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-   -   Darwinism and Libertarianism (Matt Welch & Robert Frank) (http://bloggingheads.tv/forum/showthread.php?t=7089)

miceelf 10-13-2011 06:18 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by popcorn_karate (Post 228123)
how 'bout magnets?

Heh (1:50):

http://www.youtube.com/watch?v=_-agl0pOQfs

rfrobison 10-13-2011 08:47 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by stephanie (Post 228107)
This is a longstanding and pretty unanimously held view in the US, which is why the more recent attacks on it are -- as a said before -- not a particularly good proxy for the debates over government vs. private. Also, of course, there's the fact that the USPS doesn't get subsidies and is supposed to be self-supporting. In arguing that people in urban areas should be able to pay the real cost and not have to subsidize the mail of those out in the boonies -- a position that I admit has some appeal in 2011 -- you aren't really standing up for the rights of tax payers or arguing for a smaller government, you are taking issue with laws that require uniform pricing. (We can talk about the Robinson-Patman Act next, maybe, although there are various exceptions under that law.)

I think it's hard to talk about the USPS without looking at the history, which includes, as I said before, a reference in the Constitution, many statements by the Founders about the importance of the post and of developing universal service, and, of course, a longstanding understanding of the requirement that we have a postal service as meaning universal service and universal service as incorporating uniform rates, even if that means (as it always has) that certain parts of the country subsidize others. This need for uniform rates and universal service and the costs of putting that in place were the reason behind the monopoly, of course -- it was quite reasonably believed that private companies would undercut the USPS in the profitable areas making it necessary to charge much higher rates and servicing basically only the more expensive to serve areas or otherwise making it impossible for the USPS to operate at a reasonable cost. Again, this is not some new or leftwing position, but the traditional one.

Now, although the mail is still used a lot for a lot of things, and quite possibly is more important in areas where it would be more expensive (if other forms of communications, including the internet, as well as FedEx and UPS, are less available), I suppose we may have reached a stage were the mail no longer plays the role that it used to, such that we can consider whether the uniform rate and similar requirements are so necessary. I do think that urban areas tend to be a lot more expensive in other ways and thus that it's not inherently unfair to allow mail to be more expensive in rural areas. It does go against our history and how we have traditionally looked at this, though, and seems to me perhaps a shame to discard the older approach here, which was based on (among other things) the idea that as a nation easy communications among all of us was important. Also, once again, the concept is that the USPS will be self-supporting, so to talk about this as if it's related to some burden on the taxpayers is just wrong.



Part of the argument against higher gas taxes is that in the US lots of people have to drive long distances to work and people generally rely on food and other items which may be trucked long distances.

Anyway, I'm not especially against the idea that we can discuss what services the government should provide, but when people start by railing against the Postal Service it does suggest to me that there's something more ideological going on.

Your criticisms are thoughtful, as always. In any debate over public vs. private provision of services, there are tradeoffs involved. It may in fact be that a national postal service is a "natural monopoly": To provide universal service, some parts of the country will have to subsidize others; and no private company could be contracted to do the job profitably in such a way as to reduce the actual burden borne by taxpayers. I'm skeptical, since other countries have done so, but cragger and micelf pointed out that the U.S. (and Canada) are large and somewhat sparsely populated, so the "America (Canada) are different" argument may be valid.

Incidentally, this is precisely the argument that many conservatives make against high-speed rail: It will require endless large subsidies to operate because distances between large population centers are too great for ticket fares alone to cover the costs, except on the East Coast. Japan National Railway (now known as JR) was successfully privatized in the '80s despite massive strikes by railway workers. But of the private railways born of the breakup, only JR East, JR Tokai and JR West -- which serve the Tokyo, Nagoya and Osaka areas, respectively -- make a profit. The government continues to pump taxpayer money into the others. So it probably costs the government less than before, but it doesn't cost nothing.

