I think that this person does not know what the Jevons Paradox is. The Jevons Paradox is that increasing the efficiency with which a resource is used may increase the total amount of that resource that is used. Consuming more because costs went down isn't the Jevons paradox - it's spending more because costs went down.
So if you give all your coders a great test harness and they run more tests because it takes up less of their time, that's not the Jevons paradox. If you give your coders a great test harness and then they go from spending 10% of work hours on testing to spending 20% of work hours on testing because testing has such a good ROI now, that's the Jevons paradox.
Jevons Paradox has become a meme lately because it can be used effectively in a particular type of online argument to sound smart and checkmate the other. But as you say, the popular use is nothing mysterious, just microeconomics. At a certain level of technological development, supply and demand curves meet at a point and it yields a price. If technology develops and makes production more efficient, that crossover point moves, and now more demand can be met. The popular meme idea of scoffing at road construction because it will just make more people drive misanthropically ignores that driving isn't purely emissions but it also gets people to places where they want to go, like visiting family and friends or allows them to live at a different place from where they work if that's more affordable or more to their liking. The road capacity led to more cars on the road, but also to more real demand being met. Now of course, there can be such a thing as totally frivolous additional usage, though one needs a specific value system to judge it whether a trip was virtuous or sinful.
Meanwhile real Jevons is a very particular effect that doesn't show up on all road graphs and doesn't simply mean that opening up more lanes will attract more traffic.
>The popular meme idea of scoffing at road construction because it will just make more people drive misanthropically ignores that driving isn't purely emissions but it also gets people to places where they want to go, like visiting family and friends or allows them to live at a different place from where they work if that's more affordable or more to their liking.
People scoff at road construction (or rather, road widening) as a solution to congestion. I don't think anyone is under the impression that kilometers driven would go down as road bandwidth goes up.
>The road capacity led to more cars on the road, but also to more real demand being met.
No, not necessarily. Maybe some people who would have otherwise used public transport opt to drive instead. Making roads wider could literally make them less efficient, in terms of humans moved per hour per meter of width.
> People scoff at road construction (or rather, road widening) as a solution to congestion. I don't think anyone is under the impression that kilometers driven would go down as road bandwidth goes up.
It is a solution to congestion because a part of the past congestion was that people were stuck at home and gave up on the trip overall, because it would take so long.
> Maybe some people who would have otherwise used public transport opt to drive instead.
Then presumably comfort increased. Also, add bus lanes.
>a part of the past congestion was that people were stuck at home and gave up on the trip overall
That's not congestion. If someone opts not to make a trip, or uses a means of transport that doesn't use the road, such as a subway, then they didn't create road traffic. Congestion refers specifically to the failure of traffic to advance at an efficient speed along a thoroughfare.
>Then presumably comfort increased.
Again, "people scoff at road construction as a solution to congestion". Discomfort is not a component of congestion.
> Jevons paradox happens when the cost of a resource goes down, but the total spend on that resource goes up.
I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too). Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use (instead of a decrease as a first order analysis would suggest).
Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it.
Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
It's interesting because consumption then grows in unpredictable ways: it can drive innovation even in cases where markets are constrained by monopolies, for example, where in non-Jevons cases producers would have no incentive to lower prices.
> Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
No, this isn't what Jevons says. Jevons isn't concerned about money being spent on something, just total consumption of it. Whether more money or less is spent on it depends on the price elasticity of demand. Inelastic demand will lead to less money spent despite more of the resource/service/whatever being consumed. Elastic demand will lead to more money spent.
More like: (1) oil getting cheaper makes (2) cars possible which means (3) the average person can now go further to commute which means (4) they buy a car and get a higher paid job which mans (5) their oil consumption goes from "cooking and an oil lamp" to "transport to a job that pays better than the best you could get before automobiles displaced horses".
What would the food example be? Vanilla ice cream going from a rarity only the rich could afford, to a standard desert for all when the synthetic form was invented?
Not OP but yes if you consume more jam (not if you consume the same over a period of time, because you're then just paying less for jam over a wider time scale).
The example I've heard given is accounting and spreadsheets. It made accountancy cheaper, but people then started asking more questions and analysis became a thing.
Rather than just taking the reduced spend as profit, companies wound up increasing their accountancy spend overall.
> I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too).
Kinda yes. How do you derive total spend from supply-demand curves? Multiply price and quantity at an intersection point. Likewise, you can predict total spend by multiplying p and q on the demand curve.
