Wednesday, May 09, 2007

On Satisfaction, and Competitiveness

Survey of 2,509 Americans in middle management and above, 25 years and older, conducted by Beta Research Corp. for BusinessWeek during July 13 - 17, 2006, using an online panel. Margin of error is plus/minus 2%.

Which of the following would make you happier:

You get a $ 10,000 bonus, and it's the biggest bonus in your
group - 40%
You get a $ 20,000 bonus, but it's the smallest bonus in your group - 59%

How competitive do you consider yourself to be ?

I eat nails for breakfast - Women, 3%; Men, 11%
I would eat nails for breakfast, if I thought that it would make

me CEO - Women, 18%; Men, 24%
I don't even want to think about eating nails - Women, 79%;

Men, 65%

Workers aged 25 - 34 who agree that it's a good idea to fire the worst-performing tenth of workers each
year: 45%.


Blogger Bret said...

The first question is related to one I like to ask some of my socialism leaning friends and acquaintances:

If you had to choose between one of the three economic policy scenarios, which would you choose:

Policy 1 makes the rich twice as rich and the poor 20% richer.

Policy 2 makes both rich and poor 5% richer.

Policy 3 make the rich half as rich and the poor 5% poorer.

I've noticed that they either pick 3 immediately or suffer a bit of cognitive dissonance before choosing any of the above or refusing to answer at all.

I don't have a problem with people answering 3, but since my subjective preference is so radically different from theirs, I know to not bother discussing the subtleties of economic policy with them.

May 09, 2007 3:15 PM  
Blogger Oroborous said...

That's why socialists don't come to power in America until after things are already really bad, such as during the Great Depression.

While I can see an argument for Policy #2, #1 is what I'd call "enlightened", since it causes a bit of emotional pain, yet is the best policy. It takes a mature person to endure discomfort in pursuit of what's right.

Interestingly enough, over the past thirty years the U.S. have enacted various economic policies whose combined long-term outcome has been amazingly close to following Policy #1: According to U.S. Census Bureau data, since 1975, in real, inflation-adjusted terms, the bottom 20% of U.S. households have gained 10% more income, the bottom 40% have 25% greater income, the top 40% have 60% higher incomes, and the top 3% have doubled their real annual incomes.

May 09, 2007 4:12 PM  
Blogger Bret said...

What's the difference between policy 2 and policy 3? Both are making the poor worse off than they might be in order to pursue egalitarian goals.

While I have a very strong preference for 1, I find it easier to understand choosing 3 than to understand choosing 2. 2 seems like the worst of all worlds: there's still a large disparity between rich and poor and we didn't help the poor very much in absolute terms.

May 09, 2007 5:05 PM  
Blogger Hey Skipper said...

Workers aged 25 - 34 who agree that it's a good idea to fire the worst-performing tenth of workers each year: 45%.

Does that mean 55% are worried about being in the bottom 10%?


re: your three hypotheticals.

They prove what AOG has said about the left: it is all about intentions, and never about consequences.

May 09, 2007 8:03 PM  
Blogger Harry Eagar said...

'That's why socialists don't come to power in America until after things are already really bad, such as during the Great Depression'

Not a very nice thing to say about laissez-faire capitalism.

May 09, 2007 8:33 PM  
Blogger Oroborous said...


Some people find egalitarian goals to be worth pursuing.

For instance, there's the whole "keeping up with the Joneses" phenomenon. Humans keep track of well-being in both absolute and relative terms.

Once survival is assured, Policy #2, while not increasing absolute wealth as much, might well increase satisfaction among the poor more than Policy #1 would. And after survival, isn't happiness what should be strived for ?


That's how I read it, but maybe they're just more compassionate.


Laissez-faire capitalism isn't very nice, just brutally effective. That's probably why no advanced nation continues to practice it.

May 10, 2007 4:24 AM  
Blogger Harry Eagar said...

Not sure what you mean by 'effective.'

Anyhow, at least you're not blaming Roosevelt for the crash like Orrin does.

May 10, 2007 9:29 AM  
Blogger Oroborous said...

Another example of when people want to help the needy, but do so in a less-optimal way, is when people get token gifts for donating, such as a coffee mug, tote bag, or umbrella.

To maximize their donation's impact, people ought not want to receive a little something back, but organizations that solicit donations have found that response rates go up considerably if they offer the token gifts.

To me, that falls under the type of thinking that leads to Policy #2.

May 10, 2007 9:34 AM  
Blogger Oroborous said...


Laissez-faire capitalism is very effective at distributing resources, including labor, to those places and individuals that will produce the most value from them. This function tends to produce great surplusses of goods and services over necessity, making societies that practice it quite wealthy.

That's what I mean by "effective".

However, most non-poverty-stricken people have great objections to being treated like a piece of lumber, and rightly so, so we don't any longer practice so raw a form of capitalism.

F.D. Roosevelt did a lot of nasty stuff, but he didn't cause the Great Depression. He wasn't even running for President when it started, and by the time that he assumed the office, the very worst of it was over.

Further, FDR was a staunch advocate of the Navy, from when he served as Assistant Secretary of the Navy under Woodrow Wilson, at a time when a strong navy and control of the seas was the primary way to world influence and global military power. He was also a submarine enthusiast, which was foresighted.

May 10, 2007 9:52 AM  
Blogger David said...

Laissez-faire capitalism works so well that we can afford to stop.

May 10, 2007 11:26 AM  
Blogger Bret said...

oroborous wrote: "Laissez-faire capitalism is very effective... However, most non-poverty-stricken people have great objections to being treated like a piece of lumber, and rightly so, so we don't any longer practice so raw a form of capitalism."

