1652. FreeToChoose - May 21, 1998 - 6:03 AM PDT
AdamSelene
Yes, we are in agrement. I'm fighting the temptation to respond myself, as it seems so obvious that he is wrong, and so simple to prove, yet experience has shown what will happen. I have many threads to catch up on, after being away, so that will help me avoid the temptation.
1653. thoughtful - May 21, 1998 - 6:46 AM PDT
FTC, I'm not familiar with the "lump of labor fallacy" so I don't know if it analogous to my fixed box.
chloel, an increase in productivity can give you the opportunity to decide to take that productivity gain in the form of higher income or increased leisure. But that's not what's happening in France. France already has an extraordinary amount of "leisure" in the form of an unemployment rate at 12.1%(not to mention long vacations, generous sick leave, etc.). The "cure" suggested was that, if you reduce the workweek, then employers will have to hire more workers to get the same amount of output, thus employment will rise. The actual result is, the reduced workweek increased employment costs by 15-20% and the rational response to higher labor costs is to *cut* employment, not raise it.
1654. elliot803 - May 21, 1998 - 8:53 AM PDT
Stumbo:
"Your Message #1599 pretty much sums up our interaction in general."
I agree. Our typical interaction is that you say something nonsensical, and I take the piss out of you.
1655. elliot803 - May 21, 1998 - 8:59 AM PDT
FreeToChoose:
Yes, please do explain to me why someone deserves to be rewarded or praised for being lucky enough to be born with a special talent for acquiring wealth. AdamSelene and CalGal have been assiduously evading this question since the first time I asked it.
1656. AdamSelene - May 21, 1998 - 9:16 AM PDT
elliot,
Your question is so full of presumptions that I don't know where to start. First: What do you mean by "deserve" and what do you mean by "rewarded?" If someone invents a microwave - they deserve the profit. If someone comes in third in the special olympics, they deserve our praise.
Somehow I feel this doesn't clear up anything.
1657. elliot803 - May 21, 1998 - 9:37 AM PDT
AdamSelene:
I mean "deserve," "praise" and "reward" in their usual senses. Simply declaring "If someone invents a microwave they deserve the profit" does not address the question.
1658. AdamSelene - May 21, 1998 - 10:00 AM PDT
elliot,
Why are you making this so hard? You asked why someone deserves to be rewarded or praised for a genetic gift. My answer is: They deserve to be rewarded for what they accomplish with that gift, assuming you're willing to apply the words "deserve" and "reward" for actions and properties of reality. I certainly don't think people with high IQ's should draw a stipend just for that fact - but if they create wealth with it - they deserve that wealth.
Praise is different. I praise people who do things or attempt to do things I like, hoping that they will do more of it.
What's so hard to understand? You seem to think "merit" and "deserve" apply outside of reality in some kind of cosmic rightiousness which doesn't equate to the reality of the reward that the cosmos itself provides. If that's your revealed truth, then who am I to dispute it.
1659. elliot803 - May 21, 1998 - 10:21 AM PDT
AdamSelene:
You're still not offering any moral justification for your position. You're just declaring that success is synonymous with worthiness. Why doesn't a very hard-working, less-talented person deserve as much as or more reward than a lazy, more-talented person? By what principle of morality or justice is the latter person deserving of greater reward than the former? That is the basic question.
1660. FreetoChoose - May 21, 1998 - 10:26 AM PDT
Thoughtful
One reference to lump of labor fallacy:
here
I excerpted a relevant sentence, which directly relates to the France example:
"However, Paul A. Samuelson, ECONOMICS, 10th ed., (New York: McGraw-Hill, 1976), p. 578, argues against workweek reductions
because, says he, the policy is based on a "lump of labor fallacy." "
Here is a James Fallows article in the Atlantic Monthly
Fallows
It's fairly long, and I didn't read all of it, but part way through he says:
"The most unrefined version of the anti-productivity argument is that technology will lower wages and put people out of work. This is sometimes referred to as the "lump of labor" concept--the idea that there is a certain amount of work to be done, and if machines do it, people can't. It is possible to find in American history some apparent confirmation of this view--for example, in the saga of the American farm."
1661. FreetoChoose - May 21, 1998 - 10:26 AM PDT
Thoughtful
One other reference in U.S. News & World Report by James K. Glassman
here
"As appealing as that idea sounds, it's dead wrong. It's based on what economists call the "lump of labor" fallacy. A nation does not have a fixed quantity of work to divide up among its citizens. Instead, work begets work. When a worker (Bill Gates, for instance) invents new software, he can spawn new businesses that employ more workers. When a 68-year-old becomes a part-time tutor, he can educate a child who might otherwise end up unemployed."
1662. FreetoChoose - May 21, 1998 - 10:40 AM PDT
elliot803
"Yes, please do explain to me why someone deserves to be rewarded or praised for being lucky enough to be born with a special talent for acquiring wealth."
First, there's a big difference between reward and praise.
I can accept the argument that someone ought not be praised for an attribute that is truly genetic. We usually don't praise someone for having blue eyes, we shouldn't praise someone for being tall, and, while we do it, I accept that it is illogical to praise someone's IQ to the extent that it is genetic. I distinguish this from actively using their attributes. I see no reason to avoid praising someone for their basketball prowess, as there are many examples proving that height is not a sufficient condition for basketball ability. Similarly, I see no problem in praising someone for *using* their IQ, as there are many examples of people who do not use their IQ.
1663. FreetoChoose - May 21, 1998 - 10:41 AM PDT
continued
Reward is more clear-cut. Suppose you build cars and contract with two people to build an air bag for you. The first person grew up in a top quintile family, went to the top schools, measures high on the IQ test, and builds an air bag with a failure rate (accidental deployment) of x%. The second person was raised on the streets, never went to high school, has a below average IQ, and no family. This person builds an air bag with a failure rate of 3x%. Now it is true that the feat of the second person is more astonishing. That someone with those difficulties could make an air bag that could deserves praise. (As an aside, you should find a job for this person and give the person more education, as there is lot's of potential)
But here's the question. Which air bag are you going to buy? In other words, whom are you going to reward? If you tell me that you choose to reward the second person, because it was a more difficult feat, then I don't want to buy a car from you. Anyone who would make that choice would be willing to literally kill people to reward the more impressive effort.
Praise effort; reward results.
1664. Stumbo - May 21, 1998 - 10:42 AM PDT
Elliot, Message #1654:
"I agree. Our typical interaction is that you say something nonsensical, and I take the piss out of you."
Well, if that's what you think, then you should *dis*agree that this case was typical, heh.
My half of Message #1599 made sense; yours appears to be gibberish. (If it wasn't, please explain it to me.) Is that what you meant by "taking the piss"?
1665. elliot803 - May 21, 1998 - 10:56 AM PDT
Stumbo:
I was responding to gibberish in kind.
1666. chloel - May 21, 1998 - 10:59 AM PDT
Praise vs. merit - well, actually, people *do* praise blue eyes, as well as blond[e] hair and a number of other theoretically-inherited traits; not to mention youth, of all unearned things.
But, back to impersonal qualities like airbag-building; would we agree that: Not rewarding results damages the economy; not rewarding effort damages civil society?
They aren't incompatible. We could bop into International to discuss which is worse to destroy, or to reflect on the possiblity of destroying both.
