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buswolley writes:
"Is the United States or the EU really too poor to afford to build the things each needs to maintain prosperous nations? Modern Monetary Theory (MMT) posits that America is not too poor in real resources to do the things it needs to do, and now proponents of the theory have adapted the rules of the classic board game Monopoly to demonstrate their case. For those that do not know what modern monetary theory is about, a suitable primer on the topic might be Warren Mosler's Seven Deadly Innocent Frauds of Economy Policy or Diagrams and Dollars, either as a book on Amazon or on-line for free at NewEconomicsPerspectives.org.
While the Modern Monetary Theory perspective tends to elicit disbelief and even rage, I think it is important for any scientist and geek to weigh the evidence carefully, and by doing so understand better about how and why money is created and destroyed."
(Score: 2, Insightful) by geb on Saturday March 01 2014, @03:34PM
I'll ignore the economic arguments for now, because the section about applying building codes to a monopoly game struck a serious wrong note for me.
I understand the reasoning behind law in a society, and believe that properly implemented rules can increase overall freedom. The monopoly example, on the other hand, seems to be arguing that arbitrary and pointless complexity is a good thing, because it creates jobs for people who can then uncomplicate it again as legal consultants. I have no idea how to respond to an idea that silly.
(Score: 2) by buswolley on Saturday March 01 2014, @04:49PM
I'd say that it would be arguing that regulations are often necessary, and do provide stimulus for some types of economic activity irrespective of whether the regulation is good or bad. This seems to be a valid observation, and not a value judgement, nor a call for needless regulation.
subicular junctures
(Score: 4, Insightful) by TheRaven on Saturday March 01 2014, @04:56PM
In both of these cases, the economic benefit can be offset by the costs.
There's also the obvious social question of whether the regulation actually improves life for people in the society (does reducing the freedom of builders to build and sell unsafe buildings outweigh the benefit of knowing that a new building probably won't fall down?). Social benefit and economic efficiency are very different things: it's obviously better, from a purely economic perspective, to kill people as soon as they retire, but you'd be hard pressed (outside of Florida) to argue that it would benefit society.
sudo mod me up
(Score: 2, Interesting) by geb on Saturday March 01 2014, @06:14PM
You'll get no argument from me on the need for regulation to promote safety, fairness and opportunity. I am a strong believer in the rule of law. That is why the example feels so wrong to me.
The section before that is similar I suppose. The monopoly board isn't under threat of invasion, so the example of buying aircraft carrier is pointless too, but in that case there was no suggestion of buying a deliberately broken and useless aircraft carrier.
In the case of the building regulations, the houses and hotels will be the same on the board with or without laws, so utility of the rule doesn't come into it, but it was specifically stated that the building regs should be so utterly incomprehensible that the ordinary player would require a specialist to ever apply them. That's not good.
(Score: 2, Informative) by forkazoo on Saturday March 01 2014, @05:19PM
Respond to it as being the Broken Window Fallacy.
That said, if you consider it a sort of Wellfare program by other means, stupid shit can lead to higher employment rates, which increases velocity of money in the economy...
(Score: 4, Insightful) by unitron on Saturday March 01 2014, @06:06PM
"I'll ignore the economic arguments for now, because the section about applying building codes to a monopoly game struck a serious wrong note for me."
Think of it as a literary device. You know how sometimes in historical fiction several of the hero's encounters with several different people at different times will be replaced with interaction with one fictional character? They change reality in order to be able to tell the story within certain constraints (it's only a 2 hour movie with only so much budgeted for sets, locations, costumes, and casting) while still trying to remain true to the overall idea--hero demonstrates compassion and empathy in small ways with different people in different instances in real life, in movie it's one instance with one person with a lot of compassion and empathy--either way you get the idea: hero is compassionate and empathetic, but doing it the second way lets them actually get a movie into the theaters.
Good analogies are hard to come by. You're trying to construct an instance of something with which the reader is familiar in order to explain something with which they are not familiar, by saying "this is just like that, except that it's not the same thing, but two different things, but other than being two different things they're just alike".
The author chooses the game Monopoly because it's so well known to the general public and has useful features, like currency, for illustrating what he's trying to explain.
(If author J.D. Alt is actually a person of the female variety, adjust accordingly)
The author has already done the aircraft carrier thing, which transfers a lot of money from the bank/gov to one player but after that (in this simplified version of real life illustrated as a modified version of the game) the aircraft carrier no longer plays a part in the game. The govenment checks off "buy aircraft carrier" from its "to do" list, and that's the last you hear of it.
He now needs a device which will allow him to transfer a lot of money to a player *and* which will "remain on the board" as something that continues to cause the movement of money back and forth between the players and between the players and the bank.
The complexity of the building code makes it reasonable for the bank to pay the creating player an amount of money in the aircraft carrier buying range, and provides the mechanism for the continuing financial interactions of all involved.
This is not the same as the author saying that in real life building codes *have to* be complex in order to stimulate economic activity.
In real life building codes have to be complex because buildings have lots of ways to fall apart or to kill people, or to kill people by falling apart, and builders can find all sorts of ways to cut costs in unsafe ways if not prevented from doing so.
In addition to having played Monopoly, if you've had enough of an accounting course to understand the basic principle of double entry bookkeeping, that helps you to understand Alt's article as well.
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