Re: Isn't local better than multinational?

[Ralph Shnelvar <ralphs@xxxxxxxxx>]

Dear Evan:

On Thu, 11 Nov 2004 15:50:39 -0700 (MST), you wrote:

>
>On Thu, 11 Nov 2004, Ralph Shnelvar wrote:
>
>> That's going to make the people in Cleveland _and_ the people in Boulder
>> richer.  The people in Cleveland get working capital and the nice local bank
>> in Boulder gets to make more money for its nice local people.
>>
>> Now substitute "multinational bank" for "nice local bank" and nothing
>> changes.
>
>That's a non-sequitur. The multinational bank DOESN'T make more
>money for Boulder, as the Boulder bank would.

You're right.  You see, I think like an economist and I did a bad job of
explaining that "nothing changes".

Yes, the multi-national does not directly make more money for Boulder but it
makes it for someone, somewhere.

It's like an enormous game of musical chairs with an equal number of chairs
and people.  Some people look for the comfy chairs.  Some people look for
the hard backed chairs.  There isn't a perfect mix so people scramble for
the chairs that they want.

By attempting to limit the choices of chairs to those chairs that are
"nearby", you limit human happiness.


>
>> Money goes to where it is most wanted (most needed).  In this way it creates
>> wealth for everyone; whether it be Zimbabwe or Longmont.
>
>Another non-sequitur. Need is not want. The greed motive puts money
>where it will increase most, not where it's needed. Ask the people
>of Zimbabwe; they have the most need, and getting the least.

No, Evan, you are putting your own value system on what "need" means.

What your statement directly implies is that if two people wish to have the
same thing (anything) that those willing to pay the most do not, in some
sense, need it the most.

If one accepts that, then there must be another mechanism to allocate scarce
resources.

There are only three mechanisms available to allocate scarce resources:
 (1) By price.
 (2) By lottery.
 (3) By waiting in line.

Again, think of those musical chairs.  If you have 100 people and 50 chairs,
what is the best way to allocate those chairs?  Either people can bid for a
chair and those who are most tired (or have the most money) get a chair.
But, for the most part, those who want (need) a chair the most will bid up
the price of a chair.

But let's say you don't like the idea of the 80-year-old not having a chair.
Then how does one get the 80-year-old a chair?

Well, you could set up a government to allocate the resource. But that's
just a form of lottery because someone else gets to decide - based on
arbitrary principles - who is or is not deserving.

Or, one could dole out the chairs based on first-come first-served.

The price mechanism isn't perfect.  People without money definitely do
suffer.  But arbitrary decisions ("Let's only invest in local banks.") only
make things worse.

>
>"Greed is good" -Michael Douglas in "Wallstreet", 1987

I saw that movie when it first came out and it did an incredible amount of
damage to an entire generation.

What that movie and that line did was make it easier, politically, to limit
choices because Gordon Gekko (Michael Douglas) was such an unsympathetic
bastard.

Enlightened self interest is good.  Trying to do what is best for one's
family is good because it sends an economic signal that "This is good.  This
is what I and other people want."

>
>"There is no greater disaster than greed." -Lao Tzu, 6th century BC
>
>Both cannot be right.

That is correct; they cannot both be right.  Lau Tzu was wrong.

There can be no greater disaster than theft, murder, and war.  Mere greed
does not destroy.  Theft destroys.  Murder is the ultimate theft.  War
destroys.  Once wealth is destroyed then someone, somewhere must go without.

Greed may leave people without things but destroying wealth is guaranteed to
leave people without those same things.

When greed steps over into war, then there can be no greater disaster.  And,
alas, for the most part the reason for war is greed. 

Ralph Shnelvar