1667. elliot803 - May 21, 1998 - 11:05 AM PDT
FreeToChoose:
"I can accept the argument that someone ought not be praised for an attribute that is truly genetic. We usually don't praise someone for having blue eyes, we shouldn't praise someone for being tall, and, while we do it, I accept that it is illogical to praise someone's IQ to the extent that it is genetic. I distinguish this from actively using their attributes. I see no reason to avoid praising someone for their basketball prowess, as there are many examples proving that height is not a sufficient condition for basketball ability. Similarly, I see no problem in praising someone for *using* their IQ, as there are many examples of people who do not use their IQ."
Well, if you think that effort, work, sacrifice, etc. deserves praise but genetic endowment does not, then you should only praise basketball prowess to the extent that it reflects effort rather than genes. In other words, you're agreeing with me that a less-innately-talented player who works really hard to be the best basketball player he can be deserves more praise than a more-talented one who doesn't work as hard, even if he turns out to be the better player as a result of his innate talents.
1668. chloel - May 21, 1998 - 11:06 AM PDT
throughtful - about France - Oh, I agree that the current remedy won't fix the cited ill; but isn't it a economists' refrain to trust peoples' actions before their words?
What I am fumbling for is the thought that the US has, for generations now, first attacked its economic problems with monetary tools; France starts from the labor end. I was contemplating the difference in mindset. Personally, I doubt either attack could suffice by itself, but I am always an advocate of the Vicar's Surrey.
"When you are confronted by any complex social system, such as an urban center or a hamster, with things about it that you're dissatisfied with and anxious to fix, you cannot just step in and set about fixing with much hope of helping. This realization is one of the sore discouragements of our century."
Lewis Thomas, “On Meddling”, The Medusa and the Snail
1669. AdamSelene - May 21, 1998 - 11:16 AM PDT
elliot,
I don't think FTC or I would disagree that Pistol Pete deserves more praise than Sir Barkelay. But the one who wins more games earns more reward. Are you advocating that we handicap basketball players based on innate ability, so that the highest scoring team doesn't always win?
1670. Stumbo - May 21, 1998 - 11:19 AM PDT
Elliot:
In that case, I'm glad to see you agree that your posts to me typically are gibberish. Mine, though, typically aren't -- and this was no exception. (I mean, well, it shouldn't win any Zinger of the Century awards, but it was a precise, pertinent -- and, I thought, not *that* obscure -- reference to something specific.)
(Your kindergardenish standards of what it takes to claim victory, BTW, are duly noted. Most adults wouldn't consider responding to gibberish in kind to be an achievement worth describing in such chest-thumping terms as "taking the piss out of" someone.)
1671. elliot803 - May 21, 1998 - 11:25 AM PDT
FreeToChoose:
"But here's the question. Which air bag are you going to buy? In other words, whom are you going to reward? If you tell me that you choose to reward the second person, because it was a more difficult feat, then I don't want to buy a car from you. Anyone who would make that choice would be willing to literally kill people to reward the more impressive effort."
We may choose to buy the better airbag in the interests of some greater good, but that is very different from saying that its inventor *deserves* more reward than the inventor of the inferior airbag. If someone held a gun to your head and demanded $100 or he'll shoot you, you would probably agree to give him the $100 in order to save your life, but that is very different from saying that he *deserves* the money. The point is that allocating wealth on the basis of results alone is unjust, because results are so strongly determined by factors other than individual effort, risk-taking, sacrifice, etc. Of course, once you concede that the rich don't *deserve* much or most of their wealth, you concede a powerful moral basis for redistributing some of that wealth through tax-and-spend policies. And taxes are anathema to libertarians like you and AdamSelene. That's why you tend to gloss over or deny the extent to which wealth is determined by unearned, inherited advantages.
1672. elliot803 - May 21, 1998 - 11:28 AM PDT
Stumbo:
"In that case, I'm glad to see you agree that your posts to me typically are gibberish."
As I said, I respond in kind. If you say something intelligent, you'll likely get an intelligent response. If you behave like a child, as you usually do in the Fray, it's often best to treat you as one.
1673. AdamSelene - May 21, 1998 - 11:32 AM PDT
Elliot,
There's a big difference between winning the lottery (pure luck) and mugging someone (pure effort.) Would you want to transfer the lottery winnings (unearned income) to the mugger (hard worker?)
1674. FreetoChoose - May 21, 1998 - 11:46 AM PDT
elliot803
"Well, if you think that effort, work, sacrifice, etc. deserves praise but genetic endowment does not, then you should only praise basketball prowess to the extent that it reflects effort rather than genes. In other words, you're agreeing with me that a less-innately-talented player who works really hard to be the best basketball player he can be deserves more praise than a more-talented one who doesn't work as hard, even if he turns out to be the better player as a result of his innate talents."
I do agree with you.
This may be a red-letter day. I don't recall ever agreeing with you before.
Of course a person who works hard to be a good basketball player deserves more praise than someone with innate talents.
As long as you don't leap to the conclusion that he or she should be paid more.
1675. Stumbo - May 21, 1998 - 11:48 AM PDT
Elliot:
As this most recent example shows (yet again), your powers of discernment are too weak (or your powers of self-delusion too strong) for you to be able to appropriately respond in kind.
I'm not optimistic as to the prospects of the former strengthening or the latter weakening, unfortunately.
To quote our friend Yo, "Peace."
1676. FreetoChoose - May 21, 1998 - 11:51 AM PDT
elliot803
"We may choose to buy the better airbag in the interests of some greater good, but that is very different from saying that its inventor *deserves* more reward than the inventor of the inferior airbag."
You are picking incredibly tiny nits over the definition of "deserving". The creator of the superior airbag deserves the reward. The other does not.
"If someone held a gun to your head and demanded $100 or he'll shoot you, you would probably agree to give him the $100 in order to save your life, but that is very different from saying that he *deserves* the money."
I agree. The IRS does not deserve the money.
1677. elliot803 - May 21, 1998 - 12:01 PM PDT
Stumbo:
I'm sure you thought you were being clever, but what came out was gibberish.
1678. CalGal - May 21, 1998 - 12:01 PM PDT
FTC,
You didn't respond to my flounce, dammit.
1679. AdamSelene - May 21, 1998 - 12:03 PM PDT
FTC - Lol!
1680. elliot803 - May 21, 1998 - 12:04 PM PDT
FreeToChoose:
"You are picking incredibly tiny nits over the definition of "deserving". The creator of the superior airbag deserves the reward."
Not at all. I am simply applying the moral principle that you yourself articulated in the basketball player example; namely, that people do not deserve credit simply for having been born with a superior set of genes, or some other unearned advantage.
1681. AdamSelene - May 21, 1998 - 12:06 PM PDT
elliot,
Do you comprehend the difference between praise and reward? One is a social reinforcer based on the praiser's moral proclivities while the other is based on objective performance criteria. Do you disagree? ("Duhhh," he says to himself.)
1682. CalGal - May 21, 1998 - 12:07 PM PDT
Elliot asks me to answer the question of hard work vs. brains in Message #1600.
In Message #1603 I explain to him (breaking a silence of six weeks) that I can't talk to him since he called me a homophobe who thinks that homosexuals are pedophiles. And that since he knows that's not true, I was wondering if he could apologize so that I could talk to him again instead of ignoring him, which is terribly difficult for me. (sob--another trip to the therapist).
He says in Message #1606, "Please do ignore me. "
Then he says in righteous outrage in Message #1655, "AdamSelene and CalGal have been assiduously evading this question since the first time I asked it."
