If your argument makes use of a psychologism either intellectual or emotional, it means that you’re probably wrong. If you can’t articulate a decision as a function of rational incentives you do not understand it. Human reactions tend to be rational in the context of the individual having the reaction or making the argumnet.
Source date (UTC): 2016-07-16 07:14:00 UTC
THE TRUTH: we have reversed our thousands of years of aristocracy, because of our greed at profiting from expanding the underclasses.
Source date (UTC): 2016-07-15 11:00:22 UTC
Original post: https://twitter.com/i/web/status/753907051290648576
Proximity decreases opportunity costs. We can also argue that as a consequence of reduced opportunity costs we can create opportunities otherwise impossible.
And as a consequence we compete to discover and homestead those opportunities.
We make this density possibly by the high cost of forgoing opportunities for imposing costs. Thereby preserving cooperation despite an equal decrease in the opportunity for parasitism. As such we exchange the increased cost of forgoing opportunity for parasitism for the decreased costs of opportunity for homesteading opportunities.
This concept is missing from the literature.
We focus too much upon money that provides numerous additional discounts. And we focus too little operationally on the creation of conditions that make trade and money possible.
This oversight is related to the other errors of the enlightenment
Source date (UTC): 2016-07-15 10:36:00 UTC
IMPORTANT: WHY DO CENTRAL BANKS USE INTERMEDIARIES?
—“Question: why do central banks continue to do stimulus through intermediaries like banks when they can wire the money directly to consumers? Eg. by issuing them with prepaid cards to spend?”— Ayelam
I am not an econometrician but I suspect I’ll hold my own against any living econometric economist on this subject:
The answer consists of the following components:
(1) The distribution of physical money through the banks was a necessity.
(2 )There was no other distribution channel available until perhaps 20 years ago at the earliest. (I remember how hard it was to get people to use credit cards).
(3) Digital money is actually not a very old technology and we have just recently begun to understand it.Governments move very slowly and this will disrupt the entire economy in (good) ways that will totally fuck the institutional investors that fund DC campaigns with ill-gotten gains unearned, since they merely distribute a costless good to the highest bidder for a commission. They are auctioneers. That is all.
(4) The banker/crediting agency investigates the probability and insures the probability that the debt will be repaid. This INSURER function is actually what bankers do: insure the shareholders (citizens) that their fiat money (shares) are used judiciously. This argument has increasingly become specious because we have such accurate actuarial data now that we can predict the performance of a bucket of consumers with nearly perfect accuracy.
4A) It benefits the various rent seekers and politicians if all fiscal(spending) stimulus to the economy is provided by government to government suppliers just as all monetary stimulus is distributed through the financial sectors. What would happen to the construction of high cost government projects when consumers were able to say “but I could have used that money here at home?”.
(5) There is a (mistaken) belief that the time value of productivity for the purpose of consumption (consumer income) needs interest for calculation purposes just as business and industry need interest for economic calculation purposes. This is a long conversation but I don’t see how consumption is any kind of entrepreneurial risk. it’s the cause of entrepreneurial risk.
(6) The very idea was kind of poisoned by the MMT crowd. Particularly – we do not know the impact it would have on interest rates. And at present interest rates are the metric that the world uses to control the ‘price’ of money(which is not driven by cost of production), by regulating its ‘manufacture’ by states. Without interest rates we need another measure. This measure has been in dispute for many years, with some favoring some sort of purchasing power metric, and others favoring some productivity metric, and others some ‘growth’ metric. But if money loses its intertemporal predictability then economic calculation of contracts over any period of time increases and with that, the cost of all production, and therefore all prices, increases rapidly. (remember that money = influence that saves time and is therefore a store of time-in-production. Fiat money issued as credit money is a risk that the time will be more than saved over the interim period.
(7) The moral hazard of distributing directly to consumers is frightening because unlike market activity, where people blame employers and the economy when activity shrinks and so does their income, we are fearful that people will change from living paycheck to variable paycheck, to living from monetary distribution to monetary distribution but retaliate politically against the government in the case of shrinking. Thereby all but making total communism a deterministic outcome – which is why some of the left advocate for it.
