After our intermezzo of last Tuesday, let's continue where we left off: What was it that William Stanley Jevons claimed about economics?
-QUOTE- "To me it seems that our science must be mathematical, simply because it deals with quantities.
Wherever the things treated are capable of being greater or less, there the laws and relations must be mathematical in nature." -END QUOTE-
His next step is this: -QUOTE- "A feeling, whether of pleasure or of pain, must be regarded as having two dimensions, or modes of varying regarding quantity.
Every feeling must last some time, and it may last a longer or shorter time; while it lasts, it may be more or less acute and intense.
Pleasure and pain, then, are quantities possessing two dimensions, just as surface areas possess the two dimensions of length and breadth.
It will be readily conceded that pain is the opposite of pleasure; so that to decrease pain is to increase pleasure; to add pain is to decrease pleasure.
Thus pleasure and pain treated as positive and negative quantities can be treated in algebra. (...) Pleasure and pain are undoubtedly the ultimate objects of the Calculus of Economics.
To satisfy our wants to the utmost with the least effort – to procure the greatest amount of what is desirable at the expense of the least that is undesirable – in other words, to maximize pleasure, is the problem of Economics. -END QUOTE-
To satisfy our wants, Jevons doesn't focus on the production of objects like clothes or food, but on the utility of those objects,
a concept he derived from the Utilitarian ethics of Jeremy Bentham. He takes it out of its moral context and uses it in his theory of economics.
For Bentham, utility measured moral goodness; for Jevons, it measures only economic satisfaction
And then states his major point: -QUOTE- "My principal work now lies in tracing out the exact nature and conditions of utility.
It seems strange indeed that economists have not bestowed more minute attention on a subject which doubtless furnishes the true key to the problem of Economics." -END QUOTE-
Then follows a complex exposition about "total utility", the degree of utility", "Variation of the final degree of utility" and lots more of specific economic issues, all mixed with all kinds of algebraic formulas.
Utility can be quantified. For instance, when you are thirsty, the first glass of water has the highest degree of utility. A fifth glass of water will have little additional effect and represents, in that way, the final degree of utility.
What is important for us to understand is that in the work of Jevons (and some others) we see the beginning of a shift in economic thought.
Economic thought introduces mathematics, the language of physical sciences, in an attempt to make economics primarily a theory of quantities and values.
Main Sources:
MacMillan The Encyclopedia of Philosophy, 2nd edition
of Economic Thought (2012)
TABLE OF CONTENT -----------------------------------------------------------------
1 - 100 Philosophers 9 May 2009 Start of
2 - 25+ Women Philosophers 10 May 2009 this blog
3 - 25 Adventures in Thinking 10 May 2009
4 - Modern Theories of Ethics 29 Oct 2009
5 - The Ideal State 24 Febr 2010 / 234
6 - The Mystery of the Brain 3 Sept 2010 / 266
7 - The Utopia of the Free Market 16 Febr 2012 / 383
8. - The Aftermath of Neo-liberalism 5 Sept 2012 / 413
9. - The Art Not to Be an Egoist 6 Nov 2012 / 426
10 - Non-Western Philosophy 29 May 2013 / 477
11 - Why Science is Right 2 Sept 2014 / 534
12 - A Philosopher looks at Atheism 1 Jan 2015 / 557
13 - EVIL, a philosophical investigation 17 Apr 2015 / 580
14 - Existentialism and Free Will 2 Sept 2015 / 586
15 - Spinoza 2 Sept 2016 / 615
16 - The Meaning of Life 13 Febr 2017 / 637
17 - In Search of my Self 6 Sept 2017 / 670
18 - The 20th Century Revisited 3 Apr 2018 / 706
19 - The Pessimist 11 Jan 2020 / 819
20 - The Optimist 9 Febr 2020 / 824
21 - Awakening from a Neoliberal Dream 8 Oct 2020 / 872
22 - A World Full of Patterns 1 Apr 2021 / 912
23 - The Concept of Freedom 8 Jan 2022 / 965
24 - Materialism 7 Sept 2022 / 1011
25 - Historical Materialism 5 Oct 2023 / 1088
26 - The Bonobo and the Atheist 9 Jan 2024 / 1102
27 - Artificial Intelligence 9 Feb 2024 / 1108
28 - Why Am I Here 6 Sept 2024 / 1139
The Discussion
[13:12] .: Beertje :. (beertje.beaumont): Thank you, Herman
[13:12] Max Chatnoir: Thanks, Herman.