The difference in total spend is difference between these areas. For the total spend to increase with a drop in price, the the demand must rise faster.
Jevon's paradox implies that the price equilibrium is at the highly elastic portion of the demand curve.
> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use
While that's mostly true in practical reality in established economies, that does not strictly have to be the case. On the consumer side, especially in manufacturing, there's very little difference between unit price of a good falling and input unit per output units dropping as both lead to decreased COGS. In both cases, market realities might unlock alternative approaches (the classic being robot replacing Robert), leading to increased demand.
> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use
I think these are the same, because efficiency is value over cost. In the original formulation of the paradox, a more efficient steam engine lead to a rise in coal consumption. You can look at this as a "money buys coal, coal drives locomotion" system, where the latter part was improved. Modulo practical issues with coal (transport, storage, etc), dropping the price of coal would (probably?) lead to the same effect, since the end result is that locomotion per money is increased. For an outside observer, it doesn't matter if you get more coal per money or more locomotion per coal.
> standard supply and demand
Standard supply and demand doesn't say anything about increase of spend. If food prices drop, I'm not going to buy more food. I might buy better food for the same budget, but there's no reason why my total food spend should increase.
I think it's still valid to see this as an example of the Jevons paradox: Your resource is money, and reduced per-unit cost means you are using your money (resource) more efficiently. If the total spend now goes up instead of stagnating or decreasing, you've got Jevons
Not a troll. As recently as the 1870s, when Jevons, Menger, and Walras pioneered the Marginal Revolution in economics, this was a deep new insight about elasticity.
Imagine yourself a shop keeper, hoping to boost the money coming in at the till. If you increase prices by 10%, you will get more? Right?
That depends on the elasticity of demand. If the elasticity is two, the drop in demand is twice the increase in price. 0.8 times 1.1 is 0.88. Takings fall from $100 to $88.
But if the elasticity is one half, the drop in demand is half the increase in price. 0.95 times 1.1 is 1.045. Takings rise from $100 to $104.5.
When the price goes up the shop always sells less goods, (Law of Demand) but that still leaves it unclear whether more or less money goes in the till. This is first year University economics today.
Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper. Goodbye water wheel, hello steam engine. More steam engines, greater consumption of steam power, any-one who wants to make a prediction needs to invent the concept of elasticity and try to measure it. Greater than one? Less than one? That is going to decide whether total demand rises or falls.
>Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper.
Well, in that case you're talking about an entirely different phenomenon. Jevons's paradox (as defined by this post) happens when the cost of a resource decreases and the spend on that resource increases. You're talking about what happens to the spend on resource A when the cost of resource B decreases. Whether it rises or falls, it won't be Jevons's paradox.
It was first-year GCSE (age 14-15) economics for me. But yes that's exactly it, the author appears to have discovered the price elasticity concept, as a refinement of the Law of Demand.
No, the concept the author is talking about is the Jevons paradox, just like the title says.
The law of demand frames demand as a function of price and utility — demand is monotonically non-decreasing with utility (the more useful it is, the more people want it), and monotonically non-increasing with price (the pricier it is, the less people want it), but e.g. Giffen goods and Veblen goods break the "monotonically non-increasing with price" assumption of the law of demand.
You can add efficiency to that equation — demand is a function of price, utility and efficiency, and it is also monotonically non-increasing efficiency (The less of it you need, the less people want it). If you could get twice as much saltiness from table salt, you'd cut down demand by 50%.
The Jevons paradox is about the cases where demand isn't non-increasing with efficiency, because utility is itself a function of efficiency. Increased efficiency directly lowers demand, but, because it increases utility, it also increases demand indirectly.
The paradox is usually framed as more efficiency -> more demand (because of the intermediate "more utility" step), but the author is framing it in the opposite direction, as less efficiency -> less demand (because of the intermediate "less utility"). I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
> I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
No you are right, it's the same paradox, not some distinct reverse form. If more x can cause more y, then it's logically equivalent that less x can cause less y.
Jevons Paradox is called a paradox because it is non-intuitive. It is very intuitive to conclude that when costs go up, people will use less of that thing.
I think it's a paradox in the same way that the non-reverse is. The spending might go down more than it's proportion of price increase.
An example not anchored in anything: If public transit costs x, I'll use it every day. If public transit suddenly costs 2x, I'm not gonna use it every other day, I'll rather find an alternative and use 0.
In micro economics theory they call this price elasticity where you try lowering the price to see how much more customers buy and you plot that to a graph calculator to get a curve and the bend on the curve is the price elasticity. Then you can calculate the optimal price to maximize sales.
