Comparative Advantage- by Ian Bruene

Posted on by Sarah A. Hoyt

Comparative Advantage- by Ian Bruene

A couple weeks ago Our Hostess posted about Economics being real and not some random studies degree or other nonsense. In the comments someone decided to deny the existence of Comparative Advantage, or rather, he didn’t strictly speaking deny it, he merely implied that it held the same status as employment statistics or money supply numbers; something artificial which could be “tweaked” at the government’s whim.

This is not true. This is not even close to true. And the failure to understand why it isn’t true belies a failure to understand not just this detail of economics, but what economics is about in the first place. Now admittedly these are common errors, so there is relatively little guilt in that ignorance. So common in fact are the errors that most of the people who call themselves “economists” still make what should be a five year old’s mistake.

So let us see what it is all about, using a seemingly unrelated story, which in the end will teach far more than just the concept of comparative advantage.

I currently work at Walmart, these days mostly in the back room sorting stuff. In the mid to late part of my shift this turns into sorting apparel into hanging / non-hanging, and between the different departments. For this story what matters is the hanging apparel, which is stored on wheeled racks so it can be moved around the back room and out to the floor as needed. These racks have 4-8 adjustable bars to hang apparel from, so the rack can be customized for what is needed. For a simple example; the intimates department has both bras, which take up less than a foot of vertical space, and also pajama sets, which can easily take up four feet or more of vertical space.

So, we are in the back. We have lots of boxes of clothing to sort through, and we need to efficiently use the racks we have because we don’t have an infinite number. Ignore for a moment the different departments and non-hanging clothing. All that matters is using the rack well.

The rack has 4 bars, set up for one tiny space, two medium size spaces (one on top of the other), and one giant space.

I pick up a pair of shorts. Where do I put them?

Well the rack is empty, so it doesn’t matter. I toss the shorts onto the nearest spot which happens to be the giant space which has plenty of room to fit them and move on. In fact after a little thought I realize that I should be using that largest space: it is objectively the best one, because it can hold any size garment, while the other, smaller, spaces have limitations and cannot hold larger garments.

I continue working, more clothing is put on the rack, eventually the giant space fills up. Oh well, that was bound to happen right? The rack is not infinitely sized. So I start putting clothing on the medium size sections. They might not be as good as the large one was, but at least they aren’t as small as the tiny space. Unfortunately dealing with longer dresses and pants is now a hassle, because the bottom bar is too low and they drag on the ground, so I have to put them on the top bar overlapping the stuff below and causing the whole rack to bulge out. It is annoying and frustrating, but can’t be helped after all.

Or could it?

I’m sure everyone caught the mistake – I certainly dropped enough anvils about it – but it bears articulating anyway. It is true that the giant section can hold any size garment. But thinking of it as “this can hold anything!” is backwards; the correct attitude is “this can hold things no other section can!”. That flexibility means every time I put a pair of shorts or a bra on it, I am sacrificing the ability to put a long pair of pants or a dress on the section which is the only one that can hold them. In doing so I reduce the total quantity of apparel which will fit on the rack.

Instead I should put the shorts and shirts on the medium size sections. I should put the bras on the tiny section. Only if something doesn’t fit on any of the other sections do I put it on the giant one. At least while there is room on those other sections: eventually they will fill up, and then I move to the next-smallest section which will hold the garment.

This is Comparative Advantage. This is not an analogy for it. Nor is it a hypothetical situation – I deal with it nearly every day of the week. This is the concept itself, stripped of the distractions and opportunities for excuses which are used to cloud the matter. And it is interlinked with many economic concepts which people do not understand but are fairly simple to explain.

First of all, there is no money involved. Because Economics is not about money. In fact the fastest way to tell someone doesn’t have the faintest iota of a clue about the subject – short of wearing a sickle and hammer – is that they think economics is about money and finance.

The technical definition of Economics is that it is the study of the allocation of scarce resources which have alternative uses. All of those parts matter: Scarcity, because I do not have infinite racks, and a given rack cannot hold an infinite quantity of apparel. Alternative Uses, because I could use a spot for this garment, or that garment, or a garment I pick up ten minutes from now. And Allocation, because I have to choose how I am going to divide the garments between the sections.

Second is Cost: a cost or price is not a dollar value. It is all of the options you sacrifice to choose this option. If I place a small garment in a spot where a larger one could go I am sacrificing the ability to put a larger garment there in the future. Or in monetary terms, If I go to Scheels and buy a box of 6.5 Grendel today, I am sacrificing the ability to use that money to go to the local Mongolian BBQ, as well as the ability to have that money in the bank to cover a bill, as well as an infinite number of potential other options I could have chosen.

Third is Value. In the same way that Cost is not Money, Value is not Cost. Value is a subjective thing to decide which costs you are willing to pay. If you pay a cost to get something then by your actions you prove that at the time of decision you value that something more than any of the alternatives you sacrificed to get it. Importantly Value must be subjective, because every attempt to define an objective value theory slams into fundamental problems, such as the classic “what is the value of a glass of water?”. Objective / Inherent Value Theories can only pretend to sort of badly fit reality by bolting on epicycles until they contain an ad hoc, badly-specified, incoherent, poorly-predictive implementation of half of Subjective Value Theory.

But in the end, why does any of this matter? That’s all a nice theory and has some cool quirks, and maybe it is more efficient and GDP number go up, but that isn’t what’s really important right? Who cares if you have 5% fewer luxuries; that doesn’t matter, and they are probably making you soft and weak anyway.

I’ll leave that last one for now. Beating that particular pinata might be fun but isn’t the subject at hand. The problem is that economic efficiency is not about trivial luxuries, or GDP number go up, or scummy businessmen benefiting themselves, or scummy politicians benefiting themselves. Instead economic efficiency is everything. And the only reason it can seem trivial and unimportant is because everyone reading this has lived in such unimaginable wealth for so many generations that the choice “do I starve today, or do my kids starve today?” because there isn’t enough food getting produced is not even in living memory any longer. Those “trivial luxuries”, are the reward of a culture not being moronic being less moronic about economic matters than is typical throughout human history.

Going back to my story: if I declare that using the rack efficiently doesn’t matter, I make my job harder. There is a very good chance I make my job impossible and have to leave boxes of clothing for the poor sod who sorts on the next day. Which will very likely be me.

To borrow a term from The Enemy: when you dismiss economics, you speak from a position of unimaginable privilege. If you aren’t simply ignorant of history, then you probably are one of those scummy politicians or scummy businessmen and think that economics is something which happens to other people.

*THIS IS SARAH: Ian Bruene, besides his make-ends-meet-job between-jobs is also a budding entrepreneur. If you buy gaming figurines, you could do worse than do it from Murphic industries.*

195 thoughts on “Comparative Advantage- by Ian Bruene”

  2. It’s been said that the best way to “judge” the price of a book is to look at what else you could purchase with that money.

    IE I could buy that book or purchase a Big Mac. Which would I enjoy more?

    (Yes, I know some people strongly dislike Big Macs.)

    Liked by 2 people

    1. I just bought a $160 dollar book (got a deal on it — normal price is about 200 dollars).
      But it was an academic book about Urnes stave church in Norway, with over 400 pages of articles and photographs and scholarly discussion. The book contains very detailed photos of the wooden art inside and outside the church, which I’m using as source materials for leather tooling designs. So it’s sort of an investment — selling one of the bags in the future will return twice the money I paid for the book. And I’m getting hours of enjoyment reading about a topic which I became deeply interested in.

      Or….I could have purchased an exhaust system for my car, which surely needs it.
      It’s clear which I value more…

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      1. Another way to look at “costs”.

        My sisters and I each have a child the same age. 32 years ago (they are, all three, now 35) each family bought a wooden backyard fort plus play set. Sisters each went with relatively inexpensive versions. One sister has since sold the house, with the play set, so how long it lasted is unknown. We bought the Tesla 😁of backyard sets, Rainbow Play Sets, made of Redwood wood. Fast forward when the sets are no longer needed, 12 years or so. Theirs was dismantled and disposed of at the dump. Ours was sold, for what we paid for it, dismantled and transported. Baring a tsunami (went to Oregon coast to a membership campground) it is still being played on. Sure 12 years of inflation made “sold at cost” meant the same money wasn’t worth the same. But still better than no value.

        Liked by 1 person

  3. The ultimate opportunity cost. Do I put time talent and treasure into having and raising a family? Or do I put that off to have more time, talent and treasure?

    Western society would have you believe that the latter is the best choice in opposition to eons of humans before them saying the former is the highest calling. And interestingly, by emphasizing the pursuit of money instead of family we are seeing an unprecedented lowering of the standard of living and life expectancy.

    Weird, huh?

    Liked by 2 people

    1. My college had its basketball program go bonkers my senior year. Ever since, the coach has been given offers with high monetary value, all of which he turns down because he likes where he is. (I mean, not that he’s badly-paid, but he figures that quadruple his salary wouldn’t get him half as much value of a place he can go fly-fishing virtually out his back door.)

      Liked by 1 person

      1. At UF, then-Coach Billy Donovan assembled and led the UF basketball team to a championship in 2006.

        First off, all five starters chose to return, because they wanted a chance to get another championship, and, also, and this was a specifically stated point by them: They did not want to end their collegiate experiences just yet. They enjoyed playing with each other a lot.

        They went on to win a second national championship for 2007, becoming the first team since 1991-1992 Duke Blue Devils to do so… and the first team ever to win back-to-back championships with the same starting five.

        They then graduated and moved on. Meanwhile, having shown HIS chops, Billy Donovan was invited to become the head coach for the NBA’s Orlando Magic team. After spending less than a week, he asked to be released from his contract, and elected to come back to UF as its head coach, for much the same reason — he wasn’t yet willing to give up the collegiate coaching experience. He did, eventually move on, in 2015, to become the head coach for the NBA’s Oklahoma City Thunder.

