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2023-11: Warosu is now out of extended maintenance.

/sci/ - Science & Math

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3812295 No.3812295 [Reply] [Original]

/sci/ why do you support an economic model which encourages holding onto outdated equipment and methods?

The vast majority of homes and business structures are filled to the brim with outdated and inefficient systems and designs yet the cost barrier to bring them up to modern standards is prohibitively high even to large businesses. It's exceedingly common to walk into a 50+ year old homes and see a furnace made in the 60s or 70s with all it's safety and design faults chugging away at less than 70% efficiency. It's almost as common to see even older equipment in commercial or industrial applications.

>> No.3812302

I dont think you are using the term "economic model" right.

An economic model is made when someone asks a question like "I wonder if there is a relationship between unemployment and patent law" and then they research and perhaps come up with a mathematical expression.

A model isnt something someone advocates, or puts into practice.

>> No.3812315

>>3812302
Would you prefer ideology?

>> No.3812317

>>3812315

Well, maybe.

But what ideology are you talking about?

>> No.3812335

Why is it scientists and techies have such a pathetic understanding of economics? EQUIPMENT ISN'T JUST DUMPED EACH TIME SOMETHING MORE EFFICIENT COMES OUT. And when it comes to residences, you pretty much have to look at a brand-new house to actually see the sorts of upgrades that you expected to see in older houses.

ALSO recall well that this shameful housing bubble was characterized by MILLIONS of fuckers just abandoning the old housing stock, in favor of building new stock. That means people with more money and credit would end up with new housing. That ALSO pretty much guaranteed a lot of the older stock would fall into the hands of people with less money and credit, often much less. Result: Cheap and cheaper equipment falls into the hands of people unable to upgrade it. That happens ALL THE FUCKING TIME.

>> No.3812336
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3812336

The problems you describe are certainly real. Multiple studies suggest that many carbon abatement measures would have negative cost over even the mid term, yet people don't seem to be implementing them.

The causes are harder to identify. As you said, sunk costs certainly play a role, but I don't know if that's key here: business are generally willing to take on debt for investments they know will pay off in the future. I think a more probable cause is information. People don't really know the facts on new technology - just look at the incandescent vs fluorescent debates. Uncertainty combined with risk aversion leads them to hold on to obsolete methods which they know to work.

>> No.3812341

>>3812317
The one we're using that results in the scenario mentioned in the OP.

>> No.3812342

>>3812302
you sure fucking samefag a lot can you fuck off

>> No.3812348

>>3812341

But I dont know what you are talking about. I dont know that anyone is using any ideology. Or that its an ideology that results in OP's scenario. I am not acknowledging thats how the world works.

If you are going to say an ideology is dictating the way our economy functions you need to be clear about what that is.

>> No.3812357 [DELETED] 

>>3812342

Not that you will ever believe me but I never samefag. I have never samefagged. I do acknowledge that I am often the first to respond to Econ threads, and I can imagine that looks suspicious.

>> No.3812375

>>3812335
The physical world doesn't and never did care about the housing bubble. Do you have problems differentiating fiction from reality?

>>3812336
The problem then is why is 'new and better' assumed to be 'risky' no?

>> No.3812383

>>3812375

>The problem then is why is 'new and better' assumed to be 'risky' no?

New things arent as well understood. They are inherently risky.

>> No.3812392

>>3812348
I'm not going to name something which people change the name of at their convenience. At one time it was called capitalism and when it has bad spots it's called something else.

Here's a different topic for you, how is insurance ethically justifiable? It's normally thought of as protection on an item or items. However if you give it some thought is it not in reality just you gambling that your property will be destroyed by one of the causes you're covered for. In effect are you not a loser if you property is never destroyed (no pay out to you)?

>> No.3812400

>>3812383
Not understanding how something does not increase the chance of it not working as it was intended to. Thus to say it's more risky is an unsupported conclusion.

Eg: I can not break my car engine by emitting 'ignorant' waves into it.

