tag:blogger.com,1999:blog-8764541874043694159.post7299992347323474773..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: The shabby economyFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-8764541874043694159.post-7391323062446509652015-10-20T19:15:54.382+01:002015-10-20T19:15:54.382+01:00You need to invert the question
why must the nati...You need to invert the question <br />why must the natives engage in wasteful export / tourist activity. <br />I would suggest it is simply because they have little to no purchasing power.<br />(they cannot afford to buy the existing national surplus themselves)<br /><br />Also I just finished picking rocks out of a field for the week.<br />I would think because we have a unspoken understanding that I will buy more then a few pints from his pub.<br />This closed loop system makes the hiring of a more expensive and indeed far more productive machine not economical from his perspective.<br />This is localism in action.<br /><br />The Dork of Corkhttps://www.blogger.com/profile/03352247603806622458noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-74179394689990111352015-10-20T17:48:54.829+01:002015-10-20T17:48:54.829+01:00This would be like Paul Graham's famous quote ...This would be like Paul Graham's famous quote " Internet's impact on the economy has been no greater than the fax machine's", there needs to be a study why experts can never understand and predict the trend and their utilityanuraghttps://www.blogger.com/profile/08797492916656670215noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-65177347895749061442015-10-20T09:27:09.793+01:002015-10-20T09:27:09.793+01:00"All of these enhance GDP, but are socially u..."All of these enhance GDP, but are socially useless."<br /><br />Yes. Upvote.The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-39742467699348890132015-10-20T09:26:42.875+01:002015-10-20T09:26:42.875+01:00This comment has been removed by the author.The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2915394049003531322015-10-20T08:19:40.149+01:002015-10-20T08:19:40.149+01:00Aero engine manufacturers make a lot of money on p...Aero engine manufacturers make a lot of money on parts and backup services keeping their customers kit in tip top form. After all, a Trent engine ain't cheap.<br /><br />One the notions which leaks is the economic health of the drill manufacturer that's harmed by divvying up access to a depreciating tool.<br /><br />Surely tools should be kept in good nick and the original manufacturer could be in that game. Indifference to the longer term performance of one's products isn't a high end attitude.<br /><br />The economy of maintenance and repair has many benefits whether applied to jet engines, drills, tat or our own homes. To ought to be the real economic departure of super connected diaspora of users, owners and makers.Marmothttps://www.blogger.com/profile/14689183718289934220noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-63501823401811832852015-10-19T19:52:01.312+01:002015-10-19T19:52:01.312+01:00Isn't Uber's real negative externality the...Isn't Uber's real negative externality the increase in traffic congestion -- the very congestion that incentivized most cities to restrict taxi numbers by medallions in the first place?George Cartyhttps://www.blogger.com/profile/12170378024031141482noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-54047307785634598722015-10-19T18:40:04.459+01:002015-10-19T18:40:04.459+01:00Why "spend less" spend better is always ...Why "spend less" spend better is always a good think even when you are wealthy. It is better for the one who spend but also to the everyone because first when you spend "better" you drive innovation and smart business, second you can use the money left to purchase other goods or in investment. Either way you push the economy forward.Arthiehttps://www.blogger.com/profile/07136597433371194270noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-56727225928384279162015-10-19T16:14:54.374+01:002015-10-19T16:14:54.374+01:00Interesting exchange. In Italy there's this as...Interesting exchange. In Italy there's this association called "Bilanci di Giustizia" (roughly translates to "Balances of Justice") http://www.bilancidigiustizia.it.<br />One of their mottoes is "spend less to spend better" i.e. the drill you've found for free will allow you to save that extra cash you'd like to have to spend on a night out at the theatre or whatever.