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Something has clicked

Something has just clicked in my head and economics has suddenly become fascinating.

So much of it revolves around this central question: is it possible to maximize the interests of a group while still preserving the rights of the individual?



( 12 comments — Leave a comment )
Apr. 10th, 2006 05:38 pm (UTC)

I thought for most of my life that I was bored and confused by economics, but I few years ago I realized that economics is fascinating, and I just didn't know what economics really is.

Have you looked at The Tragedy of the Commons yet? It is the classic example of the question you post, and has been analyzed in a variety of different ways, some of which you may find entertaining.

Apr. 10th, 2006 06:01 pm (UTC)
Tragedy of the Commons is one classic example. Another is the Prisoner's Dilemma, which is sort of the inverse of the same problem. The TotC is a social trap, and PD is a social fence.

I wonder if either of you have had a chance to read my series, "The Fraternal Dilemma"? I think you both might enjoy it:

Part 1
Part 2
Part 3
Part 4

To be continued...
Apr. 10th, 2006 05:44 pm (UTC)
I've seen the history of civilization and government as a struggle between ensuring the well being of most citizens and allowing individual freedoms. Sometimes these things are compatible - sometimes not.
Apr. 10th, 2006 07:16 pm (UTC)
What a very odd maxim lens to see the subject thru. But then, are you talking about normative vs observational economics. ("ought" vs "is").

Most economists would instead say that the maxim lens is "what do people do to maximize their own desires, how does the actions of the group around them affect the individual's decisions, and how do the sum of the individual decisions turn into the group behavior".
Apr. 10th, 2006 07:19 pm (UTC)
Allow me to recommend "Price Theory".


It's a pretty easy read, but don't skim. The author rigorously thinks his way thru each part. If you want to argue with him, he's very reachable via his blog and email, and loves the game of logical debate (but fair warning, if you engage him, be prepared to engage purely and soley in the sphere of logic backed by actual statistics.)
Apr. 10th, 2006 07:36 pm (UTC)
... And once the question transmutes into "how should one maximize the interests of a group while maximizing the rights of the individual", then your brain is in for a world of hurt. :-)

Being a classics sort of guy, I'd recommend a few brief articles on Wikipedia: Adam Smith, Classical Economics, and Milton Friedman. I'd be a little leery of approaching Karl Marx and Marxism without some foundation in macroeconomics (see Economics for an intro), because Marxism as a coherent theory fails to take into account the value of risk management--and not groking that means Marxism may leave you more befuddled than before.

(Short story: Marx berates the investor who builds a factory as parasites on the workers who work at the factory, because Marx's theory of value suggests that labor is the only source of value. The failure here is that risk (and managing risk) has value itself: the investor who invests in the factory risks losing his money, and so is "buying" risk in exchange for the potential reward of making money on his investment.)

I agree, though; economics as a lens to understand social interaction--and trying to answer the question "how can we maximize freedom and maximize the interests of the group" through that lens--is an endlessly fascinating topic full of rich detail.
Apr. 10th, 2006 08:38 pm (UTC)
How to maximize the interests of a group:

1) Develop an objectively valid measure of inter-personal utility
2) ...
3) (Maximize group) profit.

Peferably the solution to step 1 should not involve unnecessarily putting people in prison because you find their personal sources of utility violate your sense of aesthetics.
Apr. 10th, 2006 08:48 pm (UTC)
You may well be beyond this level in your understanding of Economics, however I would highly recommend the Economics audiobook courses offered by The Teaching Company.

Economics gives a great overview of the basics, and Legacies of Great Economists is a summation of the lives and works of groundbreaking economists throughout history. The professor is engaging and the subject matter fascinating.

I recommend it partially because the teacher does approach the subject of how to achieve social goals, in an economically sane fashion. Whether that still preserves individual rights is open to debate. However, taking the approach of, if your goal is to accomplish this particular social goal through government, what is a way that we can accomplish it in a way that is effective by taking the market into account?
Apr. 10th, 2006 08:56 pm (UTC)

At some point a groups interest inevitably has to conflict with the individuals interest, you cannot achieve the maximum possible groups interest if you preserve individual rights to their intrests.

The cost of being in a group is expected to be offset by the rewards of membership.
Apr. 10th, 2006 09:25 pm (UTC)
It may not be possible to achieve a state which maximizes the group's interests (assuming those (a) could be defined, and (b) could be measured) and independently and simulatneously maximizes individual freedom. After all, a prohibition against murder may help improve security and safety--but it does restrict one possible individual action.

On the other hand, if you measure both individual rights and group interests, do local "maximia" exist where both group interests and individual interests are relatively maximized? Part of the question, of course, depends on to what degree "group interests" (again, assuming they can be defined and measured) is placed over or under "individual interests" (which, while nebulous, are at least intuitively easier to define).

Economics makes all of this a far more interesting question to analyze because, in large part, economics provides us a whole host of tools to measure individual interactions. And a group is really nothing more than the interactions of a whole bunch of individuals. In a way, economics allows us to put the whole question of "how can we achieve a relative maximization of group interests and individual freedoms" under a very big microscope.
Apr. 13th, 2006 02:32 am (UTC)
which is pretty much what john nash won the nobel prize for
Apr. 11th, 2006 10:58 pm (UTC)
my friends the_macnab, la_chispa, and nfnitperplexity often have interesting things to say about economics. i find listening to them easier than trying to read whole books on the subject while also doing fifty billion other things.

i think your question is a little unclear, though, because "maximize" isn't defined. maybe a better way to phrase it would be, "does preserving individual rights automatically hurt the economic interests of the group(s) of which those individuals are part?"
( 12 comments — Leave a comment )


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