[13:12] herman Bergson: That is what the oil companies do these days....calculating with quantities and values
[13:13] herman Bergson: War is good for them....so keep going is their wish perhaps
[13:13] Particle Physicist Bejiita (bejiita.imako): hmpppf
[13:14] Particle Physicist Bejiita (bejiita.imako): i guess so
[13:14] Max Chatnoir: How does scarcity factor in?
[13:14] herman Bergson: There was something else in the news in the Netherlands....
[13:14] Max Chatnoir: It ought not to change the utility, but it can sure change prices.
[13:15] herman Bergson: There is a Dutch company that hosts a terrible porn website....
[13:15] Particle Physicist Bejiita (bejiita.imako): yep
[13:15] Particle Physicist Bejiita (bejiita.imako): same with the hardware shortages from AI datacenters hoarding all siicon
[13:15] herman Bergson: It cares about the quantity of their work, not the morality of it...
[13:15] Particle Physicist Bejiita (bejiita.imako): leaving almost nothing left for the consumer market
[13:15] Particle Physicist Bejiita (bejiita.imako): consumer
[13:16] herman Bergson: Scarcity is a difficult concept Max......
[13:17] herman Bergson: Who decides about that and why should prices rise?
[13:17] Stranger Nightfire: That first happened with data mining for Bitcoin it became hard to get graphics cards for computers because they were all repurposed for that
[13:17] Particle Physicist Bejiita (bejiita.imako): well as u said, its a factor, a multiplier or i guess u could use it that way but its more complex then so i guess
[13:17] Particle Physicist Bejiita (bejiita.imako): then just * scarcity factor
[13:18] herman Bergson: I heard that the Iranian oil is still transported through the Strait of Hormuz...
[13:18] Particle Physicist Bejiita (bejiita.imako): but more scarce = higher prices true
[13:18] Particle Physicist Bejiita (bejiita.imako): saw something about that
[13:18] Max Chatnoir: Also. Suppose I have a car that I use more or less every day. Then I'm very rich, so I decided I need another car. Is the utility of each car then reduced?
[13:18] herman Bergson: The oil tankers stay in the territorial waters of Iraq, Pakistan and Iran and the US navy can't stop them
[13:19] herman Bergson: When you would possess 5 cars for instance, I'd say yes
[13:20] Max Chatnoir: Why five?
[13:20] Particle Physicist Bejiita (bejiita.imako): to have only to have
[13:20] herman Bergson: Not all cars have the same degree of utility then
[13:20] Stranger Nightfire: lines form a favorite song --
[13:20] Stranger Nightfire: Money is a game and the ladder we climb
Turns a saint into a sinner with his finger in crime
I'll break it down for you motherfuckers line by line
This is business economics in a nursery rhyme
She sells seashells on a seashore
But the value of these shells will fall
Due to the laws of supply and demand
No one wants to buy shells 'cause there's loads on the sand
Step 1, you must create a sense of scarcity
Shells will sell much better if the people think they're rare, you see
Bare with me, take as many shells as you can find and hide 'em on an island, stockpile 'em high
until they're rarer than a diamond
[13:21] Stranger Nightfire: The other steps are interesting too
[13:21] herman Bergson: Yes, Stranger, a lot in economics is a matter of psychology
[13:22] Particle Physicist Bejiita (bejiita.imako): aaa diamond suppliers do this, they hold back on the supply to keep prices high - artificial scarcity
[13:22] herman Bergson: The oil prices go up and down depending on what the White House says
[13:22] Particle Physicist Bejiita (bejiita.imako): hmm yes
[13:23] herman Bergson: Makes little sense to me
[13:24] Particle Physicist Bejiita (bejiita.imako): it depends how stinky the raw sewage coming out of his mouth is, sort of
[13:25] herman Bergson: The fun part is that there is little mathematics in this kind of economic movements of prices.
[13:25] Particle Physicist Bejiita (bejiita.imako): it feels arbitrary a bit
[13:25] Particle Physicist Bejiita (bejiita.imako): as sai, Trump says something stupid and the stock plummets
[13:26] herman Bergson: And the consumer at the gas station pays and the money goes to the shareholders
[13:26] Particle Physicist Bejiita (bejiita.imako): i say its panic and hype more than actual math,
[13:26] Particle Physicist Bejiita (bejiita.imako): up and down
[13:27] Particle Physicist Bejiita (bejiita.imako): aha
[13:28] herman Bergson: My problem with Jevons is, how do you measure a feeling?
