You Fail Economics Forever Discussion - Television Tropes & Idioms

Game_Fan: I propose a slight rephrasing of Ridiculous Rationality. It's clearly a pot-shot at slightly Flanderized version the rational actor theory. Inhuman Behavior, strikes me as a better use of space. Besides covering Ridiculous Rationality it can note all economies based people acting in ways that go beyond simply illogical and right into the completely absurd or that contradict what we actually see, like how Star Trek is based on the idea that "everyone is perfect" even though we're shown repeatedly that this isn't true. It could also cut away some of the hostility that Ridiculous Rationality seems to generate.

I don't think this makes sense. "Ridiculous Rationality" is about a pretty specific way of portraying behaviour unrealistically, which is closely connected with economics. But simply categorizing every single plot and story that explores possible changes to human nature as an economic fallacy seems a bit extreme to me. Star Trek, for example, was an optimistic view of the future, and everyone becoming more "enlightened" (while still having to occasionally battle their demons) was an essential part of this optimistic and hopeful view, rather than a mere misapplication of some economic theory.

This isn't always a negative thing, from the perspective of the economy. The health of the economy is best measured by the total amount of money that's exchanged hands in a given year. So, for example, if you had a hypothetical economy with $1000 in currency and each dollar exchanged hands an average of 2.5 times, you'd have a GDP of $2500. If you take money from those who hoard rather than spend, or if you effectively borrow from the future by deficit spending, even useless actions can generate economic growth. WW 2 strongly boosted the American economy by doing nothing more than paying one person to build a bomb and another to blow it up. Of course, you can get an even better recovery if you direct the money to something that's useful.
- The above comment is a prime example of the first fallacy, as it confuses currency (and the velocity multiplier) with actual wealth. Take WWII for example, the actual average standard of living for Americans decreased during WWII because of rationing. People couldn't eat whatever they wanted. Productive forces were being diverted into producing ways to kill people and blow things up. The measured economy may have been larger, but the actual wealth produced was lower. Of course the Great Depression meant there was a lot of excess productive capacity so the reduction in standard of living wasn't nearly as noticeable as it usually is during a massive war. After WWII standard of living increased above pre-war levels rapidly because that excess productivity that was idle during the depression was now active and converted to peacetime production. In more general terms, paying someone to dig ditches and fill them back up is harmful to the economy. Why? Because productive forces are being expended, but nothing is being produced. At best, the productive forces being expended were already idle due to some depression, and so there is no harm (and no benefit) to the economy because the productivity would have been wasted anyway. Although, tying up excess production like that makes it much hard for growth to occur. So it still has negative effects.
- A simple metaphor would be buying new shovels and digging ditches and filling them in for practice. After you're done practicing you now have strength, endurance, experience and an almost new shovel and are ready to go dig ditches for profit.
Many of the WPA Projects instituted during the New Deal were exactly this. Fortunately, the rest of them were not, so the country wasn't plunged even deeper into Depression.

—- The Original Some Guy: This's a Q for clarity (as opposed to Socrates) to whoever wrote "Damn the expenses": which part doesn't happen in real life? The description read like truth-in-television. Scientists are paid to record the output of cow farts and other ridiculous studies that no company executives are stupid enough to fund. Everyone wastes wealth and the more a body has the more it wastes. What part of "damn the expenses" doesn't happen in real life?

Jojabar: There's plenty of valid research that isn't likely to be lead to patents or short-term profit; just because no company exec would fund it doesn't make it stupid.

—- I removed the comment below b/c whoever wrote it didn't know what he was writing about. Currency is created and destroyed. Even hard money fluctuates as bullion's lost and minted from gold/silver newly mined or previously used as a crafting material. Paper currencies are printed and banks increase the numerical values of currencies with computer entries no more substantial than this one. If currency couldn't be created or destroyed how have their been new currencies?

Some of this fallacy arises from the fact that currency is a zero sum system, but as pointed out in the first common error — currency is not the same as wealth.

I also removed the next comment b/c how "some economists feel" is irrelevant. Also you can tell from the writing the author knew he was bullshitting.

Note in some limited circumstances, and used in moderation, this may actually work. See "self-limiting inflation" for example, where "free money" can, under the right circumstances, promote investment and result in real wealth. Some economists also feel printing money to cover a moderate budget deficit is not necessarily a bad thing — as long as that budget is being used to actually do useful things — as long as the resulting inflation is kept at around 15% and not much higher.
- I was the one who added that, and while I'm not an expert in economics I wasn't "bullshitting" regardless of what you think you "can tell from the writing." This was on my mind because we covered it in my eco class a few weeks ago, and I thought it was relevant so I added it. Also I don't understand why the opinions of economists would be irrelevant in a trope called "you fail economics forever." One would think those economists would be the best people do determine whether an economics fail has, in fact, taken place.

Working Title: Nobody Likes The Dismal Science: From YKTTW

Kilroy I added a bit to the end of Ridiculous Rationality because it seems to me that a lot of people miss that fact that "perfect rationality" is not meant to be an accurate assumption, but rather one that reduces confounding factors, and it would be disingenuous to say otherwise. If this is controversial, then I please remove it, but I really don't think it's much of a stretch seeing as how it's the same disclaimer that every economics professor and lecturer I have ever had has given when the assumption of perfect rationality has come up.

—- MidasMint I removed

Ridiculous Rationality: Contrary to the stated assumptions of Mainstream, laissez-faire economics, human beings are not yet perfectly rational and a perfect market is not yet possible: Laws against unfair dealings are often not enforced, prices do not reflect all externalities involved (such as pollution etc.), and there are significant real-world barriers against merit-based social rising or innovation (racism, monopolies, "licensing" whose only purpose is to protect existing business, unavailable loans or courts, an out-of-reach education system, bribes, Organized Crime etc.) Though many scholarly economic works take these factors into account, it is wise to be on the look out for unlikely free-market corporate-based utopias that often are prevalent in science-fiction: without proper justification, the whole thing may work simply because the author says that it does.
Trickle-Down Syndrome: When a writer brings in a marvelous new development for society, they often assume that it will benefit everyone in that society to a similar degree, using the logic that, "a rising tide lifts all boats," without realizing that 99% of the population can't afford a boat in the first place. Especially glaring examples tend to show up in works dealing with The Singularity. The classic example of this fallacy is robotics: for a long time Science Fiction theorized that when we have developed computers of a certain sophistication, that all would benefit from more leisure that automation would provide. Instead, (and this is a clearly unnuanced depiction) many working class individuals saw their quality of life fall as they lost their assembly line jobs as manufacturing owners saw their profits climb. Certainly the situation may improve with time, but still, when the time comes it would be wise to invest in replicators, rather than hope for the largesse of replicator owners:
"The future has arrived; it's just not evenly distributed."
—William Gibson

b/c they discredit tropers who've passed economics.

Earnest: And I'm putting them back because you aren't actually explaining why they're wrong, and you've deleted {{Jordan's}} counterpoint. If you want to actually debate why they're wrong and shouldn't be there, it helps if you actually give us reasons.

MidasMint: Fine, I'll play. 6 "a perfect market is not yet possible". There is no factor preventing people from dealing with each other fairly. One man can rob another. The potential for wrong exists. But nothing stops people from restricting our property exchanges to situations of mutual agreement. Property-less systems can't work b/c finite items have limited applications, usages, and divisions. A meritocratic society is prevented by human moral failings. How plausible an author considers it charts him on the Sliding Scale Of Idealism Versus Cynicism. It's physically possible though man may make it unbelievable. Economic ideas which're physically impossible (and should be examples in this trope) are those like an equal apportionment of all goods to every man. 6 billion people could trade 100 apples peaceably but there's no way to distribute 1/6 of 10 millionths of an apple to 6 billion people. 7 When a group of people rely on each other for their standard of living and even 1 member of that group has an easier time working every other member of the group benefits from the lightening of his burden. Imagine each person as the point where lines overlap in a net and the difficulty of his labor as a weight on him. The weights put tension on the net. When weight's reduced anywhere on the net the net loses tension. Each individual point is less tense. Understand?

Earnest: Yes, they're good counterpoints arguing for how these ideas can apply and have merit in the real world, but you have to remember this trope is about the unrealistic exaggeration of these. So long as an author exaggerates the benefits while downplaying the costs of these points beyond what's reasonable, then it qualifies. For 6, we're not concerned so much with socialist, communist, or capitalist, so much as with an assumed shift in human nature and behaviour that is unrealistic. Everyone is assumed to have perfect information on all costs and benefits, or is perfectly willing to disregard emotional bias (buy national! Buy organic!) when making their decision. It's the kind of mentality that would fit much better on Vulcan than Earth. Unemotional, perfectly rational decision making. For 7, I agree with you that in the long term technological advancement is a good thing, standards of living have gone up every time a new innovation appears. That point is objecting the notion that in both short, medium and long term the new advancement will bring nothing but prosperity. Realistically, an innovation like a hover car can mean layoffs in the short term and medium term as now obsolete technologies and industries are phased out in favor of the new, until a new balance that fully uses these advances in the long term. It's the equivalent of saying every country should switch to nuclear power because it's nothing but clean, cheap energy... ignoring the large initial costs, and that coal and oil would take huge hits, meaning layoffs.