        Both examples, in sports, of people making choices based not in wealth, but in other factors…

        Liked by 1 person

    2. In my not so humble opinion, time and talent are the two most important things in raising a family. Show the kids how to get their own treasures, do not just give it to them.

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      1. Mr Houst, having attended a private high school where the median income of the parents was 3-5 times that of my parents and the top of the scale was probably 50x I got to see a plethora of spoiled brats. Most of them turned out very badly from what I can see 45+ years later. Almost all of it was because when something is easily achieved it has no value to you (referring back to Mr. Bruene’s post). With that skewed sense of value their ability to make good life choices in situations where they did NOT have relatively infinite resources was critically impaired.

        When it came to raising my own daughters in our family where resources were not so constrained as in my blue/pink collar home or my wife’s family where dad was a Masonry contractor (so money was feast or famine) we were careful to limit what they got and made sure they learned to participate in earning what they wanted. It seems to have worked.

        There really seems to be a reason great fortunes are squandered in 2-3 generations.

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        1. Same. We weren’t super poor. Public school so the gambit of classmate wealth ran richer and poorer. Same with hubby. We didn’t go without, but we didn’t get what we wanted either. Starting HS, I started getting an allowance. What I wanted for lunch I paid for, unless I fixed something available in the kitchen and took it, or did without. Got start school clothing. Beyond that. I bought it, unless outgrew it (female, so not like our son). Limited Christmas gifts. But, hubby and I started with nothing. We had to borrow the money to be able to start work from our parents (about *$2000 in 1979, counting the new refrigerator marked down because it had a huge dent, which we had for 27 years). No credit.

          Ultimately we are a lot better off than either of our parents (and his parents inherited a bundle from her dad, mostly gone medically by the time MIL passed). We were by the time our son was born. We still taught him the value of a dollar. Based on his spending habits now as an adult, he isn’t wasting it.

          ((*)) Rent: deposit, first and last month, gas to move what few things we had (mostly wedding gifts).

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            1. I was standing in front of ours going “Die! Damn it! Die!” Hubby caught me at it. We replaced it, still working. I swear our power costs dropped in half. One we replaced it with is now 18 years old. When it makes threat of failing noises, I glare and say “don’t you dare!” Finding one that fits that space will be complicated. Width and height are severely limited. Probably would cut electrical costs again, after 18 years. Nope. It can’t die.

              Liked by 1 person

  4. There is a summer camp nearby that has horse rides. For these rides, you need to know how much you weigh, because—as a lot of people who don’t know horses should know—not all horses can carry heavier riders. (In fact, a couple of years ago the companion camp had to nix all adult riders because the horses that year were divided such that the strongest horse was at a carrying capacity of 150 pounds.)

    So if a small scout of 98 pounds were to sign up for the horse that could carry 200 pounds because they wanted to, that would mean I couldn’t sign up for a ride as a sturdily-grown adult.

    Now, the way that they do this is to match each signup to the smallest capacity that can carry that rider that is still available. This means they can have the greatest number of people sign up without having to turn away people when they still have horses. Mind you, you still have to be in line to get the rides, but that’s how economic efficiency works.

    Liked by 1 person

    1. And your example is exactly the same as the clothing-and-racks example Ian offered; use the smallest usable match for each item to achieve maximum efficiency (or usability, if you prefer).

      BTW, excellent post, Ian; I’m sure Thomas Sowell would agree! 😉👍👍

      Liked by 2 people

  5. “There are no solutions, only compromises.”

    “The first rule of economics is scarcity. The first rule of politics is to ignore the first rule of economics.”

    by some former black Marxist dude named Thomas, IIRC. ;-)

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      1. Free-market decisions get called “irrational” and “market failures” in order to justify the laws overriding them. Big impersonal railroads let blacks ride in the same cars as whites? Irrational! Market failure! We need segregation laws to solve this problem! Big impersonal insurance companies won’t sell insurance for houses built on flood plains or on hurricane-ravaged beaches? Irrational! Market failure! We need government homeowner-insurance mandates to solve this problem!

        And so on and so forth.

        Liked by 1 person

        1. “Market failure” is particularly fun. Because it does occasionally happen in markets.

          It is the rule in politics.

          Also the term has almost nothing to do with the popularly understood meaning. It doesn’t mean “this product I want doesn’t exist / is more expensive than I would like”.

          Liked by 1 person

          3. When you investigate any “market failure” in depth what you discover is that it is (almost*) always the end result of a politically inspired law or regulation that deformed the market in the first place.Now sometimes (see e.g. tariffs) the politically inspired law may be reaction to some other political decision somewhere else first but that doesn’t make it invalid

            * I put almost in there because there may be a few rare cases where it wasn’t but it’s 100% of the ones I am aware of

            Liked by 2 people

            1. Tariffs are almost always a failure, and should be strongly limited whenever they ARE implemented — e.g., they apply for this year only, and will need to be re-voted for next year if they are to be implemented again.

              The only time they actually have any justification might — might, mind you — be in the instance of a brand new, developing industry which you want to get on a solid footing which cannot — yet — actually compete on a level playing field against established international players, particularly those which are themselves subsidized by foreign governments.

              It tends to distort those nascent industries, unfortunately, to be dependent on those subsidies, so they never actually become competitive on their own, which is the downside. Thus the notion of them not being able to depend on said subsidies year over year, so they don’t presume they will have them for eternity.

              But, generally, it’s almost always a Real Bad Idea to have tariffs, and they need to be seriously justified by some competent economists (e.g., not ones named “Paul Krugman“, for example) before even being contemplated.

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    2. “Economists are often accused of believing that everything – health, happiness, life itself – can be measured in money. What we actually believe is even odder. We believe that everything can be measured in anything.” – a retired law & economics professor who was not the guy Trump named as the US Ambassador to Israel.

      Liked by 1 person

      1. I get the point of the quote, as to substitutionary goods, but as worded I think it proves too much.

        I’ve seen too many social planner (spit!) types that use this sort of reasoning to claim something like “The average American has $FIGURE in life insurance, and thus values their life at $FIGURE / Life Expectancy, and we can do math with our wonderfully rational ratios as to when it’s cost effective to kill grandma and save on the social security payments.”

        Nozick’s utility monsters have fun with such people.

        Economics may illuminate what it is that we value as revealed preference, but not total rankings of all such choices as we might yet make. You might have made the life insurance trade, but would never make the “Here’s $1M. Unplug Grandma.” trade.

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        1. The purpose of life insurance is to reduce your family’s economic hardship if they lose your income. Says nothing about the value of your life, or anybody else’s.

          It’s the Medical Socialists that want to decide when to ‘help’ Grandma stop being a drain on their resources. Medical murder is now the leading cause of death in Canuckistan, and still they want to ban guns.

          1. “There will never be Death Panels!!”
          2. “Those are not Death Panels!!”
          3. “Death Panels are for the Public Good!!”

          Liked by 1 person

        2. We call them “Insurance Agents” because someone didn’t like the sound of “Bookie”.

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          1. OFFICIAL NOTICE:

            I have hereby appropriated your quote for personal usage, and intend to share it widely.

            You are thus informed that your intellectual property has been ruthlessly pirated for no recompense of your own.

            Congratulations on your otherwise successful creation.

            :-P

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    3. If all else is equal, Ricardo’s Law of Comparative Advantage is valid.

      Unfortunately, all else is rarely equal, and Competitive Advantage is often misused to compare apples and alligators by charlatans seeking personal short term gains at long term general expense.

      Not to mention that a lot of the problem is driven not by economic considerations, but by the Utopian dream that “if all economies are interdependent, there shall be no war”. (Feel free to pull out the Breton Woods rant of your choice.) Is it really comparative advantage once official trade policy starts going all Harrison Bergeron?

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      1. Not to pick a fight, but I don’t think you’re clear on what comparative advantage is. I’d also point out that ignoring comparative advantage is a much more common way for alligators and charlatans — I prefer raccoons as an example myself — to seek short term personal gain than citing it. that’s what protectionism is after all.

        Liked by 2 people

        2. No one (including me) is ignoring it. No one (including me) is saying it doesn’t exist.

          I provided one obvious example of how comparative advantage can be and has been manipulated in service of ideological goals. There are many others available.

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          1. Comparative advantage is a thing. Rhetoric is also a thing. Trade exists because of comparative advantage. Notice not just free trade, all trade, otherwise we’d all make what we needed ourselves. the obvious retort to that is that we don’t have the time, never mind the skills, to make it all ourselves to which the answer is precisely. One picks and chooses because opportunity cost is also a thing. 

            it’s actually worth taking some time to study what comparative advantage is (and is not) as opposed to what the propaganda — pro and con — say it is (or is not.)  It comes down to opportunity cost — the biggest “thing not seen” Even if I’m better at making something than you are there are times when I’m better off paying you to make it.

            A better example than the Portuguese wine thing you see in the text books (Portugal is much better at making wine than England is so it’s not comparative advantage) might be something like fixing cars. I can fix cars, I used to be very good at it, I was much better at it than most of the idiots at the car repair place, but I had a much more productive way to use my time than fixing cars so i paid them to fix my car. 

            even a mythical Superman who is better at everything than everyone else would benefit from trading. Trading is always good. it’s not the panacea it’s often made out to be by utopians, but it is always good. The word is often abused, but abusing a word doesn’t change the underlying thing — only lefties believe that it does.

            Liked by 1 person

            1. An example: When we got married I took over all the cleaning and cooking. We could both do it, and Dan does admirably when I’m sick or incapacitated.
              BUT I do it quicker, and at the time my work was worth $0 while his work and extra curricular work (little programs he often did for sale/money) was valuable. So his time was more valuable. We maximized our productivity as a couple by having me take over cleaning.
              Right now? Right now I can make more money by writing more. So I’m paying what feels like a bundle for someone to do the yard, because I can do more by writing. (Except vegetables. I love growing my own vegetables. It’s inexplicable.)

