Comments by "Wandering Existence" (@WanderingExistence) on "John Stossel"
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@jimwerther You think behavioral economics is based on a victim mentality? I don't think you understand what behavioral economics is, buddy. Maybe you should learn about things before you speak about them, that's pretty sad that you're so propagandized that you don't care about empirical studies of how people actually make decisions in the real world ¯\_(ツ)_/¯ Maybe you should do some reading before you criticize, because that doesn't seem like rational behavior.... Oh wait, humans aren't rational and you aren't acting rational, proving my point. Rational Choice Theory is bunk ;)
"Understanding Behavioral Economics
In an ideal world, people would always make optimal decisions that provide them with the greatest benefit and satisfaction. In economics, rational choice theory states that when humans are presented with various options under the conditions of scarcity, they would choose the option that maximizes their individual satisfaction. This theory assumes that people, given their preferences and constraints, are capable of making rational decisions by effectively weighing the costs and benefits of each option available to them. The final decision made will be the best choice for the individual. The rational person has self-control and is unmoved by emotions and external factors and, hence, knows what is best for himself. Alas behavioral economics explains that humans are not rational and are incapable of making good decisions." investopedia, behavioral economics (If I post the link it'll get removed)
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“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”
– MLK, Speech to the Negro American Labor Council, 1961.
“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”
- MLK, Report to SCLC Staff, May 1967.
“The evils of capitalism are as real as the evils of militarism and evils of racism.”
– MLK, Speech to SCLC Board, March 30, 1967.
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“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”
– MLK, Speech to the Negro American Labor Council, 1961.
“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”
- MLK, Report to SCLC Staff, May 1967.
“The evils of capitalism are as real as the evils of militarism and evils of racism.”
– MLK, Speech to SCLC Board, March 30, 1967.
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@grondhero Rational choice theory has been debunked and companies use it apart of their business models. If you still think RCT is a law of econ, you don't know econ, Kirby.
"Because humans are emotional and easily distracted beings, they make decisions that are not in their self-interest. For example, according to the rational choice theory, if Charles wants to lose weight and is equipped with information about the number of calories available in each edible product, he will opt only for the food products with minimal calories. Behavioral economics states that even if Charles wants to lose weight and sets his mind on eating healthy food going forward, his end behavior will be subject to cognitive bias, emotions, and social influences. If a commercial on TV advertises a brand of ice cream at an attractive price and quotes that all human beings need 2,000 calories a day to function effectively after all, the mouth-watering ice cream image, price, and seemingly valid statistics may lead Charles to fall into the sweet temptation and fall off of the weight loss bandwagon, showing his lack of self-control.
Applications
One application of behavioral economics is heuristics, which is the use of rules of thumb or mental shortcuts to make a quick decision. However, when the decision made leads to error, heuristics can lead to cognitive bias. Behavioral game theory, an emergent class of game theory, can also be applied to behavioral economics as game theory runs experiments and analyzes people’s decisions to make irrational choices. Another field in which behavioral economics can be applied to is behavioral finance, which seeks to explain why investors make rash decisions when trading in the capital markets.
Companies are increasingly incorporating behavioral economics to increase sales of their products. In 2007, the price of the 8GB iPhone was introduced for $600 and quickly reduced to $400. What if the intrinsic value of the phone was $400 anyway? If Apple introduced the phone for $400, the initial reaction to the price in the smartphone market might have been negative as the phone might be thought to be too pricey. But by introducing the phone at a higher price and bringing it down to $400, consumers believed they were getting a pretty good deal and sales surged for Apple. Also, consider a soap manufacturer who produces the same soap but markets them in two different packages to appeal to multiple target groups. One package advertises the soap for all soap users, the other for consumers with sensitive skin. The latter target would not have purchased the product if the package did not specify that the soap was for sensitive skin. They opt for the soap with the sensitive skin label even though it’s the exact same product in the general package." - Investopedia, behavioral economics
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@grondhero The stock market is the worst example you could have given. People buy more when there's euphoria at a high price and end up selling when there's panic and fear at a low price. Is buy high, sell low a rational investment thesis, Kirb??? Euphoria and fear are emotions, and they often dominate the market. Behavioral economics and behavioral finance aren't "just another perspective", they have lots of Nobel winning empirical studies and profitable business models that show humans often don't act in their own self-interest. Behavioral economics is relatively new, I think it shows that classical liberals are stuck in the past, learn something new ffs.