[13:29] herman Bergson: He compares it with the sizes of a surface, for which you can use a ruler to measure them.
[13:30] herman Bergson: To me quantifying pain and pleasure and utility is a strange idea
[13:30] Max Chatnoir: Yes, if you really REALLY want something, but you don't actually need it, how does that affect its utility?
[13:30] Particle Physicist Bejiita (bejiita.imako): Like how i want my AKAI MPC Sample
[13:30] Particle Physicist Bejiita (bejiita.imako): ㋡
[13:30] herman Bergson: It offers you the satisfaction oof possessing it, Max
[13:31] Stranger Nightfire: I had wondered about the utility of such things as pet rocks
[13:31] Max Chatnoir: Or engagement rings, sort of a fancy pet rock.
[13:31] herman Bergson: ohhh yes that hype....
[13:31] Particle Physicist Bejiita (bejiita.imako): well I might need it, i want to make music after all and have a friend learning me these things
[13:31] Stranger Nightfire: Or why people in Herman's country but at one time paying huge fortunes for a single Tulip bulb
[13:32] Max Chatnoir: So that is part of the pleasure?
[13:32] herman Bergson: But satisfaction is a feeling that will wither in time....won't last forever,
[13:32] herman Bergson: So does the utility of the object then disappear too?
[13:32] Particle Physicist Bejiita (bejiita.imako): i guess
[13:33] .: Beertje :. (beertje.beaumont): yes, then you want another pleasure
[13:33] Particle Physicist Bejiita (bejiita.imako): well depends, like i bought this computer for around 20 grand(sek), but i use it every day and it never gets boring
[13:33] herman Bergson: Yes Stranger, 1650 or so...pure madness then
[13:34] .: Beertje :. (beertje.beaumont): same as for tea..it was so rare that it costs a fortune
[13:34] herman Bergson: That is the other aspect of economics...the relation between supply and demand
[13:34] Particle Physicist Bejiita (bejiita.imako): aaa yes
[13:35] Particle Physicist Bejiita (bejiita.imako): ad there we have the thing again with the current state of computer hardware
[13:35] herman Bergson: We haven't discussed it yet this much....
[13:35] Max Chatnoir: But is supply and demand a factor in utility?
[13:35] herman Bergson: but it will become a topic in the near future, I assume
[13:36] Particle Physicist Bejiita (bejiita.imako): the silicon itself is abudant tut u need trillion dollar factories to make computer hardware, meaning there will be a limit how much u can produce
[13:36] herman Bergson: I'd say YES Max
[13:36] Particle Physicist Bejiita (bejiita.imako): like 70 % at least is made by one single factory TSMC in Taiwan
[13:36] herman Bergson: Objects with a high degree of utility and a low supply for instance
[13:37] Max Chatnoir: Is I want it the same as I need it?
[13:37] Particle Physicist Bejiita (bejiita.imako): so when AI datacenters start screaming for stuff well u can guess what will happen
[13:38] herman Bergson: No... wanting something may for instance, be related to greed while needing something may be related to a real need....for instance a pair of shoes
[13:39] Stranger Nightfire: you can't always get what you want
[13:39] herman Bergson: Shoes have a high degree of utility, but what when there is just a limited supply?
[13:39] Particle Physicist Bejiita (bejiita.imako): ah
[13:40] Stranger Nightfire: but if you try... well some hardly get what they need
[13:40] Particle Physicist Bejiita (bejiita.imako): i need clothes, and i need food, and so
[13:40] herman Bergson: Yes Stranger, there are a lot of people in this world in that situation
[13:41] Stranger Nightfire: Singer Angelina Jordan performed barefoot to bring attention to the people in the world who can't afford a pair of shoes
[13:41] Particle Physicist Bejiita (bejiita.imako): but do I need that fancy music device? I say no, but it will probably bring me joy, add its not super expensive really; however, the hype made it sell out globally before
[13:42] herman Bergson: Jevons also says things about demand and supply.... maybe I'll look into it and see how his theory is
[13:42] Particle Physicist Bejiita (bejiita.imako): want vs need and also hype
[13:42] Particle Physicist Bejiita (bejiita.imako): i say
[13:42] herman Bergson: I read a few paragraphs about it...maybe it might clarify something for us
[13:42] Particle Physicist Bejiita (bejiita.imako): ok
[13:43] Max Chatnoir: Please.
