I Win My European Unemployment Bet
I&#x27;m sorry in advance to those economists who try hard to actually try to be rigorous and scientific about their subject.*<p>Rant follows:<p>&gt; Forget ideology.  Let’s all join hands, admit that labor market regulation is a scourge [..]<p>But let&#x27;s not forget who the real scourge here are. Wanna-be rulers of the planet who dress themselves up as economists (though they come in many forms and degrees) making up just-so stories about why their next excuse to circumvene (or prevent) standards for upholding apparently not so common decency or (down to) basic human rights in the work place is justified. Or &quot;economists&quot;, and the politician who lay in bed with them (sorry to those truly led astray though!), who enable business practices that profit just their interests. Or those that think it&#x27;s okay to bleed the planet dry and destroy our biosphere for a quick buck. The list goes on...<p>Not saying the author is one of such, but they sure as hell must be out there (I&#x27;m sure their decisions are all nicely dressed in numbers and growing curves and big words!).<p>As a particularly egregious example what sufficiently unregulated labor markets can do, slave labor conditions in low-cost countries are unfortunately _really_ &quot;efficient&quot;, the higher the wealth gap the better. Or even outright slavery: Esp. uneducated people in poverty have a lot of kids to support themselves, creating an endless fountain of cheap (unqualified) laborers (don&#x27;t let them get too rich or educated though!). Got a prison population sitting idly? Well, they seem like an easy target to be extorted for un(der)paid labor.<p>Obviously there&#x27;s a need for regulation here. I don&#x27;t think however the author would condone any of the above, yet historically and contemporarily there have been several instances of stuff like this.<p>Of course there&#x27;s a lot of nuance involved, modern discussion in developed countries revolves more about the &#x2F;amount&#x2F; of social safety the state guarantees to the citizens plus the implementation of which, not about the &#x2F;whether&#x2F; it should at all. Violations of human safety and dignity at the work place esp. in developing countries are kept behind a comforting veil of cheap prices in the rich nations. Luckily things often improve when total wealth in a country rises, mostly because you need an at least somewhat educated and satisfied population at some point to keep growing which precludes subjecting them to the direst of existences. People&#x27;s desires to not be screwed with too much play a big role as well (it&#x27;s not all bad, after all).<p>Nonetheless social systems are lacking in many countries worldwide in aspects like education, healthcare, sanitation, housing, public services or (somewhat tangentially) good ol&#x27; infrastructure. &quot;But who will pay for all this fancy social security?&quot;. Well, who has all the money? It&#x27;s basically the top 1% who possesses half the net wealth globally, which is a lot even should the number be off by a fair amount (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Distribution_of_wealth#Inequality" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Distribution_of_wealth#Inequal...</a>). They don&#x27;t seem to have been paying all that much then it seems.<p>However, like above, I don&#x27;t want to make this seem about &#x2F;whether&#x2F; we should have unequal wealth or not but about &#x2F;how much&#x2F;. Instead of trying to minimize welfare, let&#x27;s ask the other way round: How much welfare could the economy sustain (without choking itself off!)? How much economic inequality is actually sustainable without tearing society apart and making it blow up like has happened in mankind&#x27;s history many times?<p>There&#x27;s an intricate balance here and many structures and parameters to tune... At the both extreme ends of wealth distribution lies dystopia and history has not been nice to countries who have left the safe zone for one reason or another.<p>The world is complicated, many economic statements are purely statistical. But arguing in a world with lots of known unknowns and even unknown unknowns is complicated. Abductive reasoning, which is what he attempted to do, tries to find an explanation for an observed phenomen given some background knowledge. It is an inherently unsafe type of inference in the real world. And in this instance it&#x27;s non-rigorously done by a human, meaning it likely suffers from one of the many kinds of glitch in naive probabilistic&#x2F;statistical reasoning (long list at <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_cognitive_biases" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_cognitive_biases</a>) our species has. If you add your ability change the world as an agent yourself, things get even more complicated (self-fulfilling prophecies anyone?).<p>Good job on his bet though. Let&#x27;s make a new bet: We have people &quot;work or die&quot;: I bet unemployment would rapidly approach 0% (dead people can&#x27;t be unemployed!). Man I should get into economics with this idea.<p>An important reason why we can&#x27;t have nice things to a degree that should be possible today is ourselves, and to fix the woes of the modern world requires an extensive look at how we organize our societies and how we cause them to be or become dysfunctional. Statements like &quot;hurr durr I win 19 bets&quot; in a field that is riddled with conflicts of interests and that seems just as much to be about ideology and opinion (how come there exist so many &quot;schools of economy&quot;? I thought we all observe the same world) as about actual evidence and rigorous reasoning seem not very impressive.<p>* see <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Demarcation_problem" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Demarcation_problem</a>