Lastly, if you really want to be a member of this community, and not just "play", wait until there's a consensus before cutting parts out of an article. This is twice now. Otherwise we'll be forced to conclude your mind is set and you can't be reasoned with. Talking out your reasoning helps your case, but leave the article be until such agreement is reached.

Madrugada: And I just cut them way back, to a simple version of what the fallacy is. This isn't a page for essays on the fine points of economics theories, it's a page about how media gets economics wrong. Stay on track. I also chopped that huge dissertation on "how games economies work" for the same reason.

The Original Some Guy: Thank you Magruda for the first edit. The last two points have been lost their "so there" tone. For the gaming bit, remember the founders had concern about all the examples people gave, some members thinking this org should be more like the other wiki, but it was decided the fun/exercise of finding examples was much the point of this org. and did no harm.

Gattsuru: Must... resist... adding... Zimbabwe...

Earnest: Well, in a very real sense, Robert Mugabe is failing economics forever.

Jethro Q Walrustitty: On the export fallecy, what about outsourcing? I'm not an economist, but I would think that moving the jobs elsewhere will hurt the local economy. That's also what I think happens in Animatrix; the Robot's superior hovercar industry put the other countires industires out of business.

Jethro remember that if Merchant A and Merchant B sell product Z and Merchant A's version of product Z is better than Merchant B's it's a net gain for people to buy Merchant A's product z. It doesn't matter what the product is or what country it's from. Folks appeal to nationalism with double standards to trick people. A guy may say, "I lost my job b/c my company hired a Mexican. You should boycott Mexican-produced products and only buy from guys that employ me". How's that fair? If the employer wants to employ the Mexican it's his business to do with as he will. If the Mexican does a better job he has earned his payment. If you're saved money or get a better product you're better off. So out of 4 people in this situation 3 have improved lots. Why should you pay the inferior worker (leaving the better worker unemployed) and force the employer to keep on a man who's not the best for the job? The prosperity of people leads towards new jobs becoming available because employers are earning more (they can expand their business) and more people have enough savings to start businesses. Keep in mind by default no one has a job. The more you save on your purchases, the easier your life is, the better the products, the more efficiently a bussinessman runs his company, the less wealth is wasted, the more wealth's spent on worthwhile pursuits (including jobs). But a greater issue of sorts is the evil of men in government, news agencies, etc. Some of the jobs that're "shipped overseas" would be done in your country if the government allowed it. Child labor laws, minimum wage laws, etc. make it less healthy for Nike to employ in The US than China. If lawmakers minded thier business companies could be even more effective, saving expenses by manufacturing near stores carrying their product. As for the Animatrix...it didn't make no sense. Worldwide people try to wipe out androids. But nobody minds the androids building a city? Nukes don't destroy their bodies! They're more creative than people (Mary Sue) and have all the benefits of mechanics. One city took over the whole world's manufacturing, nigga please.

Earnest: Interesting question. The thing is the machines were the only "country" making flying cars because they were the inventors. So it's not so much outsourcing as it is a technological innovation making a previous one obsoltete, like cars to carriages or steam ships to sailing ships. In which case, you might as well stop all innovation since it means the old industry will go kaput. I dunno, maybe they were "greedy" by not sharing, but at the same time maybe the humans were simply jealous or felt threatened.

Gattsuru: Being opposed to a certain type of import alone is not the export fallacy; it's the assumption that importing is always bad where you start going to fallacy town. Outsourcing and imports can be bad in some cases (or if you have huge net imports for too long and no exports), but if you can refine imports into more valuable goods, or if outsourcing allows the cost of a common good to drop dramatically, it's not a problem.

CapnAndy: I'm still not sure the Animatrix qualifies. The machines were importing nothing and exporting at will. Money goes in and it doesn't come back out again; this isn't a problem?

Empyrean: Star Trek was listed as averting this trope? Really? The entire notion of "post-scarcity" economics is ridiculous. Unless anyone can have an infinite amount of anything anywhere anytime they want, there is scarcity. Star Trek supposes that everyone can have anything, except for the stuff they can't have; like more starships or better weapons. The basic premise of a "post-scarcity" is pure economic fail and the setting isn't even internally consistent about it.

Doug S. Machina: I think the Culture of Iain M. Banks makes a post-scarcity society work. You can have anything you like. An alien from another society asks what stops him from claiming a planet: nothing, but nothing stops other people from coming there. Could you a fleet of ships to back up your claim? Sure, but they'd have their own minds, so they won't just take your orders.

Empyrean: Nothing would stop them, except for the Dyson sphere I've encased the entire solar system in. I can have one of those, right? No scarcity means I can have one, or a billion for that matter. In any case, if I can't have a planet (or a thousand of them) all to myself then land is still scarce. I'd count any belief in a "post-scarcity" economy of any sort as failing economics forever, since such a situation is literally impossible no matter how advanced your technology is. If multiple people cannot claim exclusive ownership over everything simultaneously, then there has to be some sort of rationing system in place. Hence, scarcity exists and the author positing that it doesn't fails economics forever.

Gattsuru: I think it's best to consider post-scarcity 'economies' as a more limited aspect of scarcity; the Culture and (earlier) Star Trek episodes make it clear that there's no real scarcity of food, practical goods, medical treatment, or entertainment items. To toss out some generic examples : A level 1 post-scarcity 'economy' is one where any of the goods or services the writer perceives as being positive rights are universally provides (Star Trek TOS). A level 2 post-scarcity 'economy' is one where any of the goods or services that the author's society would normally encounter are universally available (Star Trek TNG). A level 3 post-scarcity 'economy' is one where any of the goods or services that the author could imagine him/herself or anyone else commonly using are universally available (The Culture, arguably Transmetropolitan). A level 4 post-scarcity economy is one like you're thinking of, with near free planets. Level 5 would be effective universal playground for everyone. I don't think the higher levels make interesting stories or characters people can relate to, though, and (maybe excluding level 5) I don't think any of them should be without a currency if the characters are supposed to be human-like.

The Culture and Starfleet should probably still fit in as Failing Economics Forever, since they essentially run on Free Money For Everyone and Digging and Filling Ditches, with the 'post-scarcity' simply being an excuse for why an interstellar culture has folk programming easily copyable superdoctors and normal people studying to be doctors.

Doug S Machina: @Gattsuru: "Nothing would stop them, except for the Dyson sphere I've encased the entire solar system in. I can have one of those, right? No scarcity means I can have one, or a billion for that matter." I'd say after the first - or while it's being built - the Minds would think "Better keep an eye on that one." At the most unsubtle, it would be time to break out the superweapons.

"I don't think the higher levels make interesting stories or characters people can relate to." I suppose Banks agreed: the Culture stories are usually set among people on the edge of the Culture, such as Special Circumstances agents meddling with other societies. The average Culture citizen's life is not likely to that dramatic. Mind you, the same could probably be said of the average Briton as opposed to, say, an MI6 field agent. Transmetropolitan is an interesting example: I remember Spider saying his family was on the poverty line, but never went hungry or shoeless due to matter compilers. They did have to eat some kind of "lizard meat".

Wasn't Neal Stephenson's The Diamond Age similar? Also, does anyone remember "The Midas Plague" by Frederik Pohl? I'll probably add that later.

Gattsuru: I think you could make an interesting story with even the higher minds in the Culture, although you'd need to focus more on interactions and discovery rather than the tradition hero's journey. It's when you hit a mid level 4 post-scarcity setting or higher where it starts to be a bit much like watching someone play Sim Earth.

The Diamond Age is somewhere a low level 1 post-scarcity society at the start of the book, with food and physical goods 'too cheap to meter' but under control of the neovictorians and with some time-based rationing. The Seeds at the end of the book might make things into a middle 2 or 3 post-scarcity society, although with services still having value. That said, I'm not sure it Fails Economics Forever; the too cheap to meter technology means that the alternative would be charging money for nothing, while the rest of the major fallacies are mostly ignored. It's heavy Aesoptinium, even if it's theoretically possible, while the cultural stagnation is inexplicable, but I don't think it made Friedman start spinning in his grave.

The Midas Plague (and most of the other early Midas World texts) are an almost laughable case. I'm not sure if they were intended as such, but it's pretty much the embodiment of the Money For Nothing and Digging and Filling Ditches errors, especially odd given chronologically 'later' parts of the ~~movie~~ same universe.

Let's see... How about the Harry Potter series (mostly 2 and 3), Asimov's I Robot (not the film, the end of the book, under 1 and 4 with the machines running economies)?

Doug S Machina: "I think you could make an interesting story with even the higher minds in the Culture, although you'd need to focus more on interactions and discovery rather than the tradition hero's journey." Excession is a bit like that.

I can't comment on the Harry Potter examples, but I remember the stories from I, Robot. The Machines running the four Regions of the world had the economy perfectly tuned and all in balance. Completely impossible, but I suppose that before chaos theory, it seemed you do it with enough information.

I didn't know The Midas Plague was a movie; I've only read the short story. I'm thinking of adding this quote to the page, but is it really relevant?

"Microeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things economists are wrong about generally."

P.J. O'Rourke, Eat The Rich.

Gattsuru: It's funny, but I dunno if it's really relevant. I'm enough of a Discworld fanatic to find the current quote incredible. Sorry about the goof-up with Midas Plague; meant to refer to the other short stories in the same universe and typed without letting my brain get involved.

Kilroy: Hmm. Harry Potter is pretty vague on the economic stuff, so it's hard to comment on. Gringotts is a bit weird, especially the whole "keeping all the gold in a vault" thing, which banks didn't do even before fiat currencies. A bank can't be profitable unless it lends out the majority of the money it's borrowing via deposits, so it doesn't make much sense for people to have a vault filled with all the money they stored there. Also, the human capital required to produce anything magical is insane, especially when it comes to mass production. The Wizarding World's magical items all required highly skilled labor to make, yet we have mass-produced Nimbus Two Thousands and Bertie Bott's Every Flavor Beans. Seeing as how it's apparently illegal to use magic unless the person's graduated from a Wizarding School, and given the already small Wizarding population, the ubiquitous presence of so much mass-produced merchandise is curious. Of course, we don't know very well how magic works on a mundane (i.e. non-combat) level, so it's not entirely impossible, but all things considered one would think that you'd have highly localized brands and more artisan-based manufacturing. Some of this stuff can be explained away by making some assumptions about how magic works, but for the most part it's just not really paid much attention.

Fanra: Star Trek - Assuming almost unlimited energy (antimatter reactors) and replicators, you could provide everyone with the basics (and I mean everything except for a 500 meter yacht) without much problem. But you would still need money, or some kind of bookkeeping. Labor can not be replicated and you need bookkeeping to run a government. Starships don't build themselves. Land is something that is limited. Although you do open up other planets, that doesn't mean everyone wants to leave Earth (or their home planet). If two people both want the same land, how do you decide who gets it without money? Or if no one can own land, how do you decide who gets to live in that house?

SSJ Dk Crew: I always just sort of assumed that the non-economics of Star Trek were due less to the large amount of available resources, and more to the concept that everyone in Trekville is resting somewhere between Mary Sue and Sufficiently Advanced Aliens. In short, they're too pure for such silly concepts as possession or ownership.

Jordan: I wondered about adding the idea of ultra-isolationism- that other countries have nothing positive to offer- the extreme version of the mercantilism one- historically, China and Japan practiced this at various periods, and often occurs in Fantasy Counterpart Culture versions those countries. The Counterweight Continent in Disc World bans its citizens from leaving and keeps them ignorant that their gold is valuable- this could be a plot hole, but Pratchett mentions Agatean-immigrants being poor but hardworking, so clearly, that didn't know to bring gold with them. If I remember correctly, Ba Sing Sae in Avatar's Earth Kindom had a similar policy of not letting people leave, although they were open enough to encourage emigration to their.

- Another thought, also going from Truth In Television, is that the consequence of using war to fund your economy is that you basically end up with a choice of either going bankrupt or "taking over the world"- this pretty much explains Imperialism in the late 1800s and Avatar's Fire Nation is presented as a country going through this problem.

Earnest: I think that could work. An example of the above would be the US under President Luthor in Superman: Red Son. He manages to singlehandedly undo decades of economic decay in scant years, improve the standard of living immensely, quell civil unrest, and all by "intra country trading" and his 9th level intellect and tech gizmo's. All because basically the rest of the world was by that point communist thanks to Superman, so there was no one else to trade with, but still, the story does it more to justify Luthor's super intelligence than as an economic statement I think.

Kilroy: Actually the point when it comes to the Counterweight Continent is that their gold isn't valuable. Yes, they could be rich if they went to Ankh-Morpork, but if they all started doing that then it wouldn't be valuable there anymore either. As for isolationism, it's generally a foolish idea. Yes, an ultra-isolationist economy is sustainable. However, it is almost always better off trading with other countries, not only due to comparative advantage but also because of things like geography and transport costs. Lastly, using war to fund your economy is stupid. War is a costly and wasteful endeavor and, all other things being equal, a country at peace will almost always have better growth than a country at war. The exception is if your own country is critically short of certain natural resources and you need to conquer territory for that reason. Overall, though, war tends to sacrifice economic health in favor of other objectives.

Josef K: I was thinking about number three. Is this similar to what happened in Germany during the Interwar period (building roads and railways)? Or what has been suggested as a way of getting the US out of the crisis (aka Building Roads 2.0: Broadband all around!). The thing that confuses me is that it worked in Germany.

Earnest: My pre WWII history is rusty, so I'll probably be corrected on this, but here goes. It's not the same for two reasons: one, it was actually geared to building roads, industry, and rebuilding their armed forces, and two, it was creating a massive deficit in Germany that Hitler would have to pay eventually. He did spend his way out of the Great Depression, creating jobs and demand in the economy in a textbook "government stimulated the economy" set up, he even managed to host the '38 Olympics since it was the only country solvent enough to do so). But it was not an economic strategy designed for self sufficiency, it would require the spoils of war to pay. I imagine if there had been no WWII, he would have had to seriously tax the people to keep the economy from overheating with inflation and crashing again.

Hitman359: What? No mention of the great Austrian heresy!? Surely the denizens of the internet have heard of it! Essentially, they argue that every other theory but theirs fails economics forever, and they give good reasons as to why[1]

. (I realize I will probably start a flame war by posting this, but oh well, the truth must be told).

I've read that and agree. I suspect the reason why Keynesian monetary policy is so popular is that politicians want to do it. Economists not being stupid, they accept the theory that could land them a cushy job. Nonetheless, the fact still remains that many economists do support Keynes over Mises and until there is a clear consensus against Keynes, his work cannot be described as failing economics.

Second poster is illogical with his appeal to the majority. You don't need a consensus to admit a guy's wrong for him to be wrong. Here's a vote for you though: Keynes was batshit crazy. If you say maybe wasting wealth creates wealth you don't know what the fuck you're talking about. r.

Speckles Following tldr summarized; - > Appeal to ignorance is worse then appeal to majority IMO. Keynes makes sense if you understand the theory.

Keynes didn't assert that wasting wealth creates wealth. He asserted that there was an unavoidable boom bust market cycle, and that some busts can turn into a downwards spiral, where no one can find jobs so no one buys anything, and since no one buys anything no jobs are created. The only way to escape this cycle is for lots enterpreneurs to take a large risk and start producing again even though they know there's currently no market.

Even in normal times entrepreneurs have to 'waste' a lot of wealth before they're businesses start making money - that's why they take out loans, the amount needed to get started exceeds the amount they can raise on their own. Except during a depression no bank is willing to lend - let's say that 1 out of 50 risk takers succeed in creating a viable business while the others go bankrupt. In order to get started they all need $5000 loans - for the bank to break even they need to get 50*5000 dollars back from the one guy who made money! No normal bank could survive like that.

If they could take small enough payments over a long period of time it could work though- even better if they took small payments from all those who benefited from the trickle down effects of the small business, and also those who benefited from the trickle down of the failed businesses as well. There's only one institution who can get payments like that and has deep enough pockets to give out the loans - Government. Hence wasting money creates money during depressions - the government spends money on projects, starts new services, or cuts taxes (indirectly giving everyone a 'loan'), knowing that they won't get a direct return, but will get it indirectly through increased tax revenues as general prosperity returns.

Where this gets insane is when it is extended during the boom times. The other half of Keynes theory was that the government needs to increase revenue during the boom times to make up for all the wealth lost during the bust times, which involves raising taxes or cutting services. This is enormously unpopular among voters, so politicians tend to forget about it; alternatively, it's used as an excuse for corrupt bureaucracies to strangle real economic growth, keeping the populace poor and obedient in the name of fiscal foresight. Stimulus during bust times also causes corruption problems since the government has the freedom to pick wear the money goes, and politicians don't have the impartiality of the invisible hand. Some argue that by letting boom bust cycles occur naturally, more real economic growth occurs since the government doesn't have to keep spending tax dollars repaying debt plus interest. In reality things aren't clear, there's a lot of room for debate, at least IMO.

Lawyerdude: I'm thinking that Joel Haldemann's The Forever War belongs here. The main point of the War was so Earth's government would have a huge sink to toss resources into while molding society into a different form. Earth's wartime economy seems to combine staggering levels of unemployment with massive industrial output and an enormous tax burden. OK, so the government is gobbling up resources, but who is producing them with all that unemployment? And wouldn't doing this strangle the economy and lower everybody's standard of living?

Earnest: It's a good fit for this trope I think.

JoeyJoJo: maybe. it does show that war and the slaging economy has lower everybody's standard of living.

