Topic 11 | Econproph [Comp. Systems 2017]

For this topic discussion, there are two readings. We are trying to take a step back here and get a big-picture perspective of the modern US economy. In particular, these two posts take a look at things that don’t show up in everyday reporting or discussion of the economy or the economic system.

In the first, Umair Haque explores the importance of trust in an economy. He asserts that trust has seriously deteriorated in the US with the result that the US has moved from a constructive capitalism to an extractive capitalism that is essentially devouring itself:

You might think: trust isn’t that important. It’s just soft stuff! You can’t touch it or taste it or smell it, like, say, fresh money, a gleaming new car, apps. But trust precedes all those. Without it, the money doesn’t get spent, the goods don’t get made, the investments don’t happen. Do you spend much of yourself on what and who you don’t trust? Your money, at stores? Your time, with coworkers, Your love, with people? Perhaps you see the point. Trust is a kind of capital that precedes money and effort and ideas, financial and human and intellectual capital.

So there is a link. Somehow, suspicious of each other to the last, the American economy has turned extractive: GDP “grows”, while life expectancy falls. Think about that for a moment — it means that extreme capitalism is eating itself, you, me, democracy, the planet, society as we know it.

Why? What is the link between a loss of trust, an extractive economy, and a collapsing society — one where the government itself is turning authoritarian?

In the other reading, Anil Dash, a software startup CEO, claims that tech in the past 20 years hasn’t actually improved the functioning of markets. Instead it has brought about the appearance of markets that are actually rigged. To the degree he is right, it means that all the promises of efficiency, growth, and the magic of free market capitalism is an illusion. It means that we’re really just being taken by the tech capitalists for their riches and we don’t become better off.

As usual, please read and watch. We are interested in your thoughts and reactions to these readings/video. You may participate by blogging on your own blog (remember to categorize it as ECON 260), creating a new post on the front page of this site, or reply/comment here.

Topic 11 – Drugs, Social Norms, & Individual Behavior

The Five Letter Word That Spells the End of Societies https://umairhaque.com/the-five-letter-word-that-spells-the-end-of-societies-8c554f9489c7#.kjci9y80v
Tech and The Fake Market Tactic https://medium.com/humane-tech/tech-and-the-fake-market-tactic-8bd386e3d382#.vvh7z3n82
Optional readings for anyone particularly interested in this topic of society, the economy, and drugs. These two are primarily resources for research. They’re long or rich websites

Assessing Alternative Drug Control Regimes http://www.rand.org/content/dam/rand/pubs/reprints/2005/RP555.pdf
Data, Facts, Policies and Trends from various nationshttp://www.drugwarfacts.org/cms/node/1112#sthash.WGiekBnz.dpbs

Brittney Baley 2:46 pm on April 13, 2017

The idea of fake markets ruining our economy is an interesting topic. I personally was not aware at all. As to it leading to the end of our free market I don’t exactly agree. Honestly where did we think the free market was going to go? With a free market it is bound to happen because of greed. Companies will find any way to exploit people and get as much money as possible. The “free market” will always be unfair. We can try to make it fair, but that will never happen. Just because the market is unfair does’t mean our way of life is being destroyed. The market has always been unfair in some sort of way. Want to make a new product? Good luck getting people to notice with out investing billions of dollars in advertising. (Which, by the way, the internet actually makes advertising easier and cheaper now). So the scales are always tipped in favor of the rich.
Denae Mongeon 11:59 pm on April 17, 2017

The article “Tech and the Fake Market tactic” the writer states that the solution to eliminating the fake markets that have been created and dominated by giant tech companies is “And perhaps the single biggest thing we can do is both the hardest and the easiest: We can change our own behaviors.” He suggests first education our political leaders, however, what about bettering our education systems to educate the upcoming generations about how real fair markets work and how these fake markets are coming into play and power?

As for “The Five Letter Word That Spells the End of Societies”, wow! That was by far my favorite article about current politics to date! That is what our current politicians needs to think about and figure out to bring back!
Daoud Esa 3:06 am on April 21, 2017

Both the articles heavily mention the idea of trust. In the first article it goes on to describe the idea of trust and how it deeply connects the buyer and seller. As you read further, it explains the dangers of when trust is broken and thus a “climate change”. The second article is brilliant as it gives the necessary examples of where trust is lost between the buyer and “seller”. We as consumers are constantly sold this idea that we can trust our corporations that supply us with goods and services. In the second article I do believe that this trust is lost when open free markets limit what users can and cannot do. A great example given is Uber. Uber does not give give it’s “employees” the opportunities to set their rates. However, notice I put employees in quotation marks. This is because, technically, they are employees of Uber. However Uber promotes itself as a service that anybody can sign up for thus giving the illusion of a free market similar to that of eBay. The idea is lost in translation you could say.
Julia 3:52 pm on April 21, 2017

I agree that Trust is what politics needs to focus on. Building the peoples trust again. As for the Free and Fake markets, the corporations greed has destroyed the good quality of the free market that people trusted. The new fake markets such as Uber is not trusted by majority of the people yet because they do not have standards that they uphold there users to.
Alexander Westerlund 2:59 pm on April 24, 2017

The Tech and Fake Market Tactic article really surprised me about how much there actually is going on in the online or tech market. Its a deeper system than I ever thought it would, then again its the internet…In the rigged market, it really makes sense that the bigger companies get to pick who competes in the market. Anyone can compete in this market, but how fair is it when it comes to your product being advertised versus a more known product on the market? In a fake market the trust level between the customer and service provided is not very strong. With Uber the fluctuation in payment rates and profit margins at any time.