Belial wrote:Except there's no reason to believe that even the mythical perfect market would do that. It just seems like wishful thinking. People want to believe that a perfect capitalism will act to optimize goodness, but that's not what it's for. It's for optimizing profit. It's like saying that a wire with no power loss and zero transmission delay would program your vcr and make perfect oven fries every time
I don't disagree with that; I feel people focus far too much on profit and GDP being an overwhelmingly good thing for everyone everywhere ever. I see the end result as far far more important. To steal from Bhutan's former King Jigme Signye Wangchuck (incidentally, that is one hell of a name), we should care far more about gross domestic happiness
. Profit is only good so long as it helps, on both a societal and individual level, make people happier, healthier, safer, etc. Eventually, diminishing returns are reached, then the people being made "happier" are gaining so little from that extra profit, and the people it is being squeezed from are losing so much "happiness", that it becomes a negative. I would be far more impressed if economists and the like focused on finding those ideal points, instead of just mumbling something about free markets and the invisible hand. I believe France, for example (people more knowledgeable on France, feel free to tell me how little I know), has mandated 4 day work weeks with no overtime. Despite this, I believe France tends to rank not that far below the US on happiness rankings (flawed as such measures might be), while also have a much better GINI coefficient (32.7 vs 45, lower is better).
That tangent aside, an anecdote to reinforce my earlier point: during my college economics class, they never focused on how perfect competition, with perfect information, was flat out 100% impossible. In contrast, my engineering classes made damn sure we knew that wires do have transmission delay, they do have power loss (and all the variables that implies.. inductance and capacitance and resistance per unit length), that all the factors that we "ideal" out of our equations actually are there in the real world, and we will be expected to deal with them. But when you're handling a circuit built on a breadboard with resistors that have a variance of +
10%, the delay caused by your 3 inch wires is completely trivial, not to mention besides the point of whatever the specific circuit is attempting to teach you. Likewise, I could see perfect competition possibly being sufficient in to model for, say, a bake sale, or something similar. Once you start talking about real economies, (or complicated circuits), then you need to take off the training wheels, and realize that perfect competition (or a perfect wire) is a fairly tale.