Alsadius: Rothul, I removed the Wal-Mart example because, while the work looks a lot like something that has no value, clearly the company has decided otherwise, and they think that the customer service value is worthwhile. Given that it's gone from nothing to the biggest company in the world in less than 50 years, I'd say there's something to their way of thinking. I'll modify/remove it again in a couple days unless someone convinces me it belongs.

http://www.youtube.com/watch?v=4KrjQqIXHdU

http://vallery.net/2007/04/05/penn-and-teller-bullshit-wal-mart/

Rothul: Point well taken, though as a side note, I've read several articles that make the claim that many communities that would have otherwise not allowed Wal-Mart locations to be built were swayed by an increase in the projected amount of employment by the company after its initial offer... all jobs of which were basically minimum-wage greeter positions created for the sole purpose of giving more people "work." This, accordingly, explains why other large chain stores such as Target etc. do not create as many "greeter" type jobs... once Wal-Mart has gotten their foot in the door, it's harder to deny any other chain store from entering a market. You are correct, however, in that the situation is much more nuanced then the current writing suggests, and probably isn't worth mucking up the main article with an extended explanation. Perhaps it would work as an example on the page?

Jordan: I've noticed that all of these fallacies (except possibly the Exporting vs. Importing one) are Keynesian. What's the chance of having a free-market related fallacy along the lines of "capitalism solves all problems"/ something from Objectivism?

Earnest: Not a bad one I'd say, It's probably just not as common since most of us live in capitalist systems. I can't think of examples right now, but probably any work that shows: rapid industrialization, unregulated capitalism, or a town/state/country transitioning into either with no problems whatsoever would qualify. Then again, it's far more common that Ludd Was Right and a simple, agrarian lifestyle will be portrayed as morally superior.

Lord Helmchen: The Ridiculous Rationality one is already a major fallacy of traditional classical and neoclassical laissez-faire liberal economics. Attributing it to Keynes or Socialism, both theories which assume that the market doesn't always function perfectly for a number of reasons and requires intervention to fix market failures, is just plain wrong. Market failures caused by such things as information gaps between the supply and demand side, as well as conflicts between individually-rational and collectively-rational actions, and plain mass stupidity by people who ignore any of these problems are all rooted in classical capitalism. For good examples, see the Cobweb Model

and related Pork cycle

, and the classic Prisoner's dilemma

. Another big one are external market effects

, most famous for the classic You Fail Economics Forever "Environmental protection is economically harmful" idea, which not even the neoclassical school of economics supports anymore: The environmental damage is a cost that doesn't affect consumer or producer of a product directly, but the damage is still there, and incorporating it into the market by making producer and consumer share the cost for the damage they are causing and thus giving them an incentive to AVOID this damage makes for a net gain overall.

Helmchen: any factual damage to things is prevented by the marketplace if owned. When Brits owned the air above and ground beneath their houses a factory would be charged damages for getting soot on a house. Because the states claim all their serfs land as their own they dump poison into rivers, etc. If the river wasn't robbed from people it's likely someone who owned a piece of the river wouldn't give permission for dumping. That's pure capitalism. When the state says, "this land is my land" it's not hands off. Capitalism not a cure-all but the freer people are to trade as they will the closer to perfection mankind becomes. The contrast is oppression. Take any of your hippie bullshit and ask how it happens? Some state stooge threatens peoples lives, that's how.

The Defenestrator: So the costs of pollution can be taken into account by having the polluters pay each resident for the environmental damage caused to the air above their property? I can see that getting rather complicated, but at least it'll stop the controversy over global warming :p.

Peteman: Cut:

the Earth Kingdom (more specifically the city of Ba Sing Sae) of the same series is an "Exporting Good Importing Bad" example. On the surface, it's an extremely pleasant city, very encouraging of new settlers. Unfortunately, it's actually a police state which keeps its citizens in isolation from the rest of the world and brainwashes anyone who acts out of order, all for the purpose of preventing anyone from leaving.

I don't think Ba-Sing-Se is an example of Exporting Good, Importing Bad... In fact, it's got nothing to do with economics. The whole reason they don't want people leaving was control. They wanted the populace of the city obedient and not causing trouble.

Earnest: Cut the following for being nattery/justyfying edits. And for the record, Scotty/Geordi fix the replicators. ;)

Star Trek. Replicators plus free near unlimited energy means people work because it's fulfilling, not out of any real need. Yeah, this is a utopia fans try to work their brains around. Don't ask who repairs them or where the free energy comes from. Star Trek Deep Space Nine occasionally suggests that the system isn't working perfectly at home, and brings pay a bit closer to the equation.
- This also brings into question what the Ferengi and other merchants, including humans, are wasting their time for.
- The problem led to the replicators becoming less useful as the series progressed, to the point that even the food wasn't as good as what an alien fry cook could throw together from scavenged resources by Voyager.
  - No, the problem was they were short on some replicator particles, so they had to use real meals.
- It's not so simple. Many things(like tritanium hulls) cannot be replicated, and no one abolished the copyright, meaning that you have to work to buy holonovels, books etc. Software is nowadays technically easy to copy, but... Intellectual property is not invalidated by replicators, and this sector is already VERY big in real life. In Star Trek, its probably the most important one.
- Basically, it's just a Welfare State in bigger form: you work producing "luxuries" (this can be said holoprograms, service like enabling dining at restaurant, real meals, non-replicable minerals etc) and spend the earned money mostly on similar things. Only a small amount of earnings goes into buying allowances for replicated things (used to pay those who repair replicators). Jobless people probably have their allowances covered by state. Nowadays, welfare system put countries under strain because people need to be paid amount comparable with typical wages to live properly. But with replicated/produced duality, this does not need to be the case.
  - That said, the strange Star Trek economy would most likely be impossible without replicators.

Peteman: Here's one that I think might be good, but just want to run it by you guys: In Star Wars Prequel Trilogy, the meeting between Count Dooku and the commerce guilds seems to indicate that they wanted to start the war so they could have unrestricted trade. But considering how much a war costs... especially a galactic scale war and they were the ones footing the bill. I mean, I could understand if the plan was to bully the underprotected Republic into caving into their demands, but once the Clone Army got revealed, it seems to undermine a lot of their motivation since now they had an actual fight on their hands.

The Last Conformist: Cut this:

Three oppressive Dystopias support their economies through perpetual war in 1984, with it being explicitly stated even two on one, none can win. It's stated that this is done to destroy surplus wealth and keep people's standards of living from getting better, so it's more of an aversion.

As the second sentence says, the goal isn't to support their economies, but to keep them down. Using war to deliberately destroy wealth may be insane, but it works.

Jordan: Going back to my suggestion of adding a "capitalist" example, my likely Flanderised perception of an Ayn Rand one is something like "The poor are useless". Basically, there isn't a lot of incentive to be anything other than the Leader in the society. I think there's also a left-wing version of this (which could be its own trope) "Morlock Future"- the idea of workers being disconnected from elites to the point of being (treated as) dehumanized- see The Time Machine obviously but also Metropolis and both Brave New World and Nineteen Eighty Four

Gattsuru: I think the point of an Ayn Rand-like society is that there's no incentive to be anything other than a Leader, other than the part where being a Leader requires both a hell of a lot of skill, and a lot of risk (Rand was against bankrupt laws). Everything else is settling for second best at best, and menial labor at worst... but that's kinda the entire purpose of a capitalist system, and it's not really broken from an economic viewpoint. If you can't run the railroad, you at least run a railroad car, or at least shovel coal, because it's better than not being able to eat; there's no benefit to not playing the game. You can certainly bring up a lot of moral and social issues — most critics of Rand do — but as an economic system it's fairly logical.

I was under the impression that the 'workers' of the Time Machine eat the elites like sheep. The biological issue is a duh, but I'm not quite sure what the economic fallacy is.

Jordan: I interpreted Wells' idea as a science fiction version of Marx's class struggle idea, and one problem with that is that rich people and poor people do have commonalities (e.g. national allegiance), and so it's really not likely that elites would act in a way totally against the interests of the poor. Brave New World and other "Morlock Future" examples all try to present a system which could function where the poor lack a rational incentive to work.

I think Ayn Rand's ideology has the same problem of their not being a lot of incentive to be a poor person/a worker. There's a reason why there are left-wing political parties- whether it's good economics or not, people are either going to vote against or rebel against John Galt.

Gattsuru: I don't think 'people would stop it' is a really good Fail X Forever metric. Anyway...

There is a very good incentive to be a normal worker in Rand's world; the alternative to working is starving since Rand is against every single social safety net. In practice, even being a normal worker was supposed to be pretty worthwhile; even in the real world in places where the minimum wage is a joke and unskilled labor is viable, being a decent worker can get you a pretty good standard of living. Democratic uprisings on the matter are rather reliant on demographics; there have been places with Rand-like systems for a rather reasonable amount of time and democratic government (mostly on the outskirts of civilization, but not always). Revolts on matters like this... well, there's a reason anyone with a decent knowledge of Stalin or Mao's rise to power starts the setting off with the phrase It's A Long Story.

I'm seeing some "psychology does not work that way" (other than you holding intranational conflict as counterintuitive due to commonalities, and intranational settings with no social welfare as counterintuitive due to inevitable internal conflict), but I thought the point of this page was to bring up things based on whether they were good economics or not, not based on whether people would vote for them.

arromdee: For Brave New World:

Might be an aversion, since—although the stuff is useless to start with—the government also brainwashes the masses into desiring the useless stuff as consumer goods, giving it actual value in the economy.

