Most unproductive industries: Why don't they get critiqued?

The general econ101 argument is that prices and incentives will lead to the most efficient allocation of resources. Every sensible person, however, knows that needs to be taken with a big pinch of salt.

My question: why aren't some of these industries more heavily critiqued by the public? With all due respect, the financial sector is clearly much too big relative to the economy, and absorbs much too much talent from top schools. That said, the financial industry is most often NOT NEARLY AS UNPRODUCTIVE to society as these much less scrutinized industries:

Advertising. If you can name me a single benefit of advertising, I'd be surprised. With the increasing prominence of the internet in allowing consumers to gain knowledge of new products, advertising serves no useful purpose. The reason it still exists is a classic game theory application (firms need to keep up with one another). It is among the worst culprits in a list of unproductive industries.

Tax Lawyers and Tax Accountants: The only reason these slimy bastards exist is because the tax code is so complicated. A very simple tax code (ie. only one tax - a land tax, where the amount due is a proportion of its government registered value, no loopholes, you don't pay the tax your land is taken and sold by the tax authority - everything else tax free) would eliminate the need for most of these unproductive, overpaid, workers.

Real Estate Agents: Sorry, but real estate agents serve little useful purpose. They are merely a bunch of slimy, greasy services workers who add little or no value to the economy, but take much. Again, hopefully as time progresses, the internet will get rid or reduce the size of this unproductive industry.

Public Relations: It's bullshit. That's it. It might help an individual firm, but does nothing to help the overall economy.

Lobbying: The most corrupt, disgusting, and unproductive of all industries is government lobbying. I don't mind citizens protesting on the street with cardboard and trumpets, but professional lobbying is morally wrong. Anyone who works for a professional lobbying organization when it has to do with business/tax regulation is a despicable person, no exceptions.

Of course, I won't bother listing some financial jobs such as day-trading (they're right up with the above in terms of uselessness) but they're much more heavily scrutinized than every one of the above with the exception of lobbying.

Feel free to add your own ideas!

 

Yeah, good post. Obviously there's a slight exaggeration here: advertisers and PR people do play a role in helping spread information, however small and distorted. Not sure if I agree with your point on real estate agents either actually - aren't real estate agents market makers? (bringing buyers and sellers together, making the market more liquid).

Overall though I see your point. Add all lawyers to the list too. In an ideal would be so much trust that you wouldn't have lawsuits and whatnot, where people are using up resources trying to get their share of the pie bigger. An ideal world has everybody focused on increasing the size of the whole pie.

 
JDimon:
Overall though I see your point. Add all lawyers to the list too. In an ideal would be so much trust that you wouldn't have lawsuits and whatnot, where people are using up resources trying to get their share of the pie bigger. An ideal world has everybody focused on increasing the size of the whole pie.

I think lawyers are more important than you think.

It used to be that if two people had some dispute, it would be settled physically, with harm or death coming upon them.

Now they can simply sue each other and avoid any physical harm.

 

Well yes, any black or white statement in a world of grey is always going to be an exaggeration, but my general point is that if these industries were to be great reduced in size or go extinct altogether, there would be very little if any negative impact on society.

With the internet, there shouldn't be a need for "market makers" in the real estate industry. Hopefully in the future there won't be.

 
jacksooon999:
Tax Lawyers and Tax Accountants: The only reason these slimy bastards exist is because the tax code is so complicated.

Yes. So what is your point? As long as the tax code exist in its current form, they are 100% necessary.

jacksooon999:
Real Estate Agents: Sorry, but real estate agents serve little useful purpose. They are merely a bunch of slimy, greasy services workers who add little or no value to the economy, but take much.

What are you talking about? My parents are selling two houses right now, and they definitely don't feel like running around town handing out flyers to everyone...

I could go on, but I'm too bored with your silly arguments.

 

Your argument is prima facie flawed.

What is the purpose of the financial industry, which you have claimed is productive? Intermediation.

That is the exact same function as the other industries you see as useless.

In EC101 with perfect information, yes, real estate agents, PR, advertisers, and lobbyists fulfil no purpose; then again, neither do bankers. Lest you forget, we are just glorified salesmen at the end of the day.

As for taxes, in what hell-hole of a right-wing conspiracy blog did you decide that the deadweight of a few lawyers and accountants means that a land tax is the optimal method of taxation? That might have made a tiny modicum of sense in the early Feudal ages; today, it fails on many hundreds of levels.

 

your econ argument is wrong price and incentives does not lead to efficient allocation of resources but rather leads to greed and dis-equilibrium and inefficient allocation of resources

 

have thought about this a few times before. Ultimately, the government causes this productivity loss through excessive regulatory complexity.

I do not just mean tax law. In financial services, we have whole departments devoted to compliance. Without government regulation, HR would probably be the recruitment team and benefits coordinator.

If the law is too complex for your average joe to understand, he will need advice from a more knowledgable 3rd party.

I will argue that PR & Advertising have some value. As long as consumers are influenced, it will remain a line item for every company. Although ad campaigns cancel eachother out, a good one can cause breakout sales (e.g. Old Spice). Companies in highly concentrated industries have learned not to spend much advetising. Coke & Pepsi are perfect examples. They could spend much more, but they realize it is ineffective.

 
Real Estate Agents: Sorry, but real estate agents serve little useful purpose. They are merely a bunch of slimy, greasy services workers who add little or no value to the economy, but take much. Again, hopefully as time progresses, the internet will get rid or reduce the size of this unproductive industry.
Have you ever tried to rent out an apartment? For every ten appointments I made for showing, five people would show up. This is not easy work. I will agree that there should be a $50/showing fee rather than a 15%/rental fee.
 
Best Response
IlliniProgrammer:
Real Estate Agents: Sorry, but real estate agents serve little useful purpose. They are merely a bunch of slimy, greasy services workers who add little or no value to the economy, but take much. Again, hopefully as time progresses, the internet will get rid or reduce the size of this unproductive industry.
Have you ever tried to rent out an apartment? For every ten appointments I made for showing, five people would show up. This is not easy work. I will agree that there should be a $50/showing fee rather than a 15%/rental fee.

They're sales people, the same kind of people you find selling goods and services for every major company in the world. This also depends on what state you're in. In NY you would have a real estate agent and a lawyer or 10, whereas in Colorado you'd have just one real estate agent (or a team, depending). Real estate law varies state by state

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

this post is fuckin stupid, not everyone can be an engineer or doctor. People should do what they can to put food on the table, as long as these positions exist it means society deems them necessary. I have had my fill of the "value" argument, a carpenter may add more overt "value" than a tax accountant but who is going to fucking argue that the accountants job is less important.

 

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