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Comment by tsimionescu | Hacker News Reader

The whole point is that that is not a minor difference. That same personal car, for that same money, would be much more useful if it was someone's first car instead of 10th. The money given for the car is the same either way, but the real utility that the car brings is not.

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I don't think anyone is arguing that the value to society is the same in both circumstances. But unless you want some kind of authoritarian state, it isn't your business what someone else does with their money. Assuming they didn't break the law to get it and they paid whatever taxes they owed on it, they can do anything they want with it, including setting it on fire.

Well, in particular, setting it on fire is actually against the law, on safety and environmental reasons. The same environmental reasons will probably have to apply in the near future for over-consumption in general.

But that is all a different matter. The relevant discussion is not about trying to prevent people from spending their money for useless things. It is about the relationship between economic value and actual utility. Any transaction for a car seems to produce the same economic value, but can have vastly different social utility. Therefore, arguments that certain behaviors should be accepted because they produce economic value which must have social utility are wrong. So perhaps it does make sense to tax the rich, even though GDP or other economic value measurements will go down, because social utility will not go down proportionally.

and therefore, the price you're willing to pay for the 10th car is probably a lot lower than the price someone else may be willing to pay for their first.

The price you are willing to pay should be equal to your utility of the object.

Except that there are people for whom the price of a car is pocket change.

regardless of how the buyer feels about the cost, if they buy something that of low utility to them, then they are making irrational economic choices. But since the money is theirs, i cannot interfer 'cept to tell them they are wasting their money on useless items.

But people with a lot of money tend to spend it quite "wisely" (a survivor-ship bias, since a fool and their money is soon parted).

If you have a billion dollars, there is nothing irrational about spending 100k on a car you don't really need. Those 100k have barely any utility for you, so it doesn't matter that the car also has barely any utility.

Spending anything on anything you don't really need is irrational by definition!

Then that is a big problem with the model of a rational consumer, because no one operates to that standard, not even close.

Based on what definition exactly?

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