I had a great conversation between a bunch of friends that ended up in politics. Here are some retrospective thoughts (probably only of interest to people in the conversation).
1. I probably overstated the case for risk homeostasis. From what I can tell, people do compensate with riskier behavior, but the compensation is probably not 100%.
2. I looked but I couldn't find the source for the contention that pessimistic people are generally more correct in their beliefs, but optimistic people are generally happier and more successful.
3. Market prices are not a particularly way to measure value. As Scott recently pointed out there are reasonably significant problems with this. Some specific critiques: the surplus created (the difference between the seller's minimum price and the buyer's maximum price) is not measured, non-monetary exchanges are not measured,
4. There is no reason I can see to believe that human life is inherent (as opposed to instrumentally) valuable. This is not to say that people should not behave as if human life is inherently valuable - I am, after all, a firm deontologist.
5. If you believe that a large component of any conflict is that the aggressor believes he has a chance at winning, the marginal benefit of military spending will follow the following curve:
It will start out very low, until it hits a small band (being the amount of equipment, etc. necessary for victory) where it is very high, and then it will return to being very low to infinity. That the marginal utility of military spending is low in the upper segment of the graph is not a good argument that the US should lower its spending to the point where the marginal utility of spending is high - particularly if you value human life inherently.
6. If the management of any company adds value, it is Toyota. They even have a management system named after them, which is so good that a sizable chunk of US companies are trying to ape them.
7. For the record, it is Technology, Entertainment, Design. I lose. Again.
8. The only articles I could find on Toyota and the UAW are from late 2007, but as of then, both Honda and Toyota were not unionized (and were strongly and successfully resisting unionization).
Update: One last thing, while it is true that the marginal dollar of income to a rich person doesn't result in a dollar's worth of good to society (side note: keeping money in bank accounts is good for society - see the current "liquidity crisis" and an under-rated skill - see lottery winners), the alternative is not that they will magically be put to use for the good of society - instead, a pyramid of bureaucrats will have to figure out what to do with it.
The choice most clearly spelled out is this: should resources be distributed according to the wishes of the strong, the smart or the productive?
Peru Part 5
6 days ago