>> No.3812407

>>3812375

>The problem then is why is 'new and better' assumed to be 'risky' no?

Because a non specialist has no way of distinguishing "new and better" from "new and not going to work". Business decisions are made by people who are unlikely to have more than high school science under their belt, and probably have forgotten even that. They're not going to read a scientific study, and if they did they wouldn't understand it. As far as non scientific reports go, it's equally easy to find one claiming that some new invention costs money rather than saves it. As before, think fluorescent versus incandescent bulbs.

In the industrial revolution this problem was sidestepped because the people who used the inventions were often the same as the people who made them. Kingdom Brunel, Edison, Watt were engineers as well as entrepreneurs. Tesla wasn't, which is why his ideas never saw as wide spread implementation.

Today we rarely have that. Sure, there are start ups aplenty, but typically large firms are run by people who know woefully little about science. Homeowners, of course, are in an even a worse spot. They know as little and can't afford the expertise of those who do.

As far as homes go, I think stricter building codes are the way to go. But that's not a terribly popular idea, I'm afraid.

>> No.3812409

>>3812392

I would call insurance, buying security. I dont think its betting youll get destroyed, but rather making a deal that says "in the event I get destroyed, I would like compensation so that I dont suffer destruction." Nobody wants their life/home/car/health destroyed. And so they buy insurance to protect themselves from potential devastation.

Security is valuable, and it costs something. I dont see any ethical problems with this. What are the ethical problems with this?

There is something called moral hazard, which is associated with insurance. Which is when two parties in a contact have conflicting incentives regarding their contact. Such as, an health insurer wants the patient to never get health care because it will cost them money, and the patient wants as much care as possible since it doesnt cost anything to them.

>> No.3812415

>>3812375
> The physical world doesn't and never did care about the housing bubble. Do you have problems differentiating fiction from reality?

I'm sure most of you fuckers sitting in your value-dropping mortgaged white-elephants would like to believe that the housing bubble wasn't even real.

Eat shit. No wait, eat foreclosure.

Now back to the truths that I well related. Old housing stock remains part of a low-order amortization system. You can't sanely expect people to just run out and obtain a new furnace when there's an efficiency increase in the works. If anything, people turn the furnace DOWN, rather than part with $3000 that they don't fucking have.

>> No.3812416

>>3812400

Lets just pretend that in general 90% of everything new works perfectly. That is still more risky than something you have studied and are 100% confident works perfectly. Uncertainty creates risk, and by saying "things typically work" just says you think the uncertainty is smaller, only making it closer, but still inferior to what is tried and true.

>> No.3812423

People use older equipment and appliances because they are reliable. Back home we have a bunch of stuff that is quite possibly over 20 years old and still works perfectly, and all the new crap that is breaking down constantly and costs a forture in replacements.

>> No.3812454

Ever use a low-flo toilette? Driven an electric car? Used recycled paper? There are worlds of things that they insist are better that we use, but in reality there is a real sacrifice at hand. people have a keen bullshit detector that when you say "this new technology gives the same for 40% less cost/materials/energy/whatever" they in turn wonder "why wasnt this made before then? if my toilete can flush with 1 gallong why have they always used five? i dont trust this new shit that might not work to save a couple bucks"

the problem comes when things actually do become more efficient, and people avoid it because of this "savvy consumer" kneejerk

>> No.3812459

>>3812407
>Because a non specialist has no way of distinguishing "new and better" from "new and not going to work".
However in contrary to that line of thought non-specialists can be sold things which are 'new and not going to work' by people who merely appear to know what they're talking about.

Electronic Air Cleaners for example, they simple can not compare to solid filters in real world application and cost like $600. People by them.

>As far as homes go, I think stricter building codes are the way to go. But that's not a terribly popular idea, I'm afraid.

Course they're not popular, they side step the issue by using force of law to make up for a failing of economic forces.

>>3812409
Security is closer to prevention, reimbursement is what happens but only if the circumstance fit those outlined by the policy. That last part is what makes it a gamble.