Sigh.
Confusion.
I'm not EVADING your questions, Elliot. I'm IGNORING you.
You've indicated that my design concurs with your preferences. So quitcher bitchin and quit taking my name in vain.
If you want to fight, admit that I'm not a homophobe who thinks that gays and pedophiles are the same thing.
Otherwise, quit complaining when I don't answer your questions.
1683. elliot803 - May 21, 1998 - 12:07 PM PDT
FreeToChoose:
"As long as you don't leap to the conclusion that he or she should be paid more."
Why shouldn't he be paid more, if, as you say, his effort is more impressive and praiseworthy?
1684. AdamSelene - May 21, 1998 - 12:09 PM PDT
Elliot,
"Why shouldn't he be paid more?"
Because it's easy to work up a sweat if you're not expected to produce anything. Think about it.
Well, think about anything at all. That would be an improvement.
1685. Stumbo - May 21, 1998 - 12:12 PM PDT
Elliot:
See Message #1675, ad infinitum. Cheers.
(Actually -- just wondering -- did *anyone* get the ref, or bother to do a web search?)
1686. elliot803 - May 21, 1998 - 12:12 PM PDT
CalGal:
"I'm not EVADING your questions, Elliot. I'm IGNORING you."
Well, by choosing to ignore me, you are in fact evading the question.
You keep entering posts telling me that you're ignoring me. Go figure.
1687. elliot803 - May 21, 1998 - 12:16 PM PDT
AdamSelene:
"Because it's easy to work up a sweat if you're not expected to produce anything. Think about it."
I have and it doesn't make any sense. We're not talking about someone "working up a sweat;" we're talking about two basketball players, one of whom works much harder than the other to be the best player he can be. Why do you just snidely dismiss that accomplishment?
1688. elliot803 - May 21, 1998 - 12:18 PM PDT
Stumbo:
See message #166, ad ininitum. It pretty much sums up 90% of what you say in the Fray.
1689. FreetoChoose - May 21, 1998 - 12:26 PM PDT
CalGal
Damn, missed it. For the first time in a long time, I just came in and read the last 100 posts. Was it earlier? Hate to miss a good flounce.
1690. AdamSelene - May 21, 1998 - 12:31 PM PDT
Elliot,
If you pay people to sweat, they sweat. If you pay them to produce, they produce. I've never snidely dismissed accomplishments from hard work, nor even non-accomplishments after valiant effort. I just answered your question about why we don't pay for effort instead of results. It's easy to look like your working hard if that's what earns the money.
I think this discussion has run it's course. FTC - we should have quit when we said we would.
1691. FreetoChoose - May 21, 1998 - 12:33 PM PDT
elliot803
"Why shouldn't he be paid more, if, as you say, his effort is more impressive and praiseworthy?"
I'm almost happy to see this, as it means we weren't as much in agreement as I thought. And that possibility was greatly troubling.
To answer your question, I already did.
Praise effort; reward results.
I'll pay lot's of money to watch Jordan soar, even if genetic. I'll praise a retarded child who is working hard to make a basket. But if you expect me to pay a player more for delivering less, even though it may be more effort, then you and I have a fundamentally different view of value.
BTW, you are perfectly free to pay more to watch an inept player than you will pay to watch Jordan. I won't argue that your values have to be my values. The trouble is, you want to introduce the coercion of the government to force my values (in terms of what I pay for) to match *your* values. I plan to fight that with every fiber of my being.
1692. FreetoChoose - May 21, 1998 - 12:36 PM PDT
AdamSelene
"I think this discussion has run it's course. FTC - we should have quit when we said we would."
Probably right. But this is far more than an academic exercise. My firm is going through a transition from pure "pay for results" to more "pay for effort". Some of it is sensible, but I fear that we may go too far. We may get effort without results.
1693. AdamSelene - May 21, 1998 - 12:42 PM PDT
FTC,
My condolences. Have you sent out your resume yet?
1694. CalGal - May 21, 1998 - 12:46 PM PDT
FTC,
"My firm is going through a transition from pure 'pay for results' to more 'pay for effort'."
That's SICK. Go independent.
1695. CalGal - May 21, 1998 - 12:49 PM PDT
FTC,
Your Message #1643, my Message #1647
1696. CalGal - May 21, 1998 - 12:50 PM PDT
Adam,
LOL! I just saw your post. It's not like we feel STRONGLY about this or anything. FTC, get the hell out of Dodge!
(it's an INTP thang)
1697. elliot803 - May 21, 1998 - 12:51 PM PDT
AdamSelene:
"I just answered your question about why we don't pay for effort instead of results. It's easy to look like your working hard if that's what earns the money."
The question was why a less-talented but hard-working basketball player should make less than a more-talented but lazy one. The only answer you have given is "Because it's easy to work up a sweat if you're not expected to produce anything." I fail to see how this answers the question.
1698. elliot803 - May 21, 1998 - 12:54 PM PDT
FreeToChoose:
"My firm is going through a transition from pure "pay for results" to more 'pay for effort'. Some of it is sensible, but I fear that we may go too far. We may get effort without results."
Or you may get a workforce that feels it's being rewarded more equitably, and that is thus more loyal to the company and more productive.
1699. CalGal - May 21, 1998 - 12:58 PM PDT
Who the fuck wants a hardworking workforce that doesn't PRODUCE!!!!
Let 'em go work for the government.
1700. elliot803 - May 21, 1998 - 12:59 PM PDT
FreeToChoose:
"I'll pay lot's of money to watch Jordan soar, even if genetic. I'll praise a retarded child who is working hard to make a basket. But if you expect me to pay a player more for delivering less, even though it may be more effort, then you and I have a fundamentally different view of value."
Well, if your values include rewarding effort, let's take more of that money you and others give to watch Jordan soar, and give it to the retarded child who works so hard to be as good a player as he can be.
1701. elliot803 - May 21, 1998 - 1:07 PM PDT
CalGal:
I thought you were ignoring me. If you're not going to ignore me, please stop grandly announcing that you are.
I don't think anyone wants a workforce that doesn't produce; but most people see the wisdom and justice of rewarding effort, even at the expense of some loss of productivity. Maximizing productivity is not the only goal of human societies, you know.
1702. CalGal - May 21, 1998 - 1:15 PM PDT
From Message #1603, CalGal's rules for ignoring people:
"I go back to ignoring you except periodically clipping comments from your posts and commenting to the world at large and ignoring your followups. "
1703. AdamSelene - May 21, 1998 - 1:25 PM PDT
Elliot
"I fail to see how this answers the question."
Exactly.
1704. elliot803 - May 21, 1998 - 1:39 PM PDT
CalGal:
If you're commenting on my posts to anyone at all, then you're hardly ignoring them, are you? You're so easily provoked, and such a blabbermouth anyway, that I think you'd have a hard time ignoring anyone.
1705. elliot803 - May 21, 1998 - 1:46 PM PDT
AdamSelene:
I'm sure that kind of riposte makes you feel good--that you've put one over on me, or put me in my place, or whatever--but, you know, it's really worthless as argument.
1706. FreetoChoose - May 21, 1998 - 1:50 PM PDT
CalGal
"That's SICK. Go independent."
LOL. I'm probably too lazy. Plus, I can influence the decision to some extent.
1707. CalGal - May 21, 1998 - 1:52 PM PDT
Oh, Elliot.
