Curt Doolittle

Category: Economics, Finance, and Political Economy

  • WHAT WOULD HAPPEN IF ALL MONEY SUDDENLY DISAPPEARED? by Curt Doolittle, The Prop

    WHAT WOULD HAPPEN IF ALL MONEY SUDDENLY DISAPPEARED?

    by Curt Doolittle, The Propertarian Institute

    (Reposted from Quora)

    Believe it or not, this subject has been given quite a bit of treatment in the literature – mostly during the early part of the last century in response to the communist, socialist and fascist movements.

    REALITY:

    Almost everyone, on the planet, except for perhaps ~500M subsistence farmers would die in the first 30-90 days. Yes. Really. Seriously.

    MONEY

    Money makes planning of complex things possible.

    Humans literally cannot ‘think’ as we understand the term, without numbers, money, property, contracts, credit and interest. Just as drawings and written words help us remember things, numbers help us remember things we could not remember, think about, or compare without them. Money makes numbers possible to apply to things that are DIFFERENT. Whereas numbers without money can only be used for things that are the SAME. As such, we say that money makes it possible to compare objects that are otherwise incommensurable. Money renders the world commensurable: open to planning and the use of mathematics (measurement and forecasting).

    In practical terms, money and prices form an information system that tells us all what to do in real time in response to what others want and need. It is how we tell each other how to cooperate. It is the human social system. And the use of that social system, plus the capture of fossile fuel, has taken us out of ignorance and poverty.

    CONVERSELY

    What money and credit have also done is make it possible to breed again up to new malthusian levels. While Malthus was only half right, he was half right. Group selection accomplishes what malthus did not account for. THe general belief of ‘progressives’ is that technology will ‘save us again’ just like agrarianism, and then pastoralism saved us in the past. But the truth is we just breed up to these levels again, and reduce ourselves back to poverty.

    The problem then is that we must control our breeding. And that has been, except for a brief period in china, or the middle ages in England under Manorialism impossible to achieve. Partly because it is so profitable to sell things to people who bear children, and those children as they too mature.

    EXAMPLES

    THe US economy is primarily driven by housing, and the high rate of return on lending for housing, and the large supply of labor jobs for the production of housing. From this perspective, the exceptional nature of the american economy is not the product of ‘democracy’ or innovation, but the product of selling off a continent to waves of immigrants and their offspring, and using the profits from the sale of the (conquered) continent to invest in increasingly complex technologies.

    THe Chinese for example have figured this out and are doing the same thing but moving people from the ‘poor’ village farm to cities where they *hope* the population will be more productive than they were at subsistence farming. China can do this bcause it adopted consumer capitalism (money, prices and interest) and abandoned communism (no money, no prices, and no interest).

    The problem other countries face (India and say, Ukraine) is india is so pervasively corrupt that it’s not possible to create infrastructure without privatization of the investment through corruption, and the population is still expanding unsustainably in a dirty and hot environment. THe problem Ukraine faces, is that it cannot play ‘china’ because the lower levels of government are so corrupt and the country sees no demand for its currency, so the government cannot issue credit, and therefore the people remain poor.

    IN CLOSING

    When you say ‘money went away’ what you must also understand is that with money and prices will go the ability to communicate, and think. Literally. Humans would not be able to cooperate, communicate, plan and think without money. Worse, they would have no incentive to do so, because to have an incentive one must be able to think of something to do. And you couldn’t think of anything to do that you couldn’t do with your own two hands.

    THere is about 4 days worth of energy, and 14 days worth of food in the pipeline. If you made money vanish, you would need to make 6B people vanish along with it.

    You may find a more thorough, or a more simplistic answer elsewhere. But this is the answer, and there isnt any alternative.

    Source date (UTC): 2013-05-01 06:37:00 UTC

  • What Would Happen If There Were No Money On Earth?

    Believe it or not, this subject has been given quite a bit of treatment in the literature – mostly during the early part of the last century in response to the communist, socialist and fascist movements.