One of my favorite examples of this kind of thing is requiring a ticket for every change.
There is a class of changes that take very little time but have a positive impact. If the cost of making a ticket for that change exceeds the cost of the ticket, it's human nature that some people just won't make the change.
This is a bit of a contrived example (e.g. you could bundle multiple small changes into one ticket) but it's still a good example of a policy meant to make things better actually leading to fewer improvements.
If you had the right OS support for JS apps - all those apps that package a full chrome browser all of a sudden would have close to zero memory footprint.
I liked this footnote. A simple, intuitive explanation.
> If you pay $1.00 to press a button, and pressing the button pays you $0.99, you > will press the button zero times. If you get $1.01 instead, you will press the > button all the time.
One thought: If it only gives you $0.01 profit you'll (have to) push it more than if it gave you $1000 profit. There's a saturation point.
I thought this would be about the actual reverse effect, namely that if something gets too cheap, people don't want it anymore. Which would have been also an interesting article, regarding status symbols and luxury items.
Now that I think about it, it's very easy to point to reverse jevon's paradoxes. Regulations around building housing, large org bloat + processes, when the stupid form fill that i need to fill out gets too long on some website...
Indeed. My first thought was that this is a roundabout name for ordinary "rulebook slowdown", but of course there are other ways to increase the cost of useful behavior, not just rules.
It leads to an interesting way to think about company and civic health as well. Instead of focussing purely on incentives, one might assume that many are inclined to do good stuff anyway, and then ask: are we lowering the cost of all desired behavior as much as possible? And are we doing it for as many people as possible?
> If you make it hard to change code by requiring multiple levels of reviews, a web of Jira tickets, a horde of people needing to sign off, and other red tape, you might effectively kill a whole class of changes
I remember this theater on things which were suspected to be too expensive with insiffiufficient ROI to implement, except that all the time wasted by multiple people arguing in Jira tickets, sitting in meetings, and writing specifications was likely far more expensive than just building and testing the thing.
For some reason, there seems to be a strong and automatic tendency for older and larger organizations to drift toward petrification through bureaucratization.
Except that revenue doesn’t crater in a floating exchange rate system. Revenue from them craters but the money moves elsewhere and revenue improves there - including an increase in total transactions. Total revenue will always be Total spend less what people decide to financially save rather than spend. Because tax are percentages and the process is a geometric series.
"Vote with their feet" means relocating to another jurisdiction. The other jurisdiction doesn't necessarily have to use a different currency, e.g. if businesses move from California to Texas, they both use US dollars. Likewise any two countries that both use Euros.
Moreover, when the destination jurisdiction does use a different currency, that increases demand for the destination currency and reduces demand for the original currency, i.e. it devalues the original currency. And then even if your revenue was the same in nominal dollars it would have declined in real dollars.
On top of that, non-uniform tax rates break your model wide open. The entities who leave can exchange their currency (independently of whether it gets devalued) for assets, so that the amount of currency (as distinct from wealth, since it's an equal value exchange) increases in the hands of the people who pay lower tax rates. Which likewise has a negative impact on revenue, since they pay lower tax rates.
I think that this person does not know what the Jevons Paradox is. The Jevons Paradox is that increasing the efficiency with which a resource is used may increase the total amount of that resource that is used. Consuming more because costs went down isn't the Jevons paradox - it's spending more because costs went down.
So if you give all your coders a great test harness and they run more tests because it takes up less of their time, that's not the Jevons paradox. If you give your coders a great test harness and then they go from spending 10% of work hours on testing to spending 20% of work hours on testing because testing has such a good ROI now, that's the Jevons paradox.
Jevons Paradox has become a meme lately because it can be used effectively in a particular type of online argument to sound smart and checkmate the other. But as you say, the popular use is nothing mysterious, just microeconomics. At a certain level of technological development, supply and demand curves meet at a point and it yields a price. If technology develops and makes production more efficient, that crossover point moves, and now more demand can be met. The popular meme idea of scoffing at road construction because it will just make more people drive misanthropically ignores that driving isn't purely emissions but it also gets people to places where they want to go, like visiting family and friends or allows them to live at a different place from where they work if that's more affordable or more to their liking. The road capacity led to more cars on the road, but also to more real demand being met. Now of course, there can be such a thing as totally frivolous additional usage, though one needs a specific value system to judge it whether a trip was virtuous or sinful.
