What is Digg?441 Comments
- atdigg, on 01/14/2008, -40/+305From economics point of view the first option is better, money don't mean anything by themselves, don't have an absolute value, they only mean something by the amount of goods and services you can purchase with them, if all the rest of the people have more money than you you can purchase less stuff (it's also called "inflation")
- inactive, on 01/14/2008, -11/+219The person who wrote this story knows more about psychology then economics.
- acidbass, on 01/14/2008, -18/+154if i earned 50k and everyone else earned 25k, i would be the richest man in the world, the prices of goods would change to accommodate the new economy withg new lower prices. If everyone earned 25k essentially, you would literally the richest person in the world with earning 50k a year.
However, if you had 100k a year and everyone else had 250k, you would be the poorest person in the world.
The price of things would surge and you probably couldnt afford most of it since the average income is 250k and you have less than 50% of that.
Why would anyone want to be the poorest person in the world?
I think this article just shows how economically stupid the writers at the LA Times are. - harlowsmonkeys, on 01/14/2008, -23/+121The story is positing that goods and services remain the same, so you can purchase more if you choose the second option.
- Napoleone, on 01/14/2008, -23/+115Except that's not how our economy works.
- taltoris, on 01/14/2008, -16/+102Don't divide the pie, bake a larger one.
- zachlac, on 01/14/2008, -9/+78The problem with answering that type of question is that it's completely impossible. If everyone makes $250,000 and you make $100,000, you would be worse off than if you made $50k and everyone else made $25k. It's a stupid question to pose, since it's impossible. Wealth is based on relative capital compared to those around you. If everyone had a billion dollars, then the dollar may as well be a yen.
- harlowsmonkeys, on 01/14/2008, -12/+77Under the hypothesis in the article, goods and services remain the same price, so if you pick option one, you can't buy as much stuff. Thus, if you were an anti-social person, who only goes out of his home to buy things, option 2 is clearly better, as you have twice as much money.
However, if you actually interact with other people, things could be different. In option 2, sure, you have twice as much as in option 1, but when you go asking girls out, the guys competing with you can afford to spend twice as much on dates. Girls will pick them. In option 1, on the other hand, YOU will be the big spender relative to your competition.
Thus, the question should be would you rather have 50k and a lot of sex, or 100k and just whacking off (but you can afford some nice toys to make whacking off better)? - lispy, on 01/14/2008, -13/+74Yup, and that's BS. You can't change the rules of an economy that your subjects have learned a whole life and then ask them to change their reaction. We are trained to think this way, so we anser #1. I know, I would.
- nospinhere, on 01/14/2008, -7/+61So, I would still have option 1. With $50,000 and everybidy around me earning $25,000 I would be king ***** and pimp slap them hos!
- DrMonkeyLove, on 01/14/2008, -10/+58This is the Internet. You don't need to sign your posts.
- GuacamoleSan, on 01/14/2008, -4/+47I think the first choice makes sense. We have ingrained in our brain the idea that economics involves the whole society, not ourselves. We know that prices are based on proportion and if everyone else earns 250,000 and you earn 100,000, then laws of economics will drive down the value of money (inflation)
- mikes1, on 01/14/2008, -6/+49It is a silly assumption, since it is competely unrealistic. One might as well ask "Do you want lunch or dinner. Assume there is a free lunch."
- pehpsi, on 01/14/2008, -19/+52I hate money. It rules most. If I can get by each week I'm happy, as long as I'm doin' what I like. And I don't owe a single cent to any bank or person.
If I get a credit card in the mail, I cut it in-half right away and put it in the bin..
But that's just me. - salmonmoose, on 01/14/2008, -1/+28You're right - I think the article is speaking a little more generally.
You could explain it better by using peer groups, rather than the economy as a whole. People would prefer to earn $50k in a peer group that earned $25k, than earn $100k in a peer group than earned $250k.
Of course, then class dynamics would come into play, and you'd find that too much disparity of income tends to dismantle a peer group :) - kent1146, on 01/14/2008, -1/+28You know what else is messed up?