Warren Buffett has made a lot of his money by "being greedy when others are fearful and fearful in others are greedy".... That's sage investment advice that entirely centers around emotions and irrationality. Bahahahahaha, but yeah, you're smarter with econ than the guy who earned $110 billion by utilizing stock market irrationality; the very thing you say is false! Oh, boy, your humorous propaganda about rational choice theory is richer than Buffet himself.
Keep on being a classical liberal NPC
E: Warren Buffett's actually now worth $125 billion after buying (being greedy) more companies in this fear ridden market... Are you really going to go toe-to-toe in investment decisions against Warren Buffett??
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@jimwerther Ummm, that Churchill quote was about Democracy... "Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…" - Winston S Churchill, 11 November 1947
lmao, my laziness?? I've spent hours copy and pasting quotes, but you guys can't even be bothered to look up behavioral economics. Humans aren't always rational actors, they're emotional beings full of biases- I'm actually being pretty patient with you guys because I know humans are irrational so I understand why you're being irrational. Let's look at some more points;
"Behavioral finance has revealed that real people do not behave like the rational actors predicted by mainstream theories and the efficient markets hypothesis."...
"Real traders and investors tend to suffer from overconfidence, regret, attention deficits, and trend-chasing—each of which can lead to suboptimal decisions and eat away at returns."
4 Behavioral Biases and How to Avoid Them
By TIM PARKER Updated July 25, 2021
Fact checked by PETE RATHBURN
Let me guess you think going through the effort of correcting your Churchill quote and finding another web page on behavioral economics is "lazy"... Maybe next time you should double check your quote, Mr. LazyJim. Lmao, you guys are hilarious. Just read some behavioral finance, It's an interesting subject that can help you earn money off of people's irrationalities- The article and I have said Buffett made his money this way, as illustrated by Buffets quote "be greedy when others are fearful and fearful when others are greedy". But please continue to believe that humans are completely rational and don't suffer from emotions, like fear and greed, that caused them to make suboptimal decisions for themselves ;) Do some more reading, Mr. LazyJim.
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@jimwerther So instead of admitting you made a mistake you double down and call them the same thing, lol. Democracy and capitalism aren't completely linked... That ideology is called liberalism and it expanded in the late 1700's. There are illiberal examples of capitalism, and examples of democracy without private property. Do you think kibbutz' were capitalistic in their use of democratic voting? (To be clear, whether they succeeded or not is not the issue, rather was their democracy "capitalistic"?)
You're the one who started calling me lazy but then are offended by me calling you the same name? That's a little hypocritical, Jim. Sorry I misspelled a few things; it's called dyslexia. I'm glad you as a teacher, understand learning difficulties... You sure sound like a great teacher /S I don't think Morgan Housel is a deity, but it's obvious you think Sowell is- The irony is too funny. You can't even respond to my behavioral economics points??? *Just like all the rest, you'll ignore addressing behavioral economics* just like the petulant child you are. It's obviously a waste of time to talk to you because you won't address the main issue here; behavioral economics. You are ridiculous, and to have the audacity to call me the embarrassment. Sounds pretty lazy (lazy is your word, not mine, so don't cry about it, Jim).
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Oh, dear ... You're falling for that old authoritarian propaganda? How is it national socialism after Hitler murders all the socialists in his party 🤦🏼 It's literally on par with calling the Democratic People's Republic Of Korea a "democracy". Besides, if you're going to quote Mussolini, you should know that he was in favor of 'corporatism'. Fascism should more properly be called corporatism because it is the merger of state and corporate power.” — Benito Mussolini
Corporatism is a type of economic model that's been utilized by various types of ideologies, but in the broadest sense of the term it means collaboration of the various classes of society (workers, bosses, govt, church, etc) to work together. It's not socialism, because it's not the dissolution of class but integrating class groups to work together, much like the bundle of sticks that the fasce represents. But due to a top-down structure of society, it wasn't so much based around 'collaboration' as state-capitalist subjugation where the fascist governments set up oligopolies and monopolies to better control supply chains and labor markets.
Who did Hitler come for first... Yeah, the socialists;
"First they came for the socialists, and I did not speak out—because I was not a socialist.
Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist.
Then they came for the Jews, and I did not speak out—because I was not a Jew.
Then they came for me—and there was no one left to speak for me." - Martin Niemöller
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“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”
– MLK, Speech to the Negro American Labor Council, 1961.
“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”
- MLK, Report to SCLC Staff, May 1967.
