From Dismal Science To Joyful Art
November 26, 2001 5:19 AM Subscribe
A classic economist would tell you MetaFilter ain’t worth the server it’s hosted on. He’d say it has negative worth, since maintenance probably costs more than the gains. In classic economic terms, then, MetaFilter is not worth having around and might as well be shut down. Readers might object to that — the benefits they recieve are both intangible (information) and immeasurable (community). “The information era, with its economy of multiplication, will have more experience with and give more attention to positive sum games — if you gain, I'll gain too through feedback loops.” Time to update the Dismal Science.
While conventional economics claims to be (and needs to be) a broad study of the production and distribution of goods and services, in practice it has focused almost entirely on only one area (or sphere) of productive activity - namely the "cash" economy. The productivity within households, the informal economies within communities, the productivity of ecosystems have all been ignored and/or taken for granted. The reason sometimes given for ignoring the non-cash economies is that since there are no prices, there is no objective way to determine the value of these activities - "since we don't know how to handle it, we will assume it's unimportant." Yet this is hardly a minor oversight. In The Household Economy (still the best introduction to the economic importance of the non-market economies), Scott Burns shows that even in our highly cash-economy oriented society, at least 1/3 of all "income" comes in the direct form of goods and services through productive activities in the household and community.
raaka: do you know of any more recent works (The Household Economy was published in 1975) on the importance of the non-cash economy?
posted by Carol Anne at 5:46 AM on November 26, 2001
raaka: do you know of any more recent works (The Household Economy was published in 1975) on the importance of the non-cash economy?
posted by Carol Anne at 5:46 AM on November 26, 2001
Well, erm, I am a classic economist and I think Metafilter is perfectly worthwhile, if you take into account the benefits for mr. Haugheys resume.
As for intangible benefits, under your definition ('information') I receive intangible benefits from my cable- and my phone company, both of which get my money.
There are economists working on the issues that you mention, by the way.
posted by thijsk at 6:20 AM on November 26, 2001
As for intangible benefits, under your definition ('information') I receive intangible benefits from my cable- and my phone company, both of which get my money.
There are economists working on the issues that you mention, by the way.
posted by thijsk at 6:20 AM on November 26, 2001
sarcasm
Well, i read as far as the bit where the author started saying that free-market capitalism isn't the best way to run global economics and gave up in disgust. /sarcasm
Those who do not find the subject of interest shouldn't waste bandwidth wth their comments IMHO. Do you find starwars/buffy/startrek threads filled with '< yawn> why not try reality for a change you bunch of couch-potatoes'?
Here are some things that may interest you, Carol Anne.
Susan Meeker-Lowry is a writer, activist and the author of Economics as if the Earth Really Mattered (1988) and Invested in the Common Good (1995), both published by New Society Publishers. She lives in Montpelier, Vermont where she is initiating a local currency project.
She discusses community development banks, meaningful protest strategies, and practical examples and lessons to be learned from what she calls "economics of community", "place", and "culture".
Metafilter is a good example of the inablility of the economic models presently used to cope with reality. I is valuable in many ways that are not measured economically.
posted by asok at 6:42 AM on November 26, 2001
Well, i read as far as the bit where the author started saying that free-market capitalism isn't the best way to run global economics and gave up in disgust. /sarcasm
Those who do not find the subject of interest shouldn't waste bandwidth wth their comments IMHO. Do you find starwars/buffy/startrek threads filled with '< yawn> why not try reality for a change you bunch of couch-potatoes'?
Here are some things that may interest you, Carol Anne.
Susan Meeker-Lowry is a writer, activist and the author of Economics as if the Earth Really Mattered (1988) and Invested in the Common Good (1995), both published by New Society Publishers. She lives in Montpelier, Vermont where she is initiating a local currency project.
She discusses community development banks, meaningful protest strategies, and practical examples and lessons to be learned from what she calls "economics of community", "place", and "culture".
Metafilter is a good example of the inablility of the economic models presently used to cope with reality. I is valuable in many ways that are not measured economically.
posted by asok at 6:42 AM on November 26, 2001
[staring blankly at the screen]
*blink* *blink*
Don't do the math. I agree with phunkone.
MetaFilter is one of many examples that show potential employers just what incredibly amazing stuff Matt can pull out of his ass. I would be surprised if this thing didn't give Matt at least one job. Hell, if I had the money, I'd hire his services myself.