I rescinded the ban because I don't like not talking to people. You may find this hard to believe, but some of us actually dislike having quarrels. So I only stopped talking to you because you can call me a fool and a bitch and wishy-washy and anxious for approval and all those other mean nasty ugly things you say, but that one NAMBLA comment was really hurtful.
So since you seemed to approve of some stuff I said in Gay Life, I thought I'd check in with you again and see if you could go back to saying awful things about me in a context I could tolerate. That's all.
You seem to wish to avoid that question. Fine. FWIW, I've been doing what I did in those last two posts for six weeks now. You're just conscious of it right now and it so happens that we're both in a conversation that I find interesting, so there's more for me to comment on.
I'm not one of those people who says lightly that I don't talk to people. I started this in Message #1603 because I would like to go back to talking to you. You've consistently ignored the one question I've raised--do you *really* think I'm a homophobe who thinks that gays are synonomous with pedophiles and if not, why did you say so?--and focused on the fact that you wish me to ignore you. Again. Fine. I just am cursed with the need to explain myself.
I've been doing quite well at not explaining myself for quite some time now. I consider this a relapse. (sigh). But it is caused by a genuine wish to let you be you and insult away so long as it's not outside the bounds of what I can tolerate. It's hard work for me to not talk to someone. In the meantime, I'll do what I've been doing.
I just thought I'd give this one more try.
1708. FreetoChoose - May 21, 1998 - 1:53 PM PDT
elliot803
"The question was why a less-talented but hard-working basketball player should make less than a more-talented but lazy one."
The answer is that the public pays for results when it buys basketball.
1709. CalGal - May 21, 1998 - 1:53 PM PDT
FTC,
You're not lazy. Plus, you're an INTP. We make the best independent consultants. More money, less work. More time to Fray.
What more could you ask for?
1710. Slackjaw - May 21, 1998 - 1:56 PM PDT
when profit is affected by random factors as well as employee effort, and employees are risk averse, it can be efficient to base pay in part on effort instead of just performance. The reason is that participation constraints must be accounted for in contracts, and if (risk averse) employees are paid "too much" as a function of (randomly fluctuating) profit, it might pay for them not to participate in that contract and take their reservation payoff--the certainty equivalent of what they get upon rejecting the contract.
Compensation in the optimal contract is not necessarily monotonically increasing in profits. For example, if increases in effort convert low profit realizations into intermediate profit ones, but have little effect on the likelihood of high profit, the optimal incentive compatible contract calls for higher wages at intermediate profit levels than at very high profit levels, because it is the likelihood of intermediate profit levels that is sensitive to effort.
Of course, given asymmetric info--employees can observe their effort better than employers--this implies tolerating some shirking, relative to the (unattainable) first-best, complete information contract.
1711. FreetoChoose - May 21, 1998 - 1:56 PM PDT
elliot803
"Well, if your values include rewarding effort, let's take more of that money you and others give to watch Jordan soar, and give it to the retarded child who works so hard to be as good a player as he can be."
Have you signed for Reading Comprehension Avoidance Week? I said praise effort; reward results. I didn't say reward effort. That's your idea. I hope you are my competition when I bid for work.
1712. elliot803 - May 21, 1998 - 2:03 PM PDT
AdamSelene:
"There's a big difference between winning the lottery (pure luck) and mugging someone (pure effort.) Would you want to transfer the lottery winnings (unearned income) to the mugger (hard worker?)"
No, of course not. I'm not sure what point you think you're making, anyway. First, lottery winnings are not unearned income in the sense that inherited wealth or superior genes are unearned. In order to win the lottery, you have to take a risk. Risk-taking is generally considered meritorious, like hard work. Second, the "hard work" involved in mugging someone is generally considered to be an unjust violation of the victim's rights, unlike the hard work of legitimate employment. So the comparisons you seem to be trying to make between winning the lottery and accidents of birth, and mugging and legitimate work, are entirely specious.
1713. chloel - May 21, 1998 - 2:05 PM PDT
Slackjaw, can "asymmetric info" generally be translated out of economese into "bending the rules"? In this case?
1714. Slackjaw - May 21, 1998 - 2:05 PM PDT
"In order to win the lottery, you have to take a risk. Risk-taking is generally considered meritorious..."
It is one bizarre compensation function that considers such miniscule risk worthy of that kind of payoff.
1715. Slackjaw - May 21, 1998 - 2:07 PM PDT
chloel: I'm not sure how you mean bending the rules--asymmetric information is just when one party in some relationship has information or can take actions that another party does not have or cannot observe.
1716. elliot803 - May 21, 1998 - 2:08 PM PDT
FreeToChoose:
"The answer is that the public pays for results when it buys basketball."
But that's unfair, because the results are due in large part to a genetic advantage that its beneficiary did nothing to earn. Therefore, there is a moral obligation to redistribute that payment in a more equitable manner.
1717. FreetoChoose - May 21, 1998 - 2:10 PM PDT
Slackjaw
"when profit is affected by random factors as well as employee effort, and employees are risk averse, it can be efficient to base pay in part on effort instead of just performance."
It's interesting that you mention this. The decision to incorporate a modest change in the mix of results vs. effort was defended precisely on this basis. While we didn't build a formal model, we considered how the standard deviation of results was increasing due to some changes in the way we do business (notably, larger projects). Thus, our thinking was designed specifically to minimize reneging in certain areas where we needed a presence. There are other ways to solve the problem of the randomness: team bonuses, and multi-year bonuses. We are investigating both.
1718. Slackjaw - May 21, 1998 - 2:10 PM PDT
e.g., the seller of a used car has asymmetric information relative to potential buyers about the quality of the car. This fact is the germ of a diabolical little model that shows how asymmetric information can lead to total collapse of the possibility of exhausting mutually beneficial gains from trade-i.e., really bad market failure.
1719. FreetoChoose - May 21, 1998 - 2:12 PM PDT
elliot803
"But that's unfair, because the results are due in large part to a genetic advantage that its beneficiary did nothing to earn. Therefore, there is a moral obligation to redistribute that payment in a more equitable manner."
Bullshit.
Go form your own society if you really believe this. Convince as many people to join you as you can.
1720. Slackjaw - May 21, 1998 - 2:13 PM PDT
very interesting, FTC. Things get a bit more complicated when you have a team of employees, as well as a couple groups of teams. Let me hear how it pans out.
1721. FreetoChoose - May 21, 1998 - 2:17 PM PDT
elliot803
"In order to win the lottery, you have to take a risk. Risk-taking is generally considered meritorious, like hard work."
Typical misunderstanding of the theory of risk.
Risk-taking *is* meritorious, when the risk already exists. Insurance companies earn a profit because they take on risk. Lotteries are the *creation* of a risk that didn't exist before.
Many people fail to appreciate the distinction between gambling and insurance. You aren't the first. But now you know. (Well, maybe not, as I've made this point before.)
1722. Msivorytower - May 21, 1998 - 2:17 PM PDT
*YOU* (Slackjaw)
Need to get your head out of game theory once in a while.
However, I found Message #1710 illuminating.
1723. chloel - May 21, 1998 - 2:18 PM PDT
Slackjaw - re 1718 - well, that sounds to an outsider a lot like "markets fail when people cheat", which is what I was thinking of, although "cheating" is doubtless a naive term.
Is the car-dealer example a balance to, say, the Prisoner's Dilemma argument that cheating is not likely to be profitable in the long run?