Where practical, I favor "user fees" over broad taxation, even for government services that are universal in the abstract. The people who take advantage of many such services can, and in my view should, pay for them directly. Those who do not (or find it difficult) to take advantage of such services are often poorer--yet they still contribute to the subsidy, either through taxes or implicitly because less money available is for programs that might serve them better.

Government-guaranteed student loans and the mortgage interest tax deduction are two perfect examples of middle- and upper-class welfare programs to which the truly needy have very little access. Moreover, they distort markets and lead to wasteful over-investment (e.g., the Fannie and Freddie debacle, and skyrocketing costs for undergraduate degrees of dubious value).

So my critique of such services is based on my preference for smaller government, economic efficiency, and equity. It is in a sense "ideological," but so, I contend, is the resistance to scrapping government programs that have clearly outlived their usefulness, except for those with a direct stake in keeping the public sector as large as possible.

Sorry so long-winded.

TwinSwords 10-13-2011 08:57 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by badhatharry (Post 228095)
Thanks Jim. However I still do not understand/agree with the concept of market failure because it doesn't accurately describe the situation, although I'm sure it is an oft used term. Using the idea of the weather as an analogy... the weather is what it is because of all of the forces which affect it... the ocean currents, cloud formation, air pressure, physical land features. The weather is never said to fail even when we don't particularly like what it is doing.

I certainly understand what you mean by perverse outcomes. Those are outcomes which have come about by certain actions. They tell us that this or that action does not produce the optimal result for one or more of the parties involved. But this doesn't indicate a market failure IMHO. What it tells us is that the market is functioning perfectly. It's humming along, spitting out feedback and outcomes.

PS. Is there really a perfectly efficient abstract model? What are the characteristics of that model? In whose opinion? Is there more than one abstract model depending on how one thinks the economy should be run?

http://img687.imageshack.us/img687/8...ctrination.jpg

Unit 10-13-2011 10:24 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by jimM47 (Post 228088)
If an intervention destroyed or rendered less effective the hands-tying mechanism — the pricy suits — currently being used, I don't think the outcome would necessarily be bribery. I suspect the first response is (increased) use of the other of Kronman's primitive contracting devices: hostage-taking, collateral, and union.

* Hostage-taking (where the promisor entrusts the promisee with something valuable to the promisor but not to the promisee): e.g. an agreement that the employee not compete with the employer even (or especially) if fired.

* Collateral (where the promisor entrusts the promisee with something valuable to either of them): e.g. part of the finance employee's compensation is deferred into a later discretionary payment — i.e. a scheduled bonus.

* Union (where the two merge so their incentives align): e.g. part of the employee's compensation is tied directly to the performance of the company — i.e. stock options.

One thing to say about each of these is that they may, practically speaking, involve more risk of simply losing out on monetary compensation if you fail. At least with the pricy suit, if you fail you still have the suit. Additionally, a hands-tying mechanism has the advantage of not being specific to any particular transaction partner, so it is a good mechanism when you need to signal to a lot of potential transaction partners at once with minimal duplication of costs — i.e if the finance job applicant is going to have to interview at a whole bunch of different firms. So, it's not at all clear to me that the proportion by which each of these mechanisms are applied is sub-optimal.

I agree. Also, I suspect that the type of people who apply for these kinds of jobs actually do enjoy wearing impressive new suits. But let's even stick to the monetary aspect, let's assume that this discourages some people from applying, wouldn't the supply curve shift to the left? Thus raising the final wage? In other words, if the job is truly not so pleasant because of constant status competitions of this kind, wouldn't that be embedded in the price? I still don't see what third-party is affected by this. Now if the problem is what status-competitions in general, then that might be quite common problem in all kinds of human endeavors.

badhatharry 10-13-2011 11:22 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by popcorn_karate (Post 228123)
how 'bout magnets?

they're magic, right?

sugarkang 10-14-2011 01:10 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by rfrobison (Post 228140)
Incidentally, this is precisely the argument that many conservatives make against high-speed rail: It will require endless large subsidies to operate because distances between large population centers are too great to cover the costs, except on the East Coast. Japan National Railway (Now known as JR) was successfully privatized in the '80s despite massive strikes by railway workers. But of the private railways born of the breakup, only JR East, JR Tokai and JR West -- which serve the Tokyo, Nagoya and Osaka areas, respectively -- make a profit. The government continues to pump taxpayer money into the others. So it probably costs the government less than before, but it doesn't cost nothing.