I doubt this. Fixing the problem by getting people to buy the useless stuff is equivalent to just tossing the useless stuff in the trash and then redistributing the money that would have been used to buy it. It doesn't actually create any wealth, unless you define wealth so as to include the market value of the useless stuff, and if you do that, then consumption of the goods by the masses is destruction of wealth and there's still no net gain.

Lord Helmchen: Fixed the entry. It's an aversion because, while they do make overly complicated stuff and deliberately use more manual labor than neccessary, the book clearly explains that it is not to stimulate the economy but rather simply to generate more work to do for the people. Yes, they could be twice as productive, but they don't want to be because they want their society to be stable and stagnant as-is.

Brave New World doesn't avert this trope. Shit happens. In real life the safety net against death is wealth. Even if social engineers managed to balance the society so it's a zero sum game (impossible for its' own reasons) eventually there'd be a storm, disease, or other evil befalling the populace and the society, without any excess to work with, would collapse.

Lord Helmchen: But they do have excesses. Massive excesses, in fact. If they are easily able to double productivity when needed, then shrugging off natural disasters - which are probably already factored into their calculations, given that it's a long-running system - is not going to be a dramatic task.

Earnest: Cut the following. As much as the first two examples are true and neutral, just having a Real Life section for this page is flame bait for an edit war.

Real Life

Money For Nothing and unpayable reparations led to the downfall of the Weimar Republic.
Mugable runs Zimbabwe, a previously stable and progressive nation (for Africa), as his personal fiefdom which has resulted in truly Ridiculous Future Inflation
- I like the specification "progressive nation (for Africa)" :)
The last half-dozen presidential administrations in America have openly stated "deficits don't matter!" Bush has run the deficit up to unimaginable levels that would have made even Reagan blush, and stolen trillions from taxpayers in order to give money to his bailout buddies in the banking industry. Barack Obama's economic plan of taking money from profitable business (taxes) in order to pay people to do unprofitable things (government) puts another nail in America's coffin.

Dammerung And I thought I was being non-partisan by criticizing both parties...

Earnest: For what it's worth, I didn't like making the cut. You do make valid points, it's just that this is one of those pages that acts as a magnet for Take Thats and angry Justifying Edits. Even a Darth Wiki or Troper Tales would likely go south very quickly. For the record though, Clinton did create a budget surplus, it just... evaporated like so much water under the glare of tax cuts, tax rebates, and the war on terror. I have mixed feelings about Obama's deficit plan, but the alternative is government contracting spending and raising taxes, which would not be pretty, though it would save future generations from footing the bill.

Earnest Clinton didn't create a budget surplus. He still was in agreement with The Fed to pay more than he had. He just taxed more, closed post offices, and started a private treasury. The state can do more than two things; the President's not in an ultimatum. He should cut gov. spending, refuse to enforce every law that meddles in the economy, kill the heads (atleast) of the Federal reserve board, the secretary of treasury, and similar people for treason, go to war with The Rothschild international banking house, etc. People would explode in an orgy of freedom.

Gattsuru: The Clinton surplus disappeared before the war on terror, or even Bush's tax cuts went into place. It was mostly built on assumptions that the .com bubble would keep going, after all, so it was already starting to go caput before Bush could get his grubby hands on the thing. But I think mentioning both sides is just a good way to get twice the resulting flames, and despite having to resist adding Zimbabwe myself above, I've run into a good number of African individuals (both white and black) assuring me that the economic principles are <bahgdadbob>perfectly fine</bahgdadbob> and the whole economic mess is due to the Evil American Influence. If that country isn't a clear-cut flame-free example, I doubt anything is.

Gattsuru: So, is number 7 actually "completely unworkable", and if so, who wants to tell the Keynesians? Or did someone just want to throw a spanner at capitalism, and couldn't come up with a better alternative? The example itself points out that it takes an incredibly un-nuanced viewpoint on the situation, and last time I looked at the numbers, there happened to be a rather noteworthy increase in different jobs at the same time that assembly line output goods decreased dramatically in cost. It's always more complex than "deh tuk ur jubs!"

Rothul: Indeed. I was not the one who added number seven, but I added the (as I said unnuanced) example more as a simply understood, if not completely nuanced take on the subject. For a fully nuanced take, I'd recommend commentaries on Neo-Liberalism innovations such as Ha-joon Chang’s Bad Samaritans: The myth of free trade and the secret history of capitalism a nice summary review of which can be found here

. In any case, I think that the general point of the example (What is economically beneficial to one group is not neccesarily beneficial to all, and it is a good idea to be suspicious of literary utopias that succeed by blatantly favoring the policies of a single group, be it workers, businessmen, intelligentsia, religious workers etc.), is good, though the talk of "innovation" muddles the water a little. It could probably use a rewrite, but as I said, I didn't write it to begin with.

Rothul, what's good for anyone is good for all unless it's at the expense of someone else. One man's game is not another man's loss. Mankind did not start with a finite amount of wealth we've been squabbling over ever since. Our wealth has increased. The less people draw their benefit from others' loss (by methods like taxation) the faster humanity will prosper.

Jordan: So, why were the rationality and trickle-down syndrome cut? - hope this won't be lost, but I decided to revert those as well as an example which was deleted about an objtectivist Author Tract. This page bothered me before as a Take That against Keynesian economics, and deleting those examples seems to prove that point.

Midas Mint: Keynes was insane. If you think he made sense You Fail Economics Forever.

Jordan: I really don't care what your opinion is of Keynes. I still think the other two examples are valid flaws in fictional works. I can see the problems with the trickle-down one as it stands, but "ridiculous rationality" is a valid complaint even if you think that Capitalism is the greatest thing since sliced bread.

Earnest: And the fact that he deleted your response, as well as re-cutting the "offending" examples just proves he is an anti-Keynesian Troll (something I never thought I'd type). Keep it up Midas Mint, and a ban isn't unlikely.

Jordan: Wow, people really won't stop removing the last two examples, will they?

Nornagest: Cut everything I could find with too good of a Justifying Edit and moved some aversions into the aversions section. Also cut some natter. Also cut some examples that don't appear to fall under this trope at all.

Cut material:

* Star Trek tries to avert this with the use of Replicators plus free near-unlimited energy, which means people work because it's fulfilling, not out of any real need. The aversion fails because having replicators doesn't address the question — Where do the replicators themselves and the raw materials for the replicated items come from?

**To avoid drama-killing problems and give characters something to do, the various series have established limitations on this nearly-perfect set up.

*** Replicator-made food and products are uncreative and taste blander than organically grown and human/alien made foods.

*** There are materials that replicators can't make outright (as well as being unable to replicate living organisms).

*** Their energy supply are sometimes not so unlimited that they can build replicators large enough to make ships, (or in the case of the resource strapped Voyager, feed all the crew).

** One episode of Deep Space Nine lampshaded the vagueness of Star Trek's economics when Jake Sisko was making fun of the Ferengi's obsession with money, with Nog hitting back that the "enlighteneed, we don't need money now" Federation meant that Jake had no way of being able to buy an original baseball card as a gift for his father. The episode ended up having them have to acquire it through a chain of bartering deals.

* Robert A Heinlein's novel Beyond This Horizon, where the government gives out money to everyone, so you don't have to work...

** Yet a great deal of the population did, as the basic living stipend didn't support anything more than the absolute basics. There's also the fact that, unlike normal welfare, the government only passed out the stipend if they had the budget surplus... if they ever started running a deficit, they'd stop. Granted, they had been running a surplus quite consistently for years before the book started.

** Numerous real economists from various parts of the economist-political spectrum have suggested similar systems, such as "basic income" or "negative flat tax". No one has come up with a workable real-world system yet.

* The Colour of Magic, where a tourist from the gold-rich Counterweight Continent has the equivalent of millions in local currency. The Patrician, explaining why the Continent is kept a secret, asks Rincewind what he thinks would happen if all the locals went there and brought back a ton of gold; Rincewind's reply, "We'd all be very rich?", notably does not please him. The Patrician knows how economics work; Rincewind clearly does not.

** Making Money, as the name suggests, deals with economics, at one point having an insane (but competent) economist explain why the 4000 golems would destroy Ankh-Morpork's economy by putting everyone out of a job and spending no money. The whole point of the book is the switch from representative currency to a fiat one, but in the end the switch is only from a gold-based currency to a golem-based one. Hmmm...

*** Part of the point is that unlike gold and silver, golems have actual practical uses. Moist mentions plans for how they could be used to build infrastructure that private business can't.

* The novel 'Freehold' falls afoul of the Ridiculous Rationality issue mentioned above.

** The author does acknowledge the flaws in the system; the first book starts in the middle of a super-Enron scandal involving the guys who gauge the values of services, and one of their "Citizens" commits an act of treason that leaves thousands mentally crippled. The Bad Ass libertarians still win, however.

*Examples under roleplaying games:

** You forget that in such JRP Gs normal people aren't supposed to be able to kill those monsters. As far as players know, their characters are and a few others are the only ones able to reap monsters. They're too busy taking over or saving the world to set up a business and places that see less customers (bordered by tougher monsters) charge higher prices (presumably have less sales) and have better items in stock (no one to make 'em sold out).

