Free Markets And Perfect Markets
A free market ought to be a perfect market, according to conventional economics; that is, it should be one in which all trading information, resource availability, buyer and seller characteristics, and suchlike are perfectly known - and in which every changing fact is immediately disseminated and understood by all elements within the system.
Often, I wonder what it would be like to live in such a hellish environment. There would be little advantage to brainpower or innovation simply because everything would be known perfectly with no delay and hence everyone would respond exactly in order to maximise their own benefit. Only two things would be in doubt, and perhaps not even those two: the nature of 'benefit' and the nature of 'maximise'.
It was while playing with such idle thoughts that I realised why I had dropped economics. I thought of it as a self-defeating subject - either it reflects the real world by prediction, with the real world failing to comply simply because it is real, or it is an empirical striving after the wind. Worse, I thought of it as a dangerously amoral subject, summarisable as: 1) all humans are greedy; 2) all humans are rational; 3) it is rational to be greedy; 4) exceptions are explained by deferred greed.
But Messrs Levitt and Dubner rekindled my love of economics as a sociological science, somewhat akin to the interesting observations of human philosophers (i.e. those who agreed that 'the proper study of mankind is man'), and I awoke.
What if, my naughty mind said to me, all students were to provide evidence-based commentary for all their teachers. Then perhaps a market system could be set up in which teachers could be ranked by students better than they could be ranked by their superiors! Heh heh... happy goldfish bowl, everyone.
Often, I wonder what it would be like to live in such a hellish environment. There would be little advantage to brainpower or innovation simply because everything would be known perfectly with no delay and hence everyone would respond exactly in order to maximise their own benefit. Only two things would be in doubt, and perhaps not even those two: the nature of 'benefit' and the nature of 'maximise'.
It was while playing with such idle thoughts that I realised why I had dropped economics. I thought of it as a self-defeating subject - either it reflects the real world by prediction, with the real world failing to comply simply because it is real, or it is an empirical striving after the wind. Worse, I thought of it as a dangerously amoral subject, summarisable as: 1) all humans are greedy; 2) all humans are rational; 3) it is rational to be greedy; 4) exceptions are explained by deferred greed.
But Messrs Levitt and Dubner rekindled my love of economics as a sociological science, somewhat akin to the interesting observations of human philosophers (i.e. those who agreed that 'the proper study of mankind is man'), and I awoke.
What if, my naughty mind said to me, all students were to provide evidence-based commentary for all their teachers. Then perhaps a market system could be set up in which teachers could be ranked by students better than they could be ranked by their superiors! Heh heh... happy goldfish bowl, everyone.
Labels: Economics, Market Forces, Philosophy, Social Sciences, Students
etched with acid at 9:04:00 pm
2 Comments:
And with that ranking system, teachers would inevitably be ranked higher than their superiors. Although it does make sense, we students are the clients after all. Good service standards ftw! :)
Well you should look into Political Economy, which sheds light on the social aspects of human society, adding some water to the staleness of economics. Adam Smith would be a good start, but Karl Polanyi is also a great person to start with. in fact, i should think this a a great topic for IB....
Post a Comment
<< Home