Nobel Prize-winning economist explains how a 300 y/o model predicted Uber | Vernon Smith | Big Think 

Social community capitalism would be great!

The inevitable Anarchocapitalism.

@@ThoughtsInVideo that is an oxymoron since capitalism cannot exist without a state.

communism aka stateless, moneyless and classless society

The one in Australia, it's highly successful.

And now without dislike metrics I have no idea is this a $hit video or worth watching. But based on general quality of the channel I'll give it a chance...

It was greatly worth the watch

it's the internet my friend. when we have 50,000 choices the "owner" of the garbage we just clicked on had to draw us in with a totally deceptive headline...and we will fall for it over and over and over like cats chasing string

@@7788Sambaboy haha very true

And loose with "spiritual" imo. It's not discovery; it's conscious connection... Like the Force, or like chakras. Can we use discovery and spirituality as synonyms? Never.

I heard this from a bolt driver as well, I live in SA and also hear, that the specials kills you, do you take poeple on the side, or don't tell me, your name is here they might recognize you and fire you.

start your own services

if you make 'almost no money', then why do you do it? Not for the love of Uber, obviously. Eventually the labor market will demand real pay for the work and Uber will either figure that out or go bankrupt. Or rideshare will be managed by a blockchain and everyone will be better off...

It doesn’t make sense you work for free. You should find other work, you will be replaced by autonomous vehicles anyway.

@@matteframe Do you actually understand what a blockchain is? In what way would something being "managed by a blockchain" solve any of these problems? Do you think that the tiny gap in efficiency between the transaction costs of running the servers vs the transaction costs of running a blockchain (on the same hardware for the same price, FYI, because that's how it works, all blockchain does is change who owns the servers/store transaction data) will be enough to get rideshare to start paying people a living wage? Do you think it will make the cars go faster? Use less fuel? I feel like you must have been massively deceived about what cryptocurrency is in order to believe this. I'm not trying to attack you, I'm just trying to understand where this is coming from. I have worked with blockchain technology for almost two years and I hope that the public doesn't just see blockchain as a cure-all solution for all of our problems.

Yea when I clicked on this video I thought it was going to talk about that instead. Wasn't there some news recently that Uber will fail because their plans to move to self driving didn't pan out?

This does not correspond to the facts in the country where I live. You can take a regular Uber (or simillar app) ride to taxi with 10-25% to the app, and it will still be more affordable than taxi. The business model is not unprofitable per se, as they get great revenue per ride with very little cost.

Time will tell if Uber and Lyft survive; they are certainly not without their issues as companies. That said, it is difficult to imagine going back to the old approach of having human dispatchers trying to match cars with rides, not to mention specific taxi medallions that drivers have to pay for and such. We're certainly in a time of great change and it may take a few iterations before we reach a new stable state for transportation that can last for generations.

@@bigthink Wow, thanks for shilling out for The Man, neoliberal mouth piece! In the meantime, drivers are sometimes paying more in extra upkeep to drive than they get in wages (I in 3, if I recall) And by the way, it's weird to juxtapose how a Nobel economist found transactionnal equilibrium then talk about Uber which imposes rates on all of its drivers. You're comparing price and logistics. But whatever it takes to glorify an exploitative late capitalist racket, right?

They also don't need a lot of capital thanks to "borrowing" from the uber drivers car. Furthermore the ascendance of such firms is largely because they're doing something with money others can't and in this case that was treating employees as contractors. If uber drivers were employees and their cars were part of Ubers balance sheet investors would be insane to put their money in. Put another way Uber is a scam but the investors are accomplices instead of dupes.

You haven't read so much about Vernon's experiments. I can see. I recommend to check his experiments about bargaining and trust games.

saving this comment, its the absolute truth and everyone is just looking away. I dont get how the CEO's of those companies can live with themselves. Fucking psychopaths