              Liked by 1 person

            2. “The word is often abused, but abusing a word doesn’t change the underlying thing — only lefties believe that it does.”

              Exactly. Which is why claims of “comparative advantage” should be carefully looked at for thumbs on the scale, and a careful examination of “opportunity costs” and likelihood of adverse events —- like outsourcing a majority of your production of critical goods, from steel to medical supplies, to a country you know is an enemy.

              Free traders, in my experience, gloss over that part.

              Liked by 1 person

              1. }}} critical goods, from steel

                Except steel is not really a critical good. The solution with something like steel, which stores quite well, is to stockpile enough of it that you can build a steel mill from scratch (which actually does not take as long as you might think, when you actually want/need to do it) — said mill generally using the latest and greatest technologies, rather than 20yo techs that tend to be present in “existing” mills. This is true for almost anything that stores well and is a stable overall tech, e.g., isn’t being updated yearly.

                There are certainly issues with certain other aspects of international trade — particularly, for example, becoming dependent on trans-Pacific shipping for supplies of goods — as well as other things, like depending on possibly sloppy, corrupt, or cost-overcutting factories for something like medicines, but even those can be dealt with by having your own quality control checks for many things. The former is dealt with by working towards factories in, say, Mexico… which can help bring Mexico forward from the 19th century (and thus do things about its corruption issues). And even the latter, also, can be fixed by making sure you have multiple suppliers not all of which are on the other side of the Pacific.

                Electronics being dependent on Taiwan is not a great idea, just because Taiwan and the RoC have a long history of glaring at each other, and that could change overnight. And this specific thing is, actually, being addressed as we speak — Intel has substantial production capacity in multiple locations inside the USA for all but the very most modern techs (up to 10nm), and is currently building a major fab in southern Ohio (sub 5nm) which should have all the latest tech capacity currently available.

                We also stupidly allowed LA to become almost the sole significant port for US imports, which was stupid. There are at least three or four alternative US ports on the west coast which should have had more infrastructure built to share the load. Single-point sourcing of literally anything is bad business sense, even when it’s “cost efficient” on the surface.

                Liked by 1 person

            3. Ricardo’s example (wine/cloth) was a poor one, because it assumes central planning and a mercantile outlook.

              It assumes that the government has the power to dictate what all people in the two countries can do.

              It also ignores sunk costs (looms and wine barrels aren’t magically available after all).

              Bruene’s story would have been a much better one to have put in all those textbooks.

              But then I suspect it would have been a lot less popular, as many economists are mostly interested in giving advice to politicians. Who are interested in expanding their scope.

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  8. I have an MBA with emphasis in finance. Lots of classes in economics and one thing stood out: If my aunt had wings, she would be an airplane; if people were rational, economics might work! 

    No one is rational! Most of the time we have no clue why we make one decision and not another. We certainly don’t know the long term impacts of day to day decisions. So economics is the illusion that anyone can determine the best allocation of scarce resources.  

    Comparative advantage might exist in a world where everything is known and the future is predictable, but that is not reality.  A “rational decision” is to avoid skin cancer by staying out of the sun, but then people died from Covid because of vitamin D deficiency. Germans who made the “rational decision” to save and invest lost everything in Wiemar Germany; it would have better to live lavishly and borrow heavily! 

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      1. The central fallacy of the left is wise and “rational” people can somehow bring peace and universal happiness by a “planned economy”. Everywhere this system is tried the “rational” planners bring misery and (eventually) mass murder.  In a free society lots / most people make horrible decisions but through failure many learn to make less statistically stupid decisions. 

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        1. No. the central fallacy is that you’re not a rational being, and therefore need “Wise” people in the government to PLAN FOR YOU.
          The right believes individuals know their self-interest best.
          So, no. I’m pushing back hard against the idea no one is rational, a nonsense 70s behavorist bit of bs.

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        2. It is a -major- fallacy to assume that most people behave irrationaly when it comes to economic choices. What you are observing is that they have different values than yours. That is not “irrational”. It may be “irritating”. It could be “perplexing”. It may even be “fattening”, but it really isnt anyone elses call, unless they are directly impacting one’s own rights to say, not get attacked or defrauded.

          Example: smoking. Some folks are quite satisfied trading a longer life for their derived pleasure of smoking. That someone else does not agree is not an indication that the smokers are irrrational. It indicates they have different values for different things. Another example is riding motorcycles.

          And no, if someone demands the State pay for someone elses downside, that does not magically grant right to then manage their lives because “it costs the state”.

          That is fundamentally “bullshit”.

          Liked by 2 people

            1. So is caffeine consumption. And probably chocolate consumption. Natural stimulants.

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          2. A friend of mine got a dispensation from her LDS ward to smoke a limited number of cigaretttes a day after her doctor gave her a green light to do so to deal with some sort of respiratory issue.

            Unfortunately, she got hooked and the excess smoking, instead of being a boon to her health, eventually contributed to her too-early demise.

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      2. Man is not a rational animal.
        We are a rationalizing animal.

        We are capable of reason, but generally employ it to support positions we arrive at through other means.

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        1. For example, your own odd belief that humans are fundamentally irrational, simply because they have values different from your own, thus come to different conclusions that suit them just fine, thus are quite rational.

          Your premise is faulty. You therefore reach a logically derived but highly wrong conclusion.

          Most folks do just fine figuring out what they want. That often changes with experience. Doesnt make it irrational just becasue someone else disapproves.

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          1. I think it is less rational vs irrational (or say purely random) behavior than it is a matter of information. If the information you have is incorrect or biased (for example by your own desires/ view or just plain old greed) you may make choices which given your view of Value (which is remember relative) which appear or even are irrational from another participants view. This is the basis of a classic economic mess known as the bubble. Consider the Tulip Madness. One person sees people spending money on bulbs at a fierce and increasing rate and ASSUMES (here is the invalid information) that the prices on bulbs will always continue to rise. They may make out like a bandit if they are early in the bubble and don’t reinvest in more bulbs or they may end up totally hammered if they end up near the collapse. Part of the issue is that the person trading has assigned a value to the objects wholly on the basis of reselling them. This is a big hint that caution is warranted. To some degree, I think the Tulip Madness in particular came out of the actors in a very flush economy trying to do SOMETHING with the excess other parts of the economy was creating for them.

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    2. But people do mostly act in what they consider to be their self(and/or family’s)-interest. That may or may not coincide with what the “experts” consider to be rational Since Value, as Bruene stated, is inherently subjective, what the “experts” think to be rational economic behavior is also subjective and can be taken as just another opinion.

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    4. You have been lied to. And the lie is the precise opposite of reality: Economics does not require humans to be rational, it punishes them for being irrational.

      And despite millennia and globe spanning empires attempting it, humanity has never managed to make the bill not come due.

      Comparative advantage might exist in a world where everything is known and the future is predictable, but that is not reality.

      Bitch? I just demonstrated that it exists at the most basic everyday level.

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      1. “Bitch?” Seriously? So much for a civil discussion…  ”Economics does not require humans to be rational, it punishes them for being irrational.” ”Economics” does not give rewards or punishments. Often, the worst mistakes result in riches while many a careful investor ends up bankrupt. 

        For example – Dietrich Bonhoeffer tells the story of His father. For 30 years he paid into a retirement with an insurance company. Then came inflation. The day his contract paid off his 30 years of investment was only worth one dinner for the family. Sadly, by the time he got the to store the money was only sufficient to pay for the wine. The god of economics sure shafted him! 

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        1. To this, I’d answer that “punishment” is a very unhelpful term, as it implies that economics has some kind of agency or moral dimension. Economics is merely an attempt to describe the impersonal mechanics that govern the results of human interactions. It doesn’t give or take anything; rather, it predicts the results (whether desirable or undesirable) that will occur based on actions humans, both individually and in aggregate, have taken. What happened to Bonhoeffer’s father was not a punishment, but a consequence. An unforeseen and undeserved consequence due not only to his decision to invest in a particular way, but also to the decisions of others to debase the currency. It can seem like punishment, but it’s really just a generalized result. Sadly, the people who most deserve to be punished by economics rarely are; economics is an inexorable reality, not a system of justice or morality.

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      2. But that example does not imply many of the things Comparative Advantage is used as shorthand for.

        There’s an active bait and switch going on here.
        It behooves us to recognize that. It isn’t Comparative Advantage that has us burning Venezuelan oil.

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        1. No, making it illegal to do business in the US is what causes the problems.

          Unfortunately the people complaining about those problems blame trade. While claiming to really see deeper than most.

          Liked by 1 person

      3. Economics does not require humans to be rational, it punishes them for being irrational.

        Yes. And the operation of the forces that classical economics describes — much the same sort of way Newton’s gravitation describes (most of) what the observed real-world behavior of gravity does — acts to punish both irrationality and ignorance. And reward the combination of good information and rational analysis of it.

        But while economics is a theory, and a set of rules (tools in a toolbox) for both acting “rationally” given your own valuations of things, and understanding why others do the same (even if their conclusions and rational actions are very different from yours in the same situation), it’s not magic. No “mere” theory could be. By definition.

        If someone lies to you (the not-a-vax conspiracy, about the “vaccines” and their competing safe/effective/cheap treatments for Covid-19 infection), or if someone outright cheats you (Bernie Made-Off, and his multibillion-$ con-game) — this is not a failure of economics to be correct; it’s a statement that no theory can materialize information out of thin air (as intuition can and does for some), or could ever work as designed in the face of deliberate bald-faced manipulations, or coercion or theft. (Adding games theory to economics is not only violently non-classical but gets more than a bit, um, slippery.)

