[From Kenny Kitzke (2010.12.09)]
Martin, your experience may be anecdotal, but I believe it is very relevant to the world of economics, at least as it relates to personal economics. And, if PCT can add anything to the “science” of economics, I suspect it does have to address the behavior of individuals. How that behavior can be productively and usefully aggregated to groups or even nations is something not so clear to me. But, Kent’s work may provide a means.
Your story raises a perfectly valid point. Income isn’t the whole story in personal economics. At best, it is half the story. The rest of the story is expenses. The net has a lot to do with another economic concept called standard of living. And that is much closer to what I suspect individuals control for at what I would say is at the “self” Level 12. It is a very local experience. What someone in Denmark experiences has little interest or relevance to most people in the USA or Canada. I think there is a comparable irrelevance and disinterest by a street person in America to what the person living in a gated community in America.
Of course, there are people like Rick who feel it is their business, their responsibility, to dread the relative positions and experiences of such diverse individuals in his country. It’s his “self” right as a control system. I believe it is my right to dread other things as more important to me (my self).
I will briefly share my own awakening and puzzlement in my first trips outside the USA in the 1980’s. I was similarly shocked how the French or the Japanese could afford the shoes or clothes they wore or the price they paid for gasoline. It took me a while to understand those things were only so expensive in equivalent US dollars in their country! I assume you comprehend the rest of that economic story? So, I won’t go on.
Anyway, this is another example of why meaningful models of an economy are not likely to be developed by anyone on this net. That is why I have never volunteered to help make such a model.
When I consider the few practical problems understanding PCT has solved for psychological problems experienced in individual humans, I perceive it a relative frustrating waste of time to try to solve individual or societal economic problems based on PCT.
Rick has also written much about health care systems. That is a far easier system to model. I would think that is a much better place to start trying to use PCT to better understand what kind of system would produce the highest quality health for individuals at the lowest cost to the system. How much of the system cost an individual, a health care provider, an insurance company or the government pays is a secondary and largely political issue. What say you? You have experience with the Canadian health care system. How does its quality and cost compare to the system in America?
In a message dated 12/9/2010 9:40:48 A.M. Eastern Standard Time, mmt-csg@MMTAYLOR.NET writes:
[From Kenny Kitzke (2010.12.08)]
The reason I asked you from where you got the data to make that claim about the socialist nations like Sweden...
[Martin Taylor 2010.12.09.09.22]
I know you wrote this in response to Rick, but I want to make a personal observation about the value of comparing income rates and so forth.
Back in the 1970s and 1980s I used to spend a fair amount of time each year in Denmark with friends in the Copenhagen suburbs. At that time, by any exchange rate measure, wages in Denmark were appreciably lower than in Canada, and taxes were higher. I couldn’t understand how my friends (and other people I encountered) could have a lifestyle that seemed to indicate more disposable income than people of similar socio-economic status (such as me) would have in Canada. I asked a few questions, and found that a lot of my income went on things I considered necessities, leaving not all that much for expenditures of personal choice, whereas their necessities were largely paid by their high taxes, leaving most of the rest for expenses of personal taste. As a result, they seemed wealthier than me, despite earning less when comparing either exchange rates or purchasing power parity (Denmark seemed expensive to me at the time).
I know this is purely anecdotal, and not evidence, but it is a question that bothered me at the time, because it seemed so counterintuitive but was so obvious to the (slightly more than) casual visitor. To a large extent it is why I became interested in the workings of different economic regimes (despite that a couple of decades earlier I had devoted part of my bachelor’s essay in 1955 to the reasons why deficits and inflation were necessary to a stable economy – the essay and the paper it was based on are at http://www.mmtaylor.net/Economics/index.html , because both ring true to me today).
Just an observation, which may suggest that comparing income levels doesn’t get at the question of real wealth.