I barely passed Economics 101 back in college. Not just cuz I'm stupid. That was probably part of it, but I couldn't wrap my mind around it because macroeconomics especially didn't seem to coincide with common sense. It's about theory. Macro Economics study is for world finances what weather forecasting is for world environment. It's guesswork. I think the results are more important than the theory, and MeFi has accomplished a great deal. Some of which simply can't be measured with math.
posted by ZachsMind at 8:08 AM on November 26, 2001
*blink* *blink*
Don't do the math. I agree with phunkone.
MetaFilter is one of many examples that show potential employers just what incredibly amazing stuff Matt can pull out of his ass. I would be surprised if this thing didn't give Matt at least one job. Hell, if I had the money, I'd hire his services myself.
I barely passed Economics 101 back in college. Not just cuz I'm stupid. That was probably part of it, but I couldn't wrap my mind around it because macroeconomics especially didn't seem to coincide with common sense. It's about theory. Macro Economics study is for world finances what weather forecasting is for world environment. It's guesswork. I think the results are more important than the theory, and MeFi has accomplished a great deal. Some of which simply can't be measured with math.
posted by ZachsMind at 8:08 AM on November 26, 2001
A classic economist would tell you MetaFilter ain’t worth the server it’s hosted on. He’d say it has negative worth, since maintenance probably costs more than the gains. In classic economic terms, then, MetaFilter is not worth having around and might as well be shut down.. Readers might object to that — the benefits they recieve are both intangible (information) and immeasurable (community).The reader's benefit is unrelated to the maintenance and the gains, as the reader isn't responsible for either of them. So you can't really drag what they gain from MeFi into the equation, as the costs(maintenance) and gains(amazon wishlist) are Matt's, not the readers. Good link though.
posted by Darke at 9:43 AM on November 26, 2001
posted by Darke at 9:43 AM on November 26, 2001
Couch potato? I was somewhat let down by Carol Anne's cut and paste considering some of her previous gems.
posted by Frasermoo at 10:07 AM on November 26, 2001
posted by Frasermoo at 10:07 AM on November 26, 2001
A classic economist would tell you MetaFilter ain’t worth the server it’s hosted on.
No he wouldn't. A classic economist would tell you that the maintanence of this site is exceeding the gains because of the "free rider" issue. People can play and not pay. In an analysis of Matt's choices, the classic economist would conclude that Matt currently values the intangibles greater than his monetary cost difference.
Economics is not built on the assumption that money is the only thing people value. This is a toxic misunderstanding of the science. Economists often talk about utility, and use money as one way of measuring utility. Studying money is very useful because it produces quantitative data that can be used to answer certain questions.
I'm going to steal David Friedman's definition of economics here, because it is quite good:
"Economics is that way of understanding behavior that starts from the assumption that people have objectives and tend to choose the correct way to achieve them."
posted by marknau at 11:48 AM on November 26, 2001 [1 favorite]
No he wouldn't. A classic economist would tell you that the maintanence of this site is exceeding the gains because of the "free rider" issue. People can play and not pay. In an analysis of Matt's choices, the classic economist would conclude that Matt currently values the intangibles greater than his monetary cost difference.
Economics is not built on the assumption that money is the only thing people value. This is a toxic misunderstanding of the science. Economists often talk about utility, and use money as one way of measuring utility. Studying money is very useful because it produces quantitative data that can be used to answer certain questions.
I'm going to steal David Friedman's definition of economics here, because it is quite good:
"Economics is that way of understanding behavior that starts from the assumption that people have objectives and tend to choose the correct way to achieve them."
posted by marknau at 11:48 AM on November 26, 2001 [1 favorite]
Lets be fair now. MeFi is all but dead on the weekends and evenings, judging by comment and posting traffic.
So whatever benefit(s) (and the infungible value accorded those benefits) society might derive from MeFi are more than offset by the cost of MeFi's community as they participate whilst their employers think they are at their computers pursuing company business.
MeFi: Far more enriching than stealing office supplies.
posted by BentPenguin at 11:55 AM on November 26, 2001
So whatever benefit(s) (and the infungible value accorded those benefits) society might derive from MeFi are more than offset by the cost of MeFi's community as they participate whilst their employers think they are at their computers pursuing company business.
MeFi: Far more enriching than stealing office supplies.
posted by BentPenguin at 11:55 AM on November 26, 2001
A classic economist would tell you MetaFilter ain’t worth the server it’s hosted on.
