, the spenders aren't going to be buying the books. They don't get the books that they spend their money on. They are solely spending their money to help rank the books. Therefore, the copyright status of the books is completely irrelevant. Harry Potter, the Wealth of Nations, and all the other books on the list will be on a completely level playing field. This is exactly why the relative rankings of Harry Potter and the Wealth of Nations will be very meaningful.

Thommo wrote:

Xerographica wrote:You might be correct. But my main point, which you really haven't embraced, is that there's no serious effort to scientifically test and compare the different ranking systems. It's not like $5 billion dollars would have to be spent to build a particle accelerator. It would be relatively inexpensive for dogs at a show to be ranked by voting and/or donating to see how the rankings compare to the ranking by committee. This is just one of countless relatively inexpensive and super safe economic experiments that could be, and should be, conducted.

But there's a major problem here, we don't have a scientific experiment to conduct because we have no objective standard to measure against. There are already lots and lots of research papers into this area of psychology and sociology, I linked to a couple of examples of well known theories in the area above in #66 - Lewin, Fiedler.

The problem is the results don't really generalise all that well and aren't terribly informative. They aren't even decisive in the way experiments in a particle accelerator are.

Like I said, I'm the biggest proponent of markets. The experiment in the OP has the potential to change my mind about the effectiveness of markets. What more could you possibly want from an experiment?

Imagine the most devout and fanatical Christian. If there's an experiment that has the potential to change his mind, then that would be a pretty darn good experiment.

Thommo wrote:

Xerographica wrote:His main "contribution" was that sometimes the economy needs to be stimulated. But he never addressed, or even acknowledged, the possibility that the economic problems were caused by allowing a committee to rank all the goods in the public sector. If it is truly the case that committees are far less effective than markets at ranking things, then this will prove that Keynes' contributions were worthless.

Yeah ok, you like laissez-faire economics. We could say that hypothetically Adam Smith was worthless.

That would be blaspheme.

Thommo wrote:But omitting key economists in a summary of economics is really just an indulgence of our own biases. If we're going to do that, we have to drop any pretense of behaving rationally or doing science.

The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive. - Paul Samuelson

Samuelson was an idiot. He was easily one of the worst economists ever. But did I include him in my summary? Yup. Part of his work was actually relevant to the most fundamental economic discussion about preference revelation. The same could not be said for Keynes. So yeah, I am biased against him, but this really isn't why I didn't include him.

Xerographica wrote:

Cito di Pense wrote:

Xerographica wrote:
Clearly Smith perceived that costs were needed in order for people's valuations to be rational.

This sort of approach clarifies neither 'valuation' nor 'rational', when you specify each one in terms of the other. The fact that 'rational' is itself only a valuation, unless you have a metric (which would be empirical), is why I think your entire complaint is vacuous.

My argument is that costs are necessary in order for valuations to be rational. For example, let's say that it's up to me to decide whether you donate a kidney. How rational will my valuation be?

Bob votes for war knowing there's no chance that he will be drafted. Frank, on the other hand, votes for war knowing that he will almost certainly be drafted. All else being equal, whose valuation was more rational?

This has nothing to do with whether there are more nature shows or economics shows on Netflix, who only tries to maximize its customer base. This has nothing to do with whether this book or that book is more highly valued. That will materially affect only the authors and publishers of the books in question, unless you have a delusional sense that valuation is going to provide the most rational world because you've smoked too much Adam Smith, having discovered him just last week, and you're still pretty wet behind the ears when it comes to constructing an argument.

Xerographica wrote:I love nature shows and economics shows. Right now Netflix has a lot more nature shows than economics shows. Is it false signalling if I don't earmark any money to nature shows and instead earmark all my money to economics shows? If you think it is, then you're misunderstanding false signalling. It really isn't false signalling if I use my fees to try and strengthen the weakest links.

I think you're mistaken about this. Do you have a source that can elaborate how not donating to ratskep would be false signalling but not earmarking shows you watch would? Or perhaps you could precisely define false signalling?

To be clear my understanding of false signalling (in this context) would be intentionally assigning a value that you know to be false. For example if you earmarked all money towards economics shows and thus zero to nature shows which you value and zero to sci-fi shows which you do not value then you are still sending a false signal.

Xerographica wrote:The book ranking experiment that I described in the OP would not involve buying. When bees spend their precious calories dancing in order to help rank the flower patches by usefulness, they aren't buying the patches. Bees don't buy a patch of Aloes. Bees don't buy a patch of Kalanchoes. They spend their precious calories solely to help elevate the most valuable flower patches. The higher ranked a patch is, the more bees that will visit it.

The book ranking experiment that I described with AKU would also not involve buying. Subscribers would solely spend their fees to help elevate the most valuable books. The higher ranked a book is, the more people that will read it.