<br />I think that we can agree that if barter aka "sharing" will allow an impoverished middle class to find resources to be spent in the real economy-- if possible for locally produced goods or services -- then we can create the base for a "less dynamic" economic growth that could positively dent the hyperactive Boom-Extract-Bust short-termism that is becoming the hallmark of capitalism v2.0...Uncle GroOvehttps://www.blogger.com/profile/10205985092887415581noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-38621919657767175492015-10-19T15:51:29.311+01:002015-10-19T15:51:29.311+01:00I am not arguing for or against regulating drivers...I am not arguing for or against regulating drivers. I am just saying the way things are. The big competitive advantage Uber has is due to taxis having to pay high taxes and so having limited numbers and higher prices. Uber does not have to pay $1 mil per driver and can have huge numbers of drives who work at lower prices. The real advantage is the avoidance of taxes.Vincent Catehttps://www.blogger.com/profile/06502618776820144289noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46050713596177498152015-10-19T15:45:59.525+01:002015-10-19T15:45:59.525+01:00There are valid arguments to be made about closed ...There are valid arguments to be made about closed shops and the cost of entry, but surely a taxi service is a public utility, and the public has an interest in regulation, mainly revolving around public safety. IIRC an older rival in the UK, mini-cabs, have a rather chequered history over safety, particularly for women late at night.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-41643559865570820172015-10-19T15:38:25.726+01:002015-10-19T15:38:25.726+01:00Uber had an app that regular taxis did not but eve...Uber had an app that regular taxis did not but even after they got an app, they still could not compete because they had a huge tax overhead in the form of the medalion costs. This is reality. You may think it is ideology, but it is still real. Taxes do impact what people do and how they do it.Vincent Catehttps://www.blogger.com/profile/06502618776820144289noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-47444773698159597962015-10-19T15:10:01.688+01:002015-10-19T15:10:01.688+01:00Or in the above example, the slum landlord "s...Or in the above example, the slum landlord "shares" some rooms, which burn down because it doesn't conform to fire regulations.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-74303705523381853452015-10-19T15:07:53.977+01:002015-10-19T15:07:53.977+01:00Ayn Rand, Rand Paul and Paul Ryan walk into a bar....Ayn Rand, Rand Paul and Paul Ryan walk into a bar. The bartender serves them tainted alcohol because there are no regulations. They die.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59840834559407460602015-10-19T15:05:09.042+01:002015-10-19T15:05:09.042+01:00"This could be an incentive to drill manufact..."This could be an incentive to drill manufacturers to improve their products in order to encourage people not to recycle old drills"<br /><br />Or they can have a designed lifetime, after which they break. In the extreme, they are cheap and built shoddily because they don't care and will walk away with their profits. Or they ensure that "upgrades" enforce obsolescence (viz the computer and smartphone markets). All of these enhance GDP, but are socially useless.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-38663352772157797202015-10-19T14:35:23.369+01:002015-10-19T14:35:23.369+01:00mmm, the sweet smell of ideology in the morning !mmm, the sweet smell of ideology in the morning !Simonhttps://www.blogger.com/profile/00633666632568203068noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26549477113128562172015-10-19T13:53:37.559+01:002015-10-19T13:53:37.559+01:00When times get hard it is often from too much gove...When times get hard it is often from too much government. Taxes are high and businesses and jobs have been leaving. One way people get by is to barter. If I trade you some corn I grew for some eggs you got from your chickens, neither of us is going to pay sales tax, income tax, unemployment insurance, social security, business licenses, etc. Part of the efficiency of these online services is that they are close enough to barter that they are not taxed like normal large business. A regular taxi driver needed a $1 million medalion from the government. An Uber driver needs nothing. A regular hotel pays all kinds of taxes. But when someone "shares a room" (even if really they rents it out) they probably don't pay any tax. Something like "couchsurfing.com" the visitor might pay for dinner and perhaps no money changes hands. But part of the reason people are moving to this is that really the economy is not in good shape.<br />Vincent Catehttps://www.blogger.com/profile/06502618776820144289noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26379453466260280332015-10-19T13:38:14.563+01:002015-10-19T13:38:14.563+01:00You may argue that if the person dumping the drill...You may argue that if the person dumping the drill is doing so in order to buy a new one, that encourages production. Indeed I argued that myself in the "GDP transactions in secondary markets" post - see links. But it is not clear to me how free exchanges free up people to buy extra goods more efficiently than car boot sales, flea markets, jumble sales and charity shops. Indeed, if people need to sell old goods (even at a heavy discount) to afford new ones, then free exchanges must (again at the margin) reduce the sales of new goods, since they undercut existing second-hand markets. