Prestige Economics and Valuation Economics

Note: I'm planning on dividing this article into three separate articles:
1. This article will be renamed "A Comparison of Political Economics and Market Economics"
2. "Political Economics" (the study and practice of the forming of policy concerning an economic system)
3. "Market Economics" (the study and the real behavior of the markets of goods and services)

_The Theory of the Leisure Class: An Economic Study of Institutions_ (1899), by Thorstein Veblen

_The Decline of the West_ by Oswald Spengler

The Definitive Work on the Nature of Authority by Yours Truly

Prestige Economics[]

The academic study of Economics began as "Political Economics", which indicates some of the sources of error in applying Economics to the economic planning and expenditure of sometimes scarce resources by individuals. Nation-States historically have rarely lacked for large supplies of labor, currency, credit, a general pool of valuable commodities of some type, the ability to plan all strategies at great length and without hurry, and the ability to create entirely one-sided contracts with a large number of smaller economic players. Private citizens rarely, if ever, have had such huge advantages to bring to bear in economic conflict or cooperation.

Instead, classical Economics more resembles the study of Warfare Logistics, in that a central authority must distribute resources and troops in order to confront an enemy which is antithetical in its values and systems of valuation. Thus politicians have "war chests", every major expenditure of government funds is a "War on..." something or other, and every issue of expenditures is a matter of adversarial competition of one form or another. In classical Economics, we are constantly at war, and most often internally; we are constantly at war with ourselves. That is, indeed, a "dismal science".

Veblen Goods[]

Veblen presents the idea that "Prestige" is the singular most sought commodity by any economic player, and that valuation goods are generally taken for granted, no matter how fundamentally necessary they are to the lifestyle of leisure and conspicuous consumption. The less that one produces the goods and services of real utility, the greater the prestige one acquires. This picture of Political Economics, a picture of Nation-States, conquest, leisure, prestige, and wartime logistics can be contrasted against a (sadly) completely theoretical Economics of valuation and populations. There are unfortunate implications hidden in the premises of Prestige Economics that I hope to outline as well (such as the relationship between increasingly inaccessible social mobility and dangerously low birth rates), but there are two main questions I want to ask.

1. Can the prestige economy continue to propagate itself beyond the Agricultural and Industrial Ages, into the Information Age, given that all players must become increasingly self-aware, both individually and collectively?

2. If not, will cultures that have adopted the Prestige Economy be able to adapt to the changes in the definition of "Prestige", or will entirely new "Valuation Culture" institutions have to spring up after Prestige Economics has been discredited?

An additional question has occurred to me: are the Veblen goods an emphasis of prestige, or of autonomy and authority?

"If you're so smart, why aren't you rich?"

"If you're so rich, why are you so stupid?"

The Relationship between Prestige Economics and Valuation Economics[]

Prestige can obviously be considered a value. We can make certain sacrifices of other values in order to obtain prestige, whether that is constructive, as when someone acquires a higher level of formal education, or destructive, in the commission of a crime such as robbery or murder. The long-term, more successful attainment of prestige however, allows something no other commodity can offer: the ability to redefine values in the social dialogue in a meaningful and lasting way.

In turn, without the other, more fundamental values of a society, which are subject to these shifting priorities and fads, prestige has no real value, and can be a real danger to those who formerly exercised it. The value decisions made by an elite can help to form a society which constantly improves the well-being of its members, or can undermine any efforts to simply maintain the status quo, leading to widespread economic, political, and social failure. This is where the social dialogue, values, memes, ideologies, policies, and the prestige that shape them all become critical.

Evolutionary Biology as an Analogy to the Relationship[]

If we consider all the contents of the social dialogue as memes, and memes as an analogy to genes, then we can liken the Prestige Economy as all the matters relating to the "germ line" of a society's values. These are the issues of:

who rules,
why,
what decisions they make as to value,
how the members of an "elite" or "ruling class" relate to each other and other members of society, and
how quickly and radically values can be added, removed, or changed.

Valuation Economics[]

_Principles of Economics_ by Alfred Marshall

(The following text is taken directly and verbatim from The Library of Economics and Liberty page cited above. I have made a short selection in the spirit of Fair Use.)

BOOK I, CHAPTER II

THE SUBSTANCE OF ECONOMICS.
I.II.1
§ 1. Economics is a study of men as they live and move and think in the ordinary
business of life. But it concerns itself chiefly with those motives which
affect, most powerfully and most steadily, man's conduct in the business part of
his life. Everyone who is worth anything carries his higher nature with him into
business; and, there as elsewhere, he is influenced by his personal affections,
by his conceptions of duty and his reverence for high ideals. And it is true
that the best energies of the ablest inventors and organizers of improved
methods and appliances are stimulated by a noble emulation more than by any love
of wealth for its own sake. But, for all that, the steadiest motive to ordinary
business work is the desire for the pay which is the material reward of work.
The pay may be on its way to be spent selfishly or unselfishly, for noble or
base ends; and here the variety of human nature comes into play. But the motive
is supplied by a definite amount of money: and it is this definite and exact
money measurement of the steadiest motives in business life, which has enabled
economics far to outrun every other branch of the study of man. Just as the
chemist's fine balance has made chemistry more exact than most other physical
sciences; so this economist's balance, rough and imperfect as it is, has made
economics more exact than any other branch of social science. But of course
economics cannot be compared with the exact physical sciences: for it deals
with the ever changing and subtle forces of human nature*4.

4. Some remarks on the relation of economics to the sum total of social science
will be found in 
Appendix C, 1, 2.

This, however, is completely my own snarky take on modern Economics. Note that I place a greater emphasis than Marshall in terms of the relation of wealth to money.