I've been to Japan twice and I was really impressed with their mass transit system. I was surprised at how bullet trains connecting larger cities were seamlessly connected to smaller, local subway lines so that you could cover hundreds of miles between point A to point B utilizing one transportation network. The entire system was clean, fast and efficient. My only quibble was that tickets were a tad pricey because of the strong yen; obviously, not their fault.

Though privatization is preferable to public ownership more often than not, liberals won't ever go for it because they see corporations as the root of all evil. They say this with a straight face while proclaiming the importance of empirical evidence, good data, science and rationality.


Quote:

So my critique of such services is based on my preference for smaller government, economic efficiency, and equity. It is in a sense "ideological,"
You shouldn't have to defend these preferences as ideological. It's math and common sense, or increasingly uncommon sense it may seem to some.

badhatharry 10-14-2011 09:11 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by sugarkang (Post 228153)

liberals won't ever go for it because they see corporations as the root of all evil.

http://1.bp.blogspot.com/-FkVbZBVLj7...0/image001.png

miceelf 10-14-2011 10:35 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by badhatharry (Post 228166)

This kind of "cleverness" only works if one insists on pretending that OWS wants to destroy or eliminate corporations.

Don Zeko 10-14-2011 10:42 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by miceelf (Post 228168)
This kind of "cleverness" only works if one insists on pretending that OWS wants to destroy or eliminate corporations.

It's pretty easy to prove hypocrisy if you get to make up what your ideological opponents believe.

ledocs 10-14-2011 11:15 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Actually, I did also read "The Confessions," it occurred to me, again in English, and again a very long time ago.

Florian 10-14-2011 11:21 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by ledocs (Post 228175)
Actually, I did also read "The Confessions," it occurred to me, again in English, and again a very long time ago.

Now is the time to renew your acquaintance with Rousseau---in French. Go to your local FNAC and buy the 5-volume edition of Jean-Jacques in the Pléiade edition. That will set you back about 350 euros, I imagine.

badhatharry 10-14-2011 11:27 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by Don Zeko (Post 228172)
It's pretty easy to prove hypocrisy if you get to make up what your ideological opponents believe.

There's an awful lot being said by this crowd which points to the the evil of corporations. Here's a little sample:

Quote:

As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies.
The point is that the protestors enjoy and use the products that corporations make.They think they should appear on the shelves with lower price tags and lower profits for the manufacturers and investors. They want their student loans and mortgage payment lapses forgiven because they have been duped to take out these unwise loans. They are victims with very nice accoutrements.

The protestors on Wall Street see the main culprits as corporate corruption. The Tea Party see the main culprit as Washington. Realistically it's a combination of both. But our country has been built on this kind of confluence and it's unlikely to change much. What has brought this to a head and is responsible for the uproar is the shitty economy. If everything were buzzing along, not much would be said or noticed.

miceelf 10-14-2011 11:50 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by badhatharry (Post 228177)
The protestors on Wall Street see the main culprits as corporate corruption. The Tea Party see the main culprit as Washington. Realistically it's a combination of both. But our country has been built on this kind of confluence and it's unlikely to change much. What has brought this to a head and is responsible for the uproar is the shitty economy. If everything were buzzing along, not much would be said or noticed.

Agree somewhat on the confluence. But what makes people upset about murder is usually the death of the victim. If murder victims were walking around unharmed, not much would be said or noticed.

stephanie 10-14-2011 12:45 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by rfrobison (Post 228140)
Incidentally, this is precisely the argument that many conservatives make against high-speed rail: It will require endless large subsidies to operate because distances between large population centers are too great for ticket fares alone to cover the costs, except on the East Coast.

