What was a failure around the meaning of Aesthetics and the Arts in society, has now reached into pure scientific research.
Might there not be something here that is deeper than the market and its mechanisms? Might the market be embedded in a greater reality that requires advanced thinking about systems larger than economics and the market? America’s answer for such things is to put her head in the sand and create a “Not for profit” sector to take up the slack. But does it work? Does the complexities of expertise required by these professions far outrun the sincere ambition of talented people in that profession making the profession itself fail and spreading its shards around the rest of the society skewing the basis of society itself? REH From: [email protected] [mailto:[email protected]] On Behalf Of Arthur Cordell Sent: Saturday, September 24, 2011 9:09 PM To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION'; [email protected] Subject: Re: [Futurework] Professional Ethics (of economists) Is this the sort of market failure you are thinking about? http://opus1journal.org/articles/article.asp?docID=140 http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6435.1966.tb02491.x/abstra ct THE TYRANNY OF SMALL DECISIONS: MARKET FAILURES, IMPERFECTIONS, AND THE LIMITS OF ECONOMICS <http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6435.1966.tb02491.x/abstr act#fn1> † By Alfred E. Kahn A market economy makes its large allocations and reallocation of resources on the basis of a summing up of the ‘votes’ recorded by customers in a host of small, individual market transactions. A critical task in appraising the efficiency of such an economy, then, is to determine whether and under what conditions this adding up process produces optimal results. The ‘smallness’ of the decisive, individual transactions—their limited size, scope and time-perspective—can, it is argued, be a source of misallocations, in the sense that consumers might disapprove of the larger result thereby produced, if they were ever given the opportunity explicitly to vote for or against it. In certain circumstances, the smallness of the relevant decisions may produce authentic market failure. This will be the case where they do not include an independent appraisal of customers’ desire to keep available for possible future use a service that they do not actually use in sufficient amount to cover the costs of providing it. In other circumstances, the smallness of the individual transactions may encourage irrational consumer choice, because they are too small to justify the effort of securing good market information. In yet others, monopoly elements may cause the buyer to be presented with excessively narrow choices that do not correctly reflect that actual costs of the competing alternatives; and the result may be an uneconomic spiral of product quality changes over time so-called ‘product inflation’. Finally, the cumulation of individual choices may have the ultimate effect of changing consumer preference function themselves, in which event it is not possible for welfare economics to judge the optimality of market performance. These possible defects of the market may be conceived in the more familiar terms—as attributable to externalities, market imperfections or the defects of consumer sovereignty itself. Emphasis on the contribution influence of the smallness of the controlling decisions has the virtue of suggesting the possible necessity of substituting a ‘large’ for a piecemeal accumulation of small decisions if the results are to be intelligently appraised or improved. From: [email protected] [mailto:[email protected]] On Behalf Of Sandwichman Sent: Saturday, September 24, 2011 4:03 PM To: [email protected]; RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Professional Ethics (of economists) On Sat, Sep 24, 2011 at 11:56 AM, Mike Spencer <[email protected]> wrote: Sandwichman wrote: > Try "incidental uncharged disservices"... That works, tnx. > "Gaming the system" is a non-technical (but also non-specific) term for > what I'm talking about. Would you care to expand on that just a tad? I don't know a technical term for "Gaming the system". Yes, I would like to expand on that but it'll be more than a tad. I'm researching/writing something fairly comprehensive 'as we speak'. The issue, as I see it has to do with what is commonly referred to as "market failure" and the moral hazard that can result from attempts to correct such inefficiencies and inequities through government intervention. Or put it this way, the invisible hand of the market doesn't necessarily lead to an beneficent result but attempts by the state to fix the problems are not fool-proof (or, more to the point, game-proof) either. snip, snip, snip
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