yeeee we should introduce comunism

@@thisisloop Like neuroscientist, linguist and anthropologist Terrence W Deacon says, corporations have a mind of their own. Their actions aren’t necessarily the result of individuals, be they even the CEOs. How’s that possible? A system, any system, works by way of constraints. A car is able to go forward because it has the exact architecture of constraints that channel the energy from gasoline (chemical bonds) all the way to the wheels where it spins the rubber tires. The constraints don’t allow the energy to go anywhere and do anything else than the intended useful work. Every part of the car constrains some other part(s), so much so that if you go with a key and screwdriver and loosen the various parts, "giving them more freedom" as it were, the car would not work anymore. Those unconstrained/loose/free parts would take away energy from the intended goal of moving the car forward. Normally, cylinders constrain the expanding gases and the piston, the piston constrains the crankshaft, brackets constrain the crankshaft, screws constrain the brackets, so on and so forth-every part lacks the freedom to use up energy in unintended work. Constraint is what guides otherwise blind entropic energy into doing useful work-this is true for everything. Corporations work the same way, they are architectures of constraints that channel human work into achieving the corporation’s goals-which are no more and no less than profit related. Every human in the organizational hierarchy of that corporation is constraining some other humans and he himself is constrained by others. From R&D to accounting, everyone is forced to do their small job otherwise some other employee will punish or terminate them. And this goes as well for the CEO who cannot *not* maximize profit because the board of investors will fire him/her, if not even sue him. He’s constrained! The lawyers as well will be constrained into making his life hell. Like Deacon says, the corporation is a golem (soulless creature from jewish folklore) an unconscious system which nonetheless thanks to its architecture of constraints marches on and intelligently pursuits its own mindless growth. People are caught in this mechanism. As such, they aren’t expressing their own values. Their behavior is constrained to serve the soulless system called "Facebook", "DOW Chemical" or "BP". Employees who try to make the corporation work for the "benefit of consumers" or "good of humanity" or some other thing except profit, are "loose parts". Just like whistleblowers, they are parasites. But yeah, like Plato said about politicians, those who make it to the top tend to be the most immoral, deranged, power-seeking of them all. In fact i’ve actually read an article that maintained that high positions in corporations and politics tend to hold a much higher percentage of psychopathy than general population. And it makes perfect sense. Any caring, thoughtful individual that’s not desperately self-concerned and prepared to f*ck everyone up, tends to be filtered out as you go up the hierarchy.

@@josef9988 Both capitalism and communism are antiquated systems that were devised in times that were very different to our current context. The can’t work! People keep invoking them because that’s everything they know due to their indoctrination. All they know is capitalism or communism, and they also know that they must scream and curse. It has become a football fan type of activity, no intellectual rigor or honesty.

Thank you for taking the time to make this comment.

It is and thats its main form of power by having vast information asymmetry with its "contracted" drivers. Uber has a walled garden of information about buyers that can only be accessed if you work for Uber but at the same time Uber drivers are simply contractors with no employment rights. Just like how Amazon "innovated" by being the only one who could skit sales tax for over a decade Ubers innovation is claiming its drivers aren't employees.

The fuel price killing your profits? They should just charge a fee for you using the app monthly?

Uber is simply an unregulated taxi market model. Given enough time, it will evolve into a standard taxi industry model which has been around for 50 years+. Nothing disruptive save a digital call taking interface for customers vs the taxi company representative typing your request into their system.

Agreed. Middle comment is 100% correct + I think the last one is too kinda but maybe it could be phrased better

You got it. Even more ironic is that Uber is a dispatcher and a market maker. They ultimately set price.

So most everything he says in the video is contradictory but one thing i actually agree about is that a group of people at any education level IF GIVEN ALL THE INFORMATION can come to a price equilibrium and while thats really cool and all the real world is built on information asymmetry and its literally how every corporation makes money. Uber drivers do not set prices Uber does.

What has created inequality is mostly the intervention of the government on the economy (e.g inflation of money supply and distribution to key players)

@@allanbrado794 False. Inequality has steadily risen since the 80's due to deregulation of markets aka neoliberalism

@@juanoliveira9460 There’s an interesting side of free markets shown in a study conducted by economics professor Armin Falk. What do markets do to our morals? The researchers took a number of mice that were destined to be euthanized-because they were specially bred for scientific research but had some genetic defects and were useless-and they used them instead to test people’s psychological tendencies within markets. One group of people were directly presented with the option to save one mouse each, for some price. They were guaranteed that the mouse would be granted a life in a stimulating environment. The second group of people were set up to play free-market negotiations among themselves to establish the salvation of mice. When people made individual decisions, less than 50% were willing to let the mouse die. In the other group of people who participated in pairs-one "owned" the mouse and could negotiate for a price they'd take to sacrifice it-more than 70% allowed the mouse to die for 10 Euros or less.

@@raresmircea Quite interesting. How do you explain that? What was professor Falk interpretation?

He's referring to price equilibrium which is "efficient" aka it benefits everyone. If you were to buy a trinket and it costs the seller $500 and they sold it to you for $1000 yet another seller of the trinket sold it to you for $600 then through arbitrage you should end up with $800. The correct part is that buyers can sellers can both have a set of "perfect" information and come to the equilibrium. However the key missing here is they do not have perfect information nor do they have the time to resale the item to recoup their losses. That's a transaction cost in other words.