(8) With the advent of leftist influence on the judiciary, it is no longer a social science bound by natural laws. So we have no means of putting such a policy into the constitution such that it’s immutable. Thereby eliminating the hazards articulated above.
(9) I was nobody in 2008-2009 when I was talking about it, but as far as I know Galbraith was the only mainstream guy who articulated this problem correctly, and he correctly advocated the direct payment of mortgage debt. It would have price stabilized the world economy. But it would have fucked (undeserving) institutional debt-holders the same way greek debt holders were fucked. (His death was untimely) And conservatives (wrongly) thought it created a moral hazard (which would have been solved by giving people credit lines who had acted properly, and credit lines to those people over the next x years who were able to buy a house. ) I’ve also recommended limiting mortgages to 15 years in order to limit this problem further. Why? all increases in salary are eventually absorbed by housing prices and redistributed to long term property holders (indirect retirement savings accounts ).
(10) So net net, we can buy or nationalize the ( worst )credit card company (mastercard), and distribute liquidity directly to consumers, as long as we put constitutional safeguards in place, and as long as the amount is dependent upon the overall economy. And let industry and business determine the interest rate, which should drop dramaticlaly if we reidstribute to consumers.
Because the truth is that fiat currency is such an advantage that a people cannot compete without it.
Competing currencies and commodities exist but they are not anywhere near as price stabilized as fiat money CAN be.
So we are always going to have it. Probably digital will replace it and it will have to because the abuse of it has gotten out of hand.
What real purpose does government debt serve over simply printing money and paying with it?
You pay the price of interest in order to delay the equlibrial neutrality of money working through the economy.
In other words, the faster new money moves the faster prices in the existing cycle of production adjust.
Fast adjustment is bad if it interferes with production ( planning ) cycles.
So instead we pay interest and sell government debt so that we inflate away the interest at about the same rate that prices adjust in the economy.
If you understand it it seems ridiculous. A clever network of lies not really different from religin. i
Source date (UTC): 2016-07-15 10:15:00 UTC
So then why must we have uniformity in an economy?
Well because we can’t get customer service our if monopolies and government service is a monopoly.
So then how do we preserve competition for service with direction and low risk wages?
The type of work itself is one reward.
The payment for it another.
But the market PRICE of that reward is insufficient to produce common goods we desire while preserving incentives.
But we cannot fix prices, right?
More to come …
Source date (UTC): 2016-07-15 02:48:00 UTC
An interesting topic: the rate of change and our ability to convert from successful repetition to successful innovation.
Source date (UTC): 2016-07-12 05:27:58 UTC
Original post: https://twitter.com/i/web/status/752736234796179456
Reply addressees: @SanguineEmpiric
Replying to: https://twitter.com/i/web/status/752734227532161024
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Original post: https://twitter.com/i/web/status/752734227532161024
ELI ON THE RATIONAL RISK PURSUIT AND AVERSION OF GENDERS
—” While there certainly can be exceptions, in general, women are going to be more risk averse and men more risk tolerant.
That’s a sensible risk management strategy. If a man fails, (in contrast to a woman) the individual consequences may be severe, but the consequences to the group are less severe, because a man doesn’t have a uterus. On the other end, men can’t afford NOT to take risks because they have to *demonstrate* value, and if they don’t, they’ll be left behind by men who do.
Women, on the other hand, can afford not to take risks, because their uterii automatically give them some value, and so they’re usually better off playing it safe.
So this division of risk-taking makes evolutionary sense for all parties.
The problem comes when women attempt to IMPOSE their risk aversion on men as well, and this prevents men, not just from failing, but also from succeeding. And so it’s basically pointless even having men under those conditions, because they’re only women without uterii. And it prevents women from sharing in the successes that men can only obtain by taking risks.
But this condition is unstable, because that society will be highly susceptable to revolt or conquest by aggressive, risk-taking, males. (Think “Demolition Man.”) And when push comes to shove, the effeminate males will simply be killed, and the risk-averse women will fold to save themselves.”— Eli Harman
Source date (UTC): 2016-07-05 08:15:00 UTC
We get all this cool free stuff because google sells advertising – replacing the yellow pages.
We get all this cool free stuff because facebook sells advertising and in doing so pays for our favorite replacment for ’email’.
We get all this cool expensive stuff because Apple sells iPhones – and hardly any computers.