Meanwhile real Jevons is a very particular effect that doesn't show up on all road graphs and doesn't simply mean that opening up more lanes will attract more traffic.
>The popular meme idea of scoffing at road construction because it will just make more people drive misanthropically ignores that driving isn't purely emissions but it also gets people to places where they want to go, like visiting family and friends or allows them to live at a different place from where they work if that's more affordable or more to their liking.
People scoff at road construction (or rather, road widening) as a solution to congestion. I don't think anyone is under the impression that kilometers driven would go down as road bandwidth goes up.
>The road capacity led to more cars on the road, but also to more real demand being met.
No, not necessarily. Maybe some people who would have otherwise used public transport opt to drive instead. Making roads wider could literally make them less efficient, in terms of humans moved per hour per meter of width.
> People scoff at road construction (or rather, road widening) as a solution to congestion. I don't think anyone is under the impression that kilometers driven would go down as road bandwidth goes up.
It is a solution to congestion because a part of the past congestion was that people were stuck at home and gave up on the trip overall, because it would take so long.
> Maybe some people who would have otherwise used public transport opt to drive instead.
Then presumably comfort increased. Also, add bus lanes.
>a part of the past congestion was that people were stuck at home and gave up on the trip overall
That's not congestion. If someone opts not to make a trip, or uses a means of transport that doesn't use the road, such as a subway, then they didn't create road traffic. Congestion refers specifically to the failure of traffic to advance at an efficient speed along a thoroughfare.
>Then presumably comfort increased.
Again, "people scoff at road construction as a solution to congestion". Discomfort is not a component of congestion.
My expertise in unrelated things tells me the dunning-kruger effect is in effect.
As the cost of attention goes down, and the cost of communicating bad ideas goes down, capturing attention with bad ideas paradoxically goes up.
> Jevons paradox happens when the cost of a resource goes down, but the total spend on that resource goes up.
I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too). Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use (instead of a decrease as a first order analysis would suggest).
Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it.
Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
It's interesting because consumption then grows in unpredictable ways: it can drive innovation even in cases where markets are constrained by monopolies, for example, where in non-Jevons cases producers would have no incentive to lower prices.
> Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
No, this isn't what Jevons says. Jevons isn't concerned about money being spent on something, just total consumption of it. Whether more money or less is spent on it depends on the price elasticity of demand. Inelastic demand will lead to less money spent despite more of the resource/service/whatever being consumed. Elastic demand will lead to more money spent.
So like buying the larger jar of jam that costs more than the smaller jar because the cost per ounce is less for the larger jar.
More like: (1) oil getting cheaper makes (2) cars possible which means (3) the average person can now go further to commute which means (4) they buy a car and get a higher paid job which mans (5) their oil consumption goes from "cooking and an oil lamp" to "transport to a job that pays better than the best you could get before automobiles displaced horses".
What would the food example be? Vanilla ice cream going from a rarity only the rich could afford, to a standard desert for all when the synthetic form was invented?
Not OP but yes if you consume more jam (not if you consume the same over a period of time, because you're then just paying less for jam over a wider time scale).
The example I've heard given is accounting and spreadsheets. It made accountancy cheaper, but people then started asking more questions and analysis became a thing.
Rather than just taking the reduced spend as profit, companies wound up increasing their accountancy spend overall.
Well consuming more jam per unit time would still be supply and demand, you have to spend more on jam overall because you can buy a cheaper jar.
Not exactly, unless you still wind up eating the larger jars at the same rate as the smaller ones.
You can rephrase it as the demand curve times the price (i.e. total spend on something vs the price) sometimes has a slope of less than -1.
> I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too).
Kinda yes. How do you derive total spend from supply-demand curves? Multiply price and quantity at an intersection point. Likewise, you can predict total spend by multiplying p and q on the demand curve.
The difference in total spend is difference between these areas. For the total spend to increase with a drop in price, the the demand must rise faster.
Jevon's paradox implies that the price equilibrium is at the highly elastic portion of the demand curve.
> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use
While that's mostly true in practical reality in established economies, that does not strictly have to be the case. On the consumer side, especially in manufacturing, there's very little difference between unit price of a good falling and input unit per output units dropping as both lead to decreased COGS. In both cases, market realities might unlock alternative approaches (the classic being robot replacing Robert), leading to increased demand.
> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use
I think these are the same, because efficiency is value over cost. In the original formulation of the paradox, a more efficient steam engine lead to a rise in coal consumption. You can look at this as a "money buys coal, coal drives locomotion" system, where the latter part was improved. Modulo practical issues with coal (transport, storage, etc), dropping the price of coal would (probably?) lead to the same effect, since the end result is that locomotion per money is increased. For an outside observer, it doesn't matter if you get more coal per money or more locomotion per coal.