        “Against ignorance the gods themselves strive in vain” etc. Doubly so for lies and cheating and fraud and so forth. Expecting economic theory or understanding to simply vanquish all of those for us is a bit… well, much. And irrational and unrealistic. But what it does do, properly understood, is really pretty mind-boggling once you see it whole.

        How many things tend us, just about always, towards some kind of greater perfection? (This really does look a lot like one of the few.)

        (Especially once you’ve compared the toddler-esque “because I say so!” of socialism or royalism or outright tyranny.)

        So many so-called “market failures” are either the simple and direct consequence of “few things in this world are perfect” absolutely, or a result of the failure of (say, for example) a swindle or con-game to be a market (properly understood) in the first place. (And yes, that’s where the real lie or swindle actually comes in.)

        Every rope or cable has a breaking strength; even the ultimate ‘rope’ made of cosmic string (tension equals mass) will stretch under a sufficent load.

        That does not mean all ropes, chains, and cables are useless.

        Liked by 1 person

    6. What alternative do you propose? Top-down central economic control, by Teh Experts? That worked SO well in Russia, East Germany, Cuba, North Korea, Venezuela, Romania… Follow the Five-Year Plan, comrade!

      The Central Economic Authoriteez lack the information they would need to make rational decisions.

      Unfortunately, they persist in making decisions, and enforcing them on everybody else. Then, when the results are, inevitably — um, suboptimal, yeah, let’s go with that — they blame us for being ‘irrational’.

      Liked by 1 person

      1. It never seems to cross the minds of the leftists and statists that their anointed experts are still just people, subject to all the same foibles and irrationalities as the masses they would govern — and thus are far more dangerous than the teeming masses, because unlike us “little people,” they have the power to mess things up on a grand scale.

        They always imagine angels in positions of power, and never imagine that even angels might lack the omniscience and omnipotence to arrange everything perfectly for everyone. (There’s a cosmology that posits Lucifer, the erstwhile angel of light, as a would-be omniscient manipulator who rebelled against God when his idea was nixed in favor of the principle of free will.)

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    7. People are often (usually even) rational. They just are not always rational in ways that economists think because economists often over simplify.

      For example why do small local white goods stores (selling fridges/air conditioners etc.) persist in Japan when there are larger stores, sometimes even within the same chain, that sell the exact same products for less? The economist who looks at this from 30,000 ft says the answer is people are irrational. That’s not true.

      The economist has missed that the small local store will effectively throw in after sales service that is far far more responsive than any extended warranty service a large store will offer that has been outsourced to some large service organization that eventually uses the technicians of an almost but not quite as local shop as the people who do the repairs. It is rational to choose the local store because you get to talk to the tech direct, he comes in 5 minutes, and he likely remembers the quirk of your installation the the notsolocal tech may miss because he did that installation.

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    8. I’ll see your MBA in Finance and raise you my MSc in Financial Economics — from the LSE, mind — Hell, BA in Mathematics too, 42 years on Wall Street at firms you’ve probably heard of.

      You’re using the word rational in a very narrow sense, the one they use in economics classes so they can do their trivial calculus thing and impress the rubes. Rational Expectations, Economic Man, all that BS, don’t exist outside economic classes. Even the professors don’t believe in it. 

      That’s not what’s being said here. 

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  9. Commenting out of thread because my browser can’t comment in thread (I dread the though of having to move all my links…)

    The presence of absence of rationality has no bearing on the existence comparative advantage. It’s sort of the same way ignorance of risk does not change the presence or absence of risk.

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      1. Everybody does stupid (or irrational) things at times.

        However, “rational” like “logical” depends on the basic assumptions that humans hold about the world.

        If another outwardly intelligent person does something irrational/illogical/stupid, they may be operating on basic assumptions that are different than the rest of us.

        Not to say that they were right to take that action because their basic assumptions may not be realistic. [Crazy Grin]

        Now, on the other hand, many times people will “rationalize” their actions. In most cases IMO that’s when the people “know that they should not do that” but want to “make up” reasons for their actions.

        Liked by 1 person

        1. Yes. we’re not infallible. But most people are rational. Sometimes their premises are mistaken, or htey aren’t using their heads. BUT they are rational most of the time.

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          1. Plenty of Liberals believe that the American people should automatically support them (Liberals) because Liberal Policies are in the people’s best interests.

            We’re irrational because we don’t support them. 😈😈😈😈😈😈

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          2. Thanks for the additional comment Sarah. If by “rational” you mean mostly good decisions then I agree. All people (myself included) think and do dumb things all the time – even if I am mostly making “good decisions”. Many people do only a few dumb things a month while others are continuously stupid. But I never thought conservatives believe all people act continuously within their own self interest. I think a conservative believes that people should make their own decisions. That means good decisions and bad decisions. But better your own bad decisions than the bad decisions of some “elite”.

            Sorry for pushing your button – that was not and never will be my intent! 

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            1. “If by “rational” you mean mostly good decisions…”

              I don’t think she does. Certainly I don’t. I would say that “rational” means making decisions based on comparing value vs. cost and deciding what you value more. Making mostly good decisions should be called “wise”, not “rational”. People who choose not to exercise, even though they know that their choices will kill them in the long run, are making the decision that the cost of exercising (uncomfortable, sweaty, no fun at the time) is more than they’re willing to pay. It’s an unwise decision, but a fully rational one: they’re aware of the cost, and judging the value received (longer life) to be not worth paying the cost in their estimation.

              “Rational” in the context of decision-making just means making decisions based on reason: I look at the choices, evaluate which one I like best, and choose that one. People who make decisions based on purely short-term thinking even though their decisions will harm them in the long run are still being rational. The word you want is unwise.

              Note that I’m not claiming that all decisions are made rationally. For example, an impulse purchase of some candy at the supermarket checkout line was probably an irrational decision. The person saw the display of Snickers bars, said, “Ooh, I like Snickers,” and added one to his cart. He did not consider the cost. Sure, one dollar and fifty cents isn’t much, but it’s a cost, and he didn’t weigh cost vs. benefits. He only looked at the benefits and treated the cost as if it was zero. That’s an irrational decision. Most irrational decisions are unwise, but many rational decisions are also unwise. (And some irrational decisions are still wise, e.g. if I need gas for my car, I’m probably going to pull into the nearest gas station even though I could have saved three cents a gallon a mile down the road. I didn’t consider the cost difference, I just said “I need gas, here’s a gas station, I’m going to buy it here,” making it an irrational decision. However, if I had considered the total cost (including the cost of my time driving that extra mile) I would probably have made the same decision to buy it now, paying an extra thirty cents total for convenience. So the decision was wise, even though it was irrational because I didn’t actually make a value judgment.)

              Liked by 1 person

          3. My mother-in-law is a doctor in a small town. She has often talked about patients who know that the best thing for them in the long run is to exercise, but who don’t do it. Why? Because it takes effort, and they are making the choice to value other things with their time. My MIL would say that they are being irrational, because they’re making choices that will harm them in the long run. But I would disagree. I would say that they’re making rational decisions, judging the effort it takes to exercise (the cost) vs. the perceived benefit, and choosing the cost is not worth the benefit. I think they are making bad choices and I would choose otherwise, but “rational” does not mean “making choices I think are good”. “Rational” means “making choices they themselves think are good, based on their own perception of value vs. cost”. If they choose to value the short term over the long term, that makes their choices unwise, but not irrational.

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            1. It is well known that humans of all kinds are incredibly bad at properly pricing in future risks/harms and for that matter future benefits when the future is several years out.

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              1. This.

                I’m having some trouble right now with certain people who can’t seem to understand that a deadline which is several months away is not forever away, and therefore think that I won’t miss this or that hour they’re happily scooping up without so much as a by-your-leave. I keep trying to get it across that I need to be making regular, steady progress on this project, or that deadline’s going to be looming and I’ll still have a whole bunch of stuff to do, and not nearly enough time.

                I’ve been using the analogy of a “two years same as cash” offer, and how you need to make sure your monthly payments are big enough that you don’t have an unmanageable amount to pay when the offer ends. But it’s not quite the same, because sometimes you can find a way to come up with the money if you’ve fallen behind. Pull it out of savings, or borrow it from another source at a lower rate than the interest that’s been building up and will come crashing down if the loan’s not paid in full on time. But you can’t come up with a whole bunch of extra time when the deadline is a week away and you’ve got two months’ worth of work still undone. No amount of all-nighters can produce time that simply isn’t there, even if your body can still take that kind of abuse.

                Liked by 1 person

              1. Stationary bicycle with generator to power the coffeepot? (grin)

                I keep hand weights at my desk so when stuck waiting on something I can get in some gain. Squats also work for me almost anyplace. I focus better when I am not glued to a chair for hours. Keeping squirrels at bay is a daily war.

                PTSD is a B-word (in several languages). I do sympathize.

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                1. Decades ago I heard about someone who hooked up a stationary bike to a generator powering his TV, so if he wanted to watch his favorite show, he had to keep pedaling. That was probably in the days of cathode-ray tube televisions, which means that it would be quite a bit easier today as LED screens apparently consume roughly a third of the power of a CRT of the same screen size.

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      2. True. I’ll argue people are not always rational, and sometimes often not rational, but that is more their choice.

        I’m more asserting that rationality has no more bearing on the existence of Comparative Advantage that predestination has on the existence of physics.

        They’re just not related.

        Thinking about the argument for irrationality and predestination at the same time, does make me wonder, if humans are perfectly irrational, how could someone legitimately argue that having wise rulers would be possible. The rulers would be human, and equally subject to the same irrationality. Or conversely if one can learn rationality, then all could be taught it to the greatest benefit to all. Every intermediate stage is just an intellectual version of might makes right.

        Sort of why I stopped following Scott Adams a few years back. He didn’t believe in free will, and it seemed to end up tainting his entire philosophy.