I have to disagree with that particular interpretation of Laissez-faire. According to my dictionary, it means "with minimally restricted freedom in commerce." In my opinion, the less Laissez-faire the system, the less freedom everybody has, including workers. In fact, it seems to me that communism treats workers far more like lumber than capitalism of any kind.

Even if capitalism didn't work as well as communism (as far as effectively producing wealth), I'd still vote for capitalism because I equate it with freedom, which is more important than the wealth to me.

May 10, 2007 1:48 PM  
Blogger Harry Eagar said...

As I've said before (though not here), I spend my workdays disaggregating the averages to try to figure out what's going on.

An ever-expanding economy is not a desirable goal unless almost everybody gets a share: the Milo Minderbinder School of Economics.

Recall, I am from the South, where the aggregate economy was ever-expanding from 1790-1860. Ugh.

Also, the minimum consideration for an economy has to be that it never dips below the line where everybody eats. As the greatest economist America ever produced put it, 'People don't eat in the long run. They eat every day.'

May 10, 2007 8:08 PM  
Blogger Bret said...

harry eagar wrote: "An ever-expanding economy is not a desirable goal unless almost everybody gets a share..."

I almost agree. I'd replace "gets a share" with "has the opportunity to get a share by working unless disabled or a few other similar special cases".

harry eagar also wrote: "from the South, where the aggregate economy was ever-expanding from 1790-1860. Ugh."

Slavery is essentially the opposite of capitalism. Slaves are not allowed to make decisions regarding their economic status.

May 10, 2007 9:50 PM  
Blogger Harry Eagar said...

You might as well say 'mules are essentially the opposite of capitalism.'

The only people who have a really good shot at benefitting largely from capitalism are capitalists.

As Southern defenders of slavery used to gleefully point out, the wage worker 'at the North,' as the term then was, had less chance of eatin' reg'lar than a slave, less medical attention, less provision for old age or injury.

And, lord knows, the slaves had little enough of all those.

Capitalism is perfectly compatible with slavery and, in fact, seldom has existed without it.

And it's only in recent centuries that the kind of capitalism you are thinking of has performed better (overall, if not for large classes) than other systems. This is not so much because of capitalism but because of methodical searches for better ways of production.

State capitalism with slavery outperformed individual capitalism up to around 1600.

Say what you like about FDR and his Columbia whiz kids: Since they got their hands on the economy business panics have disappeared.

And without retarding the expansion of the economy, except in the fever dreams of Paul Craig Roberts.

May 11, 2007 12:00 AM  
Anonymous Anonymous said...

Gee, Harry, I suddenly have this image of you in your library reading about this or that historical horror, furrowing your brow and muttering "Mmm, let's see...Christianity or capitalism...Christianity or capitalism?"

Do you equate capitalism with making money?

May 11, 2007 5:19 AM  
Blogger tefta said...

In non-capitalistic societies everyone but the rulers are slaves.

May 11, 2007 5:52 AM  
Blogger Bret said...

harry eagar wrote: "State capitalism with slavery outperformed individual capitalism up to around 1600."

To start with, I think we're having a definitional argument. From, here's what I think capitalism is:

"an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth."

Therefore, in my opinion, "state capitalism" is an oxymoron. If there is a traditional monarch (as found nearly everywhere before 1600), he/she owns or controls everything, and that's not (in my opinion) capitalism, it's serfdom.

Other aspects of capitalism (again, according to my working definition and, include a "free market" and "open competition". If slavery is involved, these two conditions are violated and I also don't consider the system to be capitalism.

So, probably needless to say at this point, when I read the sentence above that you wrote, I was unable to decipher it. You must use a significantly different definition of capitalism than the one I use.

May 11, 2007 8:02 AM  
Anonymous Anonymous said...

Be very careful, Bret. Nobody can pull a treatise out of his back pocket on the horrific state capitalism of the Merovingian dynasty as fast as Harry.

May 11, 2007 8:19 AM  
Blogger Harry Eagar said...

I was thinking of China, Morocco or Venice -- famous examples of state capitalism that, in their heydays, far outdistanced what little capitalism existed by Bret's definition.

I would define capitalism as the primacy of capital over labor and/or technic in the organization of production. Finis.

Free markets have nothing to do with it; at the peak of British laissez-faire capitalism, the markets Britain sold into were hardly free.

Many of the other shibboleths of what might be called common or garden variety American concepts of capitalism can be show to be unnecessary or just plain wrong.

Trade imbalances, for exemple. I have several times cited the huge trade deficit that Britain ran with the eastern Baltic for 500 years. At the end, which was more prosperous?

What we have in the US and developed world today is an economic system without a name: it gives roughly equal weight to capital, labor and technic. It is not capitalism, according to any traditional use of the word.

May 11, 2007 9:30 AM  
Blogger Bret said...

harry eagar wrote: "I would define capitalism as the primacy of capital over labor..."

Should I interpret "primacy" as meaning that those having "capital" are able to unduly control labor, etc.? If so, then I would agree, that by your definition, capitalism is a bad thing.

May 11, 2007 9:48 AM  
Blogger Harry Eagar said...

I never said capitalism was a bad thing. I say it is not as good a thing as it is cracked up to be.

We could debate 'undue.' Owens' control of the Lowell girls would be objected to today, but at the time it probably was benign. Certainly, you'd rather have your daughter working in Lowell in 1840 than on Saipan in 2007.

But anyplace where there are antisyndicalism laws is a place where capital has undue influence.

That included the US until 70 years ago.

May 11, 2007 6:41 PM  

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