My answer to Do rising US stock markets translate into a higher quality of life for more Americans? https://www.quora.com/Do-rising-US-stock-markets-translate-into-a-higher-quality-of-life-for-more-Americans/answer/Curt-Doolittle?srid=u4Qv
Source date (UTC): 2018-03-07 03:41:44 UTC
Original post: https://twitter.com/i/web/status/971229386144927745
https://www.quora.com/In-theory-how-do-innovative-new-companies-get-created-in-a-textbook-socialist-economy/answer/Curt-Doolittle?share=9799a8b1&srid=u4QvUpdated Mar 6, 2018, 10:51 PM
Source date (UTC): 2018-03-06 22:51:00 UTC
—“I got paid more as an assistant teacher, with no meaningful responsibilities, working ten months a year, and all the school vacations, than I was paid to run the savings department at over six hundred branches of savings and loan.”— (a friend)
Source date (UTC): 2018-03-06 06:48:00 UTC
You know, I have been working on debunking the pseudoscience in economics – whether under the pretenses of socialist, social democratic, classical liberal, or libertarian dogmas for a couple of decades now. And I have a very hard time grasping how anyone can be literate enough in the subject to ask such a question, and still suggest that socialism is possible ever under any conditions whatsoever.
I know why people intuit that such a thing is possible (it isn’t), at least it isn’t for more than a few decades, any more than uninsured (unregulated) markets are possible (they aren’t).
The better the demographics the higher trust the polity the more effective are markets (rule of law) and the worse the demographics, the lower trust the polity, the more effective is command and control (rule by discretion).
Socialist economies do not innovate because of incentives. In socialist economies people can enact change through access to command (rule by command), and they cannot innovate privately without fear of capture(theft) of the proceeds of their RISK. So, (and this is true through all of history) people maximize their effort in obtaining rents (parasitism).
It’s better to think of Marx, Freud, Boaz, Frankfurt School, and Postmodern schools as a kind of pseudoscientific fiction that competes with science fiction and fantasy and the novel to inspire us such that we learn about ourselves by what we wish could be but cannot be.
https://www.quora.com/In-theory-how-do-innovative-new-companies-get-created-in-a-textbook-socialist-economy
The stock market does not represent the economy. If the stock market DOES represent the economy, then monetary policy is too loose and the stock market will act as the indicator that a correction of that monetary policy is in place – by correcting. So it’s better to treat the stock market as a canary in a coal mine that senses extremes.
Think of the economy as an enormous school of fish, or flock of birds, that has incentives both to stay near one another, to follow others who have found opportunities, and to ‘defect’ (branch off) if they find counter-opportunities.
Bad monetary policy that is used to inflate employment, by artificial stimulation of demand,
The primary value of the stock market is providing an alternative store of value given that the government is constantly destroying the value of money through inflation.
The secondary value of the stock market is that because the financial sector must desperately seek returns in order to prevent the governments’ destruction of value, the money is reinvested in increasingly risky possibilities stimulating innovation and risk taking.
The third value is that some of these infinitely risky possibilities are what we call ‘startups’ that produce technological innovations that has been the chief contribution of american society to the world economy. And the possibility of going public and ‘winning the economic lottery’ by doing so, provides the lottery effect, that although few people win, many people ‘play’, and this generates economic opportunity.
Now, I can also list all the bad things. But I’ll leave that for another post.
How does this affect the average american? Quality of Life? Well, that’s a very … troublesome term. It’s like happiness. We can’t measure it, because it’s dependent upon the individual, not the polity. We can however measure standard of living, which means the resources available to the individuals prior to their mixture of good and bad decisions.
And the evidence speaks for itself.
yes.
There is a reason that americans have the stock market and produce technology. There is a reason that london holds the bond market, and produces financing. There is a reason that germany masters capital production. There is a reason that russia masters military production.
Those reasons are the differences in risk tolerance and the sensitivity to failure of each of the polities.
https://www.quora.com/Do-rising-US-stock-markets-translate-into-a-higher-quality-of-life-for-more-Americans
You know, I have been working on debunking the pseudoscience in economics – whether under the pretenses of socialist, social democratic, classical liberal, or libertarian dogmas for a couple of decades now. And I have a very hard time grasping how anyone can be literate enough in the subject to ask such a question, and still suggest that socialism is possible ever under any conditions whatsoever.
I know why people intuit that such a thing is possible (it isn’t), at least it isn’t for more than a few decades, any more than uninsured (unregulated) markets are possible (they aren’t).
The better the demographics the higher trust the polity the more effective are markets (rule of law) and the worse the demographics, the lower trust the polity, the more effective is command and control (rule by discretion).
Socialist economies do not innovate because of incentives. In socialist economies people can enact change through access to command (rule by command), and they cannot innovate privately without fear of capture(theft) of the proceeds of their RISK. So, (and this is true through all of history) people maximize their effort in obtaining rents (parasitism).
It’s better to think of Marx, Freud, Boaz, Frankfurt School, and Postmodern schools as a kind of pseudoscientific fiction that competes with science fiction and fantasy and the novel to inspire us such that we learn about ourselves by what we wish could be but cannot be.
https://www.quora.com/In-theory-how-do-innovative-new-companies-get-created-in-a-textbook-socialist-economy