        Liked by 1 person

        1. Free will is a constant source of disagreement, since it’s intrinsically impossible to either prove or disprove using the methods of science. I happen to accept that it’s real based solely on personal experience and observation, but there’s no way I can prove it objectively.

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        2. He also talks as though he really believes we’re in a Simulation – I just wonder, doess’t this push all the questions back one level? It doesn’t explain anything.

          Liked by 2 people

        3. I think there’s probably some minimum of rationality required to recognize comparative advantage, but not much: animals manage to trade.

          But, given any capacity at all to desire and plan to fulfill same, yeah.

          In your penultimate paragraph, ‘legitimately’ is doing a lot of lifting – plenty of bad faith arguments. Might makes right is history’s most common argument.

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          1. That sentence was also supposed to be a question rather than a statement.

            I.e how could a good faith argument exist, when what could be applied to any ‘wise rulers’ could just as well be applied to any of their proposed subjects?

            Typing fast, and sometimes I get punctuation switched up. Rather changes the meaning…

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  10. I think that people are given incentives to choose what seems like irrational behavior. They are also propogandized to pick irrational things.

    It was very irrational to choose to take an untested and sketchy shot to ward off a virus with such a low kill rate.

    That’s why TPTB had to threaten, cajole, and force people to take it. 

    It wasn’t that people were being irrational about it. They were forced to choose from bad options and made the most rational choice they could. Many of these people are trying to “rationalize” it after the fact.

    Same thing is happening in the monetary arena. Government is making what seems like irrational behavior an option i.e welfare encourages the dissolution of the family in a way that our ancestors would have thought insanity.

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      1. And the not-vaccine was sold as doing many things it was never capable of nor intended to do. I haven’t forgotten nor quite forgiven (alas, not fired because rural health) my primary care physician who was a central figure for the medical center’s vaccination propaganda.

        Part of the decision making process in this is that the decider has to go with the information that is available. If it’s limited or fraudulent, the decision may not be optimal, but we work with what we have. And now, profound distrust of TPTB is part the the equation.

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      2. For myself, my wife and I took the Pfizer shot (two doses), because if we didn’t, our kids would have been unable to travel to see their grandparents. (You could send a 13-year-old on a plane alone if you had to, but not a 3-year-old or his 1-year-old brother). Absent that coercion, I would have held off, because I judged the value of the shot to be low (I have no comorbidities, and Covid was never much of a risk to me) and the risk to be unknown. (People were talking about heart inflammation at the time, but nobody was talking about cancer). Now, however, the coercion factor is gone — nobody is checking “vaccine passports” at the airport before letting you get on the plane anymore — so there’s no leverage they can use to force me to get a booster shot. I’m free to examine the risks vs. the benefits, judge that the risks vastly outweigh the benefits (to me, a healthy non-obese non-elderly man), and choose not to take another shot.

        Note: I’m not anti-vaccine in general. There is a newly-developed vaccine for dengue fever, named Qdenga, which I took recently. It’s also a two-dose vaccine, but the difference between it and the Covid shot is that Qdenga is actually a vaccine. Genetic engineering was involved in the production of the vaccine, but it is not an mRNA shot. Rather, they used genetic engineering to artificially produce the spike proteins of three different strains of the dengue virus, and those proteins (plus actual attenuated virus of a fourth strain) are what is injected into your muscle tissue. (I read the data sheet carefully before making my decision). Since dengue fever is a serious danger in the area where I live, I judged that the risk of taking a relatively-new vaccine, while non-zero, was less than the risk of dengue fever. If I lived in America, I would have made a different value judgment. (It also helps my confidence that Qdenga comes from a Japanese company, not Pfizer).

        Liked by 1 person

        1. I took the pfizer vax too. I regret it even though I appear to not have had any issues because it looks like it was far more dangerous than it seemed.

          One key thing I have learned though regarding any vaccine (any drug really) is that the manufacturing process is very very important. Pfizer’s manufacturing process using GM e.coli turns out to leave all kinds of other mRNA and DNA in the vax because they don’t (can’t?) filter this junk out and some of that appears to be incredibly dangerous.

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    2. Don’t assume people are rational because you know lots of rational people. Many are conditioned and don’t evolve beyond that, instead defend their programming and their programmers. No situational awareness or curiosity at all.

      People are willingly ignorant and will act irrational. They revel in their ignorance of serious matters. They get captured by illusions. That’s why we are in this wonderful situation.

      Many are under the delusion that we currently live in a high trust society, but the recent actions of institutions should have prejudice them of the those thoughts. So they live in a bubble till it bursts and scream “Why me?”

      Thus the whole Covid and clot shot scam played the majority as suckers while the more cautious and aware get to say “I told you so“ in vain as the writing on the wall over the last decades was rejected by the blind and the apathetic.

      Happens on a smaller scale too. Local election on Saturday saw all 7 of the tax increases, (aka boondoggle, gold-plated “bond” packages), passed since only 6% of the registered voters bother to show up. The remaining 94% will bitch about taxes until asked if they actually voted, then offer some platitude of an excuse.

      Bread and circuses or beer and sports ball…

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        1. And worse, the Liberals/Lefties will claim that the People are “victims” of false consciousness.

          IE Obviously the People will support US (Liberals/Lefties) if not for those “Evil” Right-Wingers.

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          1. Yep.

            “You don’t agree with me, that means you’re not rational!”

            Never that I value different things, or don’t agree with some of their assumptions– nope, straight to “irrational.”

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        2. When I ask people why they aren’t aware of a obvious situation that affects their budget or livelyhood, I get excuses that aren’t backed by reality.

          I’ve asked people why they didn’t vote before and 99% of the answers is apathy, not related to time or knowledge issues. Or they assume there are enough people voting for their interests that they don’t need to vote and get what they deserve.

          If you lock your doors or buy insurance, you should be able to take some time to give a crap about yourself and save some money or lives by voting or staying informed. It makes a difference because we have won or lost election issues in the area by as few as 10 or 12 votes. This has translated into real money gains or losses for residents.

          It’s not rational not to spend a modicum of time staying informed either.

          So my stats say the majority of people aren’t rational enough to protect themselves or their long term interests. Most don’t want evidence, most want a pass on their ignorance or apathy. It’s worked out for them so far, until it doesn’t.

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          1. I’ve asked people why they didn’t vote before and 99% of the answers is apathy, not related to time or knowledge issues. Or they assume there are enough people voting for their interests that they don’t need to vote and get what they deserve.

            So, in order, they don’t agree with you on value, they don’t agree with you on risk, and you judge that they deserve it.

            Followed by… a great many more value judgements and individual beliefs.

            As opposed to objective fact.

            For a very basic example, it is not actually possible to know what would have happened if votes had in fact gone the opposite way of that which they did.

            Most don’t want evidence, most want a pass on their ignorance or apathy. It’s worked out for them so far, until it doesn’t.

            Objectively, having your judgements hasn’t worked out for you, either.
            Or you wouldn’t be upset with the folks who didn’t go along with what you wanted.

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            1. There are plenty of times when you can’t know what would have happened, but the specific example you chose happens to be one of the few cases where you can know, for certain, what would have happened. At least in the short term. Namely, that if the votes had gone the other way, the tax increases would not have passed this year. Now, beyond that, it’s not possible to know for certain what would have happened as a second-order effect: would the local government have tried those same tax increases next election? Or would they have given up on them and tried to work out what to do with their existing budget? Experience says the first is more probable, but the second has sometimes happened, so we can’t know for certain. But “… what would have happened if votes had in fact gone the opposite way of that which they did” is the one case where we can know, for certain, what would have happened, so it was a poor choice of example to make your case.

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                1. His 6:52 PM comment gave the specific example of 7 tax increases that passed with 6% of the total eligible voters actually voting. Yes, in the case of electing a person to office it’s not possible to know what the loser would have done in office (who knows what Mitt Romney would have been like as president), though it is possible to guess in general terms (he would have been lousy, but still better than Obama). But given that he had made a specific example of tax increases, and later referred to election “issues” (not “elections”) won or lost by as little as a dozen votes, I read him as meaning specific “should the city issue this bond” type of issues there as well, rather than “who should be the next mayor” elections.

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                  1. I was not responding to that comment; I was doing a point by point response to an entirely different comment.

                    The entirely different comment makes the assumption without evidence that a higher percent of people turning out to vote would have gotten a different result, as well as irrationally restricts the general “we pay too much in taxes” complaint to the specific “this use of taxes is not what I want.”

                    For an example from my own area, I accept the fire, emergency, and jail taxes, but I object to the school taxes, though not as strongly as would be done in other areas, and we have actualy contested our property tax assessment, successfully. (Amusingly enough, the jail tax– to build a new jail– has ended by now, and is actually lowering our taxes, due to being able to house prisoners from out of county.)

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                    1. Then you phrased it poorly, because when you wrote “votes had in fact gone the opposite way of that which they did,” that didn’t mean “a higher percent of people turning out to vote” as you seem to have intended to write, it meant “the result of the vote was the other one”, i.e. the bill getting defeated instead of passed.

                      Anyway, I need to go do some work now, so I probably won’t show up in the comments again until tomorrow morning US time. (Which will be my evening).

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                    2. :goes and reads over the comments again:

                      No.

                      Again, you seem to be mixing up multiple responses, which were to specific statements.

                      When I wrote “the votes had in fact gone the opposite way of that which they did,” I was responding to the specific statement of “t makes a difference because we have won or lost election issues in the area by as few as 10 or 12 votes.”

                      Have a good day.

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                    3. No, this is not a case of me getting mixed up, at least in my 11:06 PM comment. (I did indeed get mixed up earlier, but by 11:06 PM blog time I’d gotten it sorted out in my head). This is a case of you writing something about the votes going the opposite way, which clearly and unambiguously means the result of the vote was the opposite result. Yet the argument you were making, as you pointed out at 10:27, was that you can’t know if more people voting would have changed the result. Which is a correct argument… but that’s not the meaning of “the votes [going] the opposite way of that which they did.”

