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Topic: Finding the best system of economy (Read 17190 times)

  • ersi
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Finding the best system of economy
From the article (book review) Innovation: The Government Was Crucial After All

Quote
"The great advances of civilization," wrote Milton Friedman in Capitalism and Freedom, his influential best seller published in 1962, "whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government." He did not say what he made of the state-sponsored art of Athens's Periclean Age or the Medici family, who, as Europe's dominant bankers but then as Florentine rulers, commissioned and financed so much Renaissance art. Or the Spanish court that gave us Velázquez. Or the many public universities that produced great scientists in our times. Or, even just before Friedman was writing, what could he have made of the Manhattan Project of the US government, which produced the atomic bomb? Or the National Institutes of Health, whose government-supported grants led to many of the most important pharmaceutical breakthroughs?

We could perhaps forgive Friedman's ill-informed remarks as a burst of ideological enthusiasm if so many economists and business executives didn't accept this myth as largely true.


  • Frenzie
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Re: Finding the best system of economy
Reply #100
I'm sure I'm marginal on some things but if I've learned anything from this tangent It's how little the economy is involved in my decision making. Even when money is tight a few dollars here or there isn't enough to deviate from what works and not needing to save a dollar has never stopped me from not spending it. Results may very of course.
I think that rather than change what I buy, I'd better pay more attention to where I buy it.[1] I do that for surprisingly large differences, like at the one store Frosch dish washing liquid is literally less than half the price of at another, but for an everyday object like mushrooms I often pay 10-20 cents more than the cheapest price. Heck, I even pay 50 % more for milk & buttermilk because the store with the more affordable (butter)milk (AH) is super out of the way in the north of town. They closed down the one much closer to me.  :no:

We recently also started saving some money through the discovery of frozen bulk Quorn over at Colruyt. But you can save money more proactively than just by randomly running into an opportunity like that.
Although I might also cut back on more expensive cheese and possibly bio products.

  • ersi
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Re: Finding the best system of economy
Reply #101
Some other Unconventional Economic Indicators that have been promoted include:

1. Hemlines: First suggested in 1925 by George Taylor of the Wharton School of Business, the Hemline Index proposes that skirt hemlines are higher when the economy is performing better. For instance, short skirts were in vogue in the 1990s when the tech bubble was increasing.
2. Haircuts: Paul Mitchell founder John Paul Dejoria suggests that during good economic times, customers will visit salons for haircuts every six weeks, while in bad times, haircut frequencies drop to every eight weeks.
3. Dry-cleaning: Another favorite Greenspan theory, this indicator suggests that dry cleaning drops during bad economic times, as people only take clothes to the cleaners when they absolutely need to when budgets are tight.
4. Fast food: Many analysts believe that during financial downturns, consumers are far more likely to purchase cheaper fast food options, while when the economy heads into an upswing, patrons are more likely to focus more on buying healthier food and eating in nicer restaurants.
What I find curious about these indicators is that most of them are allegedly trying to capture consumer behaviour, something that the mainstream theory is incapable of. According to the mainstream economic theory, just one type of people exists: maximisers of economic profit. In reality, there are at least three types: hoarders, hustlers, and drifters.

Maximisers of profit are a combination of hoarders and hustlers, whereas the bulk of consumers are drifters. After fulfilling their primary needs, drifters buy stuff just because other people are buying the same or similar stuff, or if minimalism is in the vogue, they do not buy anything. There may be more pennywise and less pennywise drifters, but they do their thing completely regardless how economy at large is doing.

With the last point (fast food), I guess they are referring to the famous Big Mac Index. It is useful for measuring purchasing power parity rather than consumer behaviour in relation to upswings and downturns of economy. West-branded fast food is a completely different social phenomenon in e.g. Eastern Europe compared to Western Europe and USA.

In Eastern Europe, McDonalds and Burger King are a symbol of the stage of development where prestigious global brands enter the local market. Visiting such places signals that you can afford shiny foreign things. It has nothing to do with cheapness or even with fastness. In under-industrialised countries, Western fast food brands are an outrageously expensive choice compared to e.g. forest produce which comes only at the expense of picking (and most people are picking forest produce by themselves because this is what under-industrialised means). When these people go to a fast food restaurant, they are not thinking about saving money. They think about showing off and having fun like they have seen in the movies, nevermind the health effects.

This is why the Big Max Index measures purchasing power parity, not much else. Also those other indices measure, in a limited way, purchasing power parity in various social strata. They can have a relation to macroeconomic trends on the assumption that economy equals consumption. Wrong assumption.

Economics is about the least attractive science, not really worth to be called a science. Accounting and econometrics are something, but economics is nothing.

  • Frenzie
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Re: Finding the best system of economy
Reply #102
With the last point (fast food), I guess they are referring to the famous Big Mac Index.
Oh right, I've heard of that.

In Eastern Europe, McDonalds and Burger King are a symbol of the stage of development where prestigious global brands enter the local market.
Back in the mid-'90s, there was a particular ad McDonald's ran on TV. A bunch of kids were hanging around a set of swings talking about what their dads did.[1] "My dad's a teacher, mine's a banker, mine's a lawyer. Dude, what's your dad do? My dad works at McDonald's." Cue stunned silence from the kids.

When I first saw that ad, for the first split second I thought it was shocked silence at the family's misfortune and I was afraid the poor kid was about to get bullied.
Maybe it was a dubbed American ad? I'm not sure if native Dutch ads were so bluntly sexist.

  • ersi
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Re: Finding the best system of economy
Reply #103
Maybe it was a dubbed American ad? I'm not sure if native Dutch ads were so bluntly sexist.


If this is a real ad by McDonalds, then they easily compete with Disney in overt racism. And yes, the message is "I'm lovin' it", their current catchphrase, but from the bad quality and general lack of availability of the video, it seems the ad was cancelled.

Is there some "Black TV" network in USA?

Edit: And yes, it looks like in USA the marketing departments in all earnestness posit the question, "How can we dupe that particular demographic into buying the product?" https://adage.com/article/cmo-strategy/mcdonald-s-hits-refresh-african-american-marketing/317145
  • Last Edit: 2019-10-20, 19:16:36 by ersi

  • Frenzie
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Re: Finding the best system of economy
Reply #104
Nope, definitely a fully Dutch commercial. Turns out there's a subtlety I missed at the time: the kid's dad in the commercial is actually a famous architect of presumably greater importance than some random lawyer.

https://www.youtube.com/watch?v=PTlDfAQNXkI

(And it says it was from 2000? Huh, it somehow feels older in my memory.)

  • ensbb3
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Re: Finding the best system of economy
Reply #105
Western fast food brands are an outrageously expensive choice compared to e.g. forest produce which comes only at the expense of picking

Well to be fair, urbanites have always been more dependent on how their money works. I grew up in a small town. Gardens, hunting and foraging were just a thing. 

  • Frenzie
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Re: Finding the best system of economy
Reply #106
Yeah, living in a city has some truly bizarre aspects, at least from my perspective as someone who didn't grow up in one. (My parents did.)

Things like blackberries are basically weeds that to quite some extent you want to get rid of. Of course you eat plenty of actual blackberries from about August to October, but they're just these things that are there. Same for watercress (except more of a welcome guest than a weed), etc., etc., etc. But here in the city blackberries are some kind of expensive delicacy, as is watercress.

  • krake
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Re: Finding the best system of economy
Reply #107
But here in the city blackberries are some kind of expensive delicacy...
Some of them are indeed expensive. :)


  • Frenzie
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Re: Finding the best system of economy
Reply #108
Yum, chips!