Wednesday, September 17, 2014

A good thing turns bad if there is too much of it

Living in the Future Tense #02, August 28, 2014
Reprinted in the Tampa Bay Times, September 8, 2014

When More of a Good Thing Is Bad

Edward Renner

If something is good, surely more must be better. But it is not necessarily so. It is true that when you are alone or don’t have any money that a friend or any amount of money is very valuable. But, the more you have of either, the less valuable any additional friend or money becomes, just as a meal for a hungry persons is more important than for someone well fed. What we often don’t fully appreciate is that both too little and too much are extremely damaging, but in very different ways and for very different reasons.

I recently received a friend request from someone I did not know.Why would a complete stranger want to be my friend? Maybe, it was because they liked my last column? A new Fan!

No, It was because we have the same last name. It turns out he had over 3,000 friends, many with our last name. It turns out he had more than 3,000 friends, many with our last name.
So, when is a few friends not enough, and a large number too many?

Facebook now has 1.11 Billion members. The 10% with the fewest friends have less than 10 friends each; but the 10% with the most friends have 500 or more friends, some up to the maximum limit of 5,000.

The typical Facebook participant has between 100 and 190 friends: These include close friends, colleagues, some personally unknown associates, and even some family. With some, they have a genuine reciprocal relationship, for others mainly one-way communication.

This number is very similar to the 150 people that social science research has show that most people can manage in a meaningful way. Facebook is a much more immediate and personal than e-mail, which in turn was more immediate and personal than the Post Office.
However, to collect 5,000 friends has little if any redeeming social value. In fact, what is true for the distribution of friends on Facebook is also true for the distribution of wealth in the US.

The Distribution of friends on Facebook and the distribution of wealth in the US are identical functions. For both groups of people the upper 10%, and in particular the upper 1%, have an excessive number of either friends or amounts of money

The important difference is that the supply of potential Facebook friends is endless, and individuals with an excessively large number of friends are the primary victims of their own excess: Too many superficial friends may be the means to loneliness no less than too few friends.

In contrast, there are only so many dollars in the economy. The supply of wealth is limited. How wealth gets distributed does make a difference. In this case, the primary victims are the 90% of individual who do not have an equitable share of the wealth.

At the poor end of the distribution a small additional amount of money makes a big difference for the person with little money. At the rich end of the distribution any additional amount of money does not make any noticeable difference.This fact is neither new nor radical. In classic free-market economic theory it is the “law of diminishing marginal utility.” But, this well established economic principle seems to have been forgotten by the current economic policies that have allowed the excessive accumulation of wealth by the1%. 

One way to correct this distribution is to increase the minimum wage to be an effective living wage, including adequate food, shelter and health care. However the very rich have used their money and influence to blocked this simple reform. Clearly, their excess has not trickled down as the promised alternative; indeed, just the opposite.

The damage this false argument has caused is great compared to the economic stimulus and improved quality of life that would result from a greater degree of equality.

In a democracy, individuals are generally free to behave in self-serving ways as long as it does not harm others. That is why a few people are free to choose to distribute their social energy to accumulate an excessive number of meaningless friends.

Perhaps, the question we should re-consider is whether, like Facebook, to permit a few people to accumulate excessive meaningless amounts of the national wealth, when the result is so harmful to the national level of well-being.

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