Thursday, February 20, 2014

The Economy Is An Equation

Hah! Exactly one search result for "the economy is an equation".  Hawkeye15 beat me to the exact phrase!  I'm kinda surprised that there aren't more results.

Reply to: The Free Market religion needs to fall on its sword

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People didn't understand how evolution works so they believed in the superiority of divine beings. It's the same thing with economics. If you don't understand how economics works then you will believe in the divinity of congress. But government planners can't even supply the optimal amount of milk.

The economy is an equation...

y = f(x)

y = supply = dependent variable = output
x = shopping/demand/preferences = independent variable = input

supply = f(shopping)

If you change the input (shopping) then the output (supply) will change accordingly. For example, if everybody becomes a vegetarian then meat will no longer be supplied.

Imagine if we prevented women from shopping for themselves. If a lady wanted anything then she would have to find a guy to buy it for her. In essence, we'd be filtering the input. As a result, the output would change accordingly. What would happen to the supply?

A. it would increase in value
B. it wouldn't change in value
C. it would decrease in value

If you answer A...then please start a thread where you suggest that we create a law that prevents women from shopping for themselves.

If you answer B...then why didn't it change in value? How much time do you think women currently spend shopping (entering their input into the equation)? If you prevent them from shopping for themselves... then are men going to volunteer their time to shop for women? Even if they do...that time has to be taken from other uses.

If you answer C...then I would be really surprised. Because right now you think it's a good idea to allow 500 congresspeople to shop for millions and millions of people in the public sector.

If preventing women from shopping for themselves destroys value...then how much value is destroyed by preventing everybody but 500 people from shopping for themselves?

Think about it...if we prevented women from shopping...then how many different personal shoppers could they choose to give their money to? Around 150 million. That would be infinitely better than our current system. If we applied our current system to the private sector...women would have to give their money to 500 elected guys. It would be a supremely stupid thing to do.

You think it's a good idea to throw nearly all the data away because you fail to understand economics. You think the output will be just as valuable even if people's preferences and circumstances are removed from the input.

So the reality is that you are the religious one...with your strong and ridiculously blind faith that somehow congress knows your preferences and circumstances like god knows how many hairs are on your head.

You're welcome to believe in the tooth fairy, santa claus, the easter bunny and god...but things are really wonderful when you don't force your absurd beliefs on others. If we created a market in the public sector...then your congress would still be there. You'd be free to indulge your faith by giving them all your money...while us nonbelievers would be free to directly input our preferences and circumstances into the equation which determines how society's limited resources are used.

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