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-19844280232689100922015-10-19T13:18:57.121+01:002015-10-19T13:18:57.121+01:00We can debate endlessly the virtues of recycling, ...We can debate endlessly the virtues of recycling, but that doesn't change the economics. Your own example shows that at the margin, production falls as a consequence of free exchange. This could be an incentive to drill manufacturers to improve their products in order to encourage people not to recycle old drills but to buy new ones. But the price still falls, either directly (because the manufacturer has over-produced drills) or indirectly (because technological improvement doesn't enable the manufacturer to raise prices). Deflationary effects like this look good for consumers, but they don't make for a prosperous economy. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-72252898570094712542015-10-19T12:52:07.530+01:002015-10-19T12:52:07.530+01:00Correction: "useless to the person holding it...Correction: "useless to the person holding it"The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-13713794376974597992015-10-19T12:51:14.309+01:002015-10-19T12:51:14.309+01:00"At the margin, items obtained for free from ..."At the margin, items obtained for free from a "sharing table" crowd out purchases of new items". Consumption is still the same, but growth is reduced because the economic value of exchange falls to zero."<br /><br />Okay. Lets look at this another way. The item on the table is a drill. The person giving away the drill has no use for the drill. The person taking the drill would have purchased a drill, but instead gets it for free. The drill maker's output falls by one drill. This is bad because the drill maker should have made a drill to sell to the person needing the drill, so the economy should have had two drills of which one was useless to the person using it.<br /><br />Why?The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-75269602541471400272015-10-19T12:37:04.929+01:002015-10-19T12:37:04.929+01:00Economics has always distinguished between economi...Economics has always distinguished between economic value and use value, or utility. The economic value of an item is defined as the amount of money that an actor is willing to pay for it in a free market. These items exchanged for free therefore have no economic value. I agree the items presumably have use value, or people wouldn't pick them up, even for free - after all, there is a deadweight cost to useless items. Would they then be able to extract economic value from those items? Perhaps. But there is an opportunity cost involved. At the margin, items obtained for free from a "sharing table" crowd out purchases of new items. Consumption is still the same, but growth is reduced because the economic value of exchange falls to zero. In other words, "free sharing" actually reduces GDP growth even if the sharers are able to generate returns from their new assets. It's back to the points I made in the "something-for-nothing society". Persistent expectation that goods and services will be free or nearly so depresses the economic value of productive activity. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2121132346808751282015-10-19T12:23:11.863+01:002015-10-19T12:23:11.863+01:00My main objection is against your sentence: "...My main objection is against your sentence: "If all you do is rent out assets for money, you produce nothing." <br /><br />Take the example of "dumping your stuff on a table and allowing it to be taken by a complete stranger." That transaction will not be reflected in GDP stats, true. No money changed hands. And that thing already existed, so there was no new output. But that item, when placed on the table, was of little or no value to the offerer. Yet that stranger might be able to extract value from the item. The transaction therefore leads to previously unrealised value being extracted from the asset through an increase in its utilisation. <br /><br />Isn't that growth? I mean, perhaps not in a GDP measurable sense, but in terms of total utility right?The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-84141639065624617072015-10-19T12:22:06.822+01:002015-10-19T12:22:06.822+01:00This comment has been removed by the author.The Spinning Economisthttps://www.blogger.com/profile/15758638338880104928noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-49546131995127573742015-10-19T12:17:50.502+01:002015-10-19T12:17:50.502+01:00Here’s the link: http://www.lrb.co.uk/v32/n13/jenn...Here’s the link: http://www.lrb.co.uk/v32/n13/jenny-turner/who-are-they<br /><br />I think it’s readable without an LRB subscription, but possibly only temporarily.Philhttps://www.blogger.com/profile/15334261621479728021noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-23676100368312032402015-10-19T12:15:05.931+01:002015-10-19T12:15:05.931+01:00This comment has been removed by the author.Philhttps://www.blogger.com/profile/15334261621479728021noreply@blogger.com