Tyndmyr wrote:I am extremely skeptical of any plan that even it's proponents admit is not rational.
I said no such thing. Personally I think it's highly rational. I merely said that economists frequently predict the future wrongly because they assume people will behave rationally but they don't. No, that doesn't matter if it comes to whether an aircraft can fly, but it matters for self-fulfilling prophecies - which economies often are: If everyone believes a bank will have a run on its money, it will. If noone believes it, then it won't.
Economics is an art as much as a science is what I'm saying - built on irrational confidence and herd instinct as much as rationality. Why does Bitcoin have value? Because everyone believes it does and for no other reason...
What if a pay rise causes people to have more life satisfaction, work harder at their jobs, take less time off work through stress etc. - and so even though, economically, it should be a a wash (+pay but +inflation), the overall economy actually benefits due to the higher proportion of happy, productive people..?
Ah, I see you're a fan of the 1984 style of government. Everything is fine. Pleasant lies are better than the truth. And we'll just assume that nobody will ever see through those lies, and there will be no consequence for miseducating the populace at large.
Huh? I am not in favour of a fantasy. More egalitarian countries - where the richest earn a much smaller multiple of the poorest than in the UK/US - are a reality
in today's world. And the evidence is overwhelming that both rich and poor
are happier. And the evidence is overwhelming that happier people are healthier and more productive - taking less days off work with stress/depression etc.
None of this is fantasy or irrational. It's all quite reasonable and rational. And it all follows from the fact that people have feelings rather than being emotionless automata.
We can debate whether minimum wage is the only or best way to achieve happiness for sure. I think it is but one tool. But I think it is a tool you ignore at your peril.
None of those things indisputably create value, that's the problem (if by value you mean generate a positive ROI).
By create value I mean generate a positive ROI including societal externalities
- not just in terms of how much cash is generated in revenues. IOW, if a company eliminates malaria worldwide and does it free of charge, in theory they have a huge negative ROI. But, in terms of economic benefits to society, there is an enormous
I don't know whether the channel tunnel creates a positive ROI or not - you have to factor in things like environmental impact from the shift in transportation, skills learnt during construction - both by individual employees and the firms involved and so on. I could quite easily imagine that even with all that it's a net loss, especially given opportunity cost.
But you chose a harsh example. The UK has numerous good examples though, from the construction of public railways to the public postal service. Over time, the economic returns must be dozens or hundreds of pounds for every taxpayer pound initially invested. A less obvious example that better highlights the 'hidden ROI' I am referring to might be free school meals: Better nutrition as a child equals better concentration equals more skills acquired equals a more productive adult taxpayer.
GPS would be a great example from the US. The Internet itself would be an example of something that will (or perhaps even already has) returned a thousand-fold on its initial investment. Not to the creators, no, but in terms of overall worldwide efficiency gains.
These are the sorts of things that governments are good at sponsoring. No, they don't always get it right. I am very sceptical of the real benefits of HS2, for example (the next big efficiency gains are going to come from virtual working and self-driving taxi cabs, not shaving minutes off a train journey). And I definitely
think Trident is a waste of money in the modern world (I find it impossible to conceive a situation where we'd rationally want to use nukes but France and/or the US wouldn't, so I think we can take a 'free ride'). But they get it right often enough to pay for the times they get it wrong - and then some.