"Economics is not the study of the distribution of limited resources. That's
puerile nonsense. Economics is the study of exchanges of value, either in the
consideration of one good's relative worth to another, and whether such an
exchange is worthwhile, in the actual exchange of goods between persons or
groups, or in an exchange of values with the environment, such as digging
a well, or hunting and gathering food. This sort of informal economic
behavior has existed as long as Mankind has existed!"
    -- Anon. of Ibid.

Valuation Economics and Crime[]

The Definition of "Crime"[]

Under Valuation Economics, crime can be defined as "the unauthorized appropriation, destruction of, or access to wealth". This also implies that a change in the distribution of wealth can have a profound effect on forms and rates of criminal behavior. This makes the importance of changes in income secondary to changes in the wealth which can be accessed for the same number of dollars. New and emerging forms of wealth (and related crimes) can have a profound impact on rates of crime without any change in income at all.

Exchanges of value can take many forms, and a proper study of these exchanges can address crimes as economic behavior.

Criminal exchanges of value can be real, unilateral theft of goods and services. They can also be the consideration of such acts, the contemplation and planning giving rise to internal and intangible satisfactions, or to the commission of such acts, out of motivations of frustration, boredom, or desire for real gains. Note that Veblen's outlook gives us insight into the nature of crimes of the rich and powerful as well, as they are just as motivated by the need for satisfaction of desires of prestige, and may commit just as heinous an act as some other person motivated by more tangible frustrations.

Frustration[]

Crimes of passion are often motivated by frustration with the limited gains to be had through accepted and "legitimate" means, the obstacles to be overcome, or more broadly by a lack of satisfaction of felt needs and wants, whether "reasonable" or otherwise.

Boredom[]

Boredom often gives rise to crimes with greater planning, and the planning itself may achieve a certain amount of satisfaction, in that it alone can relieve the boredom which caused planning to begin. If this is all that is necessary to achieve satisfaction, the goal is obtained without the actual commission of any criminal act, and society at large has no need to respond; there is no real loss to the larger society, no need for punishment or deterrence, and therefore no need for the expenditure of social resources. A crime which is totally imaginary and virtual is not, in itself, a threat to anyone.

If, however, boredom has not been entirely relieved, or other satisfactions are still lacking, the crime, however well or poorly planned, may be attempted and executed. This actual and real crime entails all the social costs outlined above, with all the negative impacts to society and the economy that this implies.

Gain and Satisfaction[]

The most problematic aspect of crime is its real ability to change who holds wealth and power, or at least the relative measures of wealth and power held in the possession of the criminal before and after the criminal act. As long as the gains to be made seem to vastly outweigh the risks and losses of being punished, there is no economic or psychological reason to believe that any but the most draconian and socially expensive punishments will have any effect on the choice of whether or not to commit a crime. Tangible and intangible poverty all but guarantee crimes will continue to occur.

Virtual Satisfactions and Crime[]

Virtual Mayhem and Real Crime: (VES); (DOOM)

While the evidence I present above is more anecdotal than formal and scientific, it presents the fascinating possibility that virtual satisfactions have already had an impact in the quantity and quality of criminal behavior in the real world. I would like to ask that this initial foray into the subject be followed up by persons of greater formal education, resources, and "legitimacy" than myself. Just remember that I legitimately possess the little black box that produced this concept, as you may have need of more like it in the future! P:D

Be advised, however, that there are some caveats necessary to consider. First, the accelerating rate of technological development more broadly may also have had an impact on the nature of crime, particularly the abundance of cameras, cellphones, and cellphones with cameras. Second, the virtualization of crime is a two-edged sword; it can create a laboratory for the elaboration and planning of real crimes to gain real wealth and power, or it can be used to satisfy the more transient problems of boredom and frustration that may arise in even a society of equability and abundance.

"Stay free, they got no vids in jail, my brother!"

http://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2012/crime-in-the-u.s.-2012/tables/1tabledatadecoverviewpdf/table_1_crime_in_the_united_states_by_volume_and_rate_per_100000_inhabitants_1993-2012.xls

https://www.census.gov/hhes/computer/files/2012/Computer_Use_Infographic_FINAL.pdf

The two references above are meant to show a connection between increases in the availability of residential Internet services, and the continuing decrease in violent crime rates. It is all but inarguable that increases of the availability of wealth result in decreases in crime.

A Healthy Economy[]

Wikipedia:Human rights in the Soviet Union

At the top of the referred page, we see two contrasting definitions of wealth and political economics, and I'd like to point out that both approaches have a distinct impact on the autonomy and self-determination of a people. If we like to believe that we live in a free-market society, in which economic choice is maximized as an optimum, than autonomy and self-determination must be an integral form of wealth in such an economy. Much of the fury of our society today is rightfully directed at economic and income inequality for precisely this reason: if incomes are not distributed by the market in such a way as to promote such autonomy, or if economic inequalities begin to have a negative impact on the civil and political rights of a substantial portion of the populace, than the health of an economy that is assumed to be "free" can easily be called into question.

Valuation Economics, Meritocracy, and Transparency[]

transparency.org

Positive and negative correlations of: potent expressions of popular will and values, meritocracy, economic growth and stability; autocracy and ideology, corruption and cronyism, debt and economic instability

Bits and Pieces[]

(Biology with Signals)

(roughing out)

Symbiosis (two curved lines forming a circle) My own favorite example of an equal trade which is greater than zero sum is "Two Men in a Desert". Two men are stranded in the desert and happen upon each other. At that point, they are one week away from escaping its dangers. The first man has two weeks worth of water, while the other has a two-week supply of food. Neither can survive the journey with what he has. The monetary valuation of the commodities is of no consequence; this is a matter of life and death.