The end goal of an economic system: Emindead vs Riceball.

[Riceball]

I thought it would be a good idea to place Emindead's assertion about economic systems made in the Occupy Wall Street thread in its own little home. For those who missed it:

the end goal of an economic system is consumption...

Nope.

Seeing as he fired the first shot, he can have first right of reply.

[Rathma]

the end goal of an economic system is consumption...

Lol, only in the modern age is consumption is an end in itself!

[Scheavo]

When you say the end goal, do you mean practically? As in, without consumption, there wouldn't be the market place and thus the economy, or do you mean, that the economy should always have the end goal of consumption?

I hope I made that distinction clear enough, I'm not sure I did though.

[rumborak]

I don't think economies have a single "end goal" really. They serve many purposes.

rumborak

[Riceball]

In Soviet Russia, economy consume you!

Anyway, the way I was taught, and way I have chosen to continue to operate as an economist, is that the end goal of economic activity is consumption. We produce so we can consume, we trade so we can consume, we pollute so that we can consume - you get the idea.

I don't mean it like an economy is geared specifically towards consumption, but that all activities within an economy have consumption at their heart. I've yet to see, anywhere, an alternative definition of purpose for economic activity.

[Scheavo]

We produce so we can consume, we trade so we can consume, we pollute so that we can consume - you get the idea.

See, to me this gets the order wrong. We consume, so we produce. We consuem, so we trade. We consume, so we pollute.

[Riceball]

That's just semantics though isn't it?

[William Wallace]

That's just semantics though isn't it?

No, that's philosophy.

[Riceball]

Is it though? Its more like the chicken and the egg...

[Scheavo]

That's just semantics though isn't it?

Partly, but I'd say it's a different hierarchy of importance. We can consume without trading, but we cannot trade without consuming.

[William Wallace]

Is it though? Its more like the chicken and the egg...

Sorry. I meant, it's just "philosophy."

[Scheavo]

Is it though? Its more like the chicken and the egg...

Sorry. I meant, it's just "philosophy."

So what exactly is your point, or do you even have one?

[jsem]

The end goal should be the maximum amount of prosperity for the maximum amount of people.

[MasterShakezula]

The end goal should be the maximum amount of prosperity for the maximum amount of people.

That should be the case.

However, it cannot be achieved in human economic systems. 

It is something to strive for, though. 

[Rathma]

Anyway, the way I was taught, and way I have chosen to continue to operate as an economist, is that the end goal of economic activity is consumption. We produce so we can consume, we trade so we can consume, we pollute so that we can consume - you get the idea.

What's the economics definition of consumption? Because it seems like depending on how you look at it all economic activity could be labeled as consumption.

[Scheavo]

The end goal should be the maximum amount of prosperity for the maximum amount of people.

You've never come off as economically socialist to me.

[jsem]

The end goal should be the maximum amount of prosperity for the maximum amount of people.

You've never come off as economically socialist to me.

I know. It's just the way I feel though. In the end, that's what it's all about. I just have a different approach to attaining this goal, and it's through free markets imo.

It's a very utilitarian argument from my side, and there is the philosophical libertarian within me fighting against this view, but I can't deny it. I mean, if libertarianism and respect for individual rights was only beneficial to a few people and left the masses in hurt I wouldn't be for it. Individual rights are only important to me to the extent that the harm done by supporting them is less than disrespecting them.

(The philosophical divide within me is huge btw, I might end up changing my mind - but the end goal is important to me)

[Super Dude]

That's not socialism, that's utilitarianism, isn't it?

[jsem]

That's not socialism, that's utilitarianism, isn't it?

In effect, yes. There's so much I dislike about how utilitarianism is used and abused though. It bothers me a great lot. But I can't see myself not bringing up that case. And my inner libertarian philosopher hates me for uttering these words.


Edit: I might end up having to retract all my utilitarian arguments upon further consideration..

Edit v.2: I mean, if forced labor for 20% of the population was a net benefit to the entire population, would it be justified? And if individual rights only meant that two or three people in an entire population were beneficiaries, would that be justified? My mind is much more inclined to accept the second argument, the libertarian argument, but I still have a hard time backing it to 100% - but I'm much further from accepting strict utilitarianism.

[jsem]

For a better answer, I'm propsing this (although it could be seen as a reproduced version of the consumption argument):

The end goal of an economic system is supplying people with the products they demand.

[Super Dude]

Sounds reasonable. My own personal problem is organizations that artificially create demand where there otherwise is none.

[Scheavo]

The end goal should be the maximum amount of prosperity for the maximum amount of people.