1724. Slackjaw - May 21, 1998 - 2:19 PM PDT
NEVER!!!!!!
Maybe after my exams.
1725. FreetoChoose - May 21, 1998 - 2:20 PM PDT
Slackjaw
We have a couple dozen formal teams, and a number of ad hoc teams. The team based bonus will largely be restricted to marketing efforts, where you can spend time and end up with nothing. The bulk of the bonus determination is based upon delivering the work, which is still results based.
1726. Msivorytower - May 21, 1998 - 2:22 PM PDT
FTC
I dislike team bonuses, they invariably end up causing ill will. There are *always* slackers (no pun intended SJ) who get a piece of the action for less work.
1727. FreetoChoose - May 21, 1998 - 2:27 PM PDT
Msivorytower
I understand and I agree. That's the basis for my trepidation over this development. However, we do have some solutions. When we bid for new work, the team is almost always ad hoc. I get to decide who will be on the team. If a team member gets credit incommensurate with the effort, then next time, I'll choose the team differently. So you might get away with it once, but that's about it. Plus, the information flow is decent, so if I am unsure about a particular individual, I'll ask around. It doesn't take long to decide whether to add someone to the team, or not.
1728. elliot803 - May 21, 1998 - 2:28 PM PDT
FreeToChoose:
"Have you signed for Reading Comprehension Avoidance Week? I said praise effort; reward results. I didn't say reward effort."
I think you must be in that comprehension avoidance program. I said "*IF* your values..."
If talent without effort does not produce results and should not be rewarded, then by rewarding results you are in fact rewarding effort rather than talent. If you were rewarding talent alone, you'd just pay people for having good genes. So why shouldn't a greater effort get a bigger reward than a smaller one?
1729. Slackjaw - May 21, 1998 - 2:30 PM PDT
ooooo! The folk theorem!!!!
Sadly, chloel, there is NO argument claiming that cheating in the prisoner's dilemma is not likely to be profitable in the long run, in spite of that nit Axelrod's innuendos. There is an argument (the folk theorem for repeated games) that mutual cooperation is one conceivable outcome in the infinitely repeated prisoner's dilemmam if people are sufficiently patient. There is an uncountable infinity of other possible outcomes (i.e., outcomes supported in subgame perfect equilibrium), including cheating forever. We don't have a general formal way of answering which one is "likely." Predictions based on the folk theorem that coopertion will emerge should be viewed with suspicion, and predictions based on some computer simulation of a round robin with 25 or so entrants are even worse.
There is also a famous paper from the early '80s showing that mutual cooperation is attainable in the FINITE prisoner's dilemma (again, though, along with many other possible outcomes, including cheating) is there is even just a tiny probability that some dementoid is the type of player who always cooperates no matter what is done to him (this is another information asymmetry result--somebody lacks information about the "type" of another player--is he demented or not?).
Yes, you're right about the cheating thing, with the caveat that quotes be around cheating. If someone can use their asymmetric info to their advantage, i.e., "lie," we presume they will do it. At the very least, it tells us where incentive effects are applying pressure.
1730. FreetoChoose - May 21, 1998 - 2:31 PM PDT
Msivorytower
Plus, this goes both ways. If I put someone on my team, and then give them less than their fair share of the reward, then next time they may be less apt to join the team. If someone is busy, they can generally opt out of joining any team. If I were to develop a reputation for screwing people, I would find myself without any help.
And Lord knows I can no longer do any work without help (hence, one of the reasons for not even considering independence).
1731. Slackjaw - May 21, 1998 - 2:33 PM PDT
"If a team member gets credit incommensurate with the effort, then next time..."
Ahhh, repeated games.
1732. PseudoErasmus - May 21, 1998 - 2:35 PM PDT
I agree with Elliot that the principle of income redistribution can be justified by the ethics he has been propounding -- namely, that earned talent is more praiseworthy and "deserving" than unearned talent; and that most individual accomplishments are significantly determined by chance and other elements unrelated to effort.
Under perfect information, policy-makers could discover what proportion of an individual's income and wealth is attributable to Elliot's metric of merit, and what proportion to chance, innate talents, socioeconomic background and other unearned advantages. Then they could devise different positive and negative tax rates for different individuals, according to their "merit".
Of course, we don't and won't ever live under perfect information -- these proportions are undiscoverable. But without actually knowing these proportions even approximately in each individual case, there is a great chance that some people might be overtaxed, others undertaxed. Surely, this is by Elliot's own metric an injustice.
So, at best, Elliot's ethical argument is a blunt instrument making a general case, a rule of thumb, a justification of principle; but, without the benefit of perfect information, it can justify no specific action. It doesn't tell us that the wealthiest citizens should be levied any particular tax rate, or even that Bill Gates should pay more in taxes than a janitor. Who knows, maybe the janitor is less deserving even by Elliot's definition than Gates.
[Moreover, even if we could devise these "ethical tax rates", they are unlikely to be the optimal ones from the point of view of incentives. In other words, we may need to let those who don't deserve all of their income (in Elliot's eyes) keep more of their income than Elliot's metric might suggest.]
1733. Msivorytower - May 21, 1998 - 2:35 PM PDT
FTC
I've seen group dynamics in class projects for a long time. There is always one or two groups whose members cannot function as a team, hence, ill will. It only takes one to spoil the group dynamic, too.
In general, I wish you well, but know I'd shy away from such work situations.
1734. PseudoErasmus - May 21, 1998 - 2:35 PM PDT
So, it's a waste of time to make this ethical case. Better stick with PE's sturdy case for income redistribution: it's necessary, and, since all government spending is income redistribution, it's impossible to construct ethical objections to any government spending on account of its being redistribution -- unless you're an anarchocapitalist like AdamSelene who opposes any government.
1735. Slackjaw - May 21, 1998 - 2:37 PM PDT
"ooooo! The folk theorem!!!!"
"Ahhh, repeated games."
Sigh. What a geek.
Oh well. Say, anybody up for why information asymmetry can cause unemployment?!
1736. Msivorytower - May 21, 1998 - 2:37 PM PDT
...there is????
There are always......
Mea culpa.
1737. FreetoChoose - May 21, 1998 - 2:37 PM PDT
elliot803
"I said "*IF* your values..." "
Playing word games now? Usually, it takes a day or two.
"If talent without effort does not produce results and should not be rewarded, then by rewarding results you are in fact rewarding effort rather than talent. If you were rewarding talent alone, you'd just pay people for having good genes. So why shouldn't a greater effort get a bigger reward than a smaller one?"
Well, since you said "if" more than once in this statement, I shan't bother answering.
Come back when you show me you have a command of logic and can use the word consistently correct.
Our discussion is at an end.
You have made it clear that you would reward effort. Go ahead.
1738. elliot803 - May 21, 1998 - 2:40 PM PDT
FreeToChoose:
"Bullshit. Go form your own society if you really believe this. Convince as many people to join you as you can."
We already live in such a society. We take money from Michael Jordan in the form of taxes--a LOT of money, actually--and hand it out to other people who don't achieve the results he does but who may make a greater effort. This is the system you have a problem with. You're the one who needs to convince people to abandon this system and create Libertaria, where "results" is the only criterion that matters. Good luck. You don't seem to be doing too well so far.
1739. FreetoChoose - May 21, 1998 - 2:40 PM PDT
elliot803
BTW (and this is not a continuation of our discussion, but another subject) why are you so reticent to answer CG's reasonable question?
