deoptimo

On a less somber note, you are praising the empowerment of ignorant people to become secret informants on behalf of a security state with the power to disrupt the lives of others. This is a tried and proven path that many countries have followed and we all know where it leads.

If you include wealth transfers such as inheritance in consumption, and you include mortgage spending, then log-consumption can work fine too. The only problem is that it is more difficult to measure because you would need to track either either consumption per-person or both income and savings per-person.

Income is easily measured for individuals, and aggregate consumption is easily measured by merchants. This is why we have a progressive income tax and not progressive consumption taxes. It could be done, it is just more difficult.

You can repeat as often as you wish that "inequality" is not relevant, but you are wrong. Utility is increased more if $1 is earned/spent by a poor person than a rich person, ipso facto inequality is bad for utility, all else being equal. My reference to the economy serving the population, is just a reference to utility, as opposed to any other linear measure such as GDP.

The idea of using log-income as a proxy for utility is not new. It is a standard measure in the economics of taxation. Yes it is different than measuring consumption. It is an improvement over GDP in the sense that it measures how the economy is serving the population. Some consider this to be a laudable goal.

Good point on the final goods distinction, thanks.

The distinction between consumption and income is not significant for a large fraction of the population, and if you are going to track just one number, it really shouldn't be consumption. If you do that, you have no hope of tracking changes in social structures or inequality or wealth accumulation. You would have to track wealth or income too.

Addressing your concern over volatile income is not that important and could compromise the usefulness of the metric. If you propose using GDP or any other linear function instead (rather a logarithm or power-law) then you cannot approximate utility and your number will be insensitive to changes in inequality. If incomes go up for the bottom half by 10%, then GDP would not change by much, though many would be better off. Income taxes are already calculated annually to smooth out these income fluctuations for seasonal workers.

A metric that I like is mean(log(after-tax income)). It is a reasonable measure of the average "utility" that income provides to a population. If money circulates among corporations but does not change personal income, then the metric remains constant. If everyone's income increases 1%, then the metric increases 1%. If inequality increases, then the metric decreases since average utility also decreases.

As an alternate hypothetical, lets imagine that every multinational happens to be related to a large number of subsidiaries in the Cayman Islands, Bermuda, Singapore, and Luxembourg. Furthermore, suppose that three quarters of all world-wide corporate profits happen to be booked in these four countries with a minuscule population. Clearly there would be a problem.

So long as there is "greyness" in the allocation of profits among related entities, this will be systematically exploited to maximally shift profit low tax jurisdictions.

Although transfer pricing is a significant component, it is not the only one.

The most obnoxious methods probably relate to hybrid mismatches where corporations exploit differences in two tax codes to take deductions in both countries. This may involve a payment that is treated as interest in one country and a dividend in the other. It may involve an entity that is treated like a flow-through partnership in one country and a corporation in the other.

There is also "treaty shopping" where corporations set up faux corporations in countries with favourable bilateral treaties so they may reduce their tax when shifting profits from country A to the intermediary to country B.

0. When many of the world's resources will be depleted in a multi-decade timeframe, there is a problem. I want humanity to last millions of years.

1. Fortunately, longer schooling and birth control has reduced the rate of growth in the model of Malthus. This is dumb luck, not divination from GDP.

2. Please remember that we won WWII and went to the moon in the periods with highest marginal tax rates. Growth is probably highest with higher rates of taxation and government investment in R&D.

Take a closer look at the sections on hybrid entities, treaty shopping, and transfer pricing. There are loopholes wide enough to let tanker ships pass.

The loophole is setting up a multi-national structure to implement the base erosion and profit-shifting strategies discussed here:

https://www.oecd.org/tax/aggressive/beps-2015-final-reports....

> So if we focused on developing a tool whose sole purpose was to give us quantified feedback on the consequences of our actions - much like how we use utility bills ...

Utility bills and a carbon tax are the only feedback you need. All the rest is politics.

I get tired of NY headlines pushing their city as the centre of the known world. So many major cities have a "Broadway".

The ratio of comments to votes in this thread is a perfect example of the "chilling effect" surrounding this topic and the limits it creates on free speech.

Why the down vote?

I agree with the sentiment, but I don't think a competition investigation is the appropriate forum to deal with this. There should be a fine, perhaps through a class action or criminal conviction.

I certainly hope the penalty for illegally wiretapping hundreds of millions of people is more than $1 per head. I value the privacy of my conversations (and life) way more than that.

Besides, if I opt-in to this service, why should everyone who ever walks into my home or office be presumed to have made the same choice? What if I am a doctor or lawyer who is not legally allowed to make that choice?

So you think that the appropriation of unused real estate is worse than whatever disaster led to the mass exodus of a population from a major city. Interesting, but that is not how I think.