                      But we’re reaching the point of diminishing returns in value here. Either you’ll agree with me that this particular phrase you wrote did not have the meaning you intended, or you won’t. If you’ll agree with me about that, this sub-discussion is effectively over because there’s no more points of contention. And if you won’t agree, well, I don’t have any new arguments to present so there won’t be any point in continuing the discussion anyway.

                      And you, too, have a good day. I hope one of your kids does something particularly memorable (and NICE, I don’t mean the bad kind of memorable) that brings a smile to your face. (Mine got to play in the rain today; first real good rain we’ve had in months. Dry season is looking like it’s nearly over, and rainy season is finally here.)

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            2. Quibbles about the “what would have happened” aside, this is a perfect example of how people use the words “rational” or “irrational” when what they really mean is “wise” or “unwise”. Are the people not bothering to vote being unwise? Certainly. But are they being irrational? No, they’re making decisions about the use of their time, prioritizing the things they find fun (watching sports on TV, or whatever) instead of the things they find not-fun (educating themselves about local politics). Are those choices going to hurt them in the long term? Absolutely. Just as with my previous example, of people who choose not to exercise, these people are making choices focused on the short term rather than the long term. But they are still making rational decisions: they are applying value judgments, and deciding based on those value judgments. When Larry Is Right calls them irrational, it’s because they are making decisions that will hurt them in the long run. But that’s not the right word for that behavior: the right word is unwise, not irrational.

              Liked by 1 person

              1. Not even “wise/unwise”. They usually mean “I approve/disapprove”, sometimes with a profound sense that this somehow involves them having authority in the matter.

                Liked by 1 person

                1. I 100% accept your rational value judgement that those 7 c-sxn are worth it.

                  From what you’ve indirectly mentioned of your children over the years, it is obvious that they are a tremendous source of joy for you!!

                  However, I will also pray & hope that the negative physical consequences of that many abdominal surgeries are now and will continue to be on the mild side.

                  Liked by 1 person

                2. But did you say, after, “Its only a flesh wound!”.

                  (grin)

                  Strapped to a board in ER, while the ER folks picked sand, glass, sand-spurs, and fire ants out of my epic bicycle crash road rash. An listening to them squawk every time they got spur-poked or ant-bit…

                  (Singing) “Always look on the bright side of life!”

                  “I’m feeling much better now, Dave….”

                  (Singing) “I want to ride my bicycle….”

                  etc…

                  Had them alternatingly giggling and swearing at/with me. It took about two hours to get me cleaned up enough to go get scanned for broken bits.

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            3. For a very basic example, it is not actually possible to know what would have happened if votes had in fact gone the opposite way of that which they did.

              In the case of city bonds, most of the time it’s a easy calculation and the results are “concrete”. The people are harder to figure out because they all have a price.

              And the city is professional enough to over communicate and do the financials for the citizens. (They know a couple of us can read financials and hold their feet to the fire…)

              “If you vote for Bond 1, Streets X, Y, and Z will be replaced. Also storm drainage in the area will installed. The cost will be in this % range per household appraised value, per year.”

              Many of the bond issues are needed, not excessive and most people would vote for them. Sometimes the bonds aren’t needed since property and sales tax revenues are higher than expected.

              However the city currently has a “Vision” inspired by the 15 minute City Global movement. Every underdeveloped tract of land has to either have a massive apartment complex or a new park on it. So many of the current bond packages reflect that “Vision”.

              I’ll gloss the protest over the school bonds, since they were mainly for more sports, more adminstration and more resources to handle “refugees”.

              And almost every city facility and ISD building has been replaced, expanded or has been renovated in the last 5 years. Parks and Rec is gold plated. I’d wish they spent a bit more on streets, water and sewer.

              The lastest boongoggle is putting new park infrastructure in a flood plain that has flooded 3 times in the last 15 years. And no new road surface or lights to handle the increased traffic.

              This vision doesn’t match that of the long time residents. More people equal more traffic, more problems, more issues, higher taxes. Plus most of the city council and management is in bed with developers. We already got one mayor fired and a Texas State law passed to prevent conflicts of interest, but couldn’t get the current mayor replaced this election.

              I did swap out my council member for a new one. (Small victory!) We shall see if they join the rubber stamp crew.

              Most of the violent crime and police calls in the area is either in apartment complexes or from the residents of… 

              In the initial “Vision” survey of citizens nine years ago, the number one request by far was “No new apartment complexes.” We have 25 large new complexes since then with more on the way. And thanks to O’Biden a certain percent of each have to be low income… Jokes on us.

              If 1 or 2 percent more of the home owners voted, this situation would not happen. Apparently everyone loves more traffic, taxes, crime because they bitch about it but don’t vote. It’s not rational. Don’t vote, don’t bitch.

              I was optimistic, but currently think people deserve the government they get if they don’t participate and they deserve it good and hard.

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              1. Again, you specifically chose elections, and I responded to what you wrote, there.

                In addition to the longer response I left to Robin, you are making the unsupported assumption that taxes go to what they are passed for, and then go on a long discussion of… that not happening.

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                1. No assumptions needed since the city clearly states exactly where the taxes and bonds go for and does a complete accounting before and after. They are quite professional in that regard and communicate well.

                  So in this local voting environment, the voter has nearly “perfect information” easily available and findable on the city’s web site. The purposed budgets, actual budgets and meetings are available on the internet. (There are also flyers, signs, mailings and emailings.)

                  Voting is also easy. Early voting for two weeks anywhere in the county. Plus the county elections web site is easy to navigate and informative. It takes less than 30 minutes total to read, comprehend the bond proposals, and go vote. The corresponding costs may be thousands in taxes and other quality of life issues.

                  Results?

                  Less people vote in the local election that raises the tax rates than those that actual appeal their county tax appraisals. More of my neighbors bitch than vote and many are retired, active and have spare time to vote.

                  In the dozens of city council meetings I’ve attended, 90% of the time, I’m one of few actively addressing the council or attending. Viewing on line stats isn’t much better, maybe 15 views per meeting. In a city with a population of 135,000. 

                  (Except for that one lady that wants to put speed bumps on every street to save the stray cats and possums. She shows up quarterly depending on the lunar cycle.)

                  So yes, I have the actual data, corresponding anecdotes and the professional opinions of various canidates and wiser locals.

                  It boils down to this analogy a navy vet gave me : “Most people don’t care about the state of the ship until their pants get wet and it’s too late.”

                  So the “city” or very small minority of voters, 3%, control the budget.  3% is an interesting percentage.

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                  1. Less people vote in the local election that raises the tax rates than those that actual appeal their county tax appraisals. 

                    That has zero to do with if the tax rate is reasonable; tax appraisal being inaccurate causes more issues than just “pays more taxes.”

                    Aaaand…. again, lots of stuff either not related, or unsupported.

                    All it suggests to me is that, if your standard of “rational” is to be applied, you fall short.

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                    1. It’s easier to gain money or not lose money by voting than fighting the apprasial board.

                      Mainly because the same exact elections also elect the people in charge of the county apprasials.

                      So the majority of people screw themselves twice and still kvetch.

                      I don’t know whether to quote Handel’s Messiah or Blazing Saddles. (The parts about sheep or morons.)

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                    2. Again, your summary of what their goal is, what the costs are, what the benefits are, and what their starting point is, is a restatement of your assumptions, not of what they actually are.

                      And that’s all BEFORE the issue of, again, assuming that more people voting would get the result you believe would have a different effect.

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              2. The lastest boongoggle is putting new park infrastructure in a flood plain that has flooded 3 times in the last 15 years. 

                I will say that, depending on the park infrastructure (Is it play fields and climbing structures i.e. things that floods won’t damage, or is it an “indoor recreation facility” i.e. a building that will have to cleaned out a remediated every time there’s a flood?), that is a much better use of the flood plain than building houses on it would have been.

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                1. Multiple buildings and 20 cabins are the new proposal. It’s a serious $$$$$ development, not a casual day park. Either they would have to raise the elevation 15″ in a large area multiple acre area or put the structures on stilts with ramps for ADA compliance.

                  Currently there exists: playing fields, parking lots, roads, pavalions and RV pads, most which can withstand being under water or can be repaired for minimal costs.

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              3. If 1 or 2 percent more of the home owners voted, this situation would not happen. Apparently everyone loves more traffic, taxes, crime because they bitch about it but don’t vote. It’s not rational. Don’t vote, don’t bitch.
                ……………………..

                In a way (don’t remember voting to reverse) not voting, if total number of voters is < 50% of registered voters, on a measure, means a measure does not pass, even if number of actual “yes” votes out number “no” votes, can be reassuring. OTOH. Except for first few votes after this passed, always been > 50% turnout. Was it a wake up call? Or? And? Shenanigans?

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                  1. My experience is that you may be able to make a difference on the local level. We have had modest successes, it hasn’t all been tilting against windmills.

                    I think most of the state and national elections have been captured by various monied factions. It’s gonna take a large political earthquake to break them free.

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    3. The Knowledge Problem– if they had better information, they would choose otherwise.

      Which is why one of the things to look at is who tries to make it so information is restricted? Why?

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      1. [Looks at Pfizer information trickling out via FOIA and such.]
        Not sure if it’s better to go long on tar, feathers, and pitchforks, or if more encourageur les autres methods will come into play.

        Never took the shot, lost one BIL to it, and suspect in another case.

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        1. A lot of my husband’s office suddenly has heart issues, even guys who’ve never had anyone in the family with heart issues.

          They were even great about it when he was putting in his moral objection paperwork so he didn’t get the shot, and helped other folks who had objections to the shot get in contact with him, they just… believed it was the right thing to do, and were alright with others doing differently.

          Don’t know what will happen. Am worried, though.

