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On November 17 2010 03:16 Dogsi wrote:Show nested quote +On November 17 2010 03:14 barkles wrote:On November 17 2010 03:06 Dogsi wrote:On November 17 2010 03:00 barkles wrote:On November 17 2010 01:11 Dogsi wrote:
"The actual socialist countries of the world are: China, Cuba, Laos, North Korea and Vietnam..."
No, those are communist states.
False. Even the USSR was called the union of soviet SOCIALIST republics. There is no communist government, only communist ideologies. In true communism there is no government (just read Marx), and in socialist states the government is huge and controls (almost) everything. So what do you call a country that is 2/3 public spending and 1/3 private spending? It's not remotely accurate to call it capitalist. Not when 2/3 of the economy is controlled by the government. I didn't say anything about that. I'm just pointing out that you if you can't even clearly identify a "communist" government from a socialist one, how can we expect you to correctly distinguish between a socialist government and a capitalist one? Also, it's inaccurate to say that just because (in your hypothetical example) 2/3 of spending is done by the government that 2/3 of the economy is controlled by the government. For example, if the government spending is done in the form of contracts for private companies, and these companies bid on the contracts, the lowest bid wins, and the private company then does whatever labor the contract entails, then this economy actually behaves in a very similar way to a free market country. The economy is "controlled" by the quality and number of firms bidding for these government contracts, even though it gets recorded as government spending. Communism is both an economic model and a system of government. Communist governments are socialist governments. Not all socialist governments are communist. I'm sorry if you can't understand the distinction.
*sigh* I don't know if I can make this any clearer: THERE IS NO SUCH THING AS A TRUE COMMUNIST GOVERNMENT. They very origins of the communist idea make this impossible. The idea is to create a "commune" where formal social planning (ie government) is unnecessary. I will agree with you that communism is an economic model, but if you have read Marx (as I have) then you will know that there is no government that exists now or that ever will exist that is communist. The idea is nonsensical if you understand what the communist idea is.
Also, you completely ignored the other point of my post. If you are going to try to force your ideas on other people, you should at least make some effort to know what you are talking about.
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when discussing about growth and using metrics like gini... you generally have to seperate rural and urban areas of a country.
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On November 16 2010 14:10 muccer wrote:Show nested quote +On November 16 2010 14:02 ZapRoffo wrote:
No one with any credibility uses GDP as a measure for overall progress in the first place, at least not in modern times, and there are lots of other measures that are used.
GDP is a very specific economic measure that just tells how much "stuff" (more exactly: goods and services) a country produces/consumes. I disagree with your comments, most governments worldwide still use GDP as the main measure and politicians refer to it constantly as proof of success/failures. I am yet to see any government basing its policies on measures of citizen's well-being. So we might be talking about the shortcomings of GDP, but a substitute measure has yet to be developed.
Not in my country, here GDP is rarely spoken ialone, usually as an addendum to a ton of other things that are going well
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On November 16 2010 14:50 domovoi wrote:GDP isn't perfect, but it's highly correlated with the well-being of the citizens. Obviously because when it comes down to it, almost everyone is very concerned about how much money they can earn and how many goods they can consume. Call it materialistic if you want, but that's how society has operated for thousands of years and only within the past century or two has it become feasible for a significant percentage of the world, if not the entire world, to afford highly desirable goods. Until people stop caring about material wealth, then GDP is what we're left with. Gini coefficient is by far the worst idea, because it says absolutely nothing on its own. The fact that China and the US have similar Gini coefficients already says enough about the uselessness of the statistic (the poorest Americans are still richer than the rest of the world and only slightly poorer than the poorest Europeans; you can't even compare the poorest Americans to the poorest Chinese, it would be like comparing me to Bill Gates). If you want to factor in inequality into one easy number, then use median income. Absolutely false. Unless the rich are buying and selling goods only to themselves rather than a publicly accessible market*, and only hiring themselves in the manufacture of such goods, then increased GDP affects anyone who participates in the labor and consumption markets. * And to a certain extent this is true in China, where governmental policies prevent many farmers from migrating to the cities.