Time will tell if Uber and Lyft survive; they are certainly not without their issues as companies, and there are others coming up that promise better working conditions. That said, it is difficult to imagine going back to the old approach of having human dispatchers trying to match cars with passengers, not to mention specific taxi medallions that drivers have to pay high rates to rent and expensive and unpredictable service. We're certainly in a time of great change and it may take a few iterations before we reach a new stable state for transportation that can last for generations. Hopefully one can be reached that can pay drivers a fairer wage while also lowering the cost to consumers by at least automating the middleman if not completely eliminating them.

@@bigthink I think that Uber is just as much a middle mad as a taxi service. Any time you have people working for nearly nothing, taking all the risks and are sacrificing their own capital (their car in this case) you'll of course as a Uber rider get better value for that than a fairly mediated transaction. So appealing to that is fallacious. The error here is thinking of Uber as a way that Uber drivers have better say on setting prices for their services. This is whole reason to have corporations in the first place is to manage risk so employees don't have to. With that said we can both agree taxis were antiquated. But this is indeed the big tech bait and switch scheme. It's more a product of how broken the economy has been for so long that it takes extraordinary exploitation to even bring any business to the table much less innovators.

The idea of a central dispatcher is having someone with his or her own interests planifying itineraries and controlling the schedules of drivers to maximize the dispatcher's utility who in some ocassions -even- owns the means of production (the taxi). The algorithm's purpose is to reduce transaction costs between sellers and buyers of the taxi service for which it charges a %. As you mention, it pushes the business concerns down onto the drivers, but this is not worse than a situation in which the algorithm doesn't exist and the driver has to find passengers, making long journeys wich increase driver's transaction costs. Finally, the driver makes a choice in his best interest : either he uses uber or not, no one is forcing him to join. To start with.

@@Furiends It is nice that you are considering risks into the calculation of the creation of value. I hope you don't adhere to the marxist's theory of value otherwise you may have a sort of cognitive disonance. Also, I see that you agree with the idea of salary being the result of wealth distribution as neoclassical economics, that If I correctly understood, you think it is a better model than Uber's.

your border collie was over 40 years old!! and how do you know you lungs are "shrinking" didn't know they could shrink.

@@7788Sambaboy my female doctor told me

@@lasan5744 "my female doctor told me" ?? Not sure what you're talking about...I was just playing with you on the 40 year old dog and shrinking lungs things, but no matter how hard I try, I can't figure out the gender specific Dr thing

@@7788Sambaboy im sorry

@@lasan5744 sorry? OK...

You haven't been paying attention.

Sounds unique. I'm ready to buy

Read Capital by Marx

Wealth of Nations by Adam Smith, Capital Vol. 1-3 by Karl Marx, The General Theory of Employment, Interest, and Money by John Keynes, Capitalism and Freedom by Milton Friedman. Those are some of the most important works in econ over the centuries.

Watch some Richard Wolff videos to balance out this one for starters

Not believing in socialism is logical. It's pretty much flat earth of economics based upon outdated theories debunked decades ago.

He said “we all have our self interests at heart and that’s refreshing”. How refreshing can it be when Adam Smith wrote that 300 years ago?

Nothing. This is just neoliberal garbage.

🤗 same to you.

Never ever will I take for granted our freedoms here in the Americas… Signed, perpetually optimistic…

@@iforget6940 You welcome 🙏🏾.

📌

@André Not sure, but i think equilibrium is the key word. Set up a fixed system without variables, and equilibrium is achieved a little after. The context as i see it, is that variables of economy is obstructing equilibrium.

Yeah, what he said doesn't reflect reality. It was basically a marketing ploy to conratulate Uber on how efficiently it exploits workers.

what it means is that the market owns you. It's about money and power and control...since most are born with none of these, the same people/families etc. own the ones that don't have the money and power.

All i got from his first example is that he believed what he did was amazing and no one in the 50’s would have believe him. However, to be honest, i couldn’t understand his example.

he didn't "lie" he was just guessing and now the corporate elite and the media giants are the "invisible hand" just that they don't have to be invisible any more as they own congress and they can now do pretty much anything they want to

ah the fascist economic school of taught as taught the people that it is totally ok to be exploited by the capitalist and let yourself be enslaved by them and of course they totally revise Adam Smith to fit their own political aganda

Smugness is one of my least favourite human traits. Especially when it's unearned.

More enjoyable than central planning and the creation of wealth throught redistribution ? Those are better ones

Unfortunately, the moment he identified as a socialist half of the people watching hit dislike and stopped watching.

Glad you liked it, thanks for watching!

😳

Glad to hear, thanks very much!

Its working wonders and inspiring awe right now.

Bobbymickael Te le gram….

The people of 40 years ago created the children of today. So they raised them to be like this. That means it's all the fault of people from 40 years ago. That's a hard fact for today's life.