          Liked by 1 person

          1. A relative had beaten cancer, but it relapsed and killed him. I don’t know (nor is it appropriate to get near the subject) if he had the shot, but the timing seems right, and the reports of cancer incidence (both relapse and new cases) among those getting the shot make me suspicious.

            One of our neighbors said he had something like 8 boosters. (He had a heart attack at a bad time, and I suspect he’s way too amenable to “expert advice”.) I worry about him.

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            1. Or it could be a matter of not being able to schedule any ‘elective procedures’ — like cancer screening — during the ‘COVID Crisis!’

              700,000 cancer patients couldn’t get treatment for nearly a year because of the ‘COVID Crisis!’ How many of them died as a result?

              I’m convinced we need to go Full Nuremberg on the shitheads. With gallows.

              Liked by 1 person

              1. Possible, either way. It’s not my circus, and I’m not at liberty to poke the bear.

                Not sure what’s going to happen, but it’s gonna be ugly. Nuremberg might be the best case scenario for the perps.

                Liked by 1 person

                  1. Aye, and even those who don’t necessarily merit severe sanctions. I’m thinking of the ones who administered the shot, while either trying to warn the shotties* or got sucked into the bill of goods. OTOH, RAH had Lazurus Long say something about stupidity being a capital crime.

                    ((*)) The FNP who handles an independent rural clinic made the not-vax takers deal with a multipage disclosure form, needing lots of initials. Before Covidiocy, the big medical complex in the county tried to put him out of business as “unnecessary”. Those 40+ miles away differed. We made it a point to get flu shots from him, before we gave up of flu shots.

                    Liked by 1 person

                  2. Unfortunately, those who are most likely to use lethal forms of violence are usually the ones who have zero plan beyond killing a lot of people, and no real goal beyond going out with a bang in front of the world.

                    Effective use of assassination identifies the targets of greatest threat, or of occupying a keystone position where their removal causes the collapse of the opposing organization, or allows for their replacement with someone who is more supportive of your own.

                    For example, Donald Trump has the means to easily have every prosecution team eliminated. Enough people follow him that he could say the word, and they’d start taking them out over the period of a week or so. (Which is why Jan 6th is so stupid, he never told them to break into the capital, only to make their voices heard. If he had told them to attack Congress, that would have been a heavily armed mob, not unarmed grandmothers taking selfies.)

                    Liked by 1 person

              2. I have a relatively small circle of friends.

                One DIED due to her chemotherapy for pancreatic cancer being “paused” during the first COVID scare. (If you research pancreatic cancer, it’s fast and vicious and you can NOT “pause” treatments. Completely predictable.)

                An aunt had a small growth in her throat scheduled for an operation. Outpatient, keyhole surgery, no big deal. Then COVID hit, or more properly the SCARE hit. They postponed it. And postponed. And delayed. And six months later, oh, hey, now it’s inoperable. So she had to undergo a regimen of radiation treatment instead. She survives, but no thanks to the medicos that delayed and postponed and gave in to the scare tactics.

                And that’s just our small circle of friends.

                Liked by 1 person

                1. I was lucky when I blew out my knee. The surgeon would have preferred me to stay overnight (after 2+ hours of surgery), but this was March 2021 and the hospital was on enforced partial shutdown, so no rooms were “available”. The recovery nurse helped out, he got me in the truck, and one of our neighbors helped me get in the house, and thence to the comfy chair.

                  Not sure what would have happened if the surgery/postop went south. The nearest next hospital is 80ish air miles away. That area has a few hospitals; whether there would have been room, unknown.

                  Liked by 1 person

                  1. BIL had replacement of replaced knee surgery (original one was 10 – 15 years ago) early February 2024. Went well. Until Tuesday, a week ago. We get a call Friday, BIL was found unresponsive last Tuesday before 1 PM. Called 911. Immediate transport to ER, by end of day was in surgery, twice. Sepsis. First surgery to clean out all infected soft tissue, clean steel parts, and pull plastic knee ball. Second surgery to replace all the cleaned steel and new plastic knee ball, that had to come from Portland, because no one local had one. He has been home since Saturday (which was probably too early, but he was insistent, based on what SIL said). We just were able to see him today.

                    Liked by 1 person

                    2. Me Too. Sepsis is nothing to mess around with.

                      Fingers crossed. Prayers on repeat. He is not out of the woods completely, yet. On IVF antibiotics 3x’s per day, for the next 6 weeks. Home care coming in each week to draw blood to check. If things go right, another 8 weeks of antibiotics. Oh. Also prescriptions for the “good stuff”. Medical is not messing around. Glad he is home. Not sure he should be. But, the brothers have stubborn down to a science. I know, I am married to the younger one. Pretty sure the (BIL) older brother is worse.

                      Liked by 1 person

                    3. I hope he does OK. It also makes me very happy that I’m not due for a knee replacement. The diagnoses came out that I have a bad meniscus tear, and the fix is to do an arthroscopic procedure to pull out the bad bits and clean up the rest. Recovery is supposed to be quite fast, including letting me drive once the good drugs wear off. I’m guessing one day after the procedure, when I’d shift to an acetaminophen/ibuprofen combination. I had to go longer after I really screwed up the knee in ’21, but that was major surgery.

                      Finally got insurance approval, but I have to get medical clearance from my regular doctor. Who I can’t see until May 28th. Not what I wanted to hear, though it gives me time to get the garden ready. (I’m good for an hour or two of such work per day until the knee says “Enough”.)

                      We’re figuring out how best to do logistics. Kat-the-dog does not tolerate being left alone (epic freakout), so either she goes with, I have a neighbor help, or I might stay in town a few days. I don’t sleep well the first night after procedures, so a hotel option looks attractive if the doc says OK.

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                    5. Not BIL’s first rodeo with knee replacement. He’s had both done before (10+ years ago). But the one had to be redone. In addition it appeared to heal well. Except one little spot at the base of the access scar on his mid-shin. Then it started weeping. SIL asked BIL to please call the doctor, repeatably. He said he would, repeatably. Then sometime weekend before it all went really sideways, he started feeling bad. Again, call the doctor. Did he? Apparently not. Tuesday, feeling bad. Again (see the theme?) … She calls to check on him from where she is working. Talks to him twice. Third time can’t get him on the phone. Tries twice before calling her mom, who is on the property. Who does not go inside the 5-wheel to check on him (being 93 is no excuse, she is mobile, she can climb the stairs into the 5-wheel). SIL just says “I need to go home.” Gets there. BIL is curled on their bed in a fetal position unresponsive. (Apparently after having fallen in the kitchen/main room, recovered, went into the bedroom. But this came out much later.) SIL calls 911. EMT’s take one look. Declare it Sepsis, and transport to emergency care.

                      Yes, I would have been dragging younger brother (hubby) to emergency care long before it became this bad. Sepsis is a big deal emergency long before someone becomes unresponsive. Now? BIL is still in danger of not surviving. Better odds now. But still not out of the woods 100%.

                      shall watch him like a hawk.

                      Yes. If you need help keeping in line, I am sure we’ll all help. Verbally if nothing else.

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                    6. I would suggest that’s Indy’s job….. but I would worry about him digging out her son’s medical books so he can add surgeon to engineer. 😸😸😸

                      Liked by 1 person

                    8. Oof. Prayers for Diane’s BIL and Dan. I’m just hoping for enough patience/acceptance(?)/something to make it through the seemingly interminable waiting to get-r-done.

                      I haven’t asked for a fit-in appointment; Dr Mengele is also a lead instructor for the OHSU rural health school in Flyover County, and I have enough health issues ongoing to be eagar to have Yet Another Doctor in play. A miracle fit-in appointment would be happily accepted, but I’m not going to ask. Something about meddling in the affairs of wizards|dragons|doctors comes to mind…

                      Liked by 1 person

                    10. I had one instance of a wound not sealing correctly (stitches came out, and I was traveling to visit family. Picked at the scab. Huge mistake.) It was still weeping later, so once I was home, the doc gave a) oral antibiotics and b) a serious ass chewing.

                      It took. Subsequent events with stitches, and I’m really good at keeping things clean, especially the long streak from the knee blowout fixup.

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            2. Wife just had a melanoma removed, from her foot. Now isn’t that an odd place for one to occur? And yes, she got jabbed, multiple times.

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      2. Yep. There are some legitimate reasons to restrict information, such as the names of your government’s covert agents or the details of your war plans, even from your friends. (Because the more people know about something, the greater chance that one of them will leak, either negligently or through not realizing their office was bugged / their computer getting hacked / other things that aren’t negligence on their part.) However, as a general rule, the person denying you access to information is not your friend and does not have your best interests in mind.

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        1. /agree on the general rule

          A broader philosophical view can be framed as “those who withhold information to which you have a right or reasonable expectation of having access to.”

          Think like in a court case, where a finding can be thrown out because the prosecution didn’t provide the information they were legally required to.

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      3. I agree.

        When it comes to information, supposedly more people would have voted against Biden if they knew Hunter’s laptop was real instead of believing TPTB. Enough to override the fraud? Maybe…

        Covid and the vax is a bit more difficult. There was enough information leaking out and the more skeptical went searching for more outside the “official” sources. The propaganda and the pressure from authorities was such that most people complied.

        Basically the nature of the internet saved many of us by routing around the control of information. Now the horrible truths that the skeptics discovered signs of early on are coming out.

        What pisses me off is the medical schools and institutions are still requiring the vax after all the revelations and data of serious and possible fatal side effects. And we can’t openly get any of the cheap, safe medication to treat flu and such. Captured indeed.

        Like Waco and Ruby Ridge, I doubt there will be any justice done. If more people become skeptical, less trusting of authority, and expand their information sources, that may be the best we can do.

        Remember: Informed Conspiracy Theorists have a current record of 57 and 0. :)

        As for the Why, it’s out there for you to discover.