Just look at floods, most policies don't include them. So I say again you are not insuring property your are gambling that a list of specific events will happen to that property.

>> No.3812466

>>3812415
Shouldn't you be playing cowa do dee or something?

The thread is about the disparity of reality and the economy and why people support it; not how the economy justifies itself within it's own circular reasoning which time and again fall apart when applied in reality.

>> No.3812473

>>3812459

Oh, you are saying the insurer might just not up hold their part of the deal because they dont want to, or they dont want to believe your circumstance fits their policy?

That is more a moral hazard problems then an insurance problem. I mean, I dont know what you are trying to say, are you saying that insurance is bad and it should be out-lawed? I think insurance is great, I think stability and safety are really great things. There are problems when insurers fight hard not to uphold their end of the deal. That is a legal and ethical problem. Its a very obvious problem in healthcare (which I take a particular interest in), I would say its basically not a problem in some other kinds of insurance. A contract is legally enforceable. So I dont think insurance companies can just do whatever they want. The policies are mutually agreed on, so, if you dont sign up for a policy that protects floods, then you didnt sign up for a policy that protects against floods.

>> No.3812474

>>3812454
>Driven an electric car?
I'd like to but being a poorfag makes that impossible. We're going back to the OP with that; economy that encourages using old technology or discourages using new tech depending on how you want to think of it.

>> No.3812489
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3812489

>>3812466

>The thread is about the disparity of reality and the economy and why people support it; not how the economy justifies itself within it's own circular reasoning which time and again fall apart when applied in reality.

what the hell man.

I think the economy is a reality. I dont think its something that people can support or not support, since it encompasses human behavior, and human specialization, and human exchange, which will always happen so long as there are human beings.

Also, the economy isnt sentient, or seperate from the individuals. It cant justify itself, or really be separate at all from the actions of the individuals in the economy.

>mfw you said economics doesnt real

>> No.3812497

>>3812473
I'm saying the reality of insurance and what it presents itself as are two entirely different things.

If I have an apple and I insure that apple, if anything happens to it I should get a replacement apple. In reality if I insure an apple and lighting strikes it I get nothing because of 'act of god' clauses.

I'm taking a risk that I will not get a return on a misrepresented service that I paid for. That's gambling, not security.

>> No.3812507

>>3812497

That's an argument against shitty insurance, though. Not the concept of buying risk.

There's a big difference between being against automobile and being against the big three.

>> No.3812514

>>3812497

>I'm saying the reality of insurance and what it presents itself as are two entirely different things.

Okay. Thats true

>In reality if I insure an apple and lighting strikes it I get nothing because of 'act of god' clauses.

Two things:

1. I think you are highly exaggerating insurance failure. If people just never got what they paid for, then people would just stop buying insurance, as they might as well being throwing it away

2. I think if you willingly agree to a policy that includes an act of god clause, then you get what you paid for, which is 100% okay in my book. Misleading people is a seperate issue entirely

>I'm taking a risk that I will not get a return on a misrepresented service that I paid for. That's gambling, not security.

Okay, fine, then what isnt gambling? Maybe when I go buy a bottle of water Im just gambling becuase maybe its actually hydrogen peroxide becuase the grocery store hates me. Who knows?

Im not saying I think the insurance industry is 100% ethical. But I think its evidently good at something considering most everyone has some form of insurance.

Also you arent differentiating between the risk of catastrophe, and the risk of your insurance holding up there end. I am saying, insurance is meant to be security from catastrophe. This is the truth, and if you dont think insurance is reliable enough to provide the security you pay for, that is a separate issue independent of the idea that insurance is security against catastrophe.

>> No.3812516

>>3812489
If it makes you feel better there is a type of economics I consider real and valid but it's more of mathematical cousin of history.

I simply can not accept that despite economic theology being a hindrance to progress people would suck it's dick all day erry day (if it had one).

