tag:blogger.com,1999:blog-3457275744943070918.post1792525534533292266..comments2023-06-28T04:41:13.798-07:00Comments on rambling lal: How I Eat, part 1.Lisahttp://www.blogger.com/profile/05992611798455984316noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-3457275744943070918.post-39622978247888446612013-03-04T14:14:37.023-08:002013-03-04T14:14:37.023-08:00Landsburg is a consequentialist, so his only conce...Landsburg is a consequentialist, so his only concern is with the effects of Scrooge's actions, not his intentions (ie: to be compassionate or not). You can, of course, quibble with his philosophy, but I do think the question of what the effects of Scrooge's actions are is both morally and economically relevant.<br /><br />Yes, if Scrooge spends lavishly and then suddenly stops, a whole bunch of people will be unemployed or see their incomes fall. This will be painful for them, but the effect on society is that people who were employed providing luxuries for a rich man are now free to do something else.<br /><br />However, Scrooge's decision to stop spending (or never to spend in the first place) has another effect: it drives down the prices of the goods he would have consumed. This does two things: it makes them more affordable for others and it sends a signal to people not to produce more of that good. You can't assume that Scrooge's not spending puts someone out of work, since because of Scrooge's miserliness that person may never have been enticed into that line of work in the first place!<br /><br />People who lose their jobs because of this type of economic adjustment are highly visible and sympathetic (and rightly do we sympathize with them). However, the long run effect of allowing such economic adjustment (and the long run effect of encouraging saving and thrift over conspicuous consumption) is to direct people's efforts into the most productive occupations. Edison killed the candlemaking profession. Ford killed the horse-drawn carriage. Each of these events were painful for candlemakers and coachmen, but by killing their professions, we freed up resources (labor) to be employed in an area where it was previously not profitable to employ them. That's how society advances.<br /><br />Allow me to recommend two classic essays on this subject: Bastiat's <a href="http://www.econlib.org/library/Bastiat/basEss1.html" rel="nofollow">What Is Seen and What Is Not Seen</a> and Hayek's <a href="http://www.econlib.org/library/Essays/hykKnw1.html" rel="nofollow">The Use of Knowledge in Society</a>.John Lynchhttps://www.blogger.com/profile/14483135164645356348noreply@blogger.comtag:blogger.com,1999:blog-3457275744943070918.post-64347636771330611042013-03-04T04:02:50.059-08:002013-03-04T04:02:50.059-08:00I sort of get what Steven Landsburg's article ...I sort of get what Steven Landsburg's article was about, but I kept asking myself---so if he doesn't spend, someone is "free" to serve someone else--doesn't that mean if he doesn't spend, someone else has to look for another job, another customer, another source of income? And of course, he is probably aware, but doesn't address that fact that the real story is about how Scrooge's miserliness may have ballooned his savings, but shrunk his compassion. If the compassionate solution to the problems around him was to save his money, he certainly didn't know it and didn't grow in compassion for his decision to save.Lisahttps://www.blogger.com/profile/05992611798455984316noreply@blogger.comtag:blogger.com,1999:blog-3457275744943070918.post-10066461413585270252013-02-25T13:13:15.046-08:002013-02-25T13:13:15.046-08:00Well, the recognition that you value the first two...Well, the recognition that you value the first two bushels of apples more than the third bushel is broadly related to <a href="http://en.wikipedia.org/wiki/Marginalism" rel="nofollow">marginalism</a> (and specifically, the concept of diminishing marginal utility), one of the most important theories in economics. And the fact that your consumption of a good prevents another's consumption of it is (unsurprisingly) known as <a href="http://en.wikipedia.org/wiki/Rivalry_(economics)" rel="nofollow">rivalry</a>. Bushels of apples exhibit both diminishing marginal utility and are both rival and excludable (often the criteria used to separate a so-called public good from a private good).<br /><br />I find that people are generally highly confused in how they think about how costs, burdens, liabilities, etc. are passed on to others. It is the consumption of rival resources that impacts other people negatively. Everything else is just accounting.<br /><br />Steven Landsburg illustrates this wonderfully in his article "<a href="http://www.slate.com/articles/life/holidays/2004/12/what_i_like_about_scrooge.html" rel="nofollow">What I Like About Scrooge</a>" in which he argues that Scrooge gets a "bum rap" for being a miser. I can think of ways to attack Landsburg's position on misers specifically, but none that attack the general proposition that it's consumption that ultimately matters in questions of wealth distribution.John Lynchhttps://www.blogger.com/profile/14483135164645356348noreply@blogger.comtag:blogger.com,1999:blog-3457275744943070918.post-13957424856217139832013-02-25T11:45:53.249-08:002013-02-25T11:45:53.249-08:00"Disposing of food by throwing it in your sto..."Disposing of food by throwing it in your stomach isn't any more useful to the others who could have used that food than disposing of it by throwing it the trash."<br /><br />Yes. In fact, by eating food because other people can't eat it for you may make the problem (on a theoretical level) harder for the people who need the food when you don't. If you consume food that you don't need, it is not available for anyone else. Consuming can include eating it AND wasting it. If we really only dished up what we need, then we would be eating less food. The food, then, that we choose not to eat (theoretically) might be available for someone else. For example, if I buy three bushels of apples and waste one bushel, no one benefits from the wasted apples. But if I realize I only need two bushels, and that's what I buy, then the third bushel is available for someone else to have.<br /><br />I know you could have said that better, John. Is there a economic truth behind that idea? What would it be called?Lisahttps://www.blogger.com/profile/05992611798455984316noreply@blogger.comtag:blogger.com,1999:blog-3457275744943070918.post-21041340618917407242013-02-25T07:47:07.070-08:002013-02-25T07:47:07.070-08:00The point about wasting food is an excellent examp...The point about wasting food is an excellent example of the <a href="http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy" rel="nofollow">sunk cost fallacy</a>.<br /><br />The only relevant question to any decision is how any particular available option maximizes the difference between expected future costs and expected future benefits. Costs and benefits that occurred in the past are unrecoverable; they are "sunk." Eating food that you don't need to eat has a cost (the extra unneeded calories) for very little benefit. That the food you are considering consuming cost you something in the near past is irrelevant: the only question now is how to maximize the difference between the expected future costs and the expected future benefits of eating the food. Period.<br /><br />This is especially true at restaurants when you're dealing with a dish (like an appetizer) that you aren't inclined to take home with you or an amount of food too small to store practically. That food is wasted the moment you order it. No one else will get it. The only remaining question is how best you can use that food. If the food will provide you with no extra benefit, don't eat it; throw it out.<br /><br />And if anyone is uncomfortable with the waste involved, I suggest not ordering too much food (yeah, given the portion sizes at American restaurants, that often means splitting your meals with someone or not eating out) or sucking it up and taking leftovers home when you don't feel like it or it seems ridiculous. Just don't think that eating the food you don't need is any less of a waste in any real sense than throwing it out. Disposing of food by throwing it in your stomach isn't any more useful to the others who could have used that food than disposing of it by throwing it the trash.<br /><br />Anyway, good post, Mom!John Lynchhttps://www.blogger.com/profile/14483135164645356348noreply@blogger.com