I agree. While GDP might have a variable marginal impact on well-being as it reaches the upper-limits, it's virtually impossible for a nation where the gdp per capita is under 10k to have a higher standard of living than one with 30k+. Median income is a very good indicator.
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Let me inject some science into this discussion (and hopefully bring it back to the original point).
First, we need to define what it means for one metric to be "better" than another. This point seems to be lost on many of the people here, since just saying one index is "better" because it includes some measure of human care or something doesn't make much sense. Ultimately, all of these metrics are trying to approximate social well-being, aka life satisfaction or happiness. An index is only good if it ranks happier countries higher, regardless of what data goes into the index. You can't just say an index is "better" because you think it's better.
Luckily enough, we actually have data on the thing we're trying to measure. Surveys around the world have been measuring life satisfaction for decades. And guess what? It's pretty close to GDP. (Evidence here). I think its interesting to talk about new indexes for ranking countries, but unless you can show that it is "better" than GDP, there's really no point in paying any attention to it.
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On November 17 2010 02:54 Dogsi wrote:Show nested quote +On November 17 2010 02:42 Yurebis wrote:
A country could be fully state-employed for digging ditches and filling them back up, and have a great GDP. Is that progress?
GDP is a questionable measure for at least that reason. Not unless those ditches were actually valued. Also, how would the state pay them if the entire economy was a single function? Sorry but your hypothetical fails.
Gee, you're really in a war against all here, aren't you.
The state can force all to both work and buy the redundant service. Such service could be valued by those who are forced to pay for it, but there is no way to know that.
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On November 17 2010 01:22 Dogsi wrote:You are ignoring the reason I stated this now aren't you? How can you quantify an abstract value? Lets say the bottom 1% in America is worse off but the top 99% are far better off, is it still an inferior system?
This is nothing more than an opinion and can not actually be quantified. No one in a developed nation is truly poor (I have been living in Indonesia for the last 5 years, I know what povery actually is) anyways.
There are poor people in developed nations, they are just not so poor as in other parts of the world. What I was trying to say, was : If in one system there is more suffering than in the other, the former one is worse. And since in first world basically only very poor people suffer in a way that can be prevented by the government, than yes even in case 1/99 split it would still be worse system. Hopefully we understand suffering in the same way, otherwise we could end up with very philosophical and ultimately pointless debate  .
On November 17 2010 01:22 Dogsi wrote:
I would not add healthcare because it is not universally beneficial. It retards research and does not contribute to the economy.
Think of it like this, if I contribute to the education of children, those children will be more productive and less likely to be a drain on society. This directly benefits me.
Paying for the health care of others does not. It only benefits me when I am the one in need of the health care. In this intance, I believe personal responsibility should come in to play. I save and invest about 2/3 of my income. I have done so for over a decade now. I do not earn a high income and would only be classed as middle class. Yet, because of my frugal nature, I have amassed a nice little nest egg and could retire now, at the age of 31, and earn about what I earn from working through passive income. In the case of a server injury or medical problem, I am suffeciently able to provide for myself because I have been responsible over the last 10 years. Also, I am careful. I have never had a serious injurty and I do nothing that would put me at risk of serious injury. I take good care of my body and have no health issues. However, UHC generally raises taxes about 15-20%. This would mean if America had UHC, I would have to pay a significantly higher portion of my income. This would cause a even large decrease in my ability to save. I would have to pay this to provide for those who are less careful and less responsible.
I have no problem helping those in need as long as they help themselves. If some one gets injured by no fault of their own and, despite having been responsible with their income, are unable to afford their medical expenses, I would gladly contribute what I could afford (and I do this on a regular basis with many of my wifes relatives here in Indonesia) to help them.
I simply do not agree with the government effectively forcing me to work (which is what taxation is) for others against my will. That is slavery. If the government is able to spend my labor (taxes paid) in a manner that is beneficial to me, then I have no problems.
I am not inherently against socialism. I support some social programs. I simply am against theft.
Would love to sea some proof behind those statements about retarding research. Also healthcare systems contribute to the economy by keeping population productive so they can do their jobs. The cheaper the system can achieve that the better, UHC performs better on this account.
