Arthur,
Well, I'm obviously pleased that at least one
economist (and an eminent one, too) has grasped
the essential point that rank order is the main
determinant of evolution within a (mammalian)
species. The (very simple) basic principle is
that of quality control by which the losers tend
not to get chosen by the females for sexual
partnership and thus tend not to pass their
particular blend of gene variations onwards. The
more gifted in a group tend to obtain more sex
than the others and thus their own particular
blend of genes tends to predominate.
Where I think Robert Franks is wrong about his
taxation ideas is owed to another economist, Fred
Hirsch. In his day he was regarded as future
Nobel Prize winner but he died tragically young.
His only book, Social Limits to Growth, however,
is still re-printed today. Hirsch points out that
the most highly regarded status goods (he calls
them positional goods) such as houses in
beautiful countryside settings and luxury
ocean-going yachts are in relatively slim supply
compared with lesser goods and mass goods. Thus
there will never be any shortage of a sufficient
number of billionaires who will be competing
fiercely for the very highest status goods,
whatever they may cost. No amount of progressive
consumption taxation will prevent this
competition. In fact, progressive taxation will
only enhance the status, and hence the
attractiveness, of the most expensive high-grade
goods. They won't lose their attractiveness, as Franks maintains.
But, essentially, Robert Franks is correct in
brining evolutionary studies into economics. He's
done a lot better in drawing wider attention to
the importance of status than I have in the past
few years on this list! Yes, Charles Darwin will
go down in longer term history as being nearer
the mark than Adam Smith. But then, some of Adam
Smith's ideas were anticipated by Greek
philosophers such as Xenophon well over two thousand years ago.
Keith
At 17:28 19/09/2011, you wrote:
As a Ph d economist from Cornell University
(adviser was Alfred E. Kahn) I sure cant argue
with Cornell professor Robert Franks ideas. (I
note that he co-authored a book with Ben
Bernanke
so perhaps his ideas will have traction)
I think though that Keith H. will have something
to say about how status is hard wired in humans
and if we give up something in one pecking order
game, we will have to substitute something else
in an another pecking order game.
Arthur
From: [email protected]
[mailto:[email protected]] On Behalf Of Ray Harrell
Sent: Monday, September 19, 2011 12:16 AM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION'
Subject: [Futurework] FW: The Darwin Economy
Bob is a member of our Board of Advisors. I
like his work. Both his articles and the Winner Take All Society.
REH
From: Robert Frank [mailto:[email protected]]
Sent: Sunday, September 18, 2011 4:28 PM
To: Robert Frank
Subject: The Darwin Economy
I hope this note finds you well.
I write to let you know that my new book, The
Darwin Economy: Liberty, Competition, and the
Common Good, will be published by Princeton
University Press this Wednesday, September 21,
as the lead title on its fall list. An essay
excerpted from the book was published in todays
Sunday Business section of the New York Times
(<http://www.nytimes.com/2011/09/18/business/darwin-the-market-whiz.html>Darwin,
The Market Whiz). And another excerpt from the
book was recently published by the Cornell
Alumni Magazine
(<http://cornellalumnimagazine.com/index.php?option=com_content&task=view&id=1172&Itemid=9>Starve
the Beast).
I was moved to write this book by feelings of
despair about our impoverished
political/economic debate. With a solid
majority in the House and enough votes to block
legislation in the Senate, Republicans have
vowed to balance the federal budget with
spending cuts alone. But as anyone familiar
with the numbers knows, thats
impossible. Well also need new revenues. Yet
Republicans on the Congressional budget
supercommittee have all signed a formal pledge
never to approve increased taxes under any
circumstances. And in a recent debate,
Republican presidential candidates all said they
would reject any proposal that had even one
dollar of tax increases for every ten dollars of
spending cuts. An economic train-wreck looms.
Thats the bad news. The good news is that
theres a painless way to avert it. In The
Darwin Economy, I describe simple steps could
liberate literally trillions of dollars in
additional resources each yearenough not just
to balance the budget but also to restore our
crumbling infrastructure. No painful sacrifices
would be required. No cherished freedoms would
be threatened. Just a few unintrusive changes in the tax code would suffice.
These bold claims, inspired by insights of
Charles Darwin, evoke the alchemists promise to
transform lead into gold. But they rest on
sound logic and compelling evidence.
Darwin understood that individual and group
interests sometimes coincide, as in Adam Smiths
Invisible-Hand theory. But he also understood
that group interests often conflict sharply with
individual interests, and that in those cases,
individual interests trump. In ways that
non-human animals cannot, we can act
collectively to curb the enormous waste that
often results from such conflicts. And therein lies the way forward.
The policies I propose rest on a simple,
uncontroversial observationthat the forces
driving luxury consumption are strongly
context-dependent. When the rich all build
larger mansions, they succeed only in raising
the bar that defines how big a mansion they feel
they need. Simple changes in the tax code could
cause across-the-board reductions in luxury
spending whose effects would be similar to those
of parallel cutbacks in weapons spending caused
by military arms control agreements. Such
agreements also create new resources out of thin
air, by enabling rival nations to spend more on
domestic services without jeopardizing their national security.
Implausible though my claim might sound on first
hearing, many respected economists (including
the two I admire mostTom Schelling and Will
Baumol) have endorsed my arguments. For
example, Baumol, a past president of the
American Economic Association, wrote that the
book's "message is my only hope for a rational
economic future." Amazon.com has compiled long
list of other endorsements
<http://www.amazon.com/Darwin-Economy-Liberty-Competition-Common/dp/0691153191/ref=sr_1_1?s=books&ie=UTF8&qid=1313029443&sr=1-1>here.
Ive been at this long enough to know better
than to expect that any single book will make
much difference. But conversations about change
have to start somewhere, and if youre concerned
about the paralysis gripping our political
process, I hope youll give The Darwin Economy a
look. Its first chapter is posted on
Princetons website
<http://press.princeton.edu/chapters/s9509.pdf>here,
and theres lots more information about it on
the books Facebook page
<http://www.facebook.com/pages/The-Darwin-Economy-by-Robert-H-Frank/199724936731171?sfrm>here.
All good wishes,
Bob
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2012/08/
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
