[euphoria83]

I am one of those people who followed the path (and was told to) of "study hard, get a good job, work hard till retirement, spend wisely, ...". A few years back, I realized that one important thing nobody taught me during my childhood is that a very important part of everyone's life is to provide value to others in exchange for money that you live by.

At that time, I decided to teach my children about this. One of the ways I have thought of doing this is to ask my children to start earning a small amount of money early in life by providing value to others in ethical ways. I am glad to read that the author, who can be considered an expert at managing personal money, is being successful at a similar experiment.

[antisuji]

This connection—between earning money and providing value to others—is something that sounds obvious, but I only really internalized it recently, after reading Kevin Simler's Congolese Trading Window thought experiment[1].

It would be easy to take this line of reasoning into dangerous territory and suppose that earning money is equivalent to being morally virtuous, but this neglects externalities and the sometimes fundamental difficulty of accurately pricing certain kinds of goods (subjective wellbeing, community, a sense of meaning, etc.). Money is, at best, a very rough proxy measure for human value.

[1] http://www.meltingasphalt.com/wealth-the-toxic-byproduct/

[sukilot]

That's a good article. It has a long introduction that resembles libertarian twaddle, but then Section V brings it home to tie the knot in a way most econ 101 libertarians ignore.

[formulaT]

Actually the article is completely wrong.

If you make money "squarely" as described in I-IV, then you have created some value. Cashing out in section V is simply consuming that value.

All we can say (given the assumptions in I-IV) is that the person was a net positive (or zero) for the Congolese economy.

The technical mistake that the author makes is not realizing that adding value to the Congolese economy means increasing the total amount of physical wealth in the economy. When the person cashes out their yacht, they are simply exchanging cash for the physical wealth they helped create.

I don't think you can logically say that I-IV are "libertarian twaddle" and that V "brings it home", because V is predicated on I-IV being true. If you're interested in the theoretical basis behind "econ 101" I suggest you look into general equilibrium theory.

[duckingtest]

It ignores the fact that, for every transaction that was made, the other side also made a profit. Saying that the man is time-shifting the grain is equivalent to saying that the farmer is time-shifting money. On the average, profit is half of added value. Spending half of added value doesn't "almost perfectly cancel out all the good you did".