I would love to know where did you pull those numbers behind taxes for UHC. All first world countries except US have UHC, all of them enjoy great healthcare often surpassing US one and yet the cost of their system is 1/2-1/4 of the US system. The only think UHC does is that it forces you to buy insurance, and introduces social solidarity, so people pay not based on their health(often their problems are not their fault), but based on your income. So yes for rich people UHC is more expensive, for most of others it is cheaper. If you think that not having an insurance and just taking care of your lifestyle is reasonable, you are very wrong. Only very small percentage of richest people can pay for medical expenses for serious health complications from their pocket. Cancer would clear your nest very quickly without insurance. So forcing people to buy insurance is no problem, because if they are stupid and do not have it, what will you do, not treat them, of course not, you will treat them and then the hospital will never see the money again, because the person will never be able to pay.
UHC is universally beneficial for many reasons:
a) First thing is as mentioned above people who cannot pay for their treatment. The hospitals will move that cost onto you. So you will pay for them anyway if you ever use healthcare system.
b) A lot of people in US are forced into bankrupcy because of medical bills, most of them as far as I know had medical insurance. Those people might have been productive members of the society, their input to the society will be greatly reduced by going bankrupt. Again bad for you although indirectly.
c) People becoming poor because of medical costs increases poverty -> increased crime. Again bad for you. This is actually more general principle behind GINI, more equality creates more unstable society with higher crime, and in bad economical situations can lead to violent revolutions.
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Also having health dependent on the wealth is so morally wrong that I cannot stress this enough, sometimes being poor is caused by being pretty much burden to the society, more often it is a matter of luck and heritage. Also being stupid is mostly inherited condition, so punishing people for being stupid is punishing them for things out of their control And you can tweak UHC so it still punishes stupidity, unfortunately most systems do not do that.
Last part I would paraphrase "MY, MY, MY money, do not touch that, I am willing to help only if I can benefit directly", but you are benefiting indirectly. Actually money spend on UHC are probably the ones that as far as government spending goes, are spent most efficiently and prosper whole society. Education and justice system being other two important ones.
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On November 17 2010 03:04 lowercase wrote:Show nested quote +On November 17 2010 02:52 domovoi wrote:That statistic doesn't seem absurd to you? I mean, the UK not very egalitarian either (the highest inequality within OECD countries outside of America), yet the UK is richer than Sweden at all levels. This may be the case, but you have only to go to Sweden to see that, on the whole, everyone there seems to be living happier, healthier lives than in the UK. You rarely see homeless people, everyone has money to take great vacations, travel, everyone is beautiful, well-dressed, friendly, industrious, and interesting. 80% of the workforce is unionized, and you will never work for less that $20/hr, which in Canada is a GOOD wage. Capitalism is just another way of saying "every man for himself." In such a situation, it's not surprising to find that all the money is being sequestered by fewer and fewer people.
Yes, Scandinavian countries are in general very well run, perhaps the best in the world. However, look at this picture:
![[image loading]](http://upload.wikimedia.org/wikipedia/commons/a/a9/Inglehart-Values-Map-Big.png)
This tells me a large part of why they work so well is because of their cultural values, and so success is more than simply saying Sweden is great because it's egalitarian. This limits the portability of their policies.
And in any case, you're probably not looking hard enough if you can't find any poor people in Sweden. Their bottom 20% makes significantly less income (adjusted for PPP and social benefits) than the UK's bottom 20%.
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On November 17 2010 03:39 zoniusalexandr wrote:Let me inject some science into this discussion (and hopefully bring it back to the original point). First, we need to define what it means for one metric to be "better" than another. This point seems to be lost on many of the people here, since just saying one index is "better" because it includes some measure of human care or something doesn't make much sense. Ultimately, all of these metrics are trying to approximate social well-being, aka life satisfaction or happiness. An index is only good if it ranks happier countries higher, regardless of what data goes into the index. You can't just say an index is "better" because you think it's better. Luckily enough, we actually have data on the thing we're trying to measure. Surveys around the world have been measuring life satisfaction for decades. And guess what? It's pretty close to GDP. (Evidence here). I think its interesting to talk about new indexes for ranking countries, but unless you can show that it is "better" than GDP, there's really no point in paying any attention to it.