I'm not ideological on this at all, so pragmatically I think it's possible you are correct. Worth looking into, IMO, but I have no strong feeling about the conclusion.

Quote:

Where practical, I favor "user fees" over broad taxation, even for government services that are universal in the abstract. The people who take advantage of many such services can, and in my view should, pay for them directly.
Again, I think this is in many cases a pragmatic issue, and I'm not opposed to the idea, but in many cases I think the existence of the service is a good even to those who don't use them. For many years I didn't have a car, so obviously did not use the highways directly, so -- even apart from their obvious use for transportation -- I think the existence of highways, the ease of traveling throughout the country, is a good for the country as a whole, not just those who use the highways a lot. (Also, there is an argument that keeping the cost of transported things down is a good for the country as a whole so we have a broad public responsibility for infrastructure. Lots and lots of other reasons too.)

Similarly, whether I use public transportation at all or not (I do), I think having reasonably-priced public transportation so that people who live in cities can get around them, as well as people from out of town. It's a public good beyond the people who directly use the services (and a good for businesses, who can have customers and employees who travel that way). Therefore, I think it's short-sighted to say only the people who directly use the services are interested.

The point is just that I think it's hard to have an across the board ideological position on this unless one is just really against the notion of public goods and community responsibility. I think it makes sense to look at and talk about individual items, even though of course one's ideology may influence how one then comes out on each individual one.

Quote:

Those who do not (or find it difficult) to take advantage of such services are often poorer--yet they still contribute to the subsidy, either through taxes or implicitly because less money available is for programs that might serve them better.
I don't think this is all that true across the board.

stephanie 10-14-2011 12:47 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by sugarkang (Post 228153)
liberals won't ever go for it because they see corporations as the root of all evil.

Nonsense.

stephanie 10-14-2011 12:50 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by miceelf (Post 228168)
This kind of "cleverness" only works if one insists on pretending that OWS wants to destroy or eliminate corporations.

Exactly. It's idiotic. Sugarkang makes the ridiculous claim that liberals hate corporations, so badhat demonstrates that "liberals" (illustrated by OWS participants, which is something of a problem itself) are, I guess, hypocrites because they buy things from corporations. Jeez, what's missing here? Oh, yes, any truth underlying Sugarkang's claim.

Such insightful and hard-hitting rightwing commentary we have on bloggingheads.

Ocean 10-14-2011 03:08 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by miceelf (Post 228179)
Agree somewhat on the confluence. But what makes people upset about murder is usually the death of the victim. If murder victims were walking around unharmed, not much would be said or noticed.

Yes, I actually agree with badhat's paragraph as well. And indeed if everyone was well fed and well housed no one would care about some taking a bigger slice or living in a bigger house. That's the way it's always been.

But when the income gap starts to become such that those at the bottom income are unable to meet their basic needs and the middle class continues to go downhill, that's when people start to protest. And justly, IMO.

laura 10-14-2011 03:25 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Er, not the UK either. Enabling legislation has been passed but Royal Mail plc has not yet been sold, so still plenty of time for the randian hellhole to develop. Talk seems to be of selling it by 2015, so your post could come right given enough time.

miceelf 10-14-2011 03:39 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by Ocean (Post 228201)
Yes, I actually agree with badhat's paragraph as well. And indeed if everyone was well fed and well housed no one would care about some taking a bigger slice or living in a bigger house. That's the way it's always been.

But when the income gap starts to become such that those at the bottom income are unable to meet their basic needs and the middle class continues to go downhill, that's when people start to protest. And justly, IMO.

Well, and to be less opaque about it. badhat is probably right that if not for the bad economy, corporate malfeasance and failure of government oversight wouldn't be big issues. But my point is that if not for corporate malfeasance, poor oversight and (I would add) the stagnation of real wages for the "bottom" 95-99%, we wouldn't have a bad economy.

miceelf 10-14-2011 03:40 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by laura (Post 228202)
Er, not the UK either. Enabling legislation has been passed but Royal Mail plc has not yet been sold, so still plenty of time for the randian hellhole to develop. Talk seems to be of selling it by 2015, so your post could come right given enough time.

