[roenxi]

"The Economy" is a (surprisingly effective!) system for allocating resources. It short-circuits a human instinct that social status and fairness should be the guide, and replaces that with "a persons economic contribution" instead.

Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much surplus stuff that everybody wins, even the unproductive. And, as a side benefit, everyone has an incentive to be productive.

The flip side is that Government is made up of ordinary people who often ask "what about fairness and status?", and likes to interfere to reallocate from productive people to unproductive people. In mild cases you get a healthy level of support for the disadvantaged, in extreme cases you get Venezuela. But in all cases, since the productive people are given less, they create less and there is less available to distribute. In theory this triggers the laws of supply-and-demand, reduces supply and prices increase.

The flip side is if the productive people consume their wealth instead of producing with it then we probably could tax them without any ill effects, but I think that is rarer than most people think.

[fzeroracer]

This seems like an odd way of rationalizing the extreme concentration of wealth to the top along with growing poverty and lack of opportunity to climb the economic ladder.

Defining people in baskets like 'productive' and 'unproductive' is a fairly cold and callous way of looking at the plight of many Americans ranging from the poor to the elderly.

edit: Also to add onto my point: We've seen in America that people over time have grown more productive, yet wages have stagnated. If your theory was correct that productive Americans are allocated more resources, then presumably we should've seen the economy adjust accordingly.

[roenxi]

Well, I actually believe that the constant money printing (eg, expressed in the US M2 Monetary Stock) has badly messed up the ability of the economy to recognise who is and isn't productive. The system is in real trouble and not working as I'd like it to.

But the question wasn't what America is doing wrong, the question was why government intervention always leads to price increases.

[jjoonathan]

The market's notion of "value" is whacked. Feeding a starving poor person is not "valuable." Finding an excuse to decline insurance coverage to someone with cancer is extremely "valuable."

When the market says that one person is 1000x more productive than another, I'd take that with a 1000 kilo grain of salt unless I know the particular market sector to be sane by some other measure.

[mcguire]

What is the "economic contribution" of, say, the average software developer versus the average first grade teacher?

[mmirate]

Ignoring that your average first-grade teacher is an employee of the State rather than of any kind of private entity ...

... it's a question of ephemeral facts. In a given area, companies who employ software developers, able to retain personnel who perform to those companies' subjective satisfaction, by paying them $X; and analogously for private schools in the same area it is $Y for first-grade teachers. How does $X compare with $Y, today, yesterday, and in all the millions of possible tomorrows?

In other words: the beauty of the free market is that we don't have to answer those questions normatively/prescriptively in any one central place.

[Emma_Goldman]

You can't brush away the misvaluation of teachers by blaming the state. Education is a public good. It's something with huge social value, but that value isn't and can't be captured by the educator. That's inherent in the activity. Capitalism only values something insofar as it can be directly exploited for personal profit.

[mmirate]

> that value isn't and can't be captured by the educator.

Oh, but it is. Quality of education is clearly valued by parents. And depending on which school-district you live in, your property tax rate varies, and the quality of the local public schools correlates rather strongly.

While I don't have personal experience with this situation ... I can easily imagine that a good private school's elevator pitch would be something to the effect of "you and we are both located in $D1, which has cheap property taxes and questionable public schools; by living here you will pay less property tax over your adult life than you would by living in $D2; however, not only can our school make your kids smarter than $D2's acclaimed public-schools can, but we can do that without costing you more tuition than that lifetime-difference in property taxes."

> Capitalism only values something insofar as it can be directly exploited for personal profit.

Personal profit is precisely the best way to motivate humans to do anything that is valuable to society.

If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

[Emma_Goldman]

The point is that a sufficiently large part of the value of education is a non-excludable public good - i.e. it has huge collective benefits for society as a whole - that if you privatised the education system it would be extremely injurious to everyone. Of course, education also gives people, if you want to use that language, a certain amount of 'human capital' which tends towards a higher earning potential. But it is because so much of the value of education is a public good that it's misvalued, and necessarily so under capitalism.

Also: "If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

As someone else mentioned, this is frighteningly sociopathic. But it's also ideologically blinkered. It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property. People act from personal profit because of the structure and cultural sediment of capitalism, not because humans are inherently selfish.

