[1] https://en.wikipedia.org/wiki/Dynamic_Analysis_and_Replannin...
This is a predominantly America-specific piece of propaganda, and it's pretty recent.
Adam Smith's ideas are primarily arguments against mercantilism (e.g. things like using tariffs to wield self-interested state power), something he showed to be against the common good. The "invisible hand" concept is used to show how self-interested action can, under conditions of *competitive markets*, lead to unintentional alignment with the common good.
Obviously that's a significant departure from the way it's commonly used today, where Thiel's book has influenced so many entrepreneurs into believing Monopolies are Good.
But the history of this is very Cold War-influenced, where "free markets" were politically positioned as alternatives to the USSR's "planned economy", and slowly pushed to depart further and further from Adam Smith's original argument about moral philosophy.
It has been funny to watch the rise of "China is beating us" rhetoric against the steady backdrop of "mercantilism is obsolete/bad" dogma, because the elephant in the room is that China has been running a textbook mercantilist playbook.
And then externally Chinese policy is oriented around suppressing the value of its currency, which is basically a monopolist's tactic--artificially lowered prices in order to crowd out competition.
I think that's mercantilist-ish, but kind of a modern version?
It's definitely the opposite of what the US does, the currency is the world reserve and therefore drives the price of the dollar above what it would be without trade, which I guess makes exporting from the US much more difficult?
Anyone who is an expert in global economics please correct me here :)
Remember, governments have a monopoly in areas of life that impact everybody constantly. Private monopolies do not, in every case you can simply ignore them and not purchase their products, and by doing so you exert more control over them than you do casting a meaningless vote every few years.
The idea of democracy being will of the people is pure fantasy. It's useful to prevent governments from doing really bad things, that's it. It doesn't even matter who you vote for, broadly speaking. Just that you are able to exert that pressure.
Haven't read his book, but the idea that monopolies are good isn't typically made in a vacuum, it's made relative to alternatives, most often "ham-fisted government intervention". It's easier to take down a badly behaving monopoly than to change government, so believing monopolies are better than the alternatives seems like a decent heuristic.
What? How is the first alternative poor government instead of multipolar competing companies? When was the last time a Monopoly was actually broken up in the US? ATT/Bell 50 years ago? lol
Over the past few centuries, countless new economic structures and strategies have been discovered and practiced. The rewards for the same action today and in the past can be completely different due to this.
So to me, if someone claimed more than a few decades ago that certain economic strategies and structures are good or bad, its simply not worth listening to them, unless someone reconfirms that the old finding still holds with the latest range of strategies. In that case, the credit and citation goes to that new someone, not the ghosts of the past.
[1] A good interactive demo https://ncase.me/trust/
As you point out, it is all game theory.
But things that arrange for the game to be more beneficial to everyone, that align our interests more, deserve to be called "good", regardless of their inability to universally do so.
The latter would be an impossible bar for anything.
Where I find things frustrating, is when someone thinks because something is "good", it somehow becomes "enough". (Think, capitalized versions of different economic schools of thought.)
Game theory is just math. As with any math, the calculations can all work out, but that says nothing of how it reflects nature. All you can say is that if the axioms are all true, then this is the necessary outcome. Look for string theory as a cautionary tale here.
Game theory assumes rational systems. But we have over 6 decades of behavior science which contradicts that fundamental assumption. Economic behavior is not necessarily rational, and subsequently it is not inherently game theoretic. You will find plenty of dogmatic, idealistic, superstitious, counter productive, etc. behaviors in an economy. You need psychology, and not just math, to describe the economics which happens in the real world.
> Hard to call such actors rational, but that does not stop as from studying them.
This is precisely why I object to your first post. “Shut up and do the math” has not done the wonders which string theorists had hoped. Game theory is a perfectly fine way to mathematics, and to study certain strategies, but it tells us nothing about the nature of economies in the real world.
It was not that great for sub groups within developed nations.
The original thesis believed that people would be retrained into other equally well paying roles.
Turns out people can’t retrain into new domains, and led to under employment.
That some workers lost their jobs is a symptom of any change. I don't know why people always get upset people losing their jobs. It's like death, if no one died relatively few people would be born. If you resist job losses you reduce overall employment and economic development.
Having to repeatedly restart your career is risky, painful, and demoralizing. I have no problem seeing why people don't like that and why it can lead to populist backlash or even violent revolutions (as it did in the past).
By the way, to address your closing comment: people don't like dying either and tend to get upset when others die?
The sad part is that industrializing societies have not been very good at reconciling the benefits with the costs. The benefits first go to a select few and have seeped out to the masses slowly. Railroads in the US are a good example. The wealth accumulated by the Vanderbilts, Hills and Harrimans, did not get redistributed in any kind of equitable manner. However, everyday people did eventually gain a lot of benefit form of those railroads through economic expansion. (None of which address the loss of the native Americans, whose losses should also be part of the equation.)
In the abstract, sure. But not when you're on the receiving end. It's like with NIMBYism: we all roll our eyes at NIMBYs until it's actually our own backyard. You're not going to convince a coal miner that they're better off learning to code. You're not going to convince a software engineer that they're better off in the mines.
Or is this just some sort of PC bullshit, that we can't talk about this sort of progress without carefully lamenting job losses? If you're not useful doing a job, why should you be employed in it? That's the bottom line.
That's a "statistic" you're pulling out of your butt, and it's doing a lot of work. No one ever knows if something like that will actually happen.
It could actually turn out that AI sacrifices 100 engineering jobs for 10 low-level service or prostitution jobs and a crap-ton of wealth to those already rich.
> The drivers suffer from that, but the net win for society is so plainly obvious that it's a better investment to retrain the driver or just pay the off rather than support a job that dying anyways.
But what actually happens is our free-market society doesn't give a shit. No meaningful retraining happens, no meaningful effort goes into cushioning the blow for the "horse and buggy driver." Our society (or more accurately, the elites in charge) go tell those harmed to fuck off and deal with it.
Maybe in the US, but in other countries those things actually happen. It's a political issue, not a moral issue with technology.
That's where wealth redistribution (Taxation) comes in. The USA is not good at progressive taxation, but everyone could be better off if it were implemented properly.
The top 10 percent of incomes pay 76% of all income taxes, the top 5% pays around 55% of all income tax.
I would say it’s pretty progressive.