The bees and AKU subscribers would both be using spending to help construct a treasure map. My best guess is that this treasure map is far more accurate than any treasure map created by voting.

This still seems like an entirely spurious distinction, yes of course bees don't exchange money, but that's neither here nor there, purchases are still a ranking by spending.

So I suggest again we move on to the proposed experiment, because this feels more and more like going in circles.

Xerographica wrote:

Thommo wrote:Perhaps you could describe that criteria and a proposed research methodology.

What makes one treasure map better than another is accuracy. The bees certainly don't benefit when many of them visit a flower patch that isn't very valuable. Neither do humans benefit when many of them read a book that isn't very valuable.

That's not quite what I mean by a proposed research methodology.

Xerographica wrote:I'm not sure where the source of confusion is. First, as I hopefully clarified, none of my proposed experiments have anything to do with buying. So, in this sense, it isn't at all relevant how many people currently buy the Wealth of Nations.

So, to be clear, you're saying that consumer spending is not a measure of spending?

Xerographica wrote:In the experiment that I proposed in the OP, nobody would buy the books. One group of students would simply spend their money to help sort the books by usefulness. The students in this group could spend as much, or as little, money as they wanted. All the money they spent would be used to crowdfund the experiment.

This experiment would result in two rankings... voting and spending. If the Wealth of Nations was placed higher in the voting rankings than in the spending rankings, then for me personally this would be strong evidence that voting is more effective than spending. For me personally it would be strong evidence against markets in general. And I'm saying this as the biggest proponent of markets in the world.

That's not an experimental design. You're just saying that if such and such happened you would interpret it in such and such way.

Xerographica wrote:It's a very different story with the OP book ranking experiment. In this case, the spenders aren't going to be buying the books. They don't get the books that they spend their money on. They are solely spending their money to help rank the books. Therefore, the copyright status of the books is completely irrelevant. Harry Potter, the Wealth of Nations, and all the other books on the list will be on a completely level playing field. This is exactly why the relative rankings of Harry Potter and the Wealth of Nations will be very meaningful.

Ok, but that's just a vote. It's a vote from a self-selected section of the wider population that is willing to pay money for the vote, but it's still a vote.

Xerographica wrote:Like I said, I'm the biggest proponent of markets. The experiment in the OP has the potential to change my mind about the effectiveness of markets. What more could you possibly want from an experiment?

Objectivity, rigour, clear applications of a potential result, a clear methodology, a clear logical chain connecting the result of the experiment to the conclusion you think I should draw.

Xerographica wrote:Imagine the most devout and fanatical Christian. If there's an experiment that has the potential to change his mind, then that would be a pretty darn good experiment.

Would it? There are 7 billion people on the planet, the hypothetical ability to potentially change the mind of one of them (which I am sceptical of) doesn't seem like it would matter much to me at all, or to anyone.

Xerographica wrote:

Thommo wrote:

Xerographica wrote:His main "contribution" was that sometimes the economy needs to be stimulated. But he never addressed, or even acknowledged, the possibility that the economic problems were caused by allowing a committee to rank all the goods in the public sector. If it is truly the case that committees are far less effective than markets at ranking things, then this will prove that Keynes' contributions were worthless.

Yeah ok, you like laissez-faire economics. We could say that hypothetically Adam Smith was worthless.

That would be blaspheme.

I think his contribution is pretty worthless at this point. Like I say, it's nothing personal, but even if his ideas had provided wonderful useful models (they haven't) and hadn't failed in numerous places (they have), it would still be largely a matter of history, as far as I'm concerned. And I say the same about On the Origin of Species or Principia. It just doesn't matter if people read them in this day and age.

Xerographica wrote:Samuelson was an idiot. He was easily one of the worst economists ever. But did I include him in my summary? Yup. Part of his work was actually relevant to the most fundamental economic discussion about preference revelation. The same could not be said for Keynes. So yeah, I am biased against him, but this really isn't why I didn't include him.

I'm not convinced. Which is probably another reason to stick to the discussion of the experiment.

Xerographica wrote:

Thomas Eshuis wrote:

Xerographica wrote:Thomas Eshuis, my basic argument is

I know what your argument is.
I don't know how your defining your crucial terms like 'effective'.

Xerographica wrote:Do you agree that this is a problem?

I don't know since you won't define what you mean by 'effective'.

Let's say

I already said that I have no interest in further analogies or scenario's.
I explicitely asked you to clarify your definitions and what do you do?
Post yet another hypothetical scenario.

I'm forced to conclude that you either do not understand the English language or are just trolling.
Until you actually start defining your terms I am not going to consider any hypotheticals, comparisons or analogies.