> standard supply and demand
Standard supply and demand doesn't say anything about increase of spend. If food prices drop, I'm not going to buy more food. I might buy better food for the same budget, but there's no reason why my total food spend should increase.
Hoarding out of fear of the price going up later due to tariffs or other economic instability/inflation. The Trump paradox?
Not for perishables, but for non-perishables.
I think it's still valid to see this as an example of the Jevons paradox: Your resource is money, and reduced per-unit cost means you are using your money (resource) more efficiently. If the total spend now goes up instead of stagnating or decreasing, you've got Jevons
you are absolutely correct, the author is putting the cart before the horse.
I can’t tell if this is a troll post or not, but either way, the concept the author seems to be looking for is called the “Law of Demand” [0].
0: https://en.wikipedia.org/wiki/Law_of_demand
Not a troll. As recently as the 1870s, when Jevons, Menger, and Walras pioneered the Marginal Revolution in economics, this was a deep new insight about elasticity.
Imagine yourself a shop keeper, hoping to boost the money coming in at the till. If you increase prices by 10%, you will get more? Right?
That depends on the elasticity of demand. If the elasticity is two, the drop in demand is twice the increase in price. 0.8 times 1.1 is 0.88. Takings fall from $100 to $88.
But if the elasticity is one half, the drop in demand is half the increase in price. 0.95 times 1.1 is 1.045. Takings rise from $100 to $104.5.
When the price goes up the shop always sells less goods, (Law of Demand) but that still leaves it unclear whether more or less money goes in the till. This is first year University economics today.
Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper. Goodbye water wheel, hello steam engine. More steam engines, greater consumption of steam power, any-one who wants to make a prediction needs to invent the concept of elasticity and try to measure it. Greater than one? Less than one? That is going to decide whether total demand rises or falls.
>Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper.
Well, in that case you're talking about an entirely different phenomenon. Jevons's paradox (as defined by this post) happens when the cost of a resource decreases and the spend on that resource increases. You're talking about what happens to the spend on resource A when the cost of resource B decreases. Whether it rises or falls, it won't be Jevons's paradox.
It was first-year GCSE (age 14-15) economics for me. But yes that's exactly it, the author appears to have discovered the price elasticity concept, as a refinement of the Law of Demand.
No, the concept the author is talking about is the Jevons paradox, just like the title says.
The law of demand frames demand as a function of price and utility — demand is monotonically non-decreasing with utility (the more useful it is, the more people want it), and monotonically non-increasing with price (the pricier it is, the less people want it), but e.g. Giffen goods and Veblen goods break the "monotonically non-increasing with price" assumption of the law of demand.
You can add efficiency to that equation — demand is a function of price, utility and efficiency, and it is also monotonically non-increasing efficiency (The less of it you need, the less people want it). If you could get twice as much saltiness from table salt, you'd cut down demand by 50%.
The Jevons paradox is about the cases where demand isn't non-increasing with efficiency, because utility is itself a function of efficiency. Increased efficiency directly lowers demand, but, because it increases utility, it also increases demand indirectly.
The paradox is usually framed as more efficiency -> more demand (because of the intermediate "more utility" step), but the author is framing it in the opposite direction, as less efficiency -> less demand (because of the intermediate "less utility"). I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
> I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
No you are right, it's the same paradox, not some distinct reverse form. If more x can cause more y, then it's logically equivalent that less x can cause less y.
exactly the Law of Demand, it is more intuitive
Jevons Paradox is called a paradox because it is non-intuitive. It is very intuitive to conclude that when costs go up, people will use less of that thing.
I think it's a paradox in the same way that the non-reverse is. The spending might go down more than it's proportion of price increase.
An example not anchored in anything: If public transit costs x, I'll use it every day. If public transit suddenly costs 2x, I'm not gonna use it every other day, I'll rather find an alternative and use 0.
Should be more like 'caution' than 'reverse-paradox'
In micro economics theory they call this price elasticity where you try lowering the price to see how much more customers buy and you plot that to a graph calculator to get a curve and the bend on the curve is the price elasticity. Then you can calculate the optimal price to maximize sales.
But you want to maximize profit, not sales.
"your margin is my opportunity".
One of my favorite examples of this kind of thing is requiring a ticket for every change.
