I already agree that the available evidence and theoretical analysis give good reason to think that markets beat large-scale central planning.
That certainly wasn’t evident from this comment of yours.
If you’re hoping that the market will produce anything like a utility-maximizing outcome
The critical issue is the time horizon. In the short term the utility-maximizing move is to divide all the wealth equally. In the long term I would argue that we have evidence showing that markets do maximize utility, compared to the available alternatives.
Does it suggest that there might be a case for government intervention, perhaps including some diddling with prices in unusual cases, in order to come closer to maximizing total utility
First, governments just love diddling with prices. Google up why sugar is so expensive in the US. Or what happens to you if you produce raisins 8-/
Second, I am deeply suspicious of the claim that diddling with the prices is done in order to maximize total utility (of some sort). Based on historical experience, I expect that diddling with the prices aims to transfer wealth from some less politically powerful group to some more politically powerful group. Crony capitalism is a very popular thing nowadays.
That doesn’t mean Jiro’s suggestion is a good one.
Jiro is basically taking the paternalistic stance: “these people don’t know what’s good for them and I’m not going to allow them to do what I don’t like”. That’s not a economic argument, it’s a moral one and picking appropriate moral criteria you can justify any economic practice whatsoever (recall Proudhon’s “Property is theft”, for example).
That certainly wasn’t evident from this comment of yours.
How fortunate, then, that I made other comments as well.
governments just love diddling with prices
I know. And they do diddle with prices. And so all the empirical evidence we have that free markets work well is really evidence that free markets with a whole lot of assorted government intervention work well.
I am deeply suspicious of the claim that diddling with the prices is done in order to maximize total utility
I wasn’t claiming (or at least wasn’t intending to claim) that it generally is. Only that it could be. An argument of the form “we could improve what markets do by doing X” is not invalidated by the fact that governments often do X for bad reasons.
picking appropriate moral criteria you can justify any economic practice whatsoever
No doubt. But if we’re going to argue about what should be done, that’s inevitably partly an argument about values. We can pretend it isn’t, e.g. by settling on some not-explicitly-value-laden thing to maximize—say, total wealth after 100 years—but that really just amounts to choosing values that only care about total wealth after 100 years.
That certainly wasn’t evident from this comment of yours.
The critical issue is the time horizon. In the short term the utility-maximizing move is to divide all the wealth equally. In the long term I would argue that we have evidence showing that markets do maximize utility, compared to the available alternatives.
First, governments just love diddling with prices. Google up why sugar is so expensive in the US. Or what happens to you if you produce raisins 8-/
Second, I am deeply suspicious of the claim that diddling with the prices is done in order to maximize total utility (of some sort). Based on historical experience, I expect that diddling with the prices aims to transfer wealth from some less politically powerful group to some more politically powerful group. Crony capitalism is a very popular thing nowadays.
Jiro is basically taking the paternalistic stance: “these people don’t know what’s good for them and I’m not going to allow them to do what I don’t like”. That’s not a economic argument, it’s a moral one and picking appropriate moral criteria you can justify any economic practice whatsoever (recall Proudhon’s “Property is theft”, for example).
How fortunate, then, that I made other comments as well.
I know. And they do diddle with prices. And so all the empirical evidence we have that free markets work well is really evidence that free markets with a whole lot of assorted government intervention work well.
I wasn’t claiming (or at least wasn’t intending to claim) that it generally is. Only that it could be. An argument of the form “we could improve what markets do by doing X” is not invalidated by the fact that governments often do X for bad reasons.
No doubt. But if we’re going to argue about what should be done, that’s inevitably partly an argument about values. We can pretend it isn’t, e.g. by settling on some not-explicitly-value-laden thing to maximize—say, total wealth after 100 years—but that really just amounts to choosing values that only care about total wealth after 100 years.