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More Jerome bashing from our least favorite Welshman. And I think he's taking a potshot at me as well.  Why is it that I think of the old line, "How do you know when a Welshman is lying?" when I read something written by him.  Well he is speaking English.

Why socialist economics on Dkos feels so dismal

Yesterday, I read on here another in the series of recommended diaries under the strangely xenophobic title of "The Anglo Disease". My heart sank as commentator after commentator propounded economic theory in the tired rhetoric of the extreme left-wing that I last heard in the UK in the 1970's. Throwing off the yoke of this enabled the British economy to become the largest in Europe, to the chagrin of many of its continental competitors.

What this language of socialist economics does is promote the real and unreal virtues of its philosophy whilst ignoring the fact that we progressive capitalists equally recognise not just the benefits of our system but also the abuses that can, and have, brought it into unwarranted disrepute..

Having a swipe at Ronnie Reagan and Maggie Thatcher doesn't bother me in what was written. Only partly satirically, but certainly with some satire, I admit that what really bugged me about hearing the attacks on even a Democratic president like Clinton, in that thread, is that the thoughts on which these were based seemed so utterly dreary,  uninviting and ...well, unexciting.

Then he went on to cite articles about how recent research has shown that people's assessment of their income situation is dependent on that of their peers.  Where there is greater peer group equality, peeople feel better off on the sole basis of their wage, compared to where the same wage is lower compared to te peer group.  

The econospeak for it is the difference between indepedent utility, my value for this good depends on only what I think of it, and interdepedent utility, my value for a good depends on who much I have of it relative to other people.  

It's the difference between the Lexus and the Olive Tree.  The Lexus is valued primarily because it's something that other people don't have, it's utility is interdependent.  The value of the Olive Tree is primarily independent, people value olives because they like to eat olives, it doesn't matter whether other people eat olives or not.

I've been writing about this and it's relationship to redistribution for the past week for a paper I'm doing for a class.  The key thing being that if utility is indepedent, then you can make people better off by growing the size of the economy, but if it's interdepedent, then the economy becomes a zero sum game.  Distribution matters in the latter case far more than in the first.  It's a major assault on welfare economics, and the politics of economic redistribution.  And European journals have been where most of this work has been published.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Nov 23rd, 2007 at 02:50:07 PM EST

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