And, at least, reading some of the editorials in the UK, the parallels with the concerns Canadians had when this got raised are very similar. Let's just say it's not universally regarded as an unmitigated good.

Ocean 10-14-2011 06:20 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by miceelf (Post 228206)
And, at least, reading some of the editorials in the UK, the parallels with the concerns Canadians had when this got raised are very similar. Let's just say it's not universally regarded as an unmitigated good.

Why don't they just raise the regular postage to $1 or $2? We probably would be able to save money in unnecessary paper, our garbage collectors would go lighter, and local businesses will have to figure out a different way of advertising which promotes creativity and perhaps creates new jobs as well.

ledocs 10-15-2011 09:33 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
In response to JimM47:

We appear to agree that the expensive suits might provide a good opportunity for imposition of an excise tax.

I am not convinced that the suit competition is actually conveying information that is useful to the market. Or, perhaps it is, but there might be much more efficient and less expensive ways of providing even better information to the market.

Quote:

The applicant is saying, in effect, "you can trust that I'm telling the truth when I vouch for my quality, because if I am not, I stand to take a big loss.
For some large portion of the applicant pool, the loss is not that big, and they will be able to use the expensive suit, whether or not they land the job. Assuming that this is the correct interpretation of what is being communicated, there is a big difference between the applicants who can easily afford the suit and those who cannot. So the employer should be focusing on that difference. But if that is what is important, then the employer presumably already knows which candidates come from privileged backgrounds and which do not. So the suit competition is superfluous at best and communicates nothing about what the employer should be focusing on, which is how much adversity the candidate had to overcome in order to get to the employer’s office for an interview.

For this reason, I don’t think the interpretation of what is being communicated is correct. The suit competition is about signaling a willingness to conform to certain norms. Insofar as conformity is important to the employer, the signal is conveying information. The greater the economic sacrifice to the applicant in signaling a willingness to conform, the more important the signal may be. But the idea that the applicant is “telling the truth when I vouch for my quality…” is reaching way too far. The suit competition conveys nothing about competence and everything about a willingness to play by the rules.

Quote:

The suit competition is actually conveying information that is useful to the market, and therefore increases societal wealth.
This can only be true if the successful candidate increases societal wealth. There is a lot of question, at least in my mind, about how much investment bankers and lawyers and accountants increase societal wealth. One would have to show that the professions as a whole are increasing societal wealth before even entertaining the hypothesis that the suit competition increases societal wealth.

Michael Lewis just published a story in “Vanity Fair” about high-end German bankers, who make a lot less than their American counterparts. They presumably wear nice suits, but not $2,500 suits. I don’t see any reason to believe that the particular form that American high-end sales culture takes, its connections to major universities and their sports teams, for example, is really in any way necessary to the actual work done. It’s necessary to creating a certain patina, at least the illusion of special competence and skill.

rfrobison 10-15-2011 11:32 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by jimM47 (Post 227984)
The most relavent part of my longer reaction initially intended to be written here:


I actually served as the interlocutor for an Apollo Diavlog in which hamandcheese was attempting to make a critique similar to Frank's (but which was hampered by sound problems), and you will find some additional (though perhaps less developed) remarks on the subject in the comments section to that diavlog.

I don't mean to butt in here, but I think Mr. Frank (and you) may be making too much of this suit thing. OK, so Mr. Frank's point throughout the discussion was that much of the signaling that people do is wasteful from a social welfare standpoint: If everyone spends $500 on suits for the big interview, its no different than everyone spending $2,000 on a suit, except that everyone is $1,500 poorer than they would be otherwise.

But people will always find some way to send these sorts of signals, and of course they have nothing to do with a person's fitness for the job. I recall reading a study that tall men make around 10% more, on average, than short men in similar positions. Obviously, unless we are talking basketball players, height has little to no bearing on job performance. Surely Mr. Frank (and you) don't think we should issue platform shoes to short guys. (This could have a big impact on my career: I'm only 5'7.")

