Comments on: The Playstation Proof

By: Henry

Henry — Mon, 08 Jan 2007 17:58:59 +0000

radek – the technical term for what you did isn’t a “slight generalization.” It’s a falsehood. You’ve been making a thorough pain of yourself in comments, trying to defend an article that is hilariously badly argued and that clearly is intended as an attack on claims about inequality, making bullshit assertions about Edwards etc. The ratio of hackishness to insight is far higher than I’m prepared to tolerate in my comments threads. Consider yourself under caution.

By: abb1

abb1 — Sun, 07 Jan 2007 19:43:51 +0000

Well, I was just visiting the US and I’m reporting that the Americans look prosperous, happy, and fat. At least in the vicinity of Boston’s Rt. 128. Of course I didn’t go places in and around Boston where one is not supposed to go, so I can’t report on that, unfortunately.

By: radek

radek — Sun, 07 Jan 2007 03:53:56 +0000

henry, I’m not sure who’s having trouble with reading comprehension here. Where do I come off as wanting to defend that “high (sic) prices for Playstations are decisive evidence that inequality isn’t an issue”?. In light of this misrepresentation of my view, my slight generalization of your statement from a particular case to “some” or even “most” is pretty innocous. So why are you splittin’ hairs?

By: Henry

Henry — Sat, 06 Jan 2007 16:49:42 +0000

radek – I don’t want to be rude here, but are you able to read properly? I didn’t say “liberterian arguments are stupid and sucky” or even “libertarian arguments are stupid and sucky.” I said that in this case, and in some others I know of, the arguments are stupid and sucky. This rather obviously doesn’t apply to libertarian arguments tout court; indeed, if you would care to read the original post, I say that Reason’s website is sometimes quite interesting, and shouldn’t be publishing this kind of guff. But if you really want to defend the argument that high prices for Playstations are decisive evidence that inequality isn’t an issue, then please, be my guest.

And as for relative poverty – the case that economic inequality is increasing is accepted by all, as far as I can see, except the most sedulous WSJ hacks. Even the bloody Economist accepts it. Measures of relative poverty are ipso facto going to increase (as the mean income, on which these measures are based, increases but the incomes of lower deciles don’t keep pace).

By: radek

radek — Sat, 06 Jan 2007 15:46:07 +0000

Maynard, I read the article. I did skip over your own comments on your blog. Now going back over them I gotta say that I pretty much agree with you (more to life then getting more calories, even if you’re damn poor). However, I don’t get the same sense from the paper that you do and even if I don’t think one paper a “tradition” makes.
In the economist circles I hang out in “paternalism” is a dirty word, and probably righly so.

By: Dave

Dave — Sat, 06 Jan 2007 05:40:16 +0000

The reaction some of you have is what separates leftists from conservatives.
Conservatives say “ look how good things are.” People are still unequal but that is no ones fault. The overall historical standard of living continues rising. The poor have more resources than ever, so much money they can afford Play Stations. The wealth of the nation is at unprecedented levels. If the economy continues to grow even more poverty will be wiped out.
The rich must either spend there income or invest it. Either way the economy benefits including the poor people. Higher taxes might weaken the economy and would take discretionary funds away from earners and put it in the hands of government functionaries. Libertarians and conservatives think that excessive taxing is unjust. Lefties love the public sector because they think the government functionaries spend the public’s earnings more wisely and in a more socially just manner than earners. But mainly they just want the wealth of the rich to somehow be diminished so that the wealth of the poor and rich will be brought percentage wise to a closer mathematical value.

If the economy were doing poorly there would be calls for government actions to improve it. If there were severe unemployment, that would be a big issue for the left. Now the best they can do is bemoan the good fortune of the wealthy. Since all boats are rising with the vigorous economy, conservatives and libertarians have a positive reaction to the good news. Since left believes there is some type of cosmic injustice to inequality, it decries the good fortune of the more affluent. At a certain point this becomes a symptom of envy and class hatred. There is nothing laudable about this, though the left thinks that it is promoting justice. If there are not enough funds to address problems faced by the citizenry, spending proposals should be offered. Since the affluent have more resources, they should disproportionately fund government activities as they do now with the progressive income tax. There are unlimited spending agendas so wants can only be partially addressed. The issue should be taxation to fund specific needs rather than the promotion of justice through forced equalization of income.

By: Maynard Handley

Maynard Handley — Sat, 06 Jan 2007 04:25:37 +0000

“Maynard H:
There is a long long tradition of economists dismissing purchases of certain goods (let’s call them “entertainment”) as somehow frivolous

Huh? Aside from Veblen I can’t think of any. If anything the economist are more prone to committing the opposite sin of “people buy whatever they buy and who are we to tell’em different” even in extreme circumstances (like John E’s heroin example)
”

Here’s an idea. Read the paper I referred to. That will give you at least one example. They don’t quite come out and say “these people are idiots for spending 10% of their miniscule income on festivals” but they do everything they can via nudges and winks to convey that idea.

