Which ideology is the best at economics?

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Which group knows economics best?

Conservative (or other center-right ideologies)	15%	[ 4 ]
Liberal (or other center-left ideologies)	15%	[ 4 ]
Socialist (cooperative capitalism, social democracy etc.)	30%	[ 8 ]
Fascist (nationalist or other far right ideologies)	0%	[ 0 ]
Libertarian (laissez faire on market and social issues)	37%	[ 10 ]
Anarchist/libertarian socialist (non-propertarian, direct democracy)	4%	[ 1 ]

Total votes : 27

Awesomelyglorious
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08 Nov 2010, 8:43 pm

marshall wrote:

It isn't necessarily more efficient. Once one has a monopoly much of the incentive to lower costs and provide a better service is gone. Competition in the form of new start-ups may eventually come, but it's rarely an instantaneous process. For the reasons I gave in my previous post it can be very difficult and it can take many years. In the mean time the consumer suffers.

Right, but the other issue is that not all monopolies even are that horrible. John Rockefeller's standard oil is still well-known for reducing the cost of oil massively, despite it having a monopoly in a much stricter sense. There is also the case of the Aluminum Company of America, which also had a highly productive monopoly. As it stands, I'd bet that monopolies in general tend to be a bit better than people give them credit for, as well as a lot harder to establish and maintain than many believe.

Quote:

No.

All the things I mentioned tend to limit the prospects for consumer choice and thus limit competition. Also, you don't even need to have total monopolies for quasi-extortionary situations to exist. This is especially true for products/services with universal demand, like healthcare.

I'd think that universal demand would make extortion harder. The larger the market, the more incentive to steal business away from a monopoly. Instead, I'd see the real issue as niche interests. I don't think that healthcare is often cited as a monopolistic industry though.

Quote:

Even if they aren't insurmountable, it doesn't mean there isn't a problem. There are holes in the idea that the "invisible hand" of the free market will instantly equilibrate these problems away as so many liassez-faire libertarians like to claim.

Who even needs "instant equilibriation"? The problem is really that anti-trust laws are, by their nature, very very very difficult to enforce in a rational manner. This creates legal instability that itself could be more threatening than the monopoly. After all, the threat of being labeled a monopoly by a law difficult to make analytic is something likely to be a continuous source of risk, especially for highly successful firms.

visagrunt
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09 Nov 2010, 12:01 pm

We have drifted away from the question.

It seems to me that the question was, "Which ideology best understands economics?" It was not, "Which ideology's economic theories are best?" Indeed, the OP is quite specific:

Quote:

"Competent in knowledge of economics" is not so much a question of right answers, but rather knowledge of economic theory, and/or other things related to academic economics.

There are great economic thinkers at all points on the political spectrum. However, at all points on the spectrum there are also people who are dilettantes and people who can't be bothered learning anything about economics.

I don't think that any point on the spectrum has got a proprietary hold on economic wisdom. The true wisdom comes with balancing competing theories so that they can complement each other. Furthermore, no economic system should be evaluated outside of its political context.

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ruveyn
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09 Nov 2010, 12:14 pm

Awesomelyglorious wrote:

Ok, I don't buy the idea that they won't "just happen" if let them accumulate wealth. That being said, this wasn't your point. You were arguing that monopolization prevented growth, not that governmental subsidies were necessary for growth.

Wealth is not accumulated. It is created by labor and thought effectively combined. The real economic process is NOT a zero sum game.

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xenon13
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09 Nov 2010, 12:24 pm

As the so-called Austrians won a similar poll here despite being a bunch of extremists so beyond the pale that even the plutocracies fear their experimentation this shows the right wing bent of the typical person who posts here.

marshall
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09 Nov 2010, 12:44 pm

ruveyn wrote:

Awesomelyglorious wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined. The real economic process is NOT a zero sum game.

"created by labor" is the Marxist theory. Interesting that you of all people would argue that. In reality, wealth is created by demand, regardless of how much labor or mental creativity goes into creating something.

Of course, when demand is backed by speculative pie-in-the-sky nonsense rather than real usefulness there's a problem. When bubbles burst you do effectively have a zero sum game (actually a negative sum game) as owners can simply cash out of their bubble and throw the burden of the resulting debt onto the working classes. In this case the wealthy class who have created the bubble are effectively redistributing the wealth to themselves while simultaneously putting everyone else in debt.

I don't mind that capitalists try to argue their view that capitalism is the "least of all evils". I have a problem though when they have to live in a fantasy world in order to defend their "least of all evils".

sartresue
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09 Nov 2010, 1:26 pm

ruveyn wrote:

91 wrote:

I think that I should get two votes, and so should everyone else.

Some of the options are political and others economic. Considering that long term economic success is dependent on a combination of economics and politics (political-economy), being only able to chose one is insufficient.

Not a bad idea. I think the only long term viable economies are a mixture of market capitalism, some form of regulation to prevent bad behavior which not only stifles the economy but produces wrong and injustice, plus a certain amount of tax supported activity to maintain the public infrastructures. Some type of infrastructure does not lend itself well to the pay for services and goods model. The roads must be for everyone, whether they can afford to use them or not. Water supply and waste disposal must be for everyone whether they can afford it or not. We cannot charge people for the basic water ration to keep them alive and we cannot charge them for taking a dump or a pee. This would soon lead to plague and disease for everyone.