Some humans use the Caps Lock key to try and REALLY emphasize the idea that they would be yelling if they were to actually be speaking. I mean, they might as well just relabel it the Asshat Lock key instead. - LocalDocal, on 01/14/2008, -3/+28Tthe article accounted for that. It specified that all goods would cost the same as now.
- eggraid, on 01/14/2008, -2/+27inflation is not even the point here. It's just a question of the relative aspect of money. And yes, in any economy - you could be trading carrots- the only way to have a bigger power of purchase for a given aggregated production is to have more of the currency than others
- HolierThanYe, on 01/14/2008, -0/+24See how much different this seems seen through the eyes of a sociologist rather than a psychologist?
- pjr12345, on 01/14/2008, -2/+25Dang! You beat me to it. The situations are clearly impossible. The price of goods and services is driven largely by the value placed on them. If everyone has less money, that money's buying power increases as a direct result of scarcity.
These types of articles are stupid, but are fun to read. - djbon2112, on 01/14/2008, -5/+24Bah are you people dumb? This is referring to the psychology of people in peer groups, not to economics in society at large! It's not a hard concept to ignore inflation for a moment for a thought experiment! Jeez.
- nicolasavru, on 01/14/2008, -5/+23It is specifically noted that the price of goods and services remains constant. Thus, it can be safely assumed that the article is referring to a small group of people as a sample group and not "the world".
- davewashere, on 01/14/2008, -1/+19So which one is better? There are many elements that must be considered here. For instance, from a sexual competitiveness perspective, you're better off being the rich person in the poor country. You might also be happier being the rich person in a poor country. How many stressed-out and depressed Americans are scraping by on $30,000 a year? I'm guessing a lot. $30,000 a year would make you the richest person in town in many countries.
- DrMonkeyLove, on 01/14/2008, -6/+23If they can't understand and rationalize the hypothetical "Assume for the moment that prices of goods and services will stay the same", then your subjects are probably too dumb to understand how economics work anyway.
- staplez, on 01/14/2008, -0/+17Having lived in a poor country on a salary that is double the average worker and less than half of the average worker in USA, I can say straight up it's incredibly better to be rich in a poor country than poor in a rich country. If for nothing else than girls want you because you make more money.
- Epik, on 01/14/2008, -2/+18Credit is an incredibly valuable tool if used wisely. But better safe than sorry, I suppose.
- wenomspitta, on 01/14/2008, -1/+16and how would that work?
the question they ask is simply - would you rather earn more than the average income or less? - metamorfoza, on 01/14/2008, -15/+29Congratulations! You've just participated in a psychological study.
Most people would give a comment on a article without reading it.
I mean, your points are valid but this was psychological study, not a study on economics. with ASSUMPTION that price of goods and services remain the SAME, people are simply asked 'what would they prefer'. They are not asked "what do you think will be the outcome on economic if you salary is..."
Digest the article before posting. - inactive, on 01/14/2008, -4/+18I'm with you on that. No amount of material goods can bring peace of mind.
- AceTracer, on 01/14/2008, -4/+18Yeah, the first question is vague. I chose the first option because obviously if everyone is making more than me, things will cost more. After reading the article, I still choose the first option.
- Ericn84, on 01/14/2008, -2/+16This article is asking a question to set people up for failure. They first give real world numbers that people can relate to then they say that those real world numbers only exist in a world that does not exist and except people to come up with the answer that they feel is the right answer.
The human mind has two ways to make a decision, either base their choice on their own experience and knowledge of the real world or base their answer on a world that does not exist and they have no experience with. Most people will pick the choice that they have the most experience with.
Now, it seems that the whole goal of the article is to say that humans don't make the best choices for themselves for their survival because they would rather have less money to purchase items as long as everyone else in the world has even less then they do. However, that choice will give them a greater chance of survival because they have more then everyone else. - zetsurin, on 01/14/2008, -6/+19Exactly! Someone else who is strong minded enough to reason things out and realise that the ridiculed choice is actually the correct one! All the people claiming 'idiot' for anyone choosing the first one has no idea of economics.
The problem is that the article is looking at this as a morality issue and a morality issue alone without factoring in the economic realities! - roflburger, on 01/14/2008, -1/+14money is relative, so of course a person has to take into account the amount others have before placing a value on an amount of money. How happy would you be if you were given a billion dollars? Now compare it to how you would feel if everyone else in the world was also given a billion dollars. Its not quite the same because whether you like it or not people don't seek money, they seek wealth, which can only be measured in relation to other people.