No, a reporter trying to explain economic analysis to the public might say that, but no economist would.
Like marknau said, an economist would say that since it exists (and mathowie is rational) it has value. It's a value that isn't easily measured however.
The dismal science has always suffered from being over-simplified for mass generalization to the point of appearing non-sensical to anyone with sense. That is why it is dismal of course.
posted by dness2 at 12:01 PM on November 26, 2001
No, a reporter trying to explain economic analysis to the public might say that, but no economist would.
Like marknau said, an economist would say that since it exists (and mathowie is rational) it has value. It's a value that isn't easily measured however.
The dismal science has always suffered from being over-simplified for mass generalization to the point of appearing non-sensical to anyone with sense. That is why it is dismal of course.
posted by dness2 at 12:01 PM on November 26, 2001
Maybe Smithian would’ve been better than classic.
“Given 1000 economists, there will be 10 theoretical economists with different theories on how to change the light bulb and 990 empirical economists laboring to determine which theory is the correct one, and everyone will still be in the dark.”
We’re well on our way here, with those sitting on both side of this particular fence about even.
“That is why it is dismal of course.”
No, Thomas Carlyle called it that after reading Malthus’ work. You’re right I simplifed the equation charting MetaFilter’s worth, but the basic point would be the same if I studied it for a few years. The gains he and the readers get from it are not measurable. An economist would say it isn’t worth very much.
“The reader's benefit is unrelated to the maintenance and the gains, as the reader isn't responsible for either of them. So you can't really drag what they gain from MeFi into the equation, as the costs(maintenance) and gains(amazon wishlist) are Matt's, not the readers. ”
I’d disagree with that since readers largely don’t support the site monetarily they don’t benefit from it. This essay was partially trying to address the value of information, community, networks; mostly gains readers recieve from MetaFilter by giving it their time.
“classic economist would tell you that the maintanence of this site is exceeding the gains because of the "free rider" issue. People can play and not pay. In an analysis of Matt's choices, the classic economist would conclude that Matt currently values the intangibles greater than his monetary cost difference.”
So, this economist would agree that his area of study inadequately measures MetaFilter’s worth. Ever more reason to expand economics. As you might imagine, I think that definition of economics is incorrect.
posted by raaka at 3:55 PM on November 26, 2001
“Given 1000 economists, there will be 10 theoretical economists with different theories on how to change the light bulb and 990 empirical economists laboring to determine which theory is the correct one, and everyone will still be in the dark.”
We’re well on our way here, with those sitting on both side of this particular fence about even.
“That is why it is dismal of course.”
No, Thomas Carlyle called it that after reading Malthus’ work. You’re right I simplifed the equation charting MetaFilter’s worth, but the basic point would be the same if I studied it for a few years. The gains he and the readers get from it are not measurable. An economist would say it isn’t worth very much.
“The reader's benefit is unrelated to the maintenance and the gains, as the reader isn't responsible for either of them. So you can't really drag what they gain from MeFi into the equation, as the costs(maintenance) and gains(amazon wishlist) are Matt's, not the readers. ”
I’d disagree with that since readers largely don’t support the site monetarily they don’t benefit from it. This essay was partially trying to address the value of information, community, networks; mostly gains readers recieve from MetaFilter by giving it their time.
“classic economist would tell you that the maintanence of this site is exceeding the gains because of the "free rider" issue. People can play and not pay. In an analysis of Matt's choices, the classic economist would conclude that Matt currently values the intangibles greater than his monetary cost difference.”
So, this economist would agree that his area of study inadequately measures MetaFilter’s worth. Ever more reason to expand economics. As you might imagine, I think that definition of economics is incorrect.
posted by raaka at 3:55 PM on November 26, 2001
So, this economist would agree that his area of study inadequately measures MetaFilter’s worth. Ever more reason to expand economics. As you might imagine, I think that definition of economics is incorrect.
This quote, and the statement "An economist would say [Metafilter] isn't worth very much." are entirely dead wrong. Once again, I stress: Economics is not just a study of monetary gain. That is an understanding of economics held by those who do not know much about it.
An economist would say that not all the monetary value of MetaFilter is being captured by Matt for a variety of reasons. MetaFilter, however, is obviously quite valuable to Matt because he is continuing to absorb losses to make it live. As well, Matt seems to value the current incarnation of MetaFilter more highly than some version that might earn more money than the present one. There are a number of ways that we could try to measure the current collective value of MetaFilter by looking at the "revealed value" of the enterprise as expressed by the participants' actions. This stuff is well-understood by economists.