[13:43] .: Beertje :. (beertje.beaumont): Seems to me that not many people can make their own clothes; everything has to be made in other countries
[13:43] Max Chatnoir: Or at least by other people.
[13:43] herman Bergson: Yes, maybe I'll find out how he sees the relation between demand and supply and utility within his mathematical context
[13:44] .: Beertje :. (beertje.beaumont): and to repair socks and shirts is not done these days
[13:44] Particle Physicist Bejiita (bejiita.imako): I saw a video about fabrics and eve thread have become so expensive (because the rich ones are now into it apparently) that ordinary people cant afford making their own clothes, its much cheaper to buy mass-produced stuff
[13:44] Stranger Nightfire: So-called supply side economics has been tried again and again, and it never works, yet people keep bringing it back up
[13:45] .: Beertje :. (beertje.beaumont): no Bejiita
[13:45] Stranger Nightfire: That's the false analogy that a rising tide will lift all ships
[13:45] Stranger Nightfire: So making rich people richer will help the poor
[13:45] .: Beertje :. (beertje.beaumont): When I make my cloths i wear them for a couple of years; it's much cheaper than to buy cheap stuff
[13:45] Stranger Nightfire: It's a big lie that doesn't seem to go away
[13:46] Particle Physicist Bejiita (bejiita.imako): might be a US thing, was something like 25 hobbies u can't afford any longer
[13:46] Stranger Nightfire: Hobbies like going to a music concert
[13:46] Particle Physicist Bejiita (bejiita.imako): https://www.youtube.com/watch?v=qsEBUgVZzRM&t=307s
[13:46] herman Bergson: Just think of the trickle-down economy of Reagan....same big lie
[13:46] Particle Physicist Bejiita (bejiita.imako): this one
[13:47] Particle Physicist Bejiita (bejiita.imako): social media hyping stuff up is also to blame
[13:47] Particle Physicist Bejiita (bejiita.imako): influencers ect
[13:48] .: Beertje :. (beertje.beaumont): [13:45] Stranger Nightfire: It's a big lie that doesn't seem to go away..what is a big lie?
[13:48] herman Bergson: One thing we'll definitely will discuss in the future is profits....what justifies profits, what are just profits, etc.
[13:49] herman Bergson: Making rich people richer will help the poor, Beertje
[13:49] Max Chatnoir: Only if the taxes come back.
[13:49] .: Beertje :. (beertje.beaumont): I can't imagine that rich people will help the poor
[13:49] .: Beertje :. (beertje.beaumont): they never did that
[13:49] Particle Physicist Bejiita (bejiita.imako): nope
[13:50] Particle Physicist Bejiita (bejiita.imako): they are too selfish
[13:50] Stranger Nightfire: There has been scientific research done It shows that rich people are less willing to share with others than poor people
[13:50] herman Bergson: No, same as that trickle down idea....make the companies and wealthy people wealthier and their spending will benefit the lower echelons in society
[13:51] Particle Physicist Bejiita (bejiita.imako): hmm, that did not work out so well right?
[13:51] herman Bergson: Yes Stranger, and one cause is that the rich lack empathy....
[13:51] Particle Physicist Bejiita (bejiita.imako): yes, they think the non-rich ones are just low level worthless scum
[13:51] herman Bergson: also some research outcome
[13:52] Particle Physicist Bejiita (bejiita.imako): as i said before, esp in USA your human value = your wallet size
[13:53] Particle Physicist Bejiita (bejiita.imako): and not how u are as a person, this is I think part of the reason Trump can be a mass murdering pigg and rapist and he still got into white house
[13:53] Stranger Nightfire: Great cartoon I saw once Guy in a suit has a bag of cookies Three guys at the table with plates in front of them Guy with the bag has put one cookie on one plate points at the guy with the empty plate and tells the one with the one cookie that that guy is trying to steal your cookie
[13:53] Particle Physicist Bejiita (bejiita.imako): because he is RICH
[13:53] herman Bergson: I guess we have analyzed the world enough for today, unless you still have a final remark
[13:55] herman Bergson: So, thank you all again
No comments:
Post a Comment