This is what I've been suspecting. It can't be true in competitive markets.
For instance, the financial markets are extremely competitive, but they are largely based around marketing bullshit products to more clueless people.
Just because something is bullshit doesn't mean it's useless. For example, selling you overpriced insurance enriches me and makes you feel better. Win-win!
- Advertising is mostly zero sum; if you have competition fighting over the same pool of potential customers, any marginal dollar you spend will work mostly to offset the marginal dollar your competition spends.
- Ad attribution - figuring out who should be rewarded for getting a customer to buy something - is a really tough problem. On the Internet in particular, you probably shouldn't even try to do it without some skilled statisticians on the team. Which hardly anyone has. What happens instead is, people bullshit each other. An ad agency will prepare a report about their effectiveness, using data they're not capable of actually understanding, and give it to a client, who's also not capable of understanding the data. Said data came from a platform the agency uses, that's often bullshitting them on purpose. Whether or not the ads were effective, or any value to the end-customer was created, is immaterial - no one in the chain is capable of truly determining it. Instead, everyone just tell each other stories about a job well done, everyone is happy, money changes hands.
And yet it persists and grows, because there's still money to be sucked out of legitimate economy, to fuel a legion of companies competing and cooperating to run in circles, bullshitting each other.
I'm not an economist, but I think this is very incorrect if you include the higher-order effects. It would seem to me that advertising is a massive driver of increased consumption and production, causing people to work more to buy things they otherwise wouldn't. As such, depending on which metric you measure (e.g. productivity vs. wellbeing), advertising is either strongly positive sum or negative sum.
This article has more info and some revealing pictures.
https://99percentinvisible.org/article/clean-city-law-secret...
wars are zero sum too (the land up for grabs is fixed). does that mean armies are bullshit?
Armies are as bullshit as anything ever. The only reason you have one is that they have one too, and vice versa.
A huge amount of technological development occurred during WW2. The jet engine, rocket and nuclear energy all spring to mind.
A lot of people now dead would punch you in the nose for suggesting those things justified their suffering.
Creation of nuclear weapons does not go on the plus side of the ledger.
I never said that - I specifically stated "nuclear power" in response to the claim that "nothing is made" during wartime.
>A lot of people now dead would punch you in the nose for suggesting those things justified their suffering.
I didn't even imply that, and no reasonable person acting in good faith could reach the conclusion that you did.
There is no doubt that the threat of being murdered by another bunch of people concentrates the minds a lot. You will do your utmost not to get yourself and your loved ones killed, which means a lot of technological improvements in order to win the war, or at least force the enemy to negotiate a ceasefire.
On the other hand, several future Einsteins, Flemings and Korolevs might just get flattened to bloody pulp in the trenches at the age of 18, before they even had a chance to show their intellectual capacity. That is a major loss, too, and one whose true dimension cannot be guessed.
It goes beyond making people "feel better". It's about variance and/or managing risk. eg. so if you die of cancer with a wife and 3 kids they won't end up in the poor house.
You may see it as a variant of Parkinson's law: Bullshit expands so as to use up all the resources available for its consumption.
What are some examples? Maybe with adblock I'm missing all the complex derivatives being peddled to people these days, but the financial products I know of are pretty straightforward.
Actual competitive markets are made of competing firms, and firms can't (in general) optimise.
1. Holmstrom's theorem tells us that no payment system for a team of agents can have a budget in balance, be in Nash equilibrium, and be Pareto efficient.
2. Since firms are definitionally teams of people, and since you don't get a choice whether the budget balancing or the workers optimise, this means that firms must sacrifice Pareto efficiency.
3. If firms can't always seek out the Pareto frontier, then a competitive market composed of firms will not satisfy the conditions for Walras' theorem to hold, and so competitive markets can't necessarily reach equilibrium.
There are always systemically fewer jobs than there are people that want them - deliberately so as a matter of policy.