You've never come off as economically socialist to me.

I know. It's just the way I feel though. In the end, that's what it's all about. I just have a different approach to attaining this goal, and it's through free markets imo.

Well, I'd say pretty much the same, I would just argue that the market doesn't always attain that goal the best, and the way to get there is "socialism," as currently defined.

Edit: I might end up having to retract all my utilitarian arguments upon further consideration..

Edit v.2: I mean, if forced labor for 20% of the population was a net benefit to the entire population, would it be justified? And if individual rights only meant that two or three people in an entire population were beneficiaries, would that be justified? My mind is much more inclined to accept the second argument, the libertarian argument, but I still have a hard time backing it to 100% - but I'm much further from accepting strict utilitarianism.

I problem I've always had with the "ends don't justify the means" argument is that it ignores how the means shape the end. Forced labor is a mean, but it's also an end, in the end.

Here's a more realistic scenario for you: socialized medicine costs less per GDP in every other modern country, and by a sizable margin (if I recall correctly, UK was highest socialized with 10%, USA 17.5%), meaning you're actually going to take less money out of the generic citizen; meanwhile, they're healthcare systems rate better, so we'd also be giving them a better system. To downside to this? You have to have government oversight and regulations, involved in negotiating prices, in some manner, and you have to subsidize the poor and the elderly through taxation.

On utilitarian grounds, the utility is massively improved. 

[jsem]

But take studies done by Philip Morris that indicated that in Slovenia or Slovakia or wherever this study was conducted, there was a 200MI dollars net surplus because of smoking every fiscal year. Because people die in advance and you don't have to pay out their pensions.
Does that mean that the government should encourage smoking because it's in the net benefit of the country?

Stuff like that truly disgusts me.

That being said, I could see the argument for single payer in medicine. And I actually support it over the current systems both here in Sweden and, I can't speak fully for it because I haven't experienced it, in the US. Even if it's a step in the "wrong" direction in the United States for my libertarian standpoint.

[Scheavo]

But take studies done by Philip Morris that indicated that in Slovenia or Slovakia or wherever this study was conducted, there was a 200MI dollars net surplus because of smoking every fiscal year. Because people die in advance and you don't have to pay out their pensions.
Does that mean that the government should encourage smoking because it's in the net benefit of the country?

What does this have to do with anything? We don't see this being the case in any socialized country, so there's no reason to think that it would happen.

Though China still tells it's citizens cigarettes are healthy...

That being said, I could see the argument for single payer in medicine. And I actually support it over the current systems both here in Sweden and, I can't speak fully for it because I haven't experienced it, in the US. Even if it's a step in the "wrong" direction in the United States for my libertarian standpoint.

Well then utilitarianism wins out! I just don't see how any market regarding health care is going to effective; people aren't making rational, market based decisions.

[jsem]

My support for single-payer wouldn't be for strictly utilitarian reasons, it's just much less bureaucracy to deal with. You don't have government making deals with healthcare institutions and the practices are completely private.

And that study I pointed out, it has a lot to do with utilitarianism. I mean, we're dealing with a lot of hypotheticals, but that's what you've got to deal with if you're going to be consistent. The greater good might trample individual rights severely, and vice versa.

The ultimate test might be a case of, say you're shipwrecked and there's five of you. You're all going to die unless someone is cannibalized. Who has to go? Is it justified for four of the shipwrecked to forcefully kill one just to sustain themselves?

[Rathma]

Anyway, the way I was taught, and way I have chosen to continue to operate as an economist, is that the end goal of economic activity is consumption. We produce so we can consume, we trade so we can consume, we pollute so that we can consume - you get the idea.

What's the economics definition of consumption? Because it seems like depending on how you look at it all economic activity could be labeled as consumption.

I'd still very much like a response to this.

[Scheavo]

And that study I pointed out, it has a lot to do with utilitarianism. I mean, we're dealing with a lot of hypotheticals, but that's what you've got to deal with if you're going to be consistent. The greater good might trample individual rights severely, and vice versa.

Like I said, my problem with most utilitarian arguments is that they improperly separate means from ends, which creates much more problematic scenarios. Utilitarianism does have what you're talking about, but when people start talking about forced labor and other truly evil things, they act as if this is only the means, and ignore what kind of effect that has on the end.

I mean, pure selfishness get's into these same kinds of issues. To take the boat example, to purely advocate the self, then you'd be saying it's okay for any one of those individuals to kill the other members to eat, and survive. Clearly that's wrong, and worse than the utilitarian killing one guy to feed four others.

It's a balancing act, libertarianism versus utilitarianism.