There is a class of changes that take very little time but have a positive impact. If the cost of making a ticket for that change exceeds the cost of the ticket, it's human nature that some people just won't make the change.
This is a bit of a contrived example (e.g. you could bundle multiple small changes into one ticket) but it's still a good example of a policy meant to make things better actually leading to fewer improvements.
Not an issue for me anymore. I make a change, then tell the agent to make the ticket too. lol
> you might effectively kill a whole class of changes, like "small refactor" PRs.
Or the changes might be "smuggled through" in an unrelated changeset that has to go through the red tape anyway.
Will it happen to memory? I am looking at you guys, electron apps.
If you had the right OS support for JS apps - all those apps that package a full chrome browser all of a sudden would have close to zero memory footprint.
A very old joke:
- Dad, dad, have you seen - the prices went up so much! Does this mean you will stop drinking now?
- No son, this means you will eat less.
I liked this footnote. A simple, intuitive explanation.
> If you pay $1.00 to press a button, and pressing the button pays you $0.99, you > will press the button zero times. If you get $1.01 instead, you will press the > button all the time.
One thought: If it only gives you $0.01 profit you'll (have to) push it more than if it gave you $1000 profit. There's a saturation point.
> The cost of making small changes to the codebase is so high that it becomes net-negative for a single developer to make the change
That's called Software Engineering at Google
And several other big tech with bad cultures
> “if the cost of a resource goes up, the total spend on that resource can go down”
This is tautologically true in the limiting case of infinite cost.
I thought this would be about the actual reverse effect, namely that if something gets too cheap, people don't want it anymore. Which would have been also an interesting article, regarding status symbols and luxury items.
Now that I think about it, it's very easy to point to reverse jevon's paradoxes. Regulations around building housing, large org bloat + processes, when the stupid form fill that i need to fill out gets too long on some website...
Indeed. My first thought was that this is a roundabout name for ordinary "rulebook slowdown", but of course there are other ways to increase the cost of useful behavior, not just rules.
It leads to an interesting way to think about company and civic health as well. Instead of focussing purely on incentives, one might assume that many are inclined to do good stuff anyway, and then ask: are we lowering the cost of all desired behavior as much as possible? And are we doing it for as many people as possible?
“If delta-x is negative, then delta-y can be positive.”
It seems like there’s a straightforward/obvious corollary that reverses the sign on both clauses. (Walk the curve in the opposing direction.)
> If you make it hard to change code by requiring multiple levels of reviews, a web of Jira tickets, a horde of people needing to sign off, and other red tape, you might effectively kill a whole class of changes
I remember this theater on things which were suspected to be too expensive with insiffiufficient ROI to implement, except that all the time wasted by multiple people arguing in Jira tickets, sitting in meetings, and writing specifications was likely far more expensive than just building and testing the thing.
For some reason, there seems to be a strong and automatic tendency for older and larger organizations to drift toward petrification through bureaucratization.
The author has discovered the red tape.
> if the cost of a resource goes up, the total spend on that resource can go down
... must be a satire post, right? This is just the most plain and intuition result.
Or also called bureaucracy
> if the cost of a resource goes up, the total spend on that resource can go down.
Not unlike hiking taxes on the rich, seeing them vote with their feet, and revenue subsequently catering.
But as long as we reward politicians for delivering blame more than results, this political folly will continue.
Until Strein's Law[1] kicks the teeth in.
[1] https://en.wikipedia.org/wiki/Herbert_Stein#Stein's_Law
Except that revenue doesn’t crater in a floating exchange rate system. Revenue from them craters but the money moves elsewhere and revenue improves there - including an increase in total transactions. Total revenue will always be Total spend less what people decide to financially save rather than spend. Because tax are percentages and the process is a geometric series.
"Vote with their feet" means relocating to another jurisdiction. The other jurisdiction doesn't necessarily have to use a different currency, e.g. if businesses move from California to Texas, they both use US dollars. Likewise any two countries that both use Euros.
Moreover, when the destination jurisdiction does use a different currency, that increases demand for the destination currency and reduces demand for the original currency, i.e. it devalues the original currency. And then even if your revenue was the same in nominal dollars it would have declined in real dollars.
On top of that, non-uniform tax rates break your model wide open. The entities who leave can exchange their currency (independently of whether it gets devalued) for assets, so that the amount of currency (as distinct from wealth, since it's an equal value exchange) increases in the hands of the people who pay lower tax rates. Which likewise has a negative impact on revenue, since they pay lower tax rates.