>> No.3812517

>>3812516
What is this "economic theology" you speak of?

For you see, I have recently developed an interest in religion and I am exploring my options.

>> No.3812527

>>3812489
If I'm in the right headspace, the economy is justified as it is due to current circumstances. The logical and most reasonable fixes for many of the problems that are "justified" end up being prohibitively expensive, realistically unfeasible to begin implementing or beyond the ability of the person to understand.

tc;db - the overbearing nature of contemporary issues are too frustrating and annoying for people to try thinking through rather than excusing

>> No.3812533

>>3812507
What you call 'shitty insurance' is the industry standard and what people accept.

>>3812514
>1. I think you are highly...

I didn't claim they never got what they paid for, it doesn't change the fact that discrepancy exists.

>2. I think if you willingly agree...

Illogical given that the alternative is no protection at all. Doesn't change the fact that I'm buying a chance at security/risk at not being protected.

>Okay, fine, then what isnt gambling?

The physical world doesn't often intentionally screw you over... given that it lacks intent.

>> No.3812548

>>3812517
The first commandment: The market will fix it. Disregard thy notions that business decisions are made by people who are not technically qualified to solve real world problems for in their flailing they will find the true path with certainty.

>> No.3812549

>>3812533

>What you call 'shitty insurance' is the industry standard and what people accept.

Well for one, it's a whole lot better in my country than in the States, but that's really quite irrelevant. If you accept that insurance is important, you can then ask how to make your insurance industry better. If you think it's wrong in principle, then you can ask how to abolish the institution. Thus it is vital to ask yourself where you stand on the issue.

>> No.3812557

>>3812533

>it doesn't change the fact that discrepancy exists.

If two people agree on a policy, and they both have perfect knowledge of what that policy implies, there is no discrepancy between the involved partys expectations and reality.

>Illogical given that the alternative is no protection at all.

No protection isnt the end of the world. I know people who willingly dont pay health insurance because they dont want it. There is a case that the demand for insurance is inelastic, but that still doesnt mean you have to buy it, that just means the margin... of... "unethical behavior" is higher.

I want to high light again, that I am not advocating that the insurance market is flawless and should be without government intervention. Im just saying its more functional than not. Its certainly not some cesspool where everyone pays for insurance and nobody ever gets their claims paid for. Thats just a cynical projection.

>The physical world doesn't often intentionally screw you over... given that it lacks intent.

Boy you better rethink that. All kinds of organisms are out to get you. Plants, animals, bacteria, viruses, and even bears. If you want to get more fundamental its nothing but empty indifference. There is a lot of reality that is out to get you.

I believe human beings are more than capable of conquering all that though.

>> No.3812561

>>3812549
>If you accept that insurance is important, you can then ask how to make your insurance industry better.

Well one of the guys I know has a fun little idea that everyone American citizen should have a tag (like with game animals) which entitles them to shoot one lawyer in the face in the course of their life time. It's certainly a start.

>Thus it is vital to ask yourself where you stand on the issue.

I think it should be irrelevant but that it can not be so long as it's neccessary.

>> No.3812562 [DELETED] 

>>3812549

Ya really. I asked him if we should ban insurance. He didnt answer me.

>> No.3812577

>>3812561

With game animals the number of licenses is calculated to keep the population at healthy levels. But there are 300 million American citizens. To redeem your lawyer vouchers you would need to invade other countries and shoot their lawyers.

>> No.3812588

>>3812577

Are there even 300 million lawyers in the world? I think we would start running lawyer deficits real quick. Its unsustainable. It would be smarter to start a lawyer quota so that there are enough lawyers to breed for next season.

>> No.3812591
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3812591

>Dat image
>That feel when my debt is under 15,000 with no interest

Ausfag here. Our Government pays for the majority of our study fees, then you have a debt of about 3-8k a year (depending on which course) from there on out. There is no interest and you are only required to pay it back as a percentage of your tax (1-8% I think) and ONLY if you are earning over $40,000.