Social well-being is definitely not the same as life-satisfaction or happiness. Many aspects of social well-being can be reasonable measured, happiness and life-satisfaction cannot. Also your evidence is not a link to any paper it is just a graph without methodology, definitions and basically even without the data. It also highly disagrees with surveys that I saw (if you want I can find them), where they tried to measure happiness around the world, and got paradoxical results where people in India or some African countries were happier than people i Sweden or Japan. That shows that measuring happiness is stupid, because it seems people are happy in poor countries and in rich countries. Much better is negative measure, that measures amount of suffering. Your metric is pretty useless, but I agree that it is important to define the "better"-metric, otherwise the discussion will go on many tangents
Anyway GDP works well as predictor of well-being only if you take all countries in the world. But if you take subset of countries within some range of GDP, GDP becomes much more useless. So to reiterate if you use only one number to rank countries, be sure about context. GDP might be good in some arguments, GINI in some others, life expectancy in some others. What I am trying to argue is that using one number to predict basically anything useful without narrowing the range of countries is pretty useless and empty exercise.
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As an economist, I can say that even economists dont think it is. But, it is a good measure of other things. I think the best way to judge a society is by their freedoms, kind of like how Amaratya Sen said in development as freedom.
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On November 17 2010 04:15 mcc wrote:Show nested quote +On November 17 2010 03:39 zoniusalexandr wrote:Let me inject some science into this discussion (and hopefully bring it back to the original point). First, we need to define what it means for one metric to be "better" than another. This point seems to be lost on many of the people here, since just saying one index is "better" because it includes some measure of human care or something doesn't make much sense. Ultimately, all of these metrics are trying to approximate social well-being, aka life satisfaction or happiness. An index is only good if it ranks happier countries higher, regardless of what data goes into the index. You can't just say an index is "better" because you think it's better. Luckily enough, we actually have data on the thing we're trying to measure. Surveys around the world have been measuring life satisfaction for decades. And guess what? It's pretty close to GDP. (Evidence here). I think its interesting to talk about new indexes for ranking countries, but unless you can show that it is "better" than GDP, there's really no point in paying any attention to it. Social well-being is definitely not the same as life-satisfaction or happiness. Many aspects of social well-being can be reasonable measured, happiness and life-satisfaction cannot. Also your evidence is not a link to any paper it is just a graph without methodology, definitions and basically even without the data. It also highly disagrees with surveys that I saw (if you want I can find them), where they tried to measure happiness around the world, and got paradoxical results where people in India or some African countries were happier than people i Sweden or Japan. That shows that measuring happiness is stupid, because it seems people are happy in poor countries and in rich countries. Much better is negative measure, that measures amount of suffering. Your metric is pretty useless, but I agree that it is important to define the "better"-metric, otherwise the discussion will go on many tangents Anyway GDP works well as predictor of well-being only if you take all countries in the world. But if you take subset of countries within some range of GDP, GDP becomes much more useless. So to reiterate if you use only one number to rank countries, be sure about context. GDP might be good in some arguments, GINI in some others, life expectancy in some others. What I am trying to argue is that using one number to predict basically anything useful without narrowing the range of countries is pretty useless and empty exercise.
The chart I linked to was part of an article (link here) that I posted on page 1 of this discussion, by an economist who has written several papers on measures of well-being (here is a link to one of his papers relevant to our discussion).
Some of the disagreement you may have seen in such surveys is due to the difference between measuring life-satisfaction and measuring happiness. Empirically, happiness tends to be more volatile and predictive of short-run well-being, along exhibiting significant seasonality. Life satisfaction is the more commonly used metric because it is less volatile and more indicative of long-run well-being. The paper I linked to above contains further discussion of this effect (as evidenced by the contrast between the two graphs on page 17).