Only a bad economist, or a non-economist, would make the mistake of assuming that net monetary gain = value. It's even worse to suppose that an entire field of study is that naive.
I strongly recommend reading the text I linked to earlier (available online in its entirety) to dispel economic misunderstandings. Just reading the first part of Chapter 1 is quite informative.
posted by marknau at 5:03 PM on November 26, 2001
This quote, and the statement "An economist would say [Metafilter] isn't worth very much." are entirely dead wrong. Once again, I stress: Economics is not just a study of monetary gain. That is an understanding of economics held by those who do not know much about it.
An economist would say that not all the monetary value of MetaFilter is being captured by Matt for a variety of reasons. MetaFilter, however, is obviously quite valuable to Matt because he is continuing to absorb losses to make it live. As well, Matt seems to value the current incarnation of MetaFilter more highly than some version that might earn more money than the present one. There are a number of ways that we could try to measure the current collective value of MetaFilter by looking at the "revealed value" of the enterprise as expressed by the participants' actions. This stuff is well-understood by economists.
Only a bad economist, or a non-economist, would make the mistake of assuming that net monetary gain = value. It's even worse to suppose that an entire field of study is that naive.
I strongly recommend reading the text I linked to earlier (available online in its entirety) to dispel economic misunderstandings. Just reading the first part of Chapter 1 is quite informative.
posted by marknau at 5:03 PM on November 26, 2001
“That is why it is dismal of course.”
No, Thomas Carlyle called it that after reading Malthus’ work.
I was referring to why I could consider it dismal; people start with a fine meal (the study of economics) and after a thorough digestion process to make it absorbable to the unschooled cillae are left with a pile that is less than pleasant.
Speaking of which,
The gains he and the readers get from it are not measurable. An economist would say it isn’t worth very much.
An economist measures value by the price or cost of the transaction. Since in this case there is no price for the reader, an economist could impute the value from the cost to Matt. The value has to be at least as great as the financial burden he is carrying. The minimum value is computable. It's the true value that is not measurable. I repeat again, NO economist would say that just because something wasn't measurable it isn't worth much.
Don't simplify your arguments for my benefit. I'm sure I'm not the most qualified economist on the MeFi block and I teach the stuff. We can handle complex thought.
posted by dness2 at 5:35 PM on November 26, 2001
No, Thomas Carlyle called it that after reading Malthus’ work.
I was referring to why I could consider it dismal; people start with a fine meal (the study of economics) and after a thorough digestion process to make it absorbable to the unschooled cillae are left with a pile that is less than pleasant.
Speaking of which,
The gains he and the readers get from it are not measurable. An economist would say it isn’t worth very much.
An economist measures value by the price or cost of the transaction. Since in this case there is no price for the reader, an economist could impute the value from the cost to Matt. The value has to be at least as great as the financial burden he is carrying. The minimum value is computable. It's the true value that is not measurable. I repeat again, NO economist would say that just because something wasn't measurable it isn't worth much.
Don't simplify your arguments for my benefit. I'm sure I'm not the most qualified economist on the MeFi block and I teach the stuff. We can handle complex thought.
posted by dness2 at 5:35 PM on November 26, 2001
I’ve read comments on this site in which people said all economic theory is too jumbled for them to understand. So, I tried and failed to adequately write a topic thread on economics. In other words:
“people start with a fine meal (the study of economics) and after a thorough digestion process to make it absorbable to the unschooled cillae are left with a pile that is less than pleasant.”
Mostly I’d go back and put market in front of every instance of worth and value.
“assuming that net monetary gain = value. It's even worse to suppose that an entire field of study is that naive.”
I don’t think I was saying that economics doesn’t understand value outside of price, only that it could be developed more.
What the essay is at least partially on about is expanding the understanding of measuring worth in the marketplace outside of price and payment. Obviously economists study this phenomenon. I know Gilman didn’t just open up a new school of economics.
This is what was interesting about it to me. I wonder if it made any impression on you.
posted by raaka at 12:00 AM on November 27, 2001
“people start with a fine meal (the study of economics) and after a thorough digestion process to make it absorbable to the unschooled cillae are left with a pile that is less than pleasant.”
Mostly I’d go back and put market in front of every instance of worth and value.
“assuming that net monetary gain = value. It's even worse to suppose that an entire field of study is that naive.”
