Can the economy really be "fixed?"

TES, unequal societies tend to be crime ridden unhealthy societies.

Just another point. Revolution is bad. I like a semi-structured free market economy, and as such, I don't want drastic revolution to come and change it. (Either by eliminating the structures that exist or the free market) Things getting worse threatens to result in bigger changes than I think are needed or wanted.

Here's the deal however. It's all about power balance. Now, in a perfect economy, every economic transaction is a completely balanced transaction in terms of the power of the buyer and the power of the seller. This is good, because it means that what usually ends up happening is the marginal benefit of the transaction is somewhat evenly split between the buyer and the seller.

What's been happening, is that power imbalances have been forming and growing. So this is a bad thing. And some people advocate for policies that actually make these imbalances worse. This is just so wrong it's not funny. It's not that I think that everything should be 50/50...that's impossible, of course. But at the very least don't muck things up further.

It's bad because of the opportunity cost. Having 10 people suffer when the alternative is to have only one person suffer should be a no brainer.

I do assert, yes, that suffering is bad.

I also assert that, being America, our concerns are first and foremost about Americans. In the greater context of things, we can also concern ourselves with how to better help other countries and stop others from suffering in other countries, but that's really a bit beyond the scope of this conversation. Further, considering how utterly minimal foreign aid is to the US federal budget, I'm pretty sure that the reason American poor families haven't risen much has nothing to do with all our resources going to help Somalian families.

Expanding on that, it's similar to monopolies are bad. I can actually show graphs that actually explicitly show the cost of permitting monopolies to exist, if anyone is interested-though I'll need someone to refresh me on how to upload images.

http://en.wikipedia.org/wiki/File:Monopoly-surpluses.svg That's the best way of graphically putting it. If we view everything benearth the demand curve as social utility towards the consumer, and everything above the demand curve as social utility to the supplier, we want to maximize the net size of that area between the two groups. When a monopoly party has the ability to set its own price, however, it can maximize the size of the area above its curve, at the expense of area beneath the demand curve-but NOT at a 1 per 1 ratio. That yellow area is the area that's cut off.

Why am I bringing it up? It's just another way of showing that whoever has the most power in a financial transaction-or any kind of transaction-will use that power to benefit themselves over others, even if that leads to lower net aggregate social utility.

edited 4th Dec '11 11:04:03 AM by TheyCallMeTomu

I would assert that maximizing the standard of living for as many citizens as possible is the optimal way to ensure growth and prosperity as a country.

Well sure, if you want to be humane about it.