Russ Nelson on Speculation WRT PG's "Mind the Gap" Essay(blog.russnelson.com)
blog.russnelson.com
Russ Nelson on Speculation WRT PG's "Mind the Gap" Essay
http://blog.russnelson.com/2008/09/17#in-defense-of-speculators
1 comments
I wasn't claiming speculation has no good effects, just that speculators don't create wealth. You don't have to create wealth to have good effects on the world. Good laws, for example, have good effects without creating wealth.
What is the difference between creating wealth and having "good effects on the world"? Wealth is what people want, and people want good effects on the world, presumably.
While we're on the subject: one thing has always bothered me about that definition of wealth. What if you make people want what you're selling? According to your definition, if politicians brainwash two nations into going to war, they're creating wealth. That doesn't seem right.
For the theses of your essays this doesn't matter, of course, but it's still interesting.
While we're on the subject: one thing has always bothered me about that definition of wealth. What if you make people want what you're selling? According to your definition, if politicians brainwash two nations into going to war, they're creating wealth. That doesn't seem right.
For the theses of your essays this doesn't matter, of course, but it's still interesting.
By these criteria, does the internet create wealth? Do roads?
All of these things provide services that allow others to be more effective.
All of these things provide services that allow others to be more effective.
Can a law create wealth?
I doubt it, but the edge cases of what counts as wealth creation and what doesn't are so hard that I'd want to think more about it before saying for sure.
I think a good law will create wealth if it enables a mutually beneficial transaction that would not otherwise be possible.
For example, a law against breach of contract makes you more likely to hire someone you don't know well. That person gets a job, you get an employee, so you're both better off. As long as this benefit is greater than the cost of enforcing the law, that law has created wealth.
I recommend Law's Order by David Friedman for a whole lot more on this subject. It's a fascinating introduction to the application of economics to law.
For example, a law against breach of contract makes you more likely to hire someone you don't know well. That person gets a job, you get an employee, so you're both better off. As long as this benefit is greater than the cost of enforcing the law, that law has created wealth.
I recommend Law's Order by David Friedman for a whole lot more on this subject. It's a fascinating introduction to the application of economics to law.
For pedantry's sake, this sounds like enabling wealth rather than creating it. The wealth doesn't originate with the law, so isn't created by it.
laws can certainly destroy wealth, and incent people to not make it