[snikeris]

> It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property.

Interesting. I've assumed that primitive communities were run from the top down with the alpha male effectively owning everything.

I found this:

https://en.wikipedia.org/wiki/Primitive_communism

But it states:

> There is also no agreement among later scholars, including Marxists, on the historical extent, or longevity, of primitive communism.

[fallingfrog]

>If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

That is a sociopathic statement that ignores all of human morality, denies any human feeling of empathy or acts of kindness, and pretends culture does not exist. It is certainly the logic of modern capitalism though.

If you saw a child about to fall into a well, and nobody else was around, would you help her? Of course you would. When you are eating thanksgiving with your family, does the strongest member of the family steal the turkey and then charge everyone for pieces of it? What you are saying is patently ridiculous.

[JoeAltmaier]

I read it more softly than that. Of course we get 'paid back' for making the Thanksgiving turkey - by goodwill. I'm paid for moral acts by a reinforced self-image and satisfaction. There are lots of forms of payment.

[marknutter]

> If you saw a child about to fall into a well, and nobody else was around, would you help her?

Are you comparing poor adults to children about to fall into a well?

[Emma_Goldman]

"Everybody wins".

This is a sadistic logic. People dying because they can't afford healthcare. "Everybody wins". Living precariously from wageslip to wageslip. "Everybody wins". Internalising the toxic logic that one's worth is directly proportional to one's market value. "Everybody wins". Etcetera.

Several things:

1. If this were so it's strange how so many widely different forms of economic organisation, across the past and present - from post-war fordism in France to the state-owned enterprises in China today - have achieved remarkable levels of growth, stability and innovation. Economies are incredibly historically, sociologically and culturally varied and complex things. They cannot be reduced to a universal and parsimonious law.

2. What is of market value is not what is of social value. Even the most gooey-eyed neoclassical economist admits that a huge number of inefficiencies and distortions separate the two. Many thinkers - Rousseau, Marx, even Rawls - took them to be very far apart. A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything and to be grateful for the Promethean achievements of the rich, is not maximising social value. It's socially and culturally crippling.

3. You are naturalising a contingent and defeasible fact: that people need gratuitously large paychecks to have sufficient incentive to work. It's proven that above £28,000, increased income has no effect on quality of life. People want more money than that because capitalism, like any social system, functionally reproduces itself ideologically; and humans can be extraordinarily sensitive as to their social status and how others perceive them.

[roenxi]

> This is a sadistic logic. People dying because they can't afford healthcare.

At some point everyone dies, and we know somewhere we run up against physical limits of what we can achieve. You'll need o be more specific about what your issue is here.

> Living precariously from wageslip to wageslip.

I've met people on $150,000 who manage to live paycheck to paycheck because they spend all their money in one go. You are probably referring to a real problem, but again maybe be more specific about what the actual problem is.

> Internalising the toxic logic that one's worth is directly proportional to one's market value.

It is impossible for everyone to simultaneously be 10x more productive than average, so I would _strongly_ advise anyone who thinks like this to pick a more achievable standard for measuring their self worth. But the choice of economic system does not determine anyone's mindset.

Several things 1)

Seems reasonable.

Several things 2)

> A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything

I mean realistically this is a value judgment so there is nothing to disagree on, but there are a lot of aspects here that are very negative. Clearly these workers are worth something, being humans, and nobody is seriously going to tell them otherwise. A lot of people are happy in their job, and realistically what is the actual problem with modern jobs? That workers have to turn up on time? That they have to be nice to people even if they don't feel like it? There are some horror stories that come out of retail, but they are caused by bad behavior of customers, not by the economic system.

I've seen a lot of people with lousy jobs who really struggle through life, but often the actual problem is something that is strictly in their personal life. I'm not sympathetic to the idea that somehow because workers don't understand the importance of what they do that they are therefore wasting time.

Several things 3)

> It's proven that above £28,000, increased income has no effect on quality of life

I'm not really familiar with the income and expense situation in the UK so I'll not try to talk about it. I would suggest that once you get beyond lifestyle expenses there are a lot of things that the wealthy do with their money that have nothing to do with their short term quality of life (like investment, or supporting family members or close friends).