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Clean tap water has declining marginal utility for a single consumer. Everything has declining marginal utility. And that includes, prominently, consumption itself (the only thing neoclassical economists will not recognise).

But I didn't talk about the subjective utility of tapwater to a single consumer at the margin, I talked about its objective value, and it is clear that it is objectively more valuable. Compare Maslow's hierarchy of needs and the share of income poor people spend on food, water and housing vs. that of rich people, for starters.

by nanne (zwaerdenmaecker@gmail.com) on Wed Aug 12th, 2009 at 01:07:15 PM EST
[ Parent ]
... their marginal value, there is a clear priority established by the question posed above, which is access to the item at all.

As we move up the hierarchy to lower priority items, the priorities of individuals will show greater diversity ... pose the question, for example, of giving up cable television and giving up access to the web, and priorities will differ.

But there are basic needs where the priority is far more uniform.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Aug 12th, 2009 at 03:26:40 PM EST
[ Parent ]
But that's where you run into problems with that line of thinking -- that there exists an objective value of water.  

Does water exist? Yes, it does: here's a river made up of it.

Does value exist? Yeah, of course, it's, er ... what do you mean by value?

Some things can be said to exist or not, and we can go about trying to prove it one way or the other using the language.  Other things, such as the abstract, cannot be said to exist or not, and usually existence is not what is interesting them.  Those are philosophical concepts, not scientific ones, and "value" belongs to that domain of thinking, while water belongs to the scientific.

The only way you can try to make an objective proposition about the value of water is to first engage in a philosophical discourse -- not a scientific one -- about what water ought to be worth to everyone.  And that's a political discussion as well since we're talking about more than just one person.

by santiago on Wed Aug 12th, 2009 at 06:35:39 PM EST
[ Parent ]
You do not have access to fresh water: You die.

You do not have reliable access to clean fresh water: You fall ill more often and die earlier.

Now, unless you want to go all po-mo on us and claim that harbouring serious reservations about illness and death is a cultural myth and/or personal economic decision, I see a pretty good basis for an objective value system there.

Until all the world is an affluent society. Then a subsistence-based value system breaks down. But come the happy day when we manage to give everyone reliable access to clean fresh water, sound food, health care, education and so on, then figuring out what to do with any consequent (or remaining) abundance is going to be a comparatively unimportant problem.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 13th, 2009 at 12:56:02 AM EST
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Not quite.  In order to get where you are, you have to assume, philosophically and politically, that people who happen to live in regions of water overabundance have a moral responsibility to collect and distribute water to people who don't live in such regions, even if people moved to water-scarce regions against the wishes of those who live in water-abundant areas.  Objectivity, therefore, has nothing to do with any claim of superiority of water over other goods for every person.

To illustrate, does it really make sense for people in Iowa, USA to be forced to give up going to movies in order to pack up their water and ship it to people rashly settled in southern California and Arizona and who now find themselves thirsty because they moved to a desert?

by santiago on Thu Aug 13th, 2009 at 10:25:14 AM EST
[ Parent ]
How would shipping water from water-rich to water-poor areas force people in either area give up going to movies?
by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Aug 13th, 2009 at 11:25:30 AM EST
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That's just the choice Jake (or whoever it was) provided for argument sake -- ranking the preferences between an equal dollar amount of movies and water.  That choice is equivalent to giving up one of the two for the other.
by santiago on Thu Aug 13th, 2009 at 11:46:54 AM EST
[ Parent ]
In order to get where you are, you have to assume, philosophically and politically, that people who happen to live in regions of water overabundance have a moral responsibility to collect and distribute water to people who don't live in such regions,

I have to assume no such thing. Serious water shortages are almost never due to a lack of water, just as serious famines are rarely due to a lack of crops. Water shortage is ordinarily caused by a lack of clean water (which can be solved by making relatively cheap modifications to the local water collection and distribution systems) and/or an oligarchy that monopolises water to sell it for profit (whether directly to the people of the region or to other countries through cash cropping).

True, there are cases of industrial mass insanity, where large numbers of people have moved to regions where there simply isn't very much water. But that is a minority of cases, and usually take place in comparatively affluent countries, where people can afford to move around casually.

So pretending that solving the world's water problems involves building aqueducts to Africa is a cheap rhetorical gimmick, nothing more.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 13th, 2009 at 11:27:26 AM EST
[ Parent ]
I agree.  But then you're not talking about water anymore. You're talking about income. (Or, more generally, about individual capabilities to get what one needs in order to avoid deprivation or lead a full and rewarding life.) And that supports my contention that their is no objective value for physical resources because need, deprivation, and good lives are either not constants, or they are abstractions.
by santiago on Thu Aug 13th, 2009 at 11:52:22 AM EST
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It is possible to speak of necessary conditions for well-being (or, inversely, sufficient conditions for deprivation), without claiming that they are sufficient (resp. necessary).

It is, of course, a political contention to claim that it is more important to fulfil all universally necessary conditions for well-being for all people, than to give one person access to luxury or positional goods.

