A friend from Argentina once told me Argentina keeps its best wines for themselves and exports the mediocre stuff, even at the sake of profits.
Similarly, a friend from Turkey once said he couldn’t find good Turkish olives outside of Turkey because “Turks are terrible businessmen and keep the best olives to themselves.”
These are anecdotal and might be untrue but I liked the idea.
At an individual level, it’s irrational to cooperate in a prisoner’s dilemma yet experiments show people cooperate.
Contributing to open source projects may fall into this category.
Have you observed any obvious behavior that goes counter to profit maximization? Any cool examples?
Trump.
Many governments cut social programs that would result in net benefits economically for society (e.g. disability services that mean more people can maintain jobs, education, family planning, public transit, all mean more money is being made overall including more taxes going to the government). But it isn’t a direct enough benefit and it’s hard to quantify, whereas slashing funding feels like immediate savings.
Imagine no longer paying for your phone service in order to save money, then being confused about why none of the jobs you applied to are calling you back. Same logic.
Well said. Using the US as a super obvious example, there’s been data for a long time that offering free publicly available birth control had a MASSIVE ROI. And yet we have piles of idiots out here saying “I don’t want my taxes going up for pay for some stranger’s birth control!”.
We can even set aside considering a “decent human” aspect where we’re happy to save women and men from PILES of stress, strife, and burden. It just makes a fuckload of economic sense if you’re not dumb or some evil Handmaiden’s Tale-style piece of shit.
Gambling.
Heard the same (keep the best for themselves, only sell the inferior stuff) about Spanish olive oil, Italian pasta, and Chinese everything.
Gawd forbid people actually enjoy the things they produce rather than sell them abroad.for maximum profit.
I don’t know if they still do it but when I was a kid in the 70’s they would dump semi trailer tanks of milk in the ditch to maintain pricing and supply.
So typically stuff like that happens if supply outstrips demand, and selling the excess would drive prices so low as to cause the farmers to actually lose money overall. Dumping excess keeps prices balanced, so it at least makes sense from an economic standpoint.
Buying locally will always be better than what you get in the supermarket. I think that’s true for any country.
It’s the stuff that’s produced on a smaller scale and can be harvestet ripe.
Others in the thread have already hinted at this fact: logic and optimization are lasers that can be pointed at anything. Point it towards money and of course it’s irrational to forfeit profits for good wine. Point it towards the good wine and of course it’s irrational to forfeit evenings drinking good wine with friends.
Put another way, one man’s trash is another man’s treasure.
Of course, this doesn’t mean most people don’t share some common values. Most people want both wine and profits!
Not only is logic and optimization a laser, but optimization can happen at many levels.
There are many experiments where the most egg-laying hens are selected and bred, but often these hens are aggressive and kill each other. However, when whole groups of hens (e.g. a group of 5 hens) are chosen, some of the hens do not lay eggs but are peace-makers and create the perfect environment for egg-laying eggs to lay many eggs.
In this example, optimization happened at the group-level and not at the individual level.
Similarly, rich people who leave high-tax societies end up in a ‘Lamborghini in a road made of mud’ situation. However, if rich people contribute to the societies that made them rich in the first place, everyone benefits. There are lower anxiety, depression, and suicide rates for everyone (including the rich) in more egalitarian societies. Here you can see the laser and the levels: the laser is either pointed at the luxury car or the quality of life, while the level is either the individual or whole society.
Group-level selection seems irrational for those who think that being an egotist is the only way.
Of course, life is not just about lasers and levels. It’s about values. Rationality is a tool. It can help us live valued lives or trip us up. If you want good wine, good cheese, money to buy something else, good friends, and a good society, that’s what matters.
Nah that’s a cop out. There are legit irrationalities that do not fall into this and i say that as a contemporary utilitarian.
Someone mentioned gambling in the comments and thats exactly one of such examples - the invisible gains here are almost impossible to justify rationally as in the entertainment provided by gambling can be replicated without the dangers of it very easily. As in mathematically speaking playing fair return games will yield the same or higher satisfaction than low yield games meaning low yields games are objectively irrational.
Both of those seems very rational in term of maximazing value.
This.
It’s irrational to consider maximum monetary gain to be the only best outcome. Why? What’s the goal? Money is only means to an end, not intrinsically worth anything.
Put another way, if the Argentinians cherish good wine, how are they better off with slightly more money and mediocre wine? (I guess they could use the profits to buy good wine?)
Totally agree. That’s why I love it so much. Like a big “fuck you” to economic theory and profit maximization.
The UK under Thatcher utterly anihilated its own manufacturing sector at a huge longterm economic detriment seemingly just to destroy labour unions.
The UK manufacturing sector for raw materials and basic products was on the way out anyway due to costs being so low in Asia, so it was more to be able to shut it down and save the government from needing to bail it out while also destroying labour unions while they were at it, hence why the advanced manufacturers (JCB, Rolls Royce, etc.) were largely unaffected
It’s only irrational to cooperate in a prisoner’s dilemma game if the rewards are set appropriately for that.
If you raise the individual rewards of the cooperation above those of the individual rewards people would get for defecting, people will in fact cooperate.
I’m sure you could write an entire collection of books on the irrationality of Brexit.
As James O’Brien graciously puts it: “We are the first country in history to have placed economic sanctions upon itself”
Besides the dumbass tariffs imposed by the US on everyone, including an island that only has penguins?
You can only get the best result in the prisoners dilemma by working with others.
Believing that humans make rational economic decisions is pretty irrational economically.
As is centering economics on a theory that ignores the means of production.
