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[Great Order]

It’s just like any other system; it looks good on paper, but whenever people get involved it gets messed up, because people don’t act in optimum ways for the system, they act in optimum ways for themselves.

No, they don't. They act in what they *think* is the optimum way for themselves.

It's like the idea of the informed, rational consumer - People aren't informed, and they aren't rational. If we were, we wouldn't have things like "Brand loyalty" mucking up the perfect free market principles.

[Strongpoint]

Can you prove that the optimum way to act even exists? What is optimum? Something decided by God(s)\laws of the universe? But then how can we know that the optimum wouldn't be humans committing a joint suicide leaving Earth to more rational species to evolve?

[anewaname]

Well, "the optimum way" is the result of reasoning, where an individual considers and assigns a weight all of the "reasons" they can imagine should be weighed. Just because any two people came to an agreement on an "optimal way", does not mean their reasons were weighted the same.

Like great order said, "optimum way for themselves", which means many people could choose the same optimal way, but have different reasons for that choice.

This is why transparency matters for decisions effecting a group. People can choose to mostly accept how a person weighs each "reason", but if the data is obscured, it becomes easier for the grift that most politicians involve themselves in.

[lemon10]

Nah, they don't even do that (see: the entire existence of emotions), they act in the "optimal way" for what evolution and their genes "think" is good for their survival, largely based on the ancestral environment (aka, caveman shit) humans evolved in.
They don't logically tally up if they should go sleep with someone, if they should protect their kid, or if they should get road rage and go try to kill the person in the car behind them.

If your logic is sufficiently inconvenient to this "optimal" evolutionary way? Yeah, your logic and values just gets thrown out the window as needed.
---
Part of this is that people work to gain power to help themselves and their family, its just good evolutionary sense, especially since historically if you don't someone else will instead, and then you starve to death cause they get all the food.

As you say, stuff like transparency, checks and balances, internal rules, norms, laws, ect, all help to counter institutional corruption from people being selfish.
Ultimately though these organizations are run by people, and these can and will all be overcome and break down given sufficient time, and once corruption gets in said organization will resist attempts to get rid of it.

Of course stopping regulatory capture is a whole 'nother can of worms, one that the US has in large part failed at by this point.

[McTraveller]

That overcomplicates things.  Economic optimum starts with achieving some result with the lowest expenditure of resources.  The bonus level is "everyone is able to get the goods and services they want."

So an optimum economy is able to produce goods and services essentially on demand and get them delivered to the people that want them, using as few resources as possible. Everything else is sentimental.

Note also this doesn't factor in what is the most ethical or anything - it's effectively just an energy equation.  The sentimental stuff comes in when talking about the merits of the "desired result" - but that's not economics.

[wobbly]

Economic optimum starts with achieving some result with the lowest expenditure of resources.

From who's perspective? If we divide the stakeholders into 4 groups: The business, the employees, the customers, other interacting businesess? Who's optimum are we actually talking about? Because quite often those are competing optimums.

So an optimum economy is able to produce goods and services essentially on demand and get them delivered to the people that want them, using as few resources as possible. Everything else is sentimental.

Note also this doesn't factor in what is the most ethical or anything - it's effectively just an energy equation.  The sentimental stuff comes in when talking about the merits of the "desired result" - but that's not economics.

I'd argue that what is "economics" is completely dependent on which economist's definition you are using, and looking at economics as a pure efficiency equation is a modern trend. There are economic definitions where the sentimental stuff is the actual point of a strong economy.

[McTraveller]

Material resource consumption doesn't depend on "perspective."  Regardless if you are a business, an employee, a customer, affected third-parties... anything that can be done for fewer resources is better.

If I had to guess I think you are talking about externalities - such as if you are "wasteful" today then maybe you can use fewer "personal" resources, but you are actually using more total resources.  For example, a process that is very polluting may let you make more widgets per unit time or something, but the total resources are still consumed; the accounting of it doesn't change the usage.

[wobbly]

Nothing in your post said "material" resource. My time as an employee is a "resource". The money I pay as a customer is a "resource". The mental effort/energy/stress I put into a job is a resource. In your original post "result" is also dependent on perspective. What is the "desired result" of the housing market. Is it to house as many people as possible? Is is to give more comfortable housing to 90% of the population, and sacrifice 10% of the population? Is it to give best return to the investor?

Every, optimization equation, optimizes around "something", and in this case opitomizes for "someone" or "some group".

Edit: Look, I may have never finished university, but I was an engineering student not an economics student. I know how optimization equations actually work. You don't "optimize" you optimize around something. It's never "maximum output" for "mimimum input", there's a process where you decide which inputs you need to minimize and which inputs you have in excess. And on the output side you are always maximizing on some "desired output". In a simple case, industrial processes create "product" and "waste". You are maximizing on the product not "product + waste". Every optimization equation has a set of specs you are optimizing on that are completely dependent on the desired outcome.

[McTraveller]

We're... saying the same thing I think. The distinction is I'm saying that economics as a whole is about total optimum, where you are saying (and I agree) that participants are often only looking at some definition of local optimum.  A business optimizing for output but not caring about waste is a local optimum, at the potential expense of a global one.

We are in agreement that our current society tends to focus on those "local" effects often at the expense of the global ones.  Housing is indeed a great example; you get competing interests between what are increasingly corporate builders versus the interests of individuals and of communities.  Those builders are optimizing local profits over global ones, and individuals and communities are just trying to have housing while putting the lowest portion of their income (effort/resources) as possible.

The base point is if there are inefficiencies in the economy - like having to spend "all your income on housing" then the total economy is slow, because there isn't enough resource left to work on other things.

[wobbly]

Probably we agree on more than we disagree on. I've enjoyed chatting but will probably chill on this subject and just read what others have to say. I suspect what Trump has installed for you in the US will screw you, the American people and the global economy and there is nothing either of us can do but enjoy (or not enjoy) the fireworks. Anyways despite our disagreements(?). I enjoyed chatting with you. Best of luck and hope something in the economy bucks the current trend.

[wobbly]

Ok said I was going to chill and ignore this thread, but I thought I'd post this article as an example of how normalized slave labour has become.

https://www.abc.net.au/news/2024-12-25/chinese-company-byd-factory-shut-down-forced-labour/104762358

[Maximum Spin]

Ok said I was going to chill and ignore this thread, but I thought I'd post this article as an example of how normalized slave labour has become.

https://www.abc.net.au/news/2024-12-25/chinese-company-byd-factory-shut-down-forced-labour/104762358

I don't think it ever really stopped being.

[hector13]

I mean, people are expected to work half their waking life 5 days in 7, plus commuting.