The only reason I can think of is a delight in cruelty, but I had hoped that that wouldn't apply to you. Does it? I doubt that you would appreciate being called such despicable names by anyone, why do you do it?
1740. elliot803 - May 21, 1998 - 2:43 PM PDT
FreeToChoose:
"You have made it clear that you would reward effort."
So have you, since rewarding results necessarily entails rewarding effort. You seem to be hopelessly confused about what you think should or should not be rewarded.
1741. FreetoChoose - May 21, 1998 - 2:43 PM PDT
Slackjaw
Aren't you supposed to be studying?
This isn't intended to be snide; I'd love to hear the answer, but not if it is taking you from exam studying. (I played that game myself)
1742. elliot803 - May 21, 1998 - 2:44 PM PDT
FreeToChoose:
I already have answered it in the thread where she first asked it. I don't feel like getting into a discussion about CalGal, NAMBLA and homophobia in the "Bubble Economy" thread.
1743. Slackjaw - May 21, 1998 - 2:45 PM PDT
FTC:
This is a light form of studying. That is why I originally came to the fray. I can goof off and work at the same time.
Of course, that is also why I chose my career path.
1744. FreetoChoose - May 21, 1998 - 2:47 PM PDT
PseudoErasmus
"I agree with Elliot that the principle of income redistribution can be justified by the ethics he has been propounding -- namely, that earned talent is more praiseworthy and "deserving" than unearned talent; and that most individual accomplishments are significantly determined by chance and other elements unrelated to effort."
Pure tripe.
When the *real* PE gets back from France and sees what garbage is being promulgated under this name; boy will he be pissed.
1745. CalGal - May 21, 1998 - 2:48 PM PDT
FTC,
Slackjaw is studying when he's on the Fray. He cuts and pastes his posts into his finals.
I can only say that your team approach hits me with all the force of an obscenity. It literally nauseates me to think of companies run this way.
I mean no disapproval, you understand. I'm sure it will work out fine (she says piously and with no small amount of polite disbelief). Just explaining how strongly the idea affects me.
Yuck.
1746. chloel - May 21, 1998 - 2:49 PM PDT
Slackjaw -
"The" folk theorem, forsooth. I thought that was garbled Gödel. Depends on the folk...
I was thinking of computer simulations of tactics in the Prisoner's Dilemma, though they currently generate considerably more than 25 participants. Please recommend a writeup of a counterargument; I'll angle it into the conversation at the next wine & eclairs & carrot-sticks event.
In your third paragraph; are "incentive effects" what hoi polloi think of as "human decency" or "basic childrearing", e.g., not lying even when we'd get away with it?
I still think Trollope put it better, but hey, whatever trips your trigger.
1747. elliot803 - May 21, 1998 - 2:50 PM PDT
Pseudo:
"So, at best, Elliot's ethical argument is a blunt instrument making a general case, a rule of thumb, a justification of principle; but, without the benefit of perfect information, it can justify no specific action."
We make specific public policies all the time on the basis of ethical principles and in the absence of perfect information. This is no different.
1748. FreetoChoose - May 21, 1998 - 2:50 PM PDT
OK CalGal
Your serve. Now you get to ask elliot to point out where the answer is; of course he will tell you to find it yourself, and we'll be right back at square one. (Notice how I cleverly wove in some reference to games, so this won't be totally off-topic)
1749. Slackjaw - May 21, 1998 - 2:53 PM PDT
PE:
your remarks about the specifics of redistribution are of course quite accurate.
However, we as a profession advocate free trade with full knowledge of the existence of specific situations in which barriers would be welfare enhancing (Krugman's "wink-nod" argument). This isn't that different. (Of course, since you already support progressivity, this is irrelevant for you in particular.)
And one could probably construct general conditions for probability densities over an individual's income that would imply (modulo incentive effects) that the "equitable" tax rates are monotonically increasing in income. The monotone likelihood ratio property comes to mind, for example.
1750. FreetoChoose - May 21, 1998 - 2:55 PM PDT
CalGal
To oversimplify, 5 figure contracts and low 6 figure contracts can be obtained (in our business) with the efforts of a single individual. High 6 figure and 7 figure contracts require a team. If we want to go after those contracts, we have to put teams together. There are plenty of sole practitioners in my field. They don't compete for the larger projects.
1751. Slackjaw - May 21, 1998 - 2:55 PM PDT
CalGal:
This wouldn't quite cut it for my exams.
1752. CalGal - May 21, 1998 - 2:56 PM PDT
FTC,
No, he made the statement, didn't answer the question, and I really didn't want to get into it. I was more looking for a "yes/no" answer so I could talk to him or not. If he didn't mean it, he could just say so. Or say that he didn't say it. By not answering, it gets slotted as "yes, CG, you are a homophobe". I'm a programmer, very binary doncha know.
But thanks for trying, dude.
I still think you're being optimistic about that whole team thing. Just to keep this on topic.
1753. CalGal - May 21, 1998 - 2:59 PM PDT
FTC,
Oh, I'm not objecting to teams. Sorry. I'm objecting to compensating by effort instead of results. You were saying that if a person didn't work they wouldn't be on the next team--that was the rationale, not the description. My famed lack of clarity at work.
I understand the need for teams; I've been a project manager (shudder at usually repressed memories). I reward based on contribution, not how hard someone tries. And quite often that means rewarding someone who played Solitaire all day but had the skill set that I needed just 15 minutes a day OVER a team player who could be replaced by any one of twenty others.
1754. FreetoChoose - May 21, 1998 - 3:02 PM PDT
CalGal
Actually, his argument that it would clutter the thread is obvious bullshit. As you note, he could simply say, Yes, I meant it, or No I didn't" in far less space than it took him to claim he had already answered it. I just wanted to point out (more for my benefit than yours) that the refusal to answer the question really appears to be somewhere between "mean" and "cruel", so he could see how he is perceived. It appears it doesn't trouble him to be perceived as cruel, so that convinces me.
1755. FreetoChoose - May 21, 1998 - 3:08 PM PDT
CalGal
"Sorry. I'm objecting to compensating by effort instead of results."
Suppose we think we have a shot at a multi-million dollar contract. If we ask a team to put together a proposal, and they fail to win the contract, they may have expended several months effort for no pay. Faced with that prospect, some people would shy away from taking the risk. As an alternative, if we promise to pay them something for the time on the proposal, even if they don't get it, then we have paid for effort, not results. It may be necessary, to attract the right talent, to promise compensation for developing a proposal that is unsuccessful.
Would you insist that a person working several months on a proposal get *no* payment if the bid is not won?
1756. CalGal - May 21, 1998 - 3:16 PM PDT
FTC,
Oh! No. But that's practically salary to me. In other words, everyone gets paid flat rate to put the proposal together. If the contract is won and I thought there were people who were responsible for making it happen, they'd get extra.
But as an independent, I don't get paid for putting proposals together. As a company, you're basically saying that you're willing to expend money to pay people to put proposals together. Your call. In my industry, that doesn't happen often. I'm either an independent who gets the work *and* the money, or *you're* my client, not your client. If you follow.
So if you have a big project and you need my expertise, you come to me and say, CalGal, here's the deal. You want to spend the time putting the proposal together? I look and say, no, not worth my time unless paid. If paid, I'm your hired gun. In that case, I'd get no additional reward for winning the contract. It's my job to see that you did.
This is interesting, but I'm not sure if it's relevant to this thread. Apologies to all if not, and FTC, NOD is free if you have further thoughts.