In the same sense and to the same extent that "equality before the law" is a political statement.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 13th, 2009 at 06:02:27 PM EST
[ Parent ]
You might very well be right.  But it's also important to note that almost everyone thinks they can be an economist and offer opinions about economic theory and evidence without ever having read the material.

(I knew a philosophy professor who was once asked by grad student if it was actually a requirement to read the large amount of material assigned before class every week.  He responded, after thinking for a moment, "No, it isn't, because a lot of people find it easier to participate in discussions when unencumbered by the facts.)

It is likely that rather fewer numbers of people think they can speak so authoritatively about natural sciences or are even interested in the natural sciences, so in economics it might simply be a case of there being just too many wise fools with which to contend.

by santiago on Thu Aug 13th, 2009 at 11:48:53 PM EST
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This should have gone under the comment about creationists, no?

In which case you really, really need to go talk to the people at the NCSE. Trust me, creos feel completely qualified to talk about a wide range of scientific issues based on Kent Hovind seminars.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 14th, 2009 at 02:44:39 AM EST
[ Parent ]
They do, but there are there as many of them?
by santiago on Fri Aug 14th, 2009 at 10:16:35 AM EST
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So you're basically saying economics has been taken over by pseudoscience to the point where it's powerless to fight back?

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
by Migeru (migeru at eurotrib dot com) on Fri Aug 14th, 2009 at 10:19:04 AM EST
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What I'm suggesting is that it may not be as much the fault of trained economists but rather the fact that economics is a discourse about morality, whereas natural science is a discourse about what exists and what doesn't, and everyone can, and should, opine about morality.

Psuedoscience occurs when people use scientific language to assert moral truths rather than to help organize thoughts about moral truths.  It happens as well outside of economics, but there are fewer opportunities to do so compared to what economics offers.  For example, it is not uncommon among biologists to assert that observable evidence regarding evolution means there is no God.  That, however, is pseudoscience in the same way that occurs with economics.  Lack of naturally observable evidence for God depends entirely upon moral abstractions and assumptions about what "God" means, but that does not stop people from making such straw-man assumptions and then arguing the lack of evidence for them. A similar thing occurs in economics with moral assumptions about justice and a good society and the kinds of evidence or lack thereof to support or refute claims about such abstractions.

This is further complicated by the fact that science itself has been given in current discourse a moral superiority that it shouldn't have.  If you can say something mathematically -- the language of science -- it provides credibility in discourse today that it really shouldn't have if the discourse were more about truth than about politics -- about who get what, and how.  The fact that economics uses the language of science to organize thinking about precisely the question of who gets what and how, makes it much more easy to abuse for discursive strategy rather than for truth telling than can be done with natural sciences.

by santiago on Fri Aug 14th, 2009 at 12:39:25 PM EST
[ Parent ]
Only about twenty congresscritters and fifty million voters...

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 14th, 2009 at 10:50:57 AM EST
[ Parent ]
The only way you can try to make an objective proposition about the value of water is to first engage in a philosophical discourse -- not a scientific one -- about what water ought to be worth to everyone.  And that's a political discussion as well since we're talking about more than just one person. (My bold.)

How many people are involved in the discussion and what the relative importance of their opinions are is very much a function of politics and the political system involved.  It can vary from one all important person, "L'estat c'est moi" to all adult citizens.  And the nature of our economy and of the economic theory that we use to explain and understand the economy should, but does not, reflect the alleged nature of the political system.  J.P. Morgan, (Columbia), J.D. Rockefeller, (U. of Chicago), Ezra Cornell, (Cornell University) and Leland Stanford, (Stanford University) consulted few people outside of their immediate circles as to the proper nature of the contents of economics that was to be taught.  They wanted something that served their interests and were far more concerned with rhetorical power than analytical or predictive power.  That is how we came to be saddled with Neo-Classical Economics.  Mason Gaffney has a very good description of the whole sorry story.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Aug 13th, 2009 at 01:13:26 AM EST
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Very well put. And that's exactly why economics is always and everywhere political economy and cannot, will not be a hard science. There probably cannot be a general theory of economics as currently understood.

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
by Migeru (migeru at eurotrib dot com) on Thu Aug 13th, 2009 at 04:31:55 AM EST
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No, because the point of current mainstream views of economics is to promote convenient fictions - or to put it more bluntly, to lie about what is inevitable in the world.

It's pure newspeak. It makes it possible to pretend that movie tickets are as valuable as water when a significant proportion of the world's population is dying from thirst, or from illness created by contaminated water supply.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Aug 13th, 2009 at 09:29:14 AM EST
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That's right.  Economics can be a very useful way (or, perversely a deceptive way) to organize facts and thoughts for what is still essentially a discourse about morality. It doesn't let anyone off the hook for making hard moral decisions.
by santiago on Thu Aug 13th, 2009 at 10:56:27 AM EST
[ Parent ]

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