I don’t think I was saying that economics doesn’t understand value outside of price, only that it could be developed more.
What the essay is at least partially on about is expanding the understanding of measuring worth in the marketplace outside of price and payment. Obviously economists study this phenomenon. I know Gilman didn’t just open up a new school of economics.
This is what was interesting about it to me. I wonder if it made any impression on you.
posted by raaka at 12:00 AM on November 27, 2001
But you're falling into the same trap the article is talking about. By pointing out MeFi's lack of "market" value because it's not in a market and equating that with a lack of worth, you are doing the same thing the article shuns. And the same thing economists have been trying to figure out how to avoid for at least 30 years. The Nobel Prize this year was given out for research into asymmetric information (ostensibly, I know there are other theories) which is a way of hiding value. The article is well-written but says basically the same thing you can find in any elementary economics textbook somewhere near the discussion of National Accounting Measures. Valuing the efforts of home-makers was a big (and never really solved) issue back in the 70's and 80's I remember. The issue at the individual level was how to handle taxes and the dependent wife.
I have observed on MeFi that it's better to shoot over people's head, risk missing everyone, and be happy to have a couple smartasses jump up, than shoot low, catch all of us and the kitchen sink, and still get into an argument that only the smartasses understand. I'm sure everyone understood the feces reference though. Or maybe not.. I got the cillae right, right? I'm very proud of that; no biology since high school.
posted by dness2 at 1:38 AM on November 27, 2001
I have observed on MeFi that it's better to shoot over people's head, risk missing everyone, and be happy to have a couple smartasses jump up, than shoot low, catch all of us and the kitchen sink, and still get into an argument that only the smartasses understand. I'm sure everyone understood the feces reference though. Or maybe not.. I got the cillae right, right? I'm very proud of that; no biology since high school.
posted by dness2 at 1:38 AM on November 27, 2001
raaka, the piece was interesting, if somewhat dated. To be honest, though (and this comes from someone who invests virtually nothing into the study of economics), I am under the (mis?)impression that economists have been busy Heisenberging their field for the last decade or more - mixing up a sorcerer's cocktail of classic + chaos + whatever else will at least describe what is happening - a CYA retreat from an economic Grand Unified Theory. Evolutionary economics, or something.
IOW, I think they are already fiddling with TWCBQ (That Which Cannot Be Quantified), and they are having as much trouble as everybody else has with Schrodinger's damned cat...
A more interesting discussion, perhaps, would be a less theoretical discourse involving the "local hook" part of your post, i.e., how will/can/should a new economic model absorb/reward/sustain a site like MeFi? Personally, I'm thinking corporate sponsorships and gated communities/services with single-bill access fees - actually a pretty un-utopian and decidedly un-democratic old school paradigm, highly anticipated by AOL/Microsoft flannel...and no, I don't like it either.
(Mainly, untrue to form, I didn't want to leave my only contribution to this thread a glib remark.)
posted by Opus Dark at 1:51 AM on November 27, 2001
IOW, I think they are already fiddling with TWCBQ (That Which Cannot Be Quantified), and they are having as much trouble as everybody else has with Schrodinger's damned cat...
A more interesting discussion, perhaps, would be a less theoretical discourse involving the "local hook" part of your post, i.e., how will/can/should a new economic model absorb/reward/sustain a site like MeFi? Personally, I'm thinking corporate sponsorships and gated communities/services with single-bill access fees - actually a pretty un-utopian and decidedly un-democratic old school paradigm, highly anticipated by AOL/Microsoft flannel...and no, I don't like it either.
(Mainly, untrue to form, I didn't want to leave my only contribution to this thread a glib remark.)
posted by Opus Dark at 1:51 AM on November 27, 2001
i am drawn to a joke.
what is the difference between sex for money, and sex for love?
sex for money is cheaper.
posted by Frasermoo at 4:02 AM on November 27, 2001
what is the difference between sex for money, and sex for love?
sex for money is cheaper.
posted by Frasermoo at 4:02 AM on November 27, 2001
MetaFilter doesn't have value, monetarily speaking.
Most of the best things in the world don't.
Economics is vastly inadequate to describe every area of life. We should just know this and move on.
posted by dagnyscott at 9:32 AM on November 27, 2001
Most of the best things in the world don't.
Economics is vastly inadequate to describe every area of life. We should just know this and move on.
posted by dagnyscott at 9:32 AM on November 27, 2001
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posted by holycola at 5:35 AM on November 26, 2001