    REALITY:
    Almost everyone, on the planet,  except for perhaps ~500M subsistence farmers would die in the first 30-90 days.  Yes.  Really.  Seriously.

    MONEY
    Money makes planning of complex things possible.
    Humans literally cannot ‘think’ as we understand the term, without numbers, money, property, contracts, credit and interest. Just as drawings and written words help us remember things, numbers help us remember things we could not remember, think about, or compare without them.  Money makes numbers possible to apply to things that are DIFFERENT.  Whereas numbers without  money can only be used for things that are the SAME. As such, we say that money makes it possible to compare objects that are otherwise incommensurable.  Money renders the world commensurable: open to planning and the use of mathematics (measurement and forecasting).

    In practical terms, money and prices form an information system that tells us all what to do in real time in response to what others want and need. It is how we tell each other how to cooperate.  It is the human social system. And the use of that social system, plus the capture of fossile fuel, has taken us out of ignorance and poverty.

    CONVERSELY
    What money and credit have also done is make it possible to breed again up to new malthusian levels. While Malthus was only half right, he was half right. Group selection accomplishes what malthus did not account for.  THe general belief of ‘progressives’ is that technology will ‘save us again’ just like agrarianism, and then pastoralism saved us in the past.  But the truth is we just breed up to these levels again, and reduce ourselves back to poverty.

    The problem then is that we must control our breeding.  And that has been, except for a brief period in china, or the middle ages in England under Manorialism impossible to achieve. Partly because it is so profitable to sell things to people who bear children, and those children as they too mature.

    EXAMPLES
    THe US economy is primarily driven by housing, and the high rate of return on lending for housing, and the large supply of labor jobs for the production of housing. From this perspective, the exceptional nature of the american economy is not the product of ‘democracy’ or innovation, but the product of selling off a continent to waves of immigrants and their offspring, and using the profits from the sale of the (conquered) continent to invest in increasingly complex technologies.

    THe Chinese for example have figured this out and are doing the same thing but moving people from the ‘poor’ village farm to cities where they *hope* the population will be more productive than they were at subsistence farming. China can do this bcause it adopted consumer capitalism (money, prices and interest) and abandoned communism (no money, no prices, and no interest). 

    The problem other countries face (India and say, Ukraine) is india is so pervasively corrupt that it’s not possible to create infrastructure without privatization of the investment through corruption, and the population is still expanding unsustainably in a dirty and hot environment.  THe problem Ukraine faces, is that it cannot play ‘china’ because the lower levels of government are so corrupt and the country sees no demand for its currency, so the government cannot issue credit, and therefore the people remain poor.

    IN CLOSING
    When you say ‘money went away’ what you must also understand is that with money and prices will go the ability to communicate, and think. Literally.  Humans would not be able to cooperate, communicate, plan and think without money. Worse, they would have no incentive to do so, because to have an incentive one must be able to think of something to do.  And you couldn’t think of anything to do that you couldn’t do with your own two hands.

    THere is about 4 days worth of energy, and 14 days worth of food in the pipeline. If you made money vanish, you would need to make 6B people vanish along with it.

    You may find a more thorough, or a more simplistic answer elsewhere. But this is the answer, and there isnt any alternative.

    https://www.quora.com/What-would-happen-if-there-were-no-money-on-earth

  • LOVE KONDRATIEV CYCLES: A great post by Helio Beltrão (Use google translate if y

    http://opontobase.com.br/kondratiev-a-irresistivel-forca-gravitacional-dos-ciclos-longos/I LOVE KONDRATIEV CYCLES:

    A great post by Helio Beltrão (Use google translate if you need to. It will do a fair job.)