Unless this is economics and I'm too clueless to know it.
1757. CalGal - May 21, 1998 - 3:19 PM PDT
FTC,
I just realized that, again, I may not have been clear.
I was reacting to the fact that your company has employees and that they are rewarded based on effort. So if they are all paid a salary and work their butts off to get a proposal in and accepted, then I think the bonuses should only be given to the people who deserved it (merit not effort). It was the idea of paying people bonuses just because they were on the team that won that nauseated me.
If your company has independents (whether employed or not) who only get paid when they bill, it's a different issue. Your company, as I said, is then hiring them to put the proposal together. Winning the proposal, in that case, should get no additional reward. They took no risk. Different issue entirely.
1758. FreetoChoose - May 21, 1998 - 3:21 PM PDT
CalGal
OK, I want to follow up, because it isn't salary, and the answer is economics, but I'll do it in email.
1759. CalGal - May 21, 1998 - 3:22 PM PDT
FTC,
I'm at the phxa one today. Which is now set up to forward elsewhere.
1760. FreetoChoose - May 21, 1998 - 3:24 PM PDT
CalGal
"If your company has independents (whether employed or not) who only get paid when they bill, it's a different issue."
We only get paid when we bill. So for example, the two hours I spent this afternoon Fraying instead of working has been on my nickel.
1761. CalGal - May 21, 1998 - 3:25 PM PDT
FTC,
I'm working, fraying, and the client is paying.
I think that makes my job the rational choice.
But I defer to Slackjaw's expertise.
1762. ChristinO - May 21, 1998 - 3:28 PM PDT
Sorry to intrude:
CalGal, incoming.
1763. Slackjaw - May 21, 1998 - 3:37 PM PDT
chloel:
Actually, even for us, it's just "a" folk theorem, not "the." There are many. But, when one of the general class is invoked
Yes, I know current simulations have many, many participants. I was referring to Axelrod's tournaments, where he used a PD-like game and an evolutinary fitness criterion to determine success. Tit for tat won. Mind you, I don't bag on simulations as a general concept, or even Axelrod's efforts, but the hubbub over them (including his own) is undeserved.
The outcome of these simulations can be very dependent on initial conditions that are irrelevant in general. E.g., in evolutionary simulations, there is a first generation population, complete with a distribution of strategies. In Axelrod's simulations, even strategies that didn't do well at all were crucial in determining which strategy reproduced best--so the outcomes were dependent on the presence of foolish players using dominated strategies in the first generation. This is not relevant in decision problems with rational players. Further, Axelrod used a resistance index to assess the relative evolutionary stability of one equilibrium in comparison with another. But this is rather crude--e.g., in a game with very many players, the near indifference of a minor player, whose strategies are of no consequence to other players, can lower an equilibrium's measured resistence.
Moreover, the strategies that often come out ahead, e.g., tit for tat, are not necessarily even subgame perfect, as tit for tat is not. I do not know much about current algorithms for generating new strategies in the pool, but such a strategy could be exploited by a rational player. If tit-for-tat really is the outcome of the evolutionary selection dynamic, it's not stable because there are strategies that do better when tit for tat dominates the population.
1764. Slackjaw - May 21, 1998 - 3:37 PM PDT
Finally, the evolutionary model, while important and interesting for some problems, can be overblown. Not everything naturally fits into it, as, for example, games between rational players who can create strategies de novo.
What is the general state of PD simulation models? Are they primarily evolutionary still?
"e.g., not lying even when we'd get away with it?" Well, see, the deal is, people do lie sometimes, especially when they're in transitory relationships. But, of course, often they don't and we're lucky because this whole "society" thing could go seriously afoul otherwise. Understanding formally when to expect what in general is not something we are up to just yet.
1765. chloel - May 21, 1998 - 3:51 PM PDT
Slack -
"Understanding formally when to expect what in general" is why I keep bringing up Trollope & Austen & James et alia. :)
I've dealt with PD simulations only as exercises in writing genetic annealing; PD and Conway's Life variants are both simple enough & pretty. The results of said programming exercises are usually, um, scattered. The "rational players who can create strategies de novo" sound more like a really tough game of Core Wars, but I have never been fluent in assembler & can't tell you anything useful about that.
I don't see why dependence on initial conditions, or even foolish players or disequilibrium, makes the simulation unrealistic, though I do see why it prevents it from being a proof.
What's the game-theory explanation for people expending effort to bring up children who aren't likely to lie?
1766. elliot803 - May 21, 1998 - 5:13 PM PDT
CalGal:
"In other words, everyone gets paid flat rate to put the proposal together. If the contract is won and I thought there were people who were responsible for making it happen, they'd get extra."
But then you're paying people for effort rather than results, which is the very policy you just claimed to oppose. If the contract is lost, the effort will probably not produce any results. Therefore, according to you, the people who made the effort should get nothing.
Actually, I should thank FTC for this example of work on a bid for a contract, since it so clearly demonstrates the stupidity of your and his "reward for results only; don't reward for effort" position.
1767. Slackjaw - May 21, 1998 - 5:20 PM PDT
yes, the simulations are pretty. We had a guy here--he just left, actually, because his wife got a job elsewhere--who is big into that stuff. There is a contingent in economics that uses it in modeling--agent-based modeling, they call it. It's sort of fringe right now; a few guys can get their papers in top journals, and there's some novelty. _Growing Artificial Societies_ is a book that I hear is pretty good, if you haven't seen it already.
Of course, in reality, irrationality and history and initial conditions matter--I don't mean to suggest otherwise. But the odds of getting them right to a first pass in a computer simulation are kind of slim. So it's questionable what the results tell you, when they turn so critically on the particulars of this or that initial condition or this type of irrationality. The latter especially has its place in an evolutionary account, but building strictly dominated strategies into the account is a bit far fecthed even for that enterprise, and again, not all PD-type interactions should be viewed as evolutionary.
There is no standard game theoretic explanation of instilling norms in your children per se. For that general phenomenon, actually, I do favor an evolutionary explanation but I have not given it a great deal of thought.
1768. Stumbo - May 21, 1998 - 5:33 PM PDT
Of course (has this point been made yet?), one can easily argue that laziness (or lack thereof) is a product of either genes or environment -- so, paying for effort is just as immoral as paying for results...
As for FTC's example -- the people are still being paid based on a probabilistic expectation of results, which, in turn, is largely based on their results in the past. (Has this one?)
1769. AdamSelene - May 21, 1998 - 5:34 PM PDT
elliot, et al.,
Of course you sometimes pay for effort. The question is, why? The answer is: to improve the odds of getting better results in the future. That's all there is to it. Incentivising effort is a second order attempt at improving results. No magic.
1770. AdamSelene - May 21, 1998 - 5:36 PM PDT
Stumbo - I think we just said the same thing, no?
1771. chloel - May 21, 1998 - 5:38 PM PDT
Darn. The massive but frequently ignored cost of raising people one would want to live with seems to me the most distorting problem in US economic policies. I was looking forward to the game-theoretic view.
1772. AdamSelene - May 21, 1998 - 5:59 PM PDT
chloel,
I usually ignore economists until they knife me in the back, although you seem like a talented player. But anyone conversant in Core Wars has my respect. So I presume you're NOT an economist.
So if you'll forgive me, what's your background?
1773. Stumbo - May 21, 1998 - 6:46 PM PDT
Adam:
Not quite -- but what you said is true as well, and there's some overlap.