        On the world level it boils down to: Absolute power corrupts absolutely. Or some people just want to see the world burn. Or they would rather rule in hell than serve in heaven. Take your pick.

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        1. Problem being, “most” folks didn’t comply.

          For example, the footnotes on the data for vaccination are fascinating— lots of “incomplete vaccination OR information” and “percent of those reported” type footnotes.

          Absolute power corrupts absolutely is related to reporting on “great” men in history, like Alexander (the great)– that they get held to a lower standard of behavior because they are generally admired.
          It’s not about power corrupting the one with power.

          Liked by 1 person

    4. Part of my rationale, along with a certain self-taught determination to bite the bullet, was that I needed to be some small part of the solution. Take this thing and hopefully get us closer to herd immunity, so the crisis can be declared over. I had some residual trust then that even the machinery of the overarching bureaucracy had some residual interest in ending a public health crisis.

      I learned how much interest the overarching bureaucracy had in putting the crisis behind them during the six-month indoor mask mandate handed down by my county in late 2021, stretching well into 2022. Yes, mock me all you want. You won’t be angrier or more disgusted at me than I already am. If it helps, I may have learned from the experience.

      This has been my weak reason to hate the “vaccine.” Yesterday evening, I learned of what may be a much stronger reason for me to hate it. I might or might not share that here. Sarah, you may provoke or dissuade my unburdening as you see fit, depending on your tolerance for a writer sitting at a keyboard and opening a figurative vein.

      Republica restituendae, et, Hamas delenda est.

      Liked by 1 person

        1. Thank you, Sarah, but after reflection I’ve decided to hold off for the moment.

          It would be unseemly of me to hijack a thread on economics with my own unrelated breast-beating, especially as I note other commenters have suffered worse without getting histrionic about it. (RCPete is a fine example.) Maybe the subject needs histrionics, as a force to galvanize opinion, but I’m not as eager to provide the histrionics as I was, say, yesterday. Also, my reaction is due to what may well be a mere coincidence of wording, and I’m less eager to thunder forth brimstone on a ‘maybe’ than I was yesterday as well.

          Beyond that, it might be wiser for me not to pick at the fresh scab, in hopes that it will heal faster. I’ve heard of this theory before, and it might be time for me to try it once, if for no other reason than out of intellectual curiosity. (That’s my idea of dry humor, in case you wondered.)

          So again, thanks, but not right now. If the subject comes up again a little more naturally, however …

          Liked by 1 person

  11. It’s also very individual – what you may think is a wonderful decision will horrify another person. Example: A doctor buddy of mine knew a national/world famous urology expert and he commanded top dollar. He decided to practice in Pierre South Dakota. Why? He could be fishing within twenty minutes of leaving work, could go goose hunting in a world class environment and he loved the outdoors. Dollars didn’t matter but life style did. 

    His cost of living was ‘low’ and his ability to ‘earn’ was more than enough to meet his desired needs and life style. His east coast doctor buddies were appalled with his choice but he lived out his professional life happy, unstressed and retired in place to continue to hunt and fish. 

    Liked by 1 person

    1. How -dare- he seek his own happiness, on his own terms, courageously, in his own way! Why he might make some folks look like cowardly simps! Back in the crab bucket!

      Liked by 1 person

      1. One of my oldest friends, my brother’s best friend and a surrogate older brother, died a few weeks ago hunting wild boar at 70. He had a heart attack and was too far from civilization to be saved.
        Surely he, a responsible MD, would not go hiking in the wilds and hunting dangerous creatures at seventy. Yeah, he didn’t have heart issues THAT HE KNEW, but he knew his age.
        And yet, and yet…
        Dying at 70 in beautiful country, doing something he loved, and having faced down and bagged a destructive (and tasty) animal?
        May we all be so lucky.

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        1. Dropping by heart attack while afield beats the heck out of being in an ICU bed, dying by inches per day, with every strange machine in the world plugged into various natural and unnatural orifices, while close family and friends weep over your not-quite-corpse, while trying to decide who has the guts to pull the plug and end everyone’s hell-on-earth.

          He chose well.

          Liked by 1 person

  12. This is a brilliant exposition. I’d love to see it in something like a Prager video.

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  13. Another thought on rational vs irrational, I remember reading SM Stirling’s “Island In the Sea of Time” where one character couldn’t understand what the “natives” were doing. To her, the “natives” were behaving irrational. IE What they were doing didn’t make sense.

    Of course, as the reader found out, the “natives” actions made perfect sense to them as they were operating under a belief system that was very different from what the character believed that they were operating under.

    She was a far-left kook-ball who believed that the Americas were a paradise before Europeans arrived.

    So when somebody thinks that other people’s actions “didn’t make sense” or “were irrational”, the explanation can be that the somebody “doesn’t know all the facts”. 🤣🤣🤣🤣🤣

    Liked by 1 person

  14. Ian – Clearly stated to a non-economist. Thank you.

    Two thoughts:

    1. In terms of economics, I wonder if rational decisions are also impacted by the amount of risk. If I have a safety net, I can make an irrational decision and it will have minimal impact. I feel less pressure to make the “right” decision because it has low negative outcomes on me. Contrariwise, if I have no safety net, I likely can afford one irrational decision, but not more than one (Trust me, I played this game and got the T-shirt).
    2. For your miniatures, do you do warrior rabbits?

    Liked by 1 person

    1. 1. Isn’t assessing the level of risk and the possible consequences part of making such a decision?

      2. Would/could they wield switchblades?

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      1. RCPete,

        1. I suppose you are right. What I was trying to get at is that an individual sometimes acts less rationally when there are less direct impacts (mostly bad, I reckon) to them. The trope-style example would be the scion of an rich family that stars a business without any need for it to make a profit versus the poor individual that has one shot to get it right. One can afford to have relatively little care about decisions or even the whether or not the company succeeds; the other can not.
        2. Knives and beyond. I am thinking firearms. Hoops, the 2.5 mutated rabbits and quintessential creature of Gamma World (see image).

        https://polyhedralnonsense.com/2019/09/14/gamma-world-1st-edition-fillable-character-sheets-artifact-sheet/

        Like

      1. The number of successful people that I know that had a safety net of a trust fund, a family with resources, friends or a previous business to use to get to the “next” level far out numbers those that “bootstrapped” from nothing. (I also have a collection of t-shirts…) Also I go out of my to help the latter when able.

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  15. The problem is that economic efficiency is not about trivial luxuries, or GDP number go up, or… Instead economic efficiency is everything.

    And this might just be the worst thing about socialism (as actually practiced, not merely fantasized about by Karl and other Marxists).

    Not even the tyranny, dictatorship, grand and petty control. Or even the kleptocracy, official and black-market-esque alike.

    But the sheer waste. In a very particular sense (that I’m very close to sure Ian could already name for us).

    Economics (see post above!) is about how to trade scarce resources between multiple alternative uses — so you get more of this and less of that, but still “efficiently” so you get (in a specific sense) “the most” you can get, out of however you’re using them.

    But left unsaid there is how there are many, many other ways to use the same resources so that get you less of one thing, without getting any more of anything else. There are so many ways to fail, that way; to be thus “inefficient” — and if you don’t use economics (or something that works exactly the same) that’s what you tend to get. Especially if your “something else” is Comrade Apparatchikov’s Five Year Plan, or The Latest Decree From Our Fearless Leader in Pyongyang or Tehran.

    Maybe you end up with a lot less, of everything.

    And as with that next-to-last example, people can actually starve in the midst if what ought to be (but is not) plenty. Even when the famine is not (see Mao, Stalin, etc.) any sort of deliberate, overt policy.

    This is the nuts-and-bolts of “equalitarian” communist poverty, this is how it actually happens. Avoidable, therefore guilty, waste. Throwing away what easily could be better — without anyone losing anything in the exchange to get it — but is not. Artificial, manufactured misery.

    (See: “Pareto optimality” and “Production Possibility Frontier”)

    Liked by 1 person

  17. FWIW, the Wiki article on this is actually not bad, and is good as an alternative to the given one, simply because some peoples’ minds respond better to a concrete example in math terms rather than the physical example provided.

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

    Again, neither is better than the other, they just appeal to different mental processes, which can be useful depending on how your own mental processes work.

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  18. Value is relative – and, to a great extent, not rational, either. Also very present-time-bound for the majority, IMHO.

    (Although I do keep us out of money-related binds, I don’t except myself from this observation.)

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  19. This is an excellent example, and I agree, this is basically the heart of economics. In the CompSci world this class of problems goes by the moniker of “The Knapsack Problem”, from a very similar example of trying to optimally pack varying-sized objects into a knapsack of a given capacity. It’s telling, that if you describe some problem to a programmer of decent wisdom as being “isomorphic to the Knapsack Problem” their response will usually be something along the lines of “Oh! …. _oh_. “ It’s a problem with a bunch of different methods for getting a “good enough” solution, with varying heuristics for different definitions of “good enough”, but trying to get the exact maximally optimal solution scales worse than exponentially (factorially, in fact) in terms of the amount of computing resources needed to solve the problem.

    The real kicker is, in real-world economic judgements, where you are trying to optimize scarce time/resources, *you have to include the time/resources you spend optimizing your solution* in your calculation. Which is why going with some reasonable rule of thumb is often the smartest choice. 

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    1. A common rule of thumb is “Choose what the Experts say is best.” It’s common because it’s quick and easy and can work tolerably well. Of course it can also bite you on the ass, especially if you take it as a True Solution instead of a quick and dirty approximation.

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  20. While Ian’s story addresses several concepts related to operations research and economics, I don’t recognize the special properties of ‘comparative advantage’ in anything he’s written here. While some define CA in terms of whose opportunity costs are lower, that abstracts away some of the implications for trading partners.

    Comparative advantage is one of the more counter-intuitive insights of economics, though hardly the only one.

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