Your point about the context of these metrics is an important one. Even though GDP is a reasonably good measure of well-being there is a considerable amount of noise involved, so other metrics might capture a piece of the variation that GDP cannot explain. My point was less about the precise predictive ability of GDP (hah!) and more trying to point out that debating the theory about which index should be better is less important than the empirical question of which is actually a better predictor. Every index is an approximation since there's only so much complexity you can possibly capture in a single number. To that end, even though we can imagine many reasons why GDP cannot be trusted, it turns out to be a pretty good metric on its own for measuring the well-being of a country.
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For the quality of discussion it would be great if some of the posters who love to throw numbers around add some links / statistics to their posts. I have the feeling alot of numbers are actually guessed / made up only to prove a point. If you looked them up (and I'm sure you did when they're legit - I doubt the majority of you have those numbers memorized) it shouldn't be any work at all for you.
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if a nation's government is efficient and thoughtful about wealth redistribution GDP is a great measure.
if your country's government has 30 years of leadership who said "fuck the poor" (lol America I love you but it's true, let's get ready for at least 6 more years!) then it's not particularly useful as income becomes concentrated at the top and people have to pay for their own 10,000 dollar a session MRIs (no Im not making that up) or their own schooling.
GDP is awesome. it measures aggregate consumption, aggregate savings (and therefore investment) and government spending. In order, those are the three most important parts of aggregate economic performance. That's all lovely, but it doesnt describe how individual people are doing all that well.
HOWEVER, a big caveat to this is that poverty rates are negatively correlated with per capita GDP (in that the poor do tend to benefit from per capita gdp growth).
anyway, my personal opinion is that the best way to approach issues of economics is to make sure the whole ship is afloat and THEN worry about the lights in people's rooms.
I personally love the "broken" cases. And especially at the aggregate level. Some people (especially the ones who were so nasty to me about GDP in the election thread) clearly prefer to stick to the models and assume they work. I prefer econometrics to the poster boy of the Austrians (micro) just like some english folks prefer milton to shakespeare.
I would posit that this idea of "social progress" is best measured by how panera breads you have per square mile.
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On November 17 2010 05:11 zoniusalexandr wrote:The chart I linked to was part of an article ( link here) that I posted on page 1 of this discussion, by an economist who has written several papers on measures of well-being ( here is a link to one of his papers relevant to our discussion). Some of the disagreement you may have seen in such surveys is due to the difference between measuring life-satisfaction and measuring happiness. Empirically, happiness tends to be more volatile and predictive of short-run well-being, along exhibiting significant seasonality. Life satisfaction is the more commonly used metric because it is less volatile and more indicative of long-run well-being. The paper I linked to above contains further discussion of this effect (as evidenced by the contrast between the two graphs on page 17).
I will read it later, it is kind of long But from what i glanced, it seems reasonable, so I stand corrected (for now at least) about the satiation point in wealth-happiness relationship. I am not sure if we disagree on that, but I still highly dislike this subjective measures, compared to some suffering metrics, which are still subjective but much less than happiness ones, and also more important I think as far as influencing government policy. But definitely thanks for the link. I will still continue to use happiness for what they measured in the article and if necessary to distinguish use long-term happiness and short-term one. I think well-being term should be reserved for some more objective measures.
On November 17 2010 05:11 zoniusalexandr wrote:
Your point about the context of these metrics is an important one. Even though GDP is a reasonably good measure of well-being there is a considerable amount of noise involved, so other metrics might capture a piece of the variation that GDP cannot explain. My point was less about the precise predictive ability of GDP (hah!) and more trying to point out that debating the theory about which index should be better is less important than the empirical question of which is actually a better predictor. Every index is an approximation since there's only so much complexity you can possibly capture in a single number. To that end, even though we can imagine many reasons why GDP cannot be trusted, it turns out to be a pretty good metric on its own for measuring the well-being of a country.
Ah, ok. Seems we were talking about slightly different things. I was looking at it only from a perspective how is such and such index well-suited for guiding policy decisions. And my hinted on "better"-metrics was judged on only that account. GDP is definitely reasonably good predictor for well-being/happiness in a general sense, no surprise there(more money the country has , more money it can spend on making life better for its citizens), although as I pointed out I am surprised there was no satiation point. I would be interested if any conclusion can be made about correlation between GDP and happiness on a smaller set of first world countries, but since there are so few of them it might be statistically "unwise".