For there to be a competitive market in jobs there should always be as least as many jobs unfilled as there are people who want to work - which represent the two tails of the market.
In the UK we currently have 3.5 million without work that want it and 1 million short of work, but only 0.6 million unfilled vacancies.
Why should both sides be equal? Easy counter-example: I'm sure everyone on earth would like an iphone (demand of 8 billion) but the supply is far less than that.
The purest markets we have are the financial markets and level 2 data tends to exhibit this quality.
Demand is desire plus ability to pay - which is why your iPhone example is deficient. That’s why billions go without and why people go for the alternatives.
However everybody needs a job to be able to live. There is no alternative to selling your labour hours in a modern world. Extracting from others is a fallacy of composition.
For instance: large companies and monopolies can stand to sustain a lot of "bullshit" as anticompetitive pressures and just economics of scale and generally just social inertia (e.g. "well competitor X might be cheaper but do they represent higher risk?") let them get away with inefficient practices. They have to do a lot of bullshit before this becomes a risk to them.
Most companies have some elasticity on this also when what they can spend is not directly tied to their revenue and their competitive position in the market. I.e. they can raise more money than their competitive position might suggest through either loans or investment. Loans and investments cannot be perfectly efficient because there is always incomplete information when awarding finance. This may occur in some types of startups but it's true for many established companies as well.
It's not necessarily the case either that bullshit jobs have to be stable in order to represent a large chunk of the labour market either. They may be wiped out by competitive pressures in one area only to open up in another.
Charities/non-profits may also provide another place for bullshit jobs to hide. Not all charities are perfectly efficient and they do not operate competitively.
In almost every corner of the economy there are inefficiencies where bullshit jobs can hide.
There must be very little overlap between my place in the world and the people whose reaction is, "nah, that can't possibly be true".
In many cases, things like customer lock-in, natural monopolies or intellectual property catalogs serve as significant barriers to entry even for well capitalized new businesses, and these barriers can more than outweigh the costs of having half your employees being essentially useless. Finally, an argument could be made for resilience in staffing. The very leanest organisation would have bus factors of 1 for every single job and the first sick employee means problems. Even raising the redundancy to "only" two people per critical function means that you just created a ton of bullshit jobs. (since most of these people will be severely underutilised)
The market is a dynamic system, constantly trying to reach some kind of equilibrium (defining which is left as an exercise to the reader). As such, it evolves through time, and has some degree of inertia. It's perfectly possible - and in fact, common - for such dynamical systems to oscillate and orbit the desired state without ever reaching it.
If you took a market as it is today, and have everyone just do whatever it is they're doing, then it's likely it would've reached some stable state. But in reality, market participants constantly change what they're doing, responding to and trying to predict what everyone else is doing.
(Especially that last part is one that's damning to any kind of predicting.)
In such conditions, bullshit jobs can persist, because they appear faster than the market is optimizing them away.
constantly trying to reach some kind of equilibrium
maybe im too hung up on the semantics/wording, but im genuinely curious because in my mind "the market" isnt really "trying" to reach anything.... maybe its agents are (gain a profit, hoodswink someone, make a fair exchange, etc etc)... so in aggregate there may be some result over time, but i find it hard to imagine its trying to reach an equilibrium per se...?
From my experience and in my opinion, when an organization pushes past the point where everybody knows everybody else and where one person can understand the whole apparatus there's absolutely nothing that can you can do but accept the reality of losing complete control and oversight.
Another aspect: the increasing number and depth of rules and regulations imposed by laws on organizations creates the need of bureaucrats that simply sign checklists without actually checking anything. You can know the jobs are bullshit but can't simply choose not to comply.
Some whole departments are there just for show. In this age you have to look like you care about the environment, social issues, etc. And while really caring would be quite expensive and in some cases completely debilitating for the business a few people making powerpoints and social media posts do the trick.
And then there's government jobs, markets ruled by monopolies, corruption, nepotism, and a million other things.