Its the perception of living the good life that makes people satisfied with their finances, not necessarily how much they have and what it can buy. When cars first came out only the rich could afford them, and even though now poor working class people can afford vastly superior models, there is still much less prestige in owning a ford tempo as compared with a Model A when they first came out. Judging by the logic in the article, the tempo owners should be much happier with their superior car, yet i doubt that that would be the case. - janeuner, on 01/14/2008, -0/+13"It specified that all goods would cost the same as now."
This person fails at economics. - WhiskeyLemur, on 06/30/2009, -4/+17Yes, it did - which is both sad and naive for an article which claims to analyze economics in any way. It's not how the market works, and it's not how human psychology works. If there's more $ to go around, you get something called "inflation." You might have heard of it.
- zspeed78, on 01/14/2008, -0/+12Good luck ever getting a house with that credit history of yours.
- kinerry, on 01/14/2008, -1/+13I used to be like that as well, and I did well off.
But eventually I educated myself on how money works. Not all credit is bad, some is good. As long as you use the borrowed money to make more money, then you are the master and it is your slave (it seems to be the other way around for you).
You can have much more impact in the world with money, the people with the money already know this, you are just their slave.
You win by BEING the system, not fighting it. - MrTulip, on 01/14/2008, -0/+12not dating in itself, but the notion that you have to pay for at least a dinner and some amusement (movies, theatre...) just to have the option for some sexual engagement and to pay at least three times to have some real sex.
the way i look at it, women and men are equal, their interest in each other mutual and therefore, neither the woman or the man should make herself/himself the bitch of the other by setting some kind of monetary investment as a prerequisite for, to put it bluntly, *****. - TabControl, on 01/14/2008, -4/+16Uhh, Guys, I don't think this is what the article really means. They aren't talking about more purchasing power and less inflation or anything of that sort. The underlying principle of this article is jealousy! They are jealous the other party is getting X mor money than them. And if they can't have more than what was offered, than they would rather have nothing and leave the other person with nothing or just less money. It's all about keeping up with the Jones's. Being better than the guy next to you. Re-Read the article.
- Orion682, on 01/14/2008, -0/+11There's no such thing as a free lunch ;)
- tomee, on 01/14/2008, -3/+13Wait, what the article says DOES make sense. Think of it as being a rich person in a poor country vs. being a poor person in a rich country.
- eggraid, on 01/14/2008, -1/+11dugg for "economically stupid". I'll use that, thanks
- MaybellineSP, on 01/14/2008, -1/+10I've heard that question before in sociology classes, but this article changed it. In class, either way, your 50k or 100k would have the same value. The question then became, would you rather live in a place where people are making half as much money as you, or 2.5times as much money as you. Most people go with $50k since they would be living a slightly better lifestyle than their neighbors.
I think whoever came up with this article's experiment mislead many people with their question, since they made up a new exception to a common hypothetical question. - prossi10, on 01/14/2008, -0/+9Your comment really doesn't have anything to do with this article. This article is about psychology and economics. It is not a place for your soap box ranting on how high and mighty you are.
- MrTulip, on 01/14/2008, -3/+12"but when you go asking girls out, the guys competing with you can afford to spend twice as much on dates. Girls will pick them. In option 1, on the other hand, YOU will be the big spender relative to your competition.
Thus, the question should be would you rather have 50k and a lot of sex, or 100k and just whacking off "
i guess that's why the american concept of 'dating' is often referred to as "legal prostitution". - ElbertF, on 01/14/2008, -3/+12"Money is a sign of poverty." - Iain M. Banks, 1987.
Money is only worth something if you have more then others. - Sagara, on 01/14/2008, -2/+11that was my initial reaction as soon as I read the first paragraph. I didn't bother reading the rest of it... I just skimmed.... to see if they'd say something smart like you just did :)
- DrMonkeyLove, on 01/14/2008, -4/+12If you think that everyone making more than you will make things cost more, then you don't understand the simple phrase, "Assume for the moment that prices of goods and services will stay the same."
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