Anyway, thanks for clarification. As I said I was interested more in judging whether an index is good for guiding policy decisions and argue that none of them particularly are.
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On November 17 2010 03:51 domovoi wrote:Show nested quote +On November 17 2010 03:04 lowercase wrote:On November 17 2010 02:52 domovoi wrote:That statistic doesn't seem absurd to you? I mean, the UK not very egalitarian either (the highest inequality within OECD countries outside of America), yet the UK is richer than Sweden at all levels. This may be the case, but you have only to go to Sweden to see that, on the whole, everyone there seems to be living happier, healthier lives than in the UK. You rarely see homeless people, everyone has money to take great vacations, travel, everyone is beautiful, well-dressed, friendly, industrious, and interesting. 80% of the workforce is unionized, and you will never work for less that $20/hr, which in Canada is a GOOD wage. Capitalism is just another way of saying "every man for himself." In such a situation, it's not surprising to find that all the money is being sequestered by fewer and fewer people. Yes, Scandinavian countries are in general very well run, perhaps the best in the world. However, look at this picture: This tells me a large part of why they work so well is because of their cultural values, and so success is more than simply saying Sweden is great because it's egalitarian. This limits the portability of their policies. And in any case, you're probably not looking hard enough if you can't find any poor people in Sweden. Their bottom 20% makes significantly less income (adjusted for PPP and social benefits) than the UK's bottom 20%.
I have no idea if scandinavian contries are particularly "well run" compared to other countries but heard a political science profesor say there's at the very least less corruption.
However I am quite confident that the bottom 20% in Sweden are better of than in the UK or US, (or essentially anywhere).
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ONe of the issues is also that governments should look to measure what their citizens are interested in and hoping for. It might well be that in a country, citizens would be happier with better healthcare, while in another the majority is keen on better education. How do we capture what the people want?
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By having elections ?
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Yes replace GDP with happines of the people.
Tings that should be included:
Level of education
Level of pollution
Level of health
Level of freedom to express your opinions
Level of special goods available (like, can you only get mainstream conventional goods or are there alternatives?)
Level of genuine careness by the authorities
Level of genuine careness by the people
Level of employment and a healthy employment environment
Level of flexibility in the system (Are the rules to be followed strictly by a represent of authority or can the represent make individual judgements)
Level of feedback (so the politicians created a lawset full of mistakes. How hard is it to rewoke it?)
Level of engagement by the people (are the people lazy TV watchers or are they prepared to make a difference?)
If a country can have succes in all of this then that country will be full of happy people - that, ill tell you, is progress.
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On November 17 2010 09:21 exeexe wrote:
Yes replace GDP with happines of the people.
Tings that should be included:
Level of education
Level of pollution
Level of health
Level of freedom to express your opinions
Level of special goods available (like, can you only get mainstream conventional goods or are there alternatives?)
Level of genuine careness by the authorities
Level of genuine careness by the people
Level of employment and a healthy employment environment
Level of flexibility in the system (Are the rules to be followed strictly by a represent of authority or can the represent make individual judgements)
Level of feedback (so the politicians created a lawset full of mistakes. How hard is it to rewoke it?)
Level of engagement by the people (are the people lazy TV watchers or are they prepared to make a difference?)
If a country can have succes in all of this then that country will be full of happy people - that, ill tell you, is progress.
I like this - and hopefully it's sort of what UK, Canada etc. are looking at, maybe? But citizens (yes through elections) need to demand for it.
http://www.visionofhumanity.org/news/measuring-wellbeing-in-the-uk/
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I think distribution of wealth is the best measurement of a society's progress. There is a finite amount of wealth at any given time in any given country. If that wealth was spread evenly among inhabitants of, say, the US, each family could enjoy a middle class lifestyle. Obviously, this could never happen, but when you start giving some families more wealth, you are taking away from others. The distribution of wealth says a lot about a country (because not everyone who is poor is lazy, and not everyone who is wealthy is hard-working).
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EPT
