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Unread 03-06-2011, 14:53
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Tristan Lall Tristan Lall is offline
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Re: Please help Wave Robotics earn $1,000!!!

Quote:
Originally Posted by Thermal View Post
Disclaimer: I'm not an economist, i'm not taking classes in economics, this post is opinionated, even in cases where I present things as fact. (trustatus: The factyness of these facts could quite easily be debated, and if your recent posts are to be used as examples, i'm sure they will be)
Sure, why not....

(By the way, I'm no economist either, though I have taken a few classes in it. I'm not intending to say that mine is the final word on the subject.)

Quote:
Originally Posted by Thermal View Post
You feel as though time is a commodity. It's not. Time (measured in hours of human labor) has value differentiation. Massive levels of value differentiation. A worker in Wisconsin will be paid $7.25 for a single unit of time (measured in hours of human labor). Meanwhile, a poker pro could be paid $64,000 for his unit of time. People who partook in this exercise of... lets call it "coinbanking"... were reimbursed for their time equal to the exchange rate of $1000.00/(hours of time spent by the winning team). You come into this thread and post up massive arguments essentially saying that the exchange rate was much too low (2.8x lower than it should be) and that people who partook in this exercise should of simply done something else for equivalent time, received a higher exchange rate for their product (hours of human labor), and then traded the exchanged good (currency backed by the United States government) to the team. And only if they done this would "society" be prosperous and much better off!
Not "only". (I'm describing an alternative, not every alternative.) But otherwise, yes, that's essentially what I'm saying. There existed a reasonable alternative use of that time, for which the team and society would have been better off.

The fact that time has different value to different people is relevant to the extent that each person's donation is going to be determined by how they value their time. For simplicity and for conservativeness I was using the minimum wage, because I think it's a fairly good lower bound for the average wage a person will receive. But of course, if you're soliciting donations from rich poker players, and they're willing to contribute an equal number of hours' work, then you'll make a lot more money per person. (Though of course, they're not really hourly or salaried, so we're talking average wages here.) Similarly, if you solicit donations from the unemployed, you're unlikely to get much money.

If we wanted to be more precise (and had the means to do an experiment), instead of assuming a single (low) wage and running with it, we could ask each donor how many hours of depositing they'd be willing to do, versus how much they value their time. I'm estimating that when you aggregate their responses, and divide by the number of donors, you're going to get something that isn't lower than the minimum wage. (As to why that's right, consider a thought experiment of several case Bs, each with a different wage. Given that it's unlikely that people will be making less than the minimum wage, and basically impossible for them to be making less than zero, but entirely possible for them to be making several times the minimum wage, the distribution of wages is not going to be symmetrical. Imagine a histogram: it will probably be almost empty from $0.00 right up to $7.25, then will have a lot of people for a while, and then will taper down as the wages get higher. The mean of that distribution is going to be larger than $7.25.)

Quote:
Originally Posted by Thermal View Post
Now, the flaw in that argument is that you guarantee that a person would be able to very simply, find something/somebody to exchange their resource (hours of human labor) into currency at a rate higher than this website, using equivalent units of time. If that was the case, everyone on this planet would be trillionaires. Nobody would be jobless, everyone would be rich, and this planet would massively prosperous selling a non-tangible commodity. I'm really quite unsure why you can so readily accept the fact that time can be exchanged at a rate higher than the minimum hourly wage of a Wisconsin worker, but cannot in turn be exchanged at a rate lower than that (and still see benefits to "society")
I'm not guaranteeing anything, but I do assume (as described above) that the average person could reasonably easily find a way to exchange their marginal unit of labour for what amounts to the minimum wage. (When I say "marginal", I'm talking about the relevant quantum of labour—that which is being used to allow them to make a donation—for which the minimum wage is a fair estimate. We're not talking about the 1st hour or the 81st hour of labour, which could be said to have very different instantaneous valuations.) It's undeniably true that this is not the case for some people, and it is equally true that many people can do much better.

However, it does not follow that just because the average is above the minimum wage (or positive, or whatever), that everyone will therefore have virtually-unlimited prosperity. I'm not sure how you're reaching that conclusion.

Quote:
Originally Posted by Thermal View Post
Unfortunately, the world doesn't work in a way where I can just walk down to the Time Exchange Office and turn in some hours for American Dollars.
That's actually a good approximation of a job. As I demonstrated previously, it doesn't matter a whole lot if you can ask for an extra hour of work, or if you just take the proceeds of an existing hour and donate them. By being employed, you are turning in hours, and receiving money.

Quote:
Originally Posted by Thermal View Post
Society(a term you so readily throw around, and I still don't know what you mean by it) does not work this way.
"Society" is exactly what it sounds like: everybody, or to narrow it down a little as a practical matter, everybody who has a conceivable interaction with you. By saying society is better off, I'm saying that holding all other factors equal, the benefits to everyone outweigh the detriments to everyone.

I've also been trying to work in examples of why it's absolutely vital to consider the effects on society, rather than just the effects on the team. The economic concept of a negative externality—a cost that is borne by someone outside of the model—applies here. If you only care about your team (or your family, or your town, or your political donors, etc.), those negative externalities can build up, and make what looks at first glance to be a positive thing (within a team-centric model, it's a free chance at $1 000), into something that's actually worse for society (what is given up to achieve that $1 000?).
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