** Pair this with dungeon treasure as the remains of powerful, ancient civilizations. Those civilizations probably collapsed because they buried all of their best stuff instead of buying or selling, causing economic ruin and stagnation until later adventurers put their money back into circulation.

** There's actually a bizarre explanation of the economy of Britannia in the Ultima series. Under normal circumstances, the money supply contracts as it is removed from circulation by monsters. Every now and then the Avatar shows up, who retrieves it and spends it back into the economy.

Dark Sovereign Suggestions: 1-5 need an explanation of why the fallacy is a fallacy. 7 needs a new name, perhaps the "high tide fallacy". The current name doesn't describe the fallacy accurately. 6 needs to be removed. It isn't an actual fallacy, and ignores what economies actually are: systems by which goods are moved from those who have, to those who want. "Ridiculous Rationality: The basic assumption underlying this one is that human beings are perfectly rational (everyone will buy exactly and only what they need, at the best possible price) and a perfect market is possible (laws against unfair dealings are both reasonable and enforced, prices reflect all external factors, and there are no significant real-world barriers to starting or operating a business.)" "Rational", "perfect", "reasonable", "fair", and "best" vary from person to person. That's why prices are what they are: because enough people bought an item at a certain price for that price to become the set price. When demand for item drops below the supply, the price gets marked down to move the product. When the demand exceeds the supply, the price of the object goes up to reflect the items scarcity. Does this always happen? Not officially no. For instance, the Wii sells at $250 retail. But you can't always find Wiis, so the only way to purchase the item when you want it is to buy from someone who already owns it. To check the standard price for such transactions, you can go to say, eBay. While the price at retail doesn't vary the price on eBay does, and as such can be considered a much better estimate of the "true" price, i.e. the price you would have to pay to purchase an item right now. In order for this to be a "you fail economics forever" fallacy, the fallacy listed would have to a. adequately reflect a widely portrayed view of economics and b. this view would have to inconsistent with actual economies. Because fairness is different from person to person, the only objective standard of what is and is not a fair price is the actual price of the item at the time of purchase. Nature decides where man cannot.

Madrugada:That a perfectly rational economic system can exist is the fallacy, for precisely the reasons you outline. Once again, This page is not about the details, strengths or weaknesses of real economic theories, it is about the ways that economics are inaccurately represented in fiction. Ridiculous Rationality is one of those misrepresentations.

Dark Sovereign: That's the thing, in what fiction is this presented as an actual argument? And how does a system based on cause and effect not count as rational? It would be true that a "rational" system could not be designed, but that isn't what's presented here. What IS here is that a rational economic system can't exist.

Madrugada: How many fictional worlds have heroes who never run out of money because they bought something they didn't need? I can't think of any (Please note: I'm not a gamer, so it may be handled much more realistically in games.) How many works of fiction have merchants who price-gouge when they can get away with it, or try to up-sell the purchaser? How many have the characters knowing exactly what a fair price for something is, even if they've never been in that area before? I can think of one: at one point in The Mallorean, Silk admits that he doesn't know if he came out ahead on a deal or not.

Worlds that don't include those aspects are all examples of Ridiculous Rationality — the markets are ridiculously rational and so are the characters. And if a Perfectly Rational economy can't exist, then by definition having one that not only exists, but works, too! in your work is fallacious.

Dark Sovereign: How frequently does that occur in the real world? More often than not "price gouging" is a result of public misconception, not actual outrageous profits. Remember the hearings on the oil company's business practices way back? This may shock you, but gasoline is a low profit business. And how would a merchant who price gouges stay in business? In the real world, another merchant can steal business from the gouger by pricing himself lower than his competition. In fiction, if there isn't another merchant in the city, then it's being unrealistic, but not fallacious. In order to be fallacious, the economic system of the fictional piece must work well, and must function in such a way that would crash any real world system. For pretty much every video game genre except mmmos, there are far too few merchants to actually qualify as economic systems. In real economics, you decide whether or not the goods or services being offered are worth the price asked for it. Thus the "fair" price is whatever your willing to trade. You say that a rational system could not exist in the real world, but rational (defined here as logical) economics are a reality. Systems which are irrational (illogical) can't be called systems. The system is not "perfect". Many do not consider it fair. But irrational is not the same thing as fair.

Madrugada: You're thinking of this as economic theory as reality. Think of it as economics as depicted in fiction. All of the You Fail X Forever tropes take into account that there is what's real, what's real in theory, and then there's what gets done in fictional settings. To many fictional works have Ridiculously Rational economics. Not simply "rational" — rational would be no problem but {{Ridiculously Rational}} is.

Dark Sovereign: In order for there to be a fallacy in fiction, there has to be real world logic to compare it to. Real world economics are strictly rational, even if the participants in economies are not. There is no such thing as a perfect or fair economy. Such things are indeed impossible. Real world economics are extremely rational, to the point where twelve-hundred page books are written on the factors that influence the market. A fictional economy that is non-fallacious would have to reflect this, or ignore economics completely, as most video games do. If the fallacy were changed to read that "fair economies" with "fair" here defined as everybody of equal (high) economic standing, that is, everybody has everything they want (not in these exact words, mind), were impossible I would drop the complaint. As it is, though, the fallacy reads as though real economics would fail economics forever.

TheOriginalSomeGuy Taking a phrase like "high tide" and adding fallacy to the end doesn't make the situation an example of a logical fallacy. "systems by which goods are moved from those who have, to those who want" is some nonsense. People trade and steal. The greater the ratio of trading to stealing the better. It's like consensual sex and rape. Both happen but the heavier the former weighs on the balance the healthier people are. What work actually portrays a society in which folks're omniscient traders? "What's real in theory"?

Madrugada: As to cutting this page, and the reasons given:

Continually engulfed in Edit Wars,

Continually? not really. There were a few, but it's not a continuous state anymore

trolling and

Who's been trolling recently? Disagreeing isn't trolling.

debate as to what is and is not appropriate for the page.

It's quite clear what's appropriate for the page and what's not. What's appropriate is "How economics are misused in works in the media." What's not is "everything else." That goes here, on the discussion page.

The overly abrasive title specifically doesn't help.

The title is in keeping with all of our other You Fail X Forever titles.

Rothul: Points well taken. I supposed my main concern is the title though. The rest of the You Fail X Forever titles concern disciplines with much less disagreement therein. There are no contemporary competing "schools" of Nuclear Physics, Geography, Statistics etc. But does someone who subscribes to Keynesian models "fail" Neo Classical economics, and vice versa?

At the very least, a Useful Notes article on the subject is needed. In fact, upon further reflection, almost all the problems with the trope concern people trying to make this trope into such an article. I rescind objection.

Madrugada: A Useful Notes page is a capital idea. (sorry, couldn't resist. 8-p) Particularly if it can be written so a non-economist or business major can understand it.

I can see your point about the title. I'm not an economist; I never realized how deep and acrimonious the divides between the various schools of thought are. So perhaps it's worth considering a rename. Would Economics Does Not Work That Way be any better?

Dark Sovereign: I would like to point out that what are known as the economic schools (Austrian, Chicago, Keynes) are more often in disagreement about public policy and how wealth should be distributed than about the basic market forces.

Rothul: Certainly, but it's increasingly difficult to separate the economic theory from the policy, which seems to be the ever-present concern with the page, especially the debate of what counts as a highlighted economic fallacy. I'm sure hard-lining Keynesians blanch a bit at "3. Digging and Filling Ditches" as the phrase is inevitably linked to an argument against Public Works. Likewise, "6. Ridiculous Rationality" seems to be a thorn in the more laissez-faire-minded tropers' sides. Again, a Useful Notes page explaining the separation between the theory and the policy would, I think, be helpful to the lay-troper, for this page to be of much use.

Dammerung: Needs more [[www.lewrockwell.com Austrian school]].

Dark Sovereign: My objection to 6 has more to do with the fact that actual economies are "ridiculously rational". A fallacy must break with real world logic to be a fallacy. Because 6 does not have such a break, I object to its inclusion. I do agree that a Useful Notes page is in order.

Rothul: Number 6 has been truncated from my original writing of it:

Ridiculous Rationality: Contrary to the stated assumptions of mainstream, laissez-faire economics, human beings are not yet perfectly rational and a perfect market is not yet possible: Laws against unfair dealings are often not enforced, prices do not reflect all externalities involved (such as pollution etc.), and there are significant real-world barriers against merit-based social rising or innovation (racism, monopolies, "licensing" whose only purpose is to protect existing business, unavailable loans or courts, an out-of-reach education system, bribes, Organized Crime etc.) Though many scholarly economic works take these factors into account, it is wise to be on the look out for unlikely free-market utopias that often are prevalent in science-fiction: without proper justification, the whole thing may work simply because the author says that it does.

