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No, it is not optimal, but that is what you have.

Two questions. When you say "optimal", what are you optimising? And what would be an "optimal" mechanism for allocation of surplus wealth?

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Thu Mar 8th, 2007 at 07:05:02 AM EST
[ Parent ]
The best possible optimization might be dangerous. The (probably) most effective free markets set the questions of this diary. I prefer multidimensional optimization: when one of variables is optimized usefully enough, I would not put much effort in improving it by small margins.

Immediate holders of surplus wealth would of course prefer to keep it to themselves. Whatever social agreements or deals are proposed, there will be some better off without the agreements (in the sense of game theory models). They may even use their power to prevent new agreements, or weaken exsisting ones. (As it happens now, with the global initiative from Washington DC.) They may use measure like propaganda to keep control. On the other hand, the rest of society players may decide that it is unfair to them to have no distribution. In extreme cases, they may have enough power to impose or persuade any distribution whatsoever. Of course, harmonious agreements are preferable. The "optimal" situation is perhaps when the power balance is in favour of the majority seeking a redistribution, and they persuade surplus wealth holders to apply multidimensional individual optimization, along the lines: is it the sum of your ambitions to grasp as much wealth as possible for this moment? Don't you want to be sure that this wonderful society will keep functioning happily in this marvelous environment for indefinitely long time?  

by das monde on Thu Mar 8th, 2007 at 07:42:48 AM EST
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