1774. chloel - May 21, 1998 - 6:57 PM PDT
Adam - But they believe you're rational and wouldn't turn your back without wearing armor, so don't actually stab you?
I'm not conversant with Core Wars. Me, I'm still waiting for _Assembler for Dummies_. I have a decent math bachelor's, a sorry memory of math grad school, and five years of noodling around into a lovely programming job. I started in testing and find program proofs and verifications are great fun (and provably not going to put me out of a job).
Any science fiction fans - anyone read _Ethan of Athos_, which imagines a society that does pay for virtue? It's a romp, but not internally inconsistent.
1775. AdamSelene - May 21, 1998 - 7:10 PM PDT
I'm a SciFi fan, but as a practicing capitalist I have little time anymore for frivolities like pleasure reading. Who's the author?
1776. chloel - May 21, 1998 - 7:14 PM PDT
Lois McMaster Bujold
still practicing? when you've learned you'll have time.
1777. AdamSelene - May 21, 1998 - 7:28 PM PDT
Lol. Perfect practice produces perfect practitioners, no?
I'll look for the title next time i'm in the mood for a vanilla latte. The last time I was in that mood - I spent over $100 on JAVA books. And not the kind you drink. Oh well.
As a reader, I assume you recognise my namesake?
1778. Stumbo - May 21, 1998 - 7:45 PM PDT
Whoa. Another math expatriate...
1779. Slackjaw - May 21, 1998 - 8:24 PM PDT
Selene:
what is this prattle about being stabbed in the back by an economist?
"Of course you sometimes pay for effort. The question is, why? The answer is: to improve the odds of getting better results in the future. That's all there is to it."
True to form, you are wrong again. You must induce a participation decision in your employees, and it will sometimes be the case, even in a ONE PERIOD employment relationship, that doing so requires conditioning pay on effort instead of results. This is because, with risk averse employees and profits subject to random shocks, basing pay solely on profit may not be attractive to the employee relative to the his next best alternative.
In fact, under complete information and perfectly observable (by the employer) effort, the profit maximizing solution is to base pay ONLY on effort. This is controllable by the employee; profit is only partially so. If you can perfectly observe effort, why base pay on anything else? You can construct a simple contract that induces the employee to take the optimal (from the firm's POV) effort level.
1780. AdamSelene - May 21, 1998 - 8:35 PM PDT
Slackjaw,
You are so full of it. WHY would one reward effort? Because it's the best stratagy to achieve results, of course. Your so lost in the details that you can't recognize simple truths arrived at in any fashion other than your last exam proof.
1781. Slackjaw - May 21, 1998 - 8:38 PM PDT
your explanation relies on a "future" which need not "exist" to attain the result.
1782. AdamSelene - May 21, 1998 - 8:55 PM PDT
Slacker, you're better than that. Don't waste my time.
1783. Slackjaw - May 21, 1998 - 8:59 PM PDT
Are you not talking about a repeated employment relationship? Did you mean something else by "future"?
Again, what is this prattle about being stabbed in the back?
1784. AdamSelene - May 21, 1998 - 9:34 PM PDT
Slacker,
Ok, that part WAS prattle, or at least, poetic license. I've only been stabbed in the front.
1785. AdamSelene - May 21, 1998 - 9:45 PM PDT
Slackjaw,
After re-reading #1779, I gotta say, do you ever go to bed without re-deducing Ohm's law to be sure the light will go out?
1786. Slackjaw - May 21, 1998 - 9:51 PM PDT
You sleep with the light out?
1787. Slackjaw - May 21, 1998 - 9:51 PM PDT
you sleep?
1788. elliot803 - May 21, 1998 - 10:12 PM PDT
Stumbo:
"Of course (has this point been made yet?), one can easily argue that laziness (or lack thereof) is a product of either genes or environment -- so, paying for effort is just as immoral as paying for results..."
No, one cannot argue that unless one believes that the amount of effort one makes to achieve some goal is fixed in the same way that innate abilities and talents are fixed; that we are essentially just robots whose fate is completely determined by factors beyond our conscious control. I don't believe that, and I doubt that many other people do, either.
"As for FTC's example -- the people are still being paid based on a probabilistic expectation of results, which, in turn, is largely based on their results in the past."
That doesn't alter the fact that they're being paid for effort rather than results.
1789. CalGal - May 21, 1998 - 10:14 PM PDT
It's salary, in that case, which is different from a reward or bonus.
1790. elliot803 - May 21, 1998 - 10:15 PM PDT
AdamSelene:
"Of course you sometimes pay for effort. The question is, why? The answer is: to improve the odds of getting better results in the future. That's all there is to it."
Hardly. We reward effort for many reasons, amoung which is the belief that greater effort deserves greater reward.
1791. elliot803 - May 21, 1998 - 10:19 PM PDT
CalGal:
"It's salary, in that case, which is different from a reward or bonus."
Huh? A salary *is* a reward for work. According to you, unless the work produces "results," it shouldn't be rewarded, because without "results" it's just effort, which you deem unworthy of reward.
1792. CalGal - May 21, 1998 - 10:20 PM PDT
You know, I wish you'd answer that damn question. It's very irritating not talking to you.
(and I sure hope you hear the irony in this post and don't answer it as if I was completely serious. You do understand irony, don't you?)
1793. Stumbo - May 21, 1998 - 10:54 PM PDT
Elliot:
Re point #1: just to make sure we're on the same page -- do you believe that some people happen to be lazier than others? (I know I'm lazier than most.) If you say yes, we'll take it from there. If you say no, I give up.
Re point #2: no; under that scenario, people are being paid merely to be part of the project, regardless of how much effort they actually put into it. But how much they get paid this time depends on the results they got last time, and how much they will get paid next time depends on the results they get this time.
(But, if your point is the trivial one that results are an increasing function of effort, I cannot help but concur.)
BTW -- gosh, hope really springs eternal after a few drinks -- have you changed your mind yet as to whether that earlier post of mine that you originally interpreted as gibberish, really was? If not, could you point out in what way it was?
1794. Slackjaw - May 22, 1998 - 1:33 AM PDT
chloel:
"But they believe you're rational..."
Selene is the error in any regression model. Pay him no mind.
1795. Slackjaw - May 22, 1998 - 1:35 AM PDT
oh, in Message #1763, I left a sentence unfinished. I meant to say that when any theorem in the class of (game theoretic) folk theorems is invoked, for some reason we just call it the folk theorem.
It's just as irrelevant now as it was then.
1796. CalGal - May 22, 1998 - 1:50 AM PDT
Slack,
Well, NOW it makes sense.
1797. Slackjaw - May 22, 1998 - 1:53 AM PDT
I completed it special for you!
1798. Slackjaw - May 22, 1998 - 1:53 AM PDT
FreeToChoose:
Do you have the posts from the old Gates thread, by any chance?
1799. CalGal - May 22, 1998 - 1:55 AM PDT
Hey, sweetcheeks. It's these special little flourishes that keep you near and dear to me. But quit picking on Adam!
I have a question:
Is everyone here discussing salary when they say pay for effort as opposed to results? Or, are you? Answer briefly and without words like utility function graph megalonomics hootenanny, please.
1800. Slackjaw - May 22, 1998 - 1:58 AM PDT
None of my posts has contained the word salary, to my knowledge.
Selene deserves everything he gets. Did you see his behavior in politics?