Now, admittedly, I wrote this when the page was in an earlier form, which the page was a bit too snarkily laissez faire in its policy implications, in an attempt at political balance, that, while misguided, was probably needed. Said implications have since been removed in the general "separating policy from the theory" edits that have been to this page's immense benefit. I still consider the thrust behind 6, however, to be a fair one: I've seen enough Sci Fi where the world suddenly becomes a magical Libertarian Mary Suetopia because there's no longer any government regulation. Perhaps the fallacy I wish to convey needs a new title to suggest that the concern is not that people act too rational, but that a regulation-free (to a ridiculous extent) world that relies on the perfect rationality of a perfect market, is presented as ethically and logistically superior, mainly because the author says so (off the top of my head, I give the happy No Law Zones of Trouble On Triton, which work so well as Space Hippie Artist Colonies because the Organized Crime has made everyone in the zone peaceful. Right.) Certainly, the same would be true of supremely competent government-planned economies etc, though Sci Fi's libertarian bent makes it that such governments are almost almost always presented as The Empire, rather than as a beneficial force.

In any case, perhaps it should be replaced with a fallacy concerning over/under regulation. Of course, the problem there is that economics is almost inextricably linked to policy when it concerns government regulation, and would invite almost certain edit wars.

Dark Sovereign: I would agree to that ("over/under regulation fallacy"). Perhaps calling it the Anarchist Assumption/Fallacy?

Madrugada: I truncated it, and, as I have said, I'm not an economist, so maybe I truncated it incorrectly. But what was there seemed, in light of the way the other fallacies were worded, to be: "No economy can be perfectly rational, so any work containing a perfectly rational economy is this trope."

Madrugada again: Would the objections to "Ridiculously Rational" be addressed by changing it to "Perfectly Rational", since all workable systems require some degree of rationality, but any system that requires perfect rationality by all concerned is impossible?

Dark Sovereign What would such a world look like? What would be the symptoms of such a economy?

Madrugada: OK, I think I see why we're talking past each other. I think we're tripping on "fallacious". This isn't about economic systems that are necessarily fallacious; it also includes systems that simply won't work in the world they're supposed to work in. If the work is a perfectly rational Utopia, with perfectly rational people, a system which requires perfect rationality by all parties isn't covered by this trope (I'm thinking of Bellamy's Looking Backwards here.)

TheOriginalSomeGuy The theories of Keynes can be understood by anyone not to make sense. They treat work's productivity as invariable = all effort is valuable. Everyone knows that to be a lie. You know if you clap your hands for 5 hours you haven't improved something. You know if you build a house on a patch of dirt the patch of dirt's worth more than it was before. Some work is profitable. Some work is not profitable. The profitability of work is a variable. The blatant lies of keynesian economics were just excuses for FDR to increase the American gov.'s debt to the Federal Reserve. They're ideas that if believed allow you to think it's good America succumbs to the Fed, abandons its' sovereignty, and pledges service to whoever Fed-chairmen want Americans to pay. There is no such thing as "under regulation". You can't be too free. A fault in the minds of many men when they want institutions to harry them in is ignorance of innate and superior self-regulating traits in people. Here's 1 for instance. New Orleans is flooded. Food and water is scarce. A merchant raises the price of food and water. From his profit he buys more food and water to sell. The purchasers and the merchant are sending a signal to water and food wholesalers that these goods are wanted more in New Orleans. More water and food head towards New Orleans. When the merchant doesn't sell out he starts lowering his price so people will clear out his inventory. He's making more than before, selling more than before, and more people are drinking and eating than before. This pattern continues indefinatly. The trends in this scenario are one's of improvement for everyone involved. Here's an alternative version with regulation=oppression. Cops arrest the vendor for price gouging. His inventory is seized as material evidence. People who were buying his food and water have no more supply of food and water. The vendor is suffering in jail, the potential purchasers are suffering starvation moreso than before, there're no goods heading to New Orleans to satisfy the crowds. Also the cops are paid by extorted funds so the people are further from being able to afford food, water, travel, or another means of survival than they would've been copless. Another gov. agency, FEMA, supposedly to the rescue, sits on its' supplies. It's basic logic: if you trade worth for worth so we keep swapping what we have to get things that better suite our situation, everyone's situation tends towards improvement. If we trade worth for waste so what we have keeps going where it doesn't help us, everyone's situation tends towards death: the outcome of poverty.

Rothul: Having interviewed the family members of college friends (for a Poltical Science paper on the subject), who were unable to leave New Orleans because of their economic situation, and having heard their tales of the pervading fear of temporarily living in a lawless world of violence and looters with no government to turn to for help, I find your example in exceedingly poor taste.

TheOriginalSomeGuy You know what really stopped folks from leaving New Orleans? Helpers from the gov. http://workbench.cadenhead.org/news/2748/police-trapped-thousands-new-orleans

And the New Orleans police robbed citizens of their guns so it was harder to protect against looters. http://www.youtube.com/watch?v=-taU9d26wT4

Cite some facts if you want to talk about reality; I won't fantasize w/you based on vague appeals to sympathy.

Rothul: And I shan't fantasize with you that the actions of overwhelmed individuals during a time of crisis somehow represents a justification for an economic policy. Purely for the record, the main references for my papers included There is No Such Thing as a Natural Disaster: Race, Class, and Hurricane Katrina, a collection of economic and social science essays, many of which can be read here

. Specifically the titular essay

, and Cities Under Siege: Katrina and the Politics of Metropolitan America.

In any case, we have strayed from trope talk, and I must insist that any further discussion be taken to a forum more appropriate.

TheOriginalSomeGuy This trope supposedly identifies works which contain economic systems that're functionally impossible in the real world. If we try to figure out what economic systems can/'t work we're discussing the knowledge needed for this trope. Our discussion started w/your "tsk tsk" comment, attempting to shame me into self-censorship. "New Orleans was bad let's not study it" being the sentiment. I've read a lot of red herrings in your message but nothing identifying a fault in one of my arguments. Having written a paper on a subject, read articles about it, and/or interviewing people about it doesn't make you right. It doesn't even mean you know what we're chatting about. The stress folks feel, "overwhelmed individuals" is irrelevant to whether their actions are productive or not. I've outlined here in detail how gov. regulation=interfering in the market place aka bullying is harmful. You've yet to write why you disagree with me about what. Is there something in you besides offended feelings? You seem to be beating around a bush to get at the gov. is good, "...world....w/no gov...to ...help" but you haven't defined that (or anything else) as your belief. Do you know if you disagree w/me? About what? What is the alternative premise you propose? What proof convinces you that premise is true?

Peteman: I'm for The Economy Does Not Work That Way.

Dammerung: I think it's extremely disingenuous to say, without caveat, war is profitable. War is a reallocation of capital from cooperation, construction, and trade to capital destruction and violence. War is profitable for a few at the expense of everyone else.

Hieronymus: Can we have a section on "Real Work" too? You know how Judaism, Christianity and Islam consider 'usury' (lending at interest) "barren" (/exploitative/immoral). And how in China's "four classes system" the peasants were 'realer' than artisans because they produced from nothing, the artisans crafted goods, and merchants just resold them, putting them at the bottom. I think this more than just economics, though, culturally, manual labor is seen as more like 'real work' than anything else. Marxists see Businessmen like conservatives see civil servants - useless, bean counting, time wasters living off everyone else's work.

Madrugada: How does it fit into "Mistakes made about the way economics are used in fiction? I don't see it, but make your case, I'm open to being persuaded.

Hieronymus: Naturally there's Shakespeare's Merchant Of Venice Shylock and Antonio both use the Bible to justify/criticize lending money. I remember in Sacco's Palestine he said his family thought if you hadn't worked in a factory you'd never worked at all. I admit I haven't looked for examples assuming that such a big cultural trope would have plenty represented in fiction. It's also 'failing economics' because it's wrong after all.

Madrugada: Well, first, Judaism doesn't consider lending at interest to be wrong; that was one of the main points about Merchant Of Venice — Shylock wasn't doing anything wrong. The prohibition against usury is from Paul, not Jesus.

Second, and this is my main sticking point about adding it, is that unless there's actually some mechanism in place to make the "realer" money that the peasant has more valuable than the "less real" money of the merchant, it's simply cultural, not economic.

Hieronymus: Firstly, Judaism did. Here

, here

and here

. Christians got it from the Old Testament in the first place. The thing about Merchant of Venice is Jews were forbidden to lend to Jews, and Christians extended this as Christians between Christians, but Jews to Christians and vice verse was fine, which is the reason Jews had a niche in finance in Christian communities. When Shylock and Antonia argue, Antonio quotes the actual proscription, and Shylock responds with an analogy to borrowing cattle and breeding them, which is technically only an analogy, not explicit permission.

Second: I should be more careful in my phrasing. In truth, this belief is unjustified economically, but it has been very strong in cultures across the world, and this of course is reflected in fiction. Economic nonsense, but people and particularly writers believe it, so that's why I think it belongs on this page. When you look at Acceptable Cultural Targets, you can't really tell if "New Money" gets its worse for being exploitative parasites, or "Old Money" because they're parasites who make no effort to exploit by virtue of inheritance.

Peteman: If I'm not mistaken, from those quotes, lending money with interest was immoral if it was done to your people (i.e.: Jews doing it to Jews). The fourth one of those quotes expressly states this

. Plus, one thing I've heard about those times was that Jews had a hard time getting jobs that weren't money lenders.