“The evils of capitalism are as real as the evils of militarism and evils of racism.”
– MLK, Speech to SCLC Board, March 30, 1967.
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@metalman666ization This is the irony, you say you understand economics, but you act as if negative externalities don't exist in the real world and mispricing's only come from government; This neglect of real economic events just reeks of dogmatic ideology. There is no such thing as a perfect market equilibrium, prices are always changing to meet available information BUT like I said AVAILABLE info. For instance, if you have an externality that by definition has value that is not being accessed by market mechanisms. You neglect these large concepts and yet you say you understand economics- that piques my curiosity.
Do you incorporate behavioral economics into your perspective? If not, then you don't understand real world economic interactions. Between logical fallacies and behavioral game theory that stems from philosophical concepts of fairness, humans studied in the real world present different characteristics than neoliberal concepts of the "rational actor". Quite honestly I don't even think you know what I mean by a democratic socialist... You probably think of Lenin or something strawmanned like that.
So we don't get sidetracked please reply to each of these main topics;
1) please address my two non-govt examples of mispricing; negative/ positive externalities and an ignorance to correlated risk
2) What role, if any, do empirical studies of behavioral economics factor into your concept of "correct economics", and
3) I don't think you know what democratic socialism means to demsoc's, but I sure would be curious to hear what your capitalist brain thinks it means.
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@SeraphsWitness You say Pareto efficiency isn't relevant to externalities.... Let's check the textbook;
"Chapter 14
Externalities
An externality is the accompanying impact (whether positive or negative) of one agent’s consumption or production activity on the utility or technology of another, where this impact is
independent of markets or prices.
....
Because externalities are external to the workings of markets, the prices at which trades occur
do not reflect their additional costs (in the case of negative externalities) or benefits (in the case
of positive externalities). Consequently, the First Welfare Theorem typically fails, i.e., *in the presence of externalities, the Walras allocation is generally no longer Pareto efficient.* We begin by
illustrating this inefficiency and then consider three “solutions” that have been suggested to
mitigate these problems and that have influenced government policy towards externalities." - Intermediate Microeconomics a tool building approach, by Economist Samiran Banerjee
For clarification, the Warlas law is a concept of market equilibrium, which like I keep saying becomes unhinged in the presence of externalities. You can call me moronic all you want, but you can't cite a single source that proves me wrong. You're just talking out of your ass, I actually can provide textbook and real world examples of these concepts. Keep up with all those fallacies, it's a pretty cute look on you. Feel free to come back and comment when you can provide cited sources for your opinion or a source that critiques the chapter of the textbook that I quoted- until then I'll consider you very confused.
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@metalman666ization Wow, bud, I'm talking about externalities because you guys don't seem to understand the importance of externalities to mispricing of supply and demand. Secondly, I know democratic socialism is different from the Nordic model of social democracy... I'm more anti-capitalist than the Nordic model, but thanks for your strawman (ironic when you accuse me of strawmanning and you end up doing such). The Next System Project is a think tank that I like that is devoted to building communities back up by creating community driven institutions, like coops/ credit unions, land trusts, and labor unions. They have helped multiple communities recover from capital flight that left communities to scrape by- but I don't know, maybe you like when your job gets relocated overseas and It becomes hard to put food on the table.
Third, I don't have to believe in the labor theory of value in order to believe the working class should have autonomy over their own labor- capitalism is based on commodifying humans and decreasing their freedom through exorbitant inequality. Instead of using government redistribution like in the Nordic model I think that there should be a fundamentally more fair distribution within property rights so the government doesn't have to redistribute as heavily to correct such glaring inequalities.
Thanks for trying, sorry you fell into a hypocritical fallacy.... Maybe next time you'll be able to be a little bit more intellectually curious instead of assuming you know my beliefs... Maybe you shouldn't be guessing behavior either, lol 😉✌️
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You probably think that because you don't understand what socialism is. Socialism is primarily democratic.... How do you think trade unions function?
“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”
– MLK, Speech to the Negro American Labor Council, 1961.
“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”
- MLK, Report to SCLC Staff, May 1967.
“The evils of capitalism are as real as the evils of militarism and evils of racism.”
– MLK, Speech to SCLC Board, March 30, 1967.
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“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”
– MLK, Speech to the Negro American Labor Council, 1961.
“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”
- MLK, Report to SCLC Staff, May 1967.
“The evils of capitalism are as real as the evils of militarism and evils of racism.”
– MLK, Speech to SCLC Board, March 30, 1967.
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