All three of these companies are disruptable by technolgical competiton that is not difficult to envision.
But will we get all this cool ‘free stuff’.
Like I said, apple will break first. The question is, whether they will use the ‘opportunity’ to take out Microsoft or not.
I konw how to do it. I assume people at Apple do.
But you know, they might consider it slumming.
Source date (UTC): 2016-07-04 03:38:00 UTC
NO CAPITALISM IS NOT ENOUGH
–“trust isn’t necessary just capitalism”— Diego Anonymous
Diego,
Let me correct you a bit – largely by providing you with more precise language.
Capitalism – private production of goods and services by the universal distribution of private property rights – has always existed to some degree – it must for trade to exist.
But, cooperation at *scale* using institutions, that creates what we call ‘consumer capitalism’ requires high trust society.
Without high trust, states are necessary to organize sale and complex production, because of the risk required of all participants. States as the insurer of last resort, insure against ‘risk of defection’.
This is why centrally managed economies can be used to transform states from a condition of backwardness, but cannot be used to maintain them once backwardness is reduced and society reordered, or to create persistently competitive states where self-ordering produces consistent market innovation.
The only known way of producing high trust is evolution from common (negative) law, property rights for women, and the prohibition on inbreeding (cousin marriage). Common law insures against ‘risk of defection’.
The only known way of producing common (negative) law is evolution from a militia (Anglo-Saxon model).
The only known way of producing a professional bureaucracy is evolution from an army (french-german-prussian). (And this leads to napoleonic law of state vs people, not common natural-law of militias of universal equality)
The only known way of producing a libertarian (anglo-saxon) political order is with militia and common law, combining to provide sufficient suppression of free riding such that commons can be produced without defection preserving competitiveness, and private goods can be produced competitively.
One man may rule.
An Oligarchy may rule.
A professional bureaucracy may rule.
Or all may rule – thereby ensuring that none rules.
Rule of law (nomocracy);
The civic production of commons (liberalism);
The private production of goods and services (capitalism);
And the condition under which we experience all three (liberty);
Can each exist but they cannot exist without one another.
Source date (UTC): 2016-07-03 05:09:00 UTC
TEN THOUGHTS ON MONEY
Q&A: –“Curt, have you written much on money?”–
I’ve written a bit , here and there, mostly on:
1) the fact that fiat money is equal to shares in the state/economy, not notes or money. Moreover, I’ve tried to impress upon people that colloquial money (various mediums of exchange in sufficient volume to produce market price signals) and all its forms, differ substantially from money proper. And I’ve tried to correct mises and the bitcoin community on their uses of these terms – because it’s fraudulent to compare these media as having the same properties. They don’t’.
2) it’s not clear that people have any right to the appreciation of fiat money, nor whether they have a right to its store of value for any extended period of time (longer than a business cycle).
3) We should use multiple currencies for multiple purposes so that rates of inflationary dilution are purpose-specific.
4) There is no need to continue distribution of liquidity through the banking system as we did when there was hard currency. We can directly issue liquidity to consumers and cause spending without giving profits or power to the banking and finance system. This forces business and industry to fight for consumers, rather than fight for access to credit.
5) Money is information and the more kinds of money the more kinds of information we have that is less subject to distortion. I could write a book on this subject alone.
6) In theory money is neutral, in practice it is not. Not because prices are not eventually equilibrated, but because this process of equilibration works through the economy disruptively and without uniformity.
7) Lending should be regulated to the same degree as law, and debt should not be resellable because a price (value) is subjectively constructed and non-transferrable, and non-insurable.
8 ) Law has been abused to work in the favor of hazard-creation by lenders, and this should be inverted, and bankruptcy protection increased so that lenders have an extremely difficult time collecting and instead take fewer risks and take less responsibility for distributing liquidity.
9) intergenerational redistribution must be stopped, and the singaporean model adopted so that the future is calculable. Furthermore, this money cannot be touched by creditors or the state, or anyone else for that matter.
10 ) I would prefer that the government collected fees on all financial transactions rather than income taxes. I believe fees are necessary for the production of insurance of last resort, and those discretionary commons that make us competitive.
Those are the major topics.
Source date (UTC): 2016-07-02 03:28:00 UTC