hard heads soft hearts
Wednesday, May 02, 2012
Sasha Said - Reeling From The News.
. . .Remember the job I was telling you about? Nine days of unpaid training and the need to pass a bunch of proficiency tests, after which we were to start a part-time, no-benefits contract job for $9.50 an hour? Today I received a notice congratulating me on passing the final test. Unfortunately, the notice then went on to inform me that the project has been canceled. Just like that. There will be no jobs for anyone. No reason was given.I guess what I don't understand regarding the sneering tone toward ZMP workers is, what makes these people so sure that their contribution is positive? Surely it's possible that someone who at least tried to prevent the $3 trillion disaster in Iraq has made a more valuable ex ante contribution than an employed middle-class worker who kept his head down and nose clean? I don't begrudge anyone their well-paying job, what I don't get is the certainty that their market income reflects their actual contribution.
Also, it seems worth pointing that your MP can be highly dependent on fairly arbitrary decisions made by the people at the top. For example suppose your CEO is
So whether the active traders have a large positive MP, or negative MP, depends on a big macro decision by the person at the top, and the important point is that this is a type of decision for which leaders are *never* held accountable. Whether a leader chooses an active trading approach, or a passive index approach, the machine will produce large amounts of evidence why the choice of the leader was right/superior/inevitable. Whichever choice the leader makes, it will turn out to have been the right one in the minds of most people, at most times.
I'm not claiming that a benevolent dictator could dictate incomes more fairly and justly. What I'm saying is that market outcomes deserve respect but not reverence. We can believe that there's no better way of generating an initial presumptive allocation of rewards than the market, without believing the market to such an extent that we're willing to let people starve/go homeless because of our alleged certainty in their ZMP.
John Maynard Keynes - Chapter 12. The State of Long-Term Expectation (1936)
. . .The outstanding fact is the extreme precariousness of the basis of knowledge on which our estimates of prospective yield have to be made. Our knowledge of the factors which will govern the yield of an investment some years hence is usually very slight and often negligible. If we speak frankly, we have to admit that our basis of knowledge for estimating the yield ten years hence of a railway, a copper mine, a textile factory, the goodwill of a patent medicine, an Atlantic liner, a building in the City of London amounts to little and sometimes to nothing; or even five years hence. In fact, those who seriously attempt to make any such estimate are often so much in the minority that their behaviour does not govern the market.John C. Bogle - Don’t Count On It! The Perils of Numeracy (Princeton 10/18/2002)
(Via Sarah Kliff (Wonkblog)) Amy Berman (WapPo) - On living with inflammatory breast cancer
next post: 8/10/2012
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