By: radek

radek — Sat, 06 Jan 2007 03:27:37 +0000

Ok, I’m wrong, they do reflect adjustments for inflation only. It’s a bit annoying that the Census website doesn’t come out and say so and you have to crunch the numbers yourself to see. So it is a measure of absolute poverty.

By: radek

radek — Sat, 06 Jan 2007 03:22:44 +0000

And.
The idea of “relative poverty” as generally used is really just a particular measure of inequality – % of folks with income relative to some threshold which is a function of the absolute affluence of the society they live in. “Absolute poverty” means people living below some threshold which is independent of the affluence of the society they live in. Like 1$ or 2$ a day, that the WB uses a threshold for poor countries. Obviously not many people in US like that.

But.
The data I linked to above is probably a measure of “relative poverty” so even as far as that goes Henry is incorrect. This is because the threshold used to asses the poverty rate changes year to year as average income has increased. I could be wrong if those adjustments only reflect accounting for inflation, but I think they’re more than that. I’ll check around.

By: radek

radek — Sat, 06 Jan 2007 03:09:52 +0000

Henry:
by poverty, I meant relative poverty, as should have been clear from the rest of the post. Capisce?

Except it wasn’t. Your precise words were “increasing poverty”. And it doesn’t seem to me like Taylor’s talking about relative poverty. He’s talking about straight forward ability to purchase a product. That sounds more like absolute poverty.
And aside from asserting that liberterian arguments are “stupid and sucky” you have made no argument that (absolute or relative) poverty is increasing.

John Q:
Your post is correct but again I don’t think Taylor’s talking about inequality. Everyone can agree that (absolute) poverty is bad. Inequality is generally bad but it also opens up a host of other issues. Given that Reason is a liberterian mag I expect they take the “if povery is non-increasing then who cares about inequality” view.

Maynard H:
There is a long long tradition of economists dismissing purchases of certain goods (let’s call them “entertainment”) as somehow frivolous

Which means dsquared above is right though I don’t know what that’s supposed to imply.

By: Matthew

Matthew — Fri, 05 Jan 2007 21:44:06 +0000

This same logic (some expensive PS3s exist somwhere, therefore everyone is middle class) was found in some Wall Street Journal article.

The only thing is there are hardly any PS3s and they’re still not selling out. Even if they were selling in large numbers to lower class people, going $600+ deeper into debt is not a good sign of someone’s economic security.

By: dsquared

dsquared — Fri, 05 Jan 2007 21:33:56 +0000

for what it’s worth, I’ve been to a fair few villages in Africa and Southeast Asia where there was no clean water but there was satellite TV, and am mildly surprised that people who have never seriously had to think about being able to afford either express such strong opinions about what people ought to be prepared to pay for, particularly in the face of the market outcome.

By: Maynard Handley

Maynard Handley — Fri, 05 Jan 2007 20:39:50 +0000

I’d like to tackle this claim from a different point of view.

Let us assume that the people buy these playstations are, in fact, poor. Even so, why is this a problematic purchase? There is a long long tradition of economists dismissing purchases of certain goods (let’s call them “entertainment”) as somehow frivolous; but why should this be so? People are more than cows that walk on two legs. If they value entertainment so highly that they are willing to pay for it even when they are poor, that is telling us something about the human condition, not that they are not poor.
(Of course there are all sorts of aspects to this argument. You can claim that PS3s are a stupid purchase in terms of entertainment/dollar. You can make various slippery slope arguments. You can wish that people entertained themselves in more constructive ways like reading non-fiction books or listening to non-fiction audiobook.
My point, right now, is to stand up and say proudly that it is inhuman [from the same people like Leo Kass who seem to take “humanity” very seriously”] to deny that “entertainment” is as important to humans as food and shelter and health.)

For more on this subject, my blog post
http://name99.org/blog99/?p=92
has a reference to and discussion of an academic article about how people around the world living on less than $1 or $2 a day spend their money. A striking point of the article is that, once again, revealed preferences show the importance of entertainment. A lot of money is spent on “entertainment” (at least 10%, perhaps more depending on how you define things).

By: Ron Davison

Ron Davison — Fri, 05 Jan 2007 18:28:08 +0000

I suppose it could just be my bias showing, but the conservative movement seems to specialize in non sequiturs. “People are buying play stations. How can we say that there is growing inequality?” The problem is not inaccuracies in the writing – the problem is the inaccuracies in the reading, as the conservative crowd seems to merrily hop along from thought (9-11 changed everything!) to thought (we need to invade Iraq now!), confusing the proximity of scattered thoughts for connections between them. Sigh.

By: sara

sara — Fri, 05 Jan 2007 17:09:42 +0000

Let them buy Playstations and new TVs and eat Doritos!

(Yes, I know the original quotation is apocryphal.)

In fact, many of the Playstations were bought by people intending to resell them at a profit when the artificially low supply ran out.