Until I came to this board I didn't realise some students got debts in the hundreds of thousands. Is this common practice in America or is it just the minority?

>> No.3812603

>>3812557
>I know people who willingly dont pay health insurance because they dont want it.

Assuming you're in the US then Obama's failed attempt at health care reform will put a stop to that. Medical insurance isn't where you wanted to take this discussion, people do die from failure to pay out or approve treatment by the insurance companies. Never mind that the high costs to the uninsured can at least be partially attributed to deals made with insurance companies.

>Boy you better rethink that. All kinds of organisms are out to get you. Plants, animals, bacteria, viruses, and even bears. If you want to get more fundamental its nothing but empty indifference. There is a lot of reality that is out to get you.


Sorry I should have said that bears aren't out to screw you with a metaphysical concept.

>> No.3812609
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3812609

>>3812591
>your reaction when I attended an 8 month certification program and it cost $20k
>I owe that back with interest

>> No.3812612

>>3812591
Don't forget that good old Centrelink gives a $1000 bonus to Uni students each semester. That plus $400 a fortnight in youth allowance makes life pretty fuckin' easy for students over here.

>> No.3812611
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3812611

>>3812603

>Assuming you're in the US then Obama's failed attempt at health care reform will put a stop to that.

I dont know what to say. I live in the US, and I know people who dont pay for health insurance.

But I agree that NObamacare is more like sucks-care.

> Medical insurance isn't where you wanted to take this discussion

Actually I would greatly prefer to talk about medical insurance. Pic related. Im actually going to hang out with my old healthcare econ professor tomorrow.

>> No.3812622

>>3812562
I think it should be irrelevant but that it can not be so long as it's neccessary.

>>3812577
So there won't be any lawyers, I'm not seeing the problem with that...

>> No.3812630

>>3812622

>I think it should be irrelevant

Irrelevant to what?

>> No.3812632

>>3812622

You don't think it's a good idea to reform the legal system first and then massacre the guys who run it? Land the plane before you lynch the pilot.

>> No.3812634

>>3812591
>>3812612
Dude, I made more money from Centrelink than I have in debts.

I ain't even kidding.

8k in scholarships for my first year, 5k the second, then the $400 a fortnight.

My debt? $10,000.

Next year is going to see another ~5k debt with a $4,000 scholarship, so it's the first year I'll be behind... until you take fortnightly payments into account.

>> No.3812642

>>3812611
>I dont know what to say. I live in the US, and I know people who dont pay for health insurance.
The law doesn't come into full effect immediately and I don't off hand remember what the penalty will be for getting caught with no insurance.

Granted I have some insurance now but it still doesn't mean I could afford treatment. The co-pay alone on anything more serious than the flu would bankrupt me. Such is life in a stagnant state with no job opportunities...

>> No.3812651

>>3812630
Everything?

>>3812632
That would be ideal but while we're dreaming I'd also like a pony.

>> No.3812659

>>3812651

Why should insurance be irrelevant to everything?

Lets say, I fear the potential to get a life threatening disease, and I wish for some kind of security from that, what am I to do without the existence of insurance?

>> No.3812667

>>3812659
Insurance doesn't protect you from life threatening diseases, medical knowledge and technology do. There's no need to add the extra step.

>> No.3812672

>>3812667

Yeah but people cant always afford that medical care. That would mean everyone saving up tens of thousands of dollars in case they got sick.

People are much more willing to buy insurance, and also, its much more efficient for people to all contribute a small amount to a fund, and have the fund cover the just the ones who need it.

>> No.3812844

>>3812672
Only an economist would say 'people can't afford this thing they need let's make a convoluted system of money shifting full of potential losses and special interests.'

If an economist were to into engineering I can only imagine the noodle bridges that would result... they'd probably have loops too.

>> No.3812900

>>3812844
>engineering
>not concerned with cost

>> No.3812933

>>3812900
>confusing efficiency with cost

>> No.3812965

>Implying cost is part of efficiency