A pure free market economy is not likely to produce a reliable supply of fresh drinkable water for a large population. In England which at one time was the closest thing to market capitalism it was necessary to build sewers in London and Liverpool at public expense (that means it was tax funded). There is no way a pure free market economy is going to lead to adequate sewer systems. The free market can produce individual chemical toilets but the chemical goo still has to be dumped somewhere or recycled. A pure free market is not likely to handle this.

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Ruveyn unjaded topic

+1

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Last edited by sartresue on 09 Nov 2010, 1:34 pm, edited 2 times in total.

skafather84
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09 Nov 2010, 1:33 pm

ruveyn wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined.

You should tell all the traders on Wall Street and the various bankers this bit of information. They seem to think that they can create money without legitimate labor and merely through public relations and number manipulation.

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sartresue
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09 Nov 2010, 1:39 pm

sartresue wrote:

ruveyn wrote:

91 wrote:

Ruveyn unjaded topic

+1

Econowisdom topic

visagrunt wrote:

Quote:

I don't think that any point on the spectrum has got a proprietary hold on economic wisdom. The true wisdom comes with balancing competing theories so that they can complement each other. Furthermore, no economic system should be evaluated outside of its political context.

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DW_a_mom
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09 Nov 2010, 1:43 pm

skafather84 wrote:

ruveyn wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined.

Also known as the arbitrage factor. Repackage the same assets in a new way so they can be sold using different financial formulas and the uptick is known as the arbitrage. It's quite fun, actually. Or, well, it was, until everyone all got carried away. I worked on some IPO's back in the day. Just because I'm liberal doesn't mean I've never played and enjoyed the game; I'm just not the one willing to say it never needs any oversight or regulation. I played it long and well enough (doesn't take much) to know that self-regulation in some areas doesn't quite work.

But, as Visagrunt accurately pointed out, it has little to do with the original question.

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ruveyn
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09 Nov 2010, 4:03 pm

skafather84 wrote:

ruveyn wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined.

Unless someone is making stuff or services to sell there is nothing to arbitrage. The arbitrageurs are a derivative of the productive economy. They make money by equalizing prices between out of sync markets. But it takes making stuff for sale for there to be markets to arbitrage.

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Inuyasha
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09 Nov 2010, 4:03 pm

skafather84 wrote:

ruveyn wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined.

Not all of them are that way. If you refer to the Bank Bailout quite a few banks were forced by the Federal Government to take the money that they didn't want. They promptly sent the money back as soon as they could.

I'm not kidding, there were quite a few banks that weren't in any trouble and didn't want Federal money with strings attached.

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09 Nov 2010, 4:57 pm

Inuyasha wrote:

skafather84 wrote:

ruveyn wrote:

Wealth is not accumulated. It is created by labor and thought effectively combined.

I'm shocked that a bank would be resistant to any sort of regulation.

psychohist
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09 Nov 2010, 5:29 pm

Awesomelyglorious wrote:

psychohist wrote:

[Statistics is a branch of mathematics. Quantitative comparisons are mathematics.

Umm.... yes, I know. The issue is that statistics isn't the same kind of elaborate system-building we've seen from neoclassical economists.

I'd certainly agree that a lot of the models you describe have limited usefulness.

quote]

Quote:

Fluid flows are chaotic systems. Yet, hydraulic and aeronautical engineers do quite useful quantitative analyses by using appropriate levels of abstraction.

They also have a lot of ability to experiment, even to really know the initial data well. Economists really don't.[/quote]
Valid point. We have to take the messy real life "experiments" where we can - Volcker's 1980 interest rate increases ending runaway inflation, Friedman's work in Chile.

Quote:

The reason most predictions by economists fail is because most economists get lost in the details, rather than abstracting to the appropriate level.

No, it is really because there isn't enough data to actually make good predictions, the economy at each point in time is rather different, even further, if a good prediction existed, it would be exploited to the point where it could no longer work.

Accurate predictions will come true whether or not someone exploits them. That's what makes them accurate.

Quote:

There's also the fact that most economists don't bother to research boring but critical parameters, such as price sensitivities.

Most intro textbooks actually have a table of price sensitivities.

Linky to such a textbook, please. I've never seen one such.

Awesomelyglorious
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09 Nov 2010, 7:43 pm

psychohist wrote:

Accurate predictions will come true whether or not someone exploits them. That's what makes them accurate.

No, not at all. "Accuracy" merely means that given the current set of events, the prediction will happen. The criticism is that exploiting a prediction involves changing what will happen. The basis of this criticism is that most predictions have value to somebody, and that most actions people take based upon these predictions will change the overall system. I mean, basically, the argument is that accurate predictions won't exist, because if they come into being, the system will evolve based upon those predictions and throw the entire issue off.

Think about a future predicting device. If you knew the moment that you were going to die, you would probably change your life, but changing your life means that the moment you will die will change. Thus, the accuracy of the prediction at a moment will cause it to later be inaccurate.

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Linky to such a textbook, please. I've never seen one such.

Umm.... most textbook are IP. Also, the price elasticity of demand is a measure of price sensitivity, and my old high school textbook(well, maybe the edition is different, the cover and authors are the same), the 15th edition of Economics Principles, Problems, and Policies, by Campbell R. McConnell and Stanley L. Brue has a chart of them on page 381.

Orwell
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09 Nov 2010, 9:23 pm

Awesomelyglorious wrote:

psychohist wrote:

Linky to such a textbook, please. I've never seen one such.

My intro econ book also had such a table somewhere in the first two or three chapters.

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NeantHumain
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09 Nov 2010, 9:51 pm

Honestly, I took a semester-long economics class in high school, and that's it. In college, my social sciences electives were more psychology and sociology.

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