    Source date (UTC): 2013-04-30 07:55:00 UTC

  • READING: WHY MALTHUS

    http://lindert.econ.ucdavis.edu/seminars/papers/WuLeminJMPMalthusianConstancy.pdfWORTH READING: WHY MALTHUS

    Source date (UTC): 2013-04-23 13:42:00 UTC

  • REWRITING ECONOMIC HISTORY TO INCLUDE R&D. Finally. FInally we’re getting our ec

    http://economistsview.typepad.com/economistsview/2013/04/we-are-essentially-rewriting-economic-history.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FKupd+(Economist’s+View)FINALLY: REWRITING ECONOMIC HISTORY TO INCLUDE R&D.

    Finally. FInally we’re getting our economic data updated. Now, if they’d just do the same with household income data, we might have a worthwhile set of data to work from.

    Source date (UTC): 2013-04-22 07:16:00 UTC

  • The other, less vainglorious argument, is that the public views expansion of tax

    The other, less vainglorious argument, is that the public views expansion of taxation and redistribution, whether between cultures in the USA, or between cultures in Europe, as having passed a tipping point, and that the politicians in both countries understand which is more dangerous to them.

    I think your argument is correct but irrelevant. I think my argument is also correct, and the one answer that is relevant.

    If you want democracy, you’re going to get democratic results. This is one of them.

    Source date (UTC): 2013-04-17 10:43:00 UTC

  • What Is The Libertarian Position On The Phoebus Cartel?

    The libertarian position is often misinterpreted.  We do not suggest that cartels will not form. Rather, that cartels are not sustainable.   Our position is that they aren’t sustainable, nor are monopolies, without government support.  If they are sustainable, then they’re probably market-efficient, and therefore not a cartel in practice -although its pretty difficult to imagine such a thing.

    The counter argument is that government interference can end cartels more quickly than the market.  Although this is both questionable and comes at a very high price: Phone service was a lot better Before the breakup of ATT, and the attack on MIcrosoft was an attack on the desire of a company to give us for free what others wanted money for.

    (One concern: I am not confident that the land problem has been solved however – or that it matters. But I think it is arguable that the problem of land cannot be solved without war  on one end of the spectrum and restricted reproduction on the other.)

    As others have noted, the Phoebus cartel did disappear quickly. So I assume that you were simply confused by the difference between whether cartels are possible or whether they’re sustainable.

    https://www.quora.com/What-is-the-libertarian-position-on-the-Phoebus-cartel

  • ECONOMIC FALLACY #3 : CORRELATION VS CAUSATION Correlation does not mean causati

    ECONOMIC FALLACY #3 : CORRELATION VS CAUSATION

    Correlation does not mean causation.

    I hesitate to include this one on the list because the phrase has become overused in some circles. It can be very easy to accuse someone of this and then not have to deal with their argument, even though there is good reason to believe causation exists. Inappropriately accusing people of this fallacy is especially easy when discussing economics. Economics is like a science in which you can’t account for all of the variables. Politicians can take credit, or blame others, for things without knowing the real cause.

    One example of this fallacy is David Johnston’s assessment of the Bush tax cuts. I have no problem when he says the Bush tax cuts didn’t lead to the prosperity Bush promised, although I don’t blame Bush for that, and nearly every politician exaggerates when they are trying to sell something. The main problem I have is when he says “the data show overwhelmingly that the Republican-sponsored tax cuts damaged our nation.” This is a case of the fallacy because most of his evidence that the nation has been damaged is a decrease in average income (his case that less revenue was collected is legitimate). It very well could be the case that the tax cuts made the average income higher than what it would have been.

    The average income could have decreased for reasons other than the Bush’s tax cuts. I lean toward that conclusion because there is no conceivable way that tax cuts can cause a decrease in average income. I would be more than happy to retract my statement if someone could please tell me how this happens.