Hieronymus: I say that in the next sentence. Did you just stop reading when you followed the link the quotes? "...The thing about Merchant of Venice is Jews were forbidden to lend to Jews, and Christians extended this as Christians between Christians, but Jews to Christians and vice verse was fine, which is the reason Jews had a niche in finance in Christian communities...." From that paragraph.

Eric DVH: Also, there's the fact that it DOES work in Real Life. See here

. All Semitic scripture unanimously agrees that usury is always an evil deed. Period (Jews believe this too, but feel that charging interest from those gullible goys is OK, a double standard which has understandably earned us quite a bit of flak over the millennia.) You can choose to disagree with this, but you can't deny it. I myself am of the opinion that making a profit on lending isn't a bad thing as long as the total interest paid is substantially lower than the total amount lent. I mean, paying somebody back $800k just because you borrowed $250k from them is insane.

Twin Bird: Removed...

Gudrun Schyman, a Swedish politician, made international headlines with the money for nothing mistake. Her solution to the gender wage gap was to institute a lower tax for women. She wasn't trying to rag on men, she was just trying to fix the wage gap while failing economics forever.

Because first, this isn't a road we want to go down, and second, I don't see how this is "money for nothing." In terms of real value, she's taking money from men to give to women, to rectify the money the wage gap takes from women to give to men. Stupid, yes. Any of the nine fallacies, no. But that's not really important since we don't need Real Life examples on this page, as above.

Madrugada: It seems that Milo Minderbinder's egg business from Catch-22 really should be on here somewhere, but I can't figure out if he's getting it wrong or actually making it work. I think it works if you look at it from an accounting standpoint, but just trying to figure the economics of it makes my head hurt, so if someone with a better grasp of the subject could take a stab at it, that would be great.

jfpbookworm: What about the idea that a failing business can just increase the prices of its products to increase its profits? While this can be true in a few isolated cases (where a product wasn't at the optimum price, or where an individual unit of a product becomes much more expensive to produce), largely it's a case of failing economics. Real Life examples would include justifying raising the price of intellectual property by citing losses due to piracy; while piracy cuts into profits, if a company could make more money charging a higher price they'd do it anyway (this one is more about P.R. than bad business). A common fictional aversion is the lemonade stand scenario where a young character figures that if they can make money selling lemonade for 50 cents a glass, just imagine how much they could make selling it for $50 or more!

Korval: I'm not up on economics (I prefer hard sciences), but I don't understand how wealth isn't zero sum? Outside of things like intellectual property (which are wholly fictitious forms of "wealth", created for the sole purpose of monetizing something that didn't used to be considered worth anything), I don't know of any form of wealth that exists in perpetuity. At some point, you are using materials with either 100% efficiency or with near enough to 100% that getting those last few percentage points would cost more than it is worth. Once everything that can be used is being used, there's no more wealth to be had.

Further, there is the issue of exactly how much "educated" workforce you really need. The more educated a workforce is, the less willing/able they will be to do crap-work. Let's say in your economy, you have a market that employs 200,000 people making some product. Now, someone comes along that can do the same job, but only employing 1000 (imagine that Mc Donald's goes robotic). So now there need to be employment opportunities for the new 199,000 workers on the market.

It doesn't matter how educated the workforce is; if nobody is hiring, there are no jobs available. The best that these people can do is try to go into business for themselves. That will lead to a few being successful, but most failing miserably.

As for the fictitious forms of wealth, those have limits too. People can only purchase such things with disposable income, and there is only so much of that to go around. If you're already using up 100% of all available disposable income with the current stock of intellectual property, the market is saturated. Any additional pseudo-wealth on top of this is... not valuable. Literally.

In short, capitalism is about growth. Eventually, you run out of room to grow. Wealth isn't infinite. If you run out of wealth, capitalism necessarily breaks down.

Can someone explain how this logic is not correct?

: Yes, wealth doesn't violate the conservation of matter. However, oil companies don't mine oil because it's there, and they'll stop mining it before it runs out. They mine it because they can make a profit. If some scientist makes mining oil cheaper, then effectively more oil "appears" because more is now profitable to sell. He'll do it because someone will pay him. Interfere and you'll destroy the wealth and the oil, in practice. If there's two million worth of oil in a subterranean well that takes two million and one dollars to extract, it's effectively not there.

Also, it's more of rhetorical point to contradict the idea that, say, if there are 100 people at work, you could just raise their wages because the number of jobs is fixed by the number of people who need them. Policies can effectively create and destroy jobs.

Similarly, it contradicts protectionism. Yes, foreign company x could be banned and home company y could be given their business instead, but they're not "stealing" your industry, they're selling something that somebody wants. If your own company made a better product, people will buy them. Even if you ban them buying foreign cars, people will spend less on the now inferior domestic product. So you haven't zero-sum "taken back" anything from the foreigners, you've actually destroyed some wealth.

And the last point, an economy that's not growing doesn't mean it's not there. It just means that it's not getting any richer. It's still as rich as it is. If Bill Gates got no pay rise he'd still be a multibillionaire. Growth is not wealth.

T Beholder: Uh... someone had very strange ideas about protectionism. It's based on assumptions that a) sellers compete with prices, not just quality (and there's lots of reasons for cost differences); and b) foreign business will tend to spend more in other places, so the wealth does not returns — the capital leaks. Thus one's better to watch out, and do something if it leaks out more than in.

Nasrudith: Removed the following from destruction equals employment Editor Tract natter as it was clearly political bitching.

It would have to be efficient, given the utterly minuscule amount of taxes from the "wealthy" (really the poor working classes) go toward such things, as compared to going toward handouts to those poor, poor billionaires who find themselves suddenly (sob) only multi-millionaires. (sniffle)

—- Removed:

It is weakly justified in that they were being manipulated by the Sith and with no known standing Republic army, they didn't expect a drawn-out galactic war.
If they could have overthrown the Republic government quickly, they might have been able to set up a puppet government. Being able to do as they pleased on what were formerly Republic worlds could open up a lot of opportunities for them.
The Commerce Guilds were only called the commerce guilds - there's already one People'sRepublicOfTyranny in the Star Wars verse. Besides, who says they were giving their support for free? The confederacy could be paying then through the nose for all we know.

A bunch of fan-wanky justifying edits on a Star Wars example? I am filled with shock and dismay.

—- On The Tribe: That example doesn't sound quite as bad as it is put - the basic principle of captialism is that different people have differing desires and neccessities, and what is of lesser value to one is of greater value to another. The free exchange of goods thus not only fulfills needs but rewards productivity, thereby increasing the resources available for trade and creating the ever-increasing spiral of abundance present in capitalist societies. The infusion of capital into a depressed economy can thus enhance it by increasing the amounts exchanged; this is the definition of an investment. There is no real reason an "authority" cannot provide said investment - as long as said infusion is explicitly expected to be repaid. Otherwise it's simply Money For Nothing.

If you're gonna delete, commissars should give at least a half-assed excuse. *cough*jojabar*cough*

jojabar: Commisar. I get it. Funny. I clearly can't have deleted that because justifying edits are recommended against, it must be because I'm some kind of commie thug.

Kalaong: And in response to the above, perhaps we should delete the entire Real Life section. Everybody's here to be entertained, more than anything else, and real economics are depressing no matter your beliefs. If you disagree with policies, you're depressed because you're sure your way would be better. If you agree with them, you're depressed because your way isn't performing as you expected. And when people start throwing walls of text at each other, it's about as disruptive as it would be if said walls were real.

Unknown Troper: Agreed. I've axed the Real Life section on these grounds.

Studiode Kadent: I would like to suggest adding a new fallacy that counts as Failing Economics Forever. Specifically, Intrinsic Economic Value (the belief that economic value, i.e. market price, is a physical stuff that exists inside goods).

You Fail Economics Forever is generally defined in terms of the Marginalist revolution and the resultant neoclassical economics. Economic Subjectivism is one of the primary pillars of Walras, Jevons and Menger's work. It is fair to say that denying subjective economic value should count as Failing Economics Forever.

Note that by this standard, both Karl Marx and Adam Smith would Fail Economics Forever. Labor Theory of Value was one of the pillars of classical economics after all.

Should I add this in? Additionally, maybe we should consider rewriting this page and define Failing Economics Forever as ignoring the basic principles of neoclassical economics. Im an Austrian but both the Austrians and Keynesians agree on the basic principles of neoclassical economics (yes, I'd argue the Keynesians are inconsistent but that's not a debate for here).

This troper, personally, thinks that you're getting too far into Real Life. This trope is about fictional works, and mostly about really silly, obviously wrong economic ideas that could never work, but that are presented as working in fiction. Intrinsic economic value might be a good fallacy to add, say, for instances in fiction when characters seem to think something has a lot of economic value even when there's no reason for it to be valuable in the setting, or when a character feels that something should have a lot of economic value specifically just because of the time and effort put into it, even when there's no demand for it. But I think rewriting this page to turn it into a discussion of current and obsolete Real Life economic ideas would be going a bit far. At the end of the day, this is about silly things found in fiction, not a serious discussion of economic theory.
- Thanks for your comments. So would it be acceptable to just add the point on intrisic economic value?

Main Tropes Index

Troperville

Editing Help

Tools

Toys