Producerism

Long time between drinks! I've had a bunch of things keep me busy in the meantime, and a general lack of doing stuff bloggable, but figured it was worth keeping this from stagnating by posting an update to cover a few topics that had come up recently.

Firstly, as hinted by the picture, I finally got around to reading Atlas Shrugged. I've been meaning to catch up on more classic, controversial stories, and after repeatedly coming up in the recent US elections, I figured it was worth a shot. The only thing I'd heard about it was the quote about it and Lord of the Rings - so I expected rampant free markets but not much else.

While it certainly takes it to the extreme (Ayn Rand seems like she'd have been an interesting person to talk to, if not insufferable), I think there's a few things to take from it in a more recent climate. The characters are a bit too...rational, I guess, for it to even approximate reality - not that that's a bad thing, just that I don't see that the real world has enough grounding in rationality for a bunch of the ideas to actually work - especially as technology results in the scope/complexity of businesses increasing, so the size increases and the influence one person can have over direction decreases.

Image from Wikipedia

At the same time as reading it however, I was also doing a Coursera course on Economics for Scientists - I'd always been slightly interested in at least the scientific modelling behind it, and given that I'm now in Switzerland, it seemed like a good reason to learn more. The thing that struck me as interesting, given Atlas Shrugged and news stories, was that, for pretty much every time a Producer produced a surplus, there was also a related Consumer surplus. This assumes a few things: e.g. that consumers are rational(ish) and won't spend more than the gained value from buying something, that producers sell at one price (no discrimination), that producers are trying to maximise their profit, ... but in general, the more a producer gains from selling something, it's likely correlated to how much consumers (as a whole) also gain.

This is also one of the premises in Rand's book, but given all the recent dissent towards wealthy producers (see: Occupy movements, anger towards Australian mining magnates, and general dislike for retailers making money) it's interesting to see that the general public consensus is the opposite: that earning more means you must be cheating people somewhere. Sure, there are some places were this is true (e.g. Libor rate fixing) but, at least for people making profits from selling actual goods (Steve Jobs, Gina Rinehart, James Packer, ...), it seems much easier/more popular to demonize based on not sharing the wealth, without acknowledging the corollary, that as a side effect of getting to that wealth, the population as a whole has gained considerably too (people now have extra iron, and iPhones, ...).

Maybe you can claim that they actually lied/cheated/stole their way there, but I feel that's a difficult position to rationally take - it seems instead that it's too easy to round the Consumer's surplus (split between many, so individually quite small) down to zero, and concentrate just on the Producer's (split between few, so much larger). I just hope that rather than trying to bring down profit-makers, we can instead use the surplus we get from them, and encourage competition from others that just increases everyone's standards as a whole.

A question to leave those who've read this far, and I look forward to thoughts in the comments:

Assume my tax bracket is 30%. Is it better to (a) donate $300 to charity, or (b) spend $300 on my own productivity that will make me $1000 more profitable per year?

That's enough thinking for one day, enjoy a tilt-shift view of Zurich :)

Meanwhile, to lighten things a bit and recap on other things I've read since my last Kindle update:

• 1Q84: an entertaining read if you want to read to have your mind pulled in unusual directions.
• Ready Player One: definite read if you enjoy 70s/80s gaming memorabilia, but otherwise, maybe wait for the movie, which should be good. Halting State felt similar(ish), more serious though nothing special.
• There But For The: Weird. Nothing really happened, but it never felt like it should, so kind of relaxing. But nice to finally feel like I'm reading art, rather than consumables.
• The Contotionists Hand: Recommended as Palahniuk-esque, not as good but lived up to the genre, so not bad if you've run out of Chuck to read.
• The Fear Index / Fifth Avenue: Both wall-street-style finance/thriller/action, I'd class as airport novels but not as consumable as, say, Dan Brown. Maybe for people who fantasize about running a hedge fund.