    I first became aware of this fallacy while I was in college. I was discussing minimum wage with a sociology professor. There are better arguments for raising the minimum wage, but the one she was giving me was that raising it often decreased the unemployment rate. I was baffled that someone could say this because, again, there is no conceivable way that increasing minimum wage could cause a decrease in unemployment. She pointed to certain years when minimum wage increased, and unemployment decreased. It escaped her that minimum wage could have destroyed jobs in one place while a new business may have started up in another, showing a net increase in employment.

    With both the professor and Johnston, they claim that they are just looking at the facts, and those of us with even a little understanding of what causes what in economics are blindly following an ideology with no connection to reality. All this tells me is that they have no interest in how economics actually works. They have a political position they want to advance and they hope they can find “facts” to support it, even if it doesn’t make any sense.

    Source date (UTC): 2013-04-11 03:16:00 UTC

  • ECONOMIC FALLACY #4: SCIENTISTS AREN’T NEUTRAL SCIENTISTS AND ACADEMICS ARE ADVO

    ECONOMIC FALLACY #4: SCIENTISTS AREN’T NEUTRAL

    SCIENTISTS AND ACADEMICS ARE ADVOCATES OF EXTREMES, THEY ARE NOT NEUTRAL JUDGES

    No need to explain this. The process of competition between ideas in the pursuit of status in the scientific community tends, over time, to produce relatively truthful results. But scientists cannot make the claim for neutrality, or that as individuals they even follow the scientific method. It is the market for status signals that produces the outcome, not the ethics of any particular scientist. In fact, it certainly looks like most grad students are vastly incompetent, most professors are not much better, and only the top one percent of people in any discipline are even close to accurate about anything that they publish. And those that are, are accurate because they are synthesists, of everyone’s work not advocates of their own.

    Science is not what scientists claim it to be. Economists are as bad or worse.

    Source date (UTC): 2013-04-11 03:15:00 UTC

  • ECONOMIC FALLACY #2 : HIDDEN COSTS Not Accounting For Hidden Costs or HIdden Tra

    ECONOMIC FALLACY #2 : HIDDEN COSTS

    Not Accounting For Hidden Costs or HIdden Transfers.

    This is somewhat similar to “the broken window fallacy” introduced by Frédéric Bastiat. Bastiat tells a parable where a shopkeeper’s son breaks a window in the shop. As a condolence people say that at least the son has fueled a job for the man who will repair the window. While the son did circulate money, and boost one industry, the shopkeeper would have used his money to employ other labor if the window had not been broken.

    When the government spends money on something, part of the cost is not only the dollars spent, but the things that the money would have been spent on otherwise. Amazingly what the money would have been spent on otherwise is very often the same thing the government is trying to create. So politicians may have done nothing at all when all is said and done, we may even be worse off, but they can take credit for what was created.

    The current best example of this is the stimulus. Supporters of the stimulus can say that it created jobs, but because we can only speculate on what might have happened without the stimulus, the true costs remain hidden.

    Lawrence Lindsey argues convincingly that it was simply a waste of money. One of his best lines is “Since the beginning of the recession, the number of unemployed has increased by more than 8 million people. For $800 billion, we could have handed every one of these people a check for $100,000.” Not only is the cost over $800 billion, but it may very well be the case that more jobs would have been created if that money remained in the hands of the private sector. For those of us who think government is by nature horribly inefficient, that is a reasonable conclusion.

    Spending money for policies like the stimulus is usually a beneficial political move (although when you get up to $800 billion your chances get a lot worse). First and foremost, you can say you “did something about it.” That always counts for a lot in politics (this is another point made by Sowell). You don’t want to be caught sitting on your hands, not wasting money. Second, you can say that it would have been far worse if you didn’t do something, since all we can do is speculate about the alternative. Third, you can point to a concrete example of progress you have made. You were part of the effort that created hundreds of thousands of jobs. It doesn’t matter if its cost was so high, that it may have also erased hundreds of thousands of jobs.

    Generally speaking the government is so inefficient that when it says it created something, most likely it destroyed far more in order to create it.

    Source date (UTC): 2013-04-11 03:08:00 UTC