On a more serious note, Mr. Frank proposes a steeply progressive tax on consumption beyond a certain level to "nudge" people into saving more, and to remove the tax penalties on hiring. While I find that idea intriguing, it raises the question of how to determine the "appropriate" level of consumption. What seems a sufficiently opulent lifestyle to Mr. Frank, or you, or me, might seem like intolerable deprivation to someone else. I doubt one could ever reach a societal consensus on that question.

If Herman Cain's "9-9-9" proposal were implemented, it would have the benefit of simplicity by treating all consumption equally. (One would have to set up a rebate of some kind for the poor, whose expenditures for basic necessities like food and shelter make up a much higher share of their income than do those of the wealthy.)

Of course Herman Cain's tax proposals (or anything like them) have as much chance of becoming law as Hell does of freezing over.

cragger 10-15-2011 11:50 AM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
While I agree with your skepticism about the societal benefits accruing from the fact that daddy bought junior a fancy suit to interview in, I think this discussion has lost view of the forest. The suit example may be a bad example, likely one that came to Mr. Frank's mind because it seems superficially similiar to his Darwinian example of the bull seals.

Getting sidetracked by expensive suits, intentionally or not, seems to have the same effect that Mr. Welch achieved through his dismissive response that "we don't want the government telling us how much to spend for suits". That is, it avoids any real recognition of the underlying issue which is the existance of classes of action that may benefit the individual in the short run but which are to the determent of the whole in the long run. It thus finesses any attempt to deal with the problem, to the immediate benefit of the few at the expense of the whole, though perhaps that is the point.

jimM47 10-15-2011 06:30 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

Originally Posted by ledocs (Post 228266)
For some large portion of the applicant pool, the loss is not that big, and they will be able to use the expensive suit, whether or not they land the job. . . . But if that is what is important, then the employer presumably already knows which candidates come from privileged backgrounds and which do not. . . .

This presumes that the only (or main) reason you can have a pricy suit is that you come from privilege, which I think is incorrect. I'm sure plenty of these suit buyers are paying for these suits with borrowed funds. That doesn't indicate a privileged background, it indicates high permanent income expectations. The value of the signal is, of course, diminished somewhat by very privileged people, but that's why employers don't rely exclusively on the one signal.

Quote:

The suit competition is about signaling a willingness to conform to certain norms. . . . The greater the economic sacrifice to the applicant in signaling a willingness to conform, the more important the signal may be. . . . The suit competition conveys nothing about competence and everything about a willingness to play by the rules.
I agree that willingness to play by the rules is one of the key things being signalled by the pricy suit, but that fits into the more general proposition I am making. Willingness to play by the rules is in fact a pretty big part of what makes a person competent for certain jobs.

Quote:

This can only be true if the successful candidate increases societal wealth. There is a lot of question, at least in my mind, about how much investment bankers and lawyers and accountants increase societal wealth.
Granted that the social value of signaling that enables a transaction is dependent on the social value of the transaction itself. But we aren't analyzing suits for their own sake, we are analyzing them as an easy-to-grasp example of an underlying principle that comes into play regardless of the social value of the transactions to which it applies. And finance can be (and should be) something that does create a large amount of societal wealth, which it would be, but for malincentives in our regulatory environment that allowed the system to be crafted into a giant rent-seeking machine centered around capitalizing on the Federal government's implicit put on too-big-to-fail banks.

ledocs 10-15-2011 08:48 PM

Re: Darwinism and Libertarianism (Matt Welch & Robert Frank)
 
Quote:

This presumes that the only (or main) reason you can have a pricy suit is that you come from privilege, which I think is incorrect. I'm sure plenty of these suit buyers are paying for these suits with borrowed funds.
I was presuming only that some significant percentage of the pool of successful applicants for investment banking jobs, the people who get interviews and have a good chance of being hired, come from privileged backgrounds, went to Ivy's or near-Ivy's, and so on.


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