[Riceball]

Anyway, the way I was taught, and way I have chosen to continue to operate as an economist, is that the end goal of economic activity is consumption. We produce so we can consume, we trade so we can consume, we pollute so that we can consume - you get the idea.

What's the economics definition of consumption? Because it seems like depending on how you look at it all economic activity could be labeled as consumption.

I'd still very much like a response to this.

Sorry mate, I do economics all week. Weekend is sport time

The way I like to look at it, any action which generates utility for the agent can be considered consumption; 90% of the time that is a consumer consuming a good or service.

[Scheavo]

Hmm, consumption is really a tricky word when it comes down to it, and every economic school fittingly seems to have it's own definition of the word. However, for the English language, I'll refer to an actual dictionary: however, based upon Merriam-Webster, I offer this:

the utilization of economic goods in the satisfaction of wants or in the process of production resulting chiefly in their destruction, deterioration, or transformation

And the etymology:

wasting of the body by disease; wasting disease" (replacing O.E. yfeladl "the evil disease"), from O.Fr. consumpcion, from L. consumptionem (nom. consumptio) "a using up, wasting," from consumpt-, pp. stem of consumere (see consume). Meaning "the using up of material" is 1530s.

Therefor, I say that clearly all economic systems are not geared towards consumption, or need not be; a sustainable/green economy aims to actually reduce consumption. I mean, by it's definition, a consumer society is one which is wasting away, using up materials, and not sustainable.

[jsem]

To take the boat example, to purely advocate the self, then you'd be saying it's okay for any one of those individuals to kill the other members to eat, and survive. Clearly that's wrong, and worse than the utilitarian killing one guy to feed four others.

Completely the opposite. The whole idea of libertarianism builds on the the belief that we have a right to our life and no one person has the right to take that away from us. For them to forcefully end his life without his consent would be the worst crime possible.

[Scheavo]

To take the boat example, to purely advocate the self, then you'd be saying it's okay for any one of those individuals to kill the other members to eat, and survive. Clearly that's wrong, and worse than the utilitarian killing one guy to feed four others.

Completely the opposite. The whole idea of libertarianism builds on the the belief that we have a right to our life and no one person has the right to take that away from us. For them to forcefully end his life without his consent would be the worst crime possible.

I didn't quite say libertarianism, I said individualism. I'm aware of the difference, and my point was to show you the inherent aspect of libertarianism that is social, and how your have to give up some of your rights and theoretical safety for the benefit of others (depending upon circumstances, it might be very most advantageous for you to kill every one else and eat them). Libertarianism is not individualism, as many usually make it out to be.

It's a balancing act, libertarianism versus utilitarianism.

I would change this... it's "individual" versus "collectivism" which is the balancing act, and libertarianism and utilitarianism are both balancing acts, which find themselves closer to opposing ends. Since neither is in the middle, we still need to basically balance libertarianism and utilitarianism, or individualism vs. utilitarianism.

[jsem]

I didn't quite say libertarianism, I said individualism. I'm aware of the difference, and my point was to show you the inherent aspect of libertarianism that is social, and how your have to give up some of your rights and theoretical safety for the benefit of others (depending upon circumstances, it might be very most advantageous for you to kill every one else and eat them).

What rights do I have to give up? The only thing I could see is some sort of a violation of privacy if there is probably cause that I might be commiting a crime. The rights of being able to kill persons? That is infringement of their rights, therefore I have no right to commit such an act.

Or I am I missing the point here...

[Scheavo]

That is infringement of their rights, therefore I have no right to commit such an act.

Don't know if you missed it, or I threw it into left field, but: that's according to a rather specific moral code, not one agreed upon by all humans, and definitely not all animals. Right's are simply agreed upon moral rules, basically, so to say in the first place that your right to life includes not being able to kill other people isn't very solid at any rate. There are plenty of moralities, whether we want to truly call them that or not, which would say it's perfectly fine to kill everyone else to survive.

[jsem]

Oh well. In any case I'd strongly disagree with that king of moral justification for murder.

[Rathma]

Therefor, I say that clearly all economic systems are not geared towards consumption, or need not be; a sustainable/green economy aims to actually reduce consumption. I mean, by it's definition, a consumer society is one which is wasting away, using up materials, and not sustainable.

Good point. Also, it may make sense to say that a market economy's driving force is consumption, but when it comes to at least the stated purposes of institutions that oversee the economy there are other factors such as maintaining low unemployment and consistent inflation. Economic systems will always have forces regulating and/or rigging the market, thus setting the rules, and the "purpose" of such a system will be shaped by the intentions of those forces.