A competent wine maker is already rewarded for being able to produce a good bottle of wine under normal capitalism—he can sell this bottle for, say, $50 and you can’t do this with your homebrew.
As to you goals, I don’t see why low velocity of money is a problem (yes, I’m familiar with Keynes). It’s a symptom of the sluggishness of the underlying economic activity, not its cause. Having bank deposits or bonds pay negative interest is also a solved problem (see contemporary Europe), and if you want all store-of-value to be subject to negative interest rates you have to outlaw cash and equivalents to start with.
I don’t know what is “good” value. I also don’t know what is “dignity of labour”.
The wine buyer is not rewarded for buying from a wine maker that will make a better wine bottle tomorrow though. Think for a bit on if she was.
I’m not sure if the velocity of money is a result or a cause of economic activity, but my reason tells me that if it is flowing faster, ‘I’ have a better chance at having some flow to me. P(making 100k at mv 6) < P(making 100k at mv 12)
Can you name a form of non artificial capital that is a cash equivalent? Maybe gold? Any non elements that aren’t subject to entropy? Ultimately, yes, I think all artificial forms of ‘store of value’ should have an artificial form of entropy added to them because that is the way the world works.
I bet if you don’t know what good value is that you at least know bad value when you see it.
...as for the robots. I’m a little serious. If agi emerges into a world where economic nodes are dependent upon each other and it has more to gain from cooperation than dominating, it might buy us a few years to find a balance.
If she were rewarded for buying from someone who’d get better tomorrow, she will also get punished for buying from someone who’d get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don’t see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.
As a buyer I don’t want to have a little bit of risky investment forced into every purchase I make.
my reason tells me that if it is flowing faster, ‘I’ have a better chance at having some flow to me.
Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket.
a form of non artificial capital that is a cash equivalent?
What’s “non-artificial capital”? Money itself is “artificial” to start with, the current fiat currencies for certain.
“Cash” is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid.
You can think of inflation as “entropy” for cash.
I bet if you don’t know what good value is that you at least know bad value when you see it.
Not in your sense, I don’t. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example.
If agi emerges into a world where economic nodes are dependent upon each other and it has more to gain from cooperation than dominating
Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.
If she were rewarded for buying from someone who’d get better tomorrow, she will also get punished for buying from someone who’d get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don’t see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.
Some risk, yes. But in the models I’ve run, the risk is fairly small and is mitigated by the fact that shitty wine maker spends some of your cash with awesome barrel maker and awesome seed provider. The recursiveness of the system time shifts out some of your risk.
If shitty wine maker goes out of business, because we have a public ledger we can ‘fold the blockchain’ and connect where the money went to where the money came from and fill in a void that, in the current economy, causes all kinds of volatility.
As a buyer I don’t want to have a little bit of risky investment forced into every purchase I make.
I think you do, you just don’t know it yet :) Your choice would be between more than what you get now or way more than you get now. If I told you that your risk was between getting back 3% or 300% of what you spent over the next 50 years, even in the worst case you’ve gained 3%. You could of course choose to keep using your old money.
Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket.
If you buy a lottery ticket that is good for all future drawings, and they double the number of drawings, you do have a better chance of winning. Your economic potential isn’t a lottery ticket that expires. If people have more to gain by holding their cash than spending/investing it, the chance that they will invest/spend with you goes down. If they there is a cost for holding cash they will seek ways to at least break even. Maybe you break even today, but with your experience, you turn a profit tomorrow.
What’s “non-artificial capital”? Money itself is “artificial” to start with, the current fiat currencies for certain.
A bulldozer is natural capital(non-artificial). A tree is natural. You are natural. A computer is natural. All those things are subject to entropy and have a natural carrying cost. Items whose value derive from law, psychology, math, or ideas are artificial. Money is artificial, but if you don’t make the map the territory something is going to go wonky and you’re going to have a ‘correction’.
“Cash” is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid.
And I’d contend that the store of value part is convenient, but ultimately misguided. It was a shortcut we needed to use to get from horse drawn carriages to databases. But we don’t need to completely preserve the ‘store of value’ anymore. We can let it decay just like the world around it.
You can think of inflation as “entropy” for cash.
Yes, but I’ll contend that controlled inflation(demurrage) is better than the random inflation we deal with now.
Not in your sense, I don’t. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example.
As good a value as a $1 shirt made by a robot down the block? No fossil fuels burned in shipping, no slave labor. Surely there are better and worse ways of doing things.
Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.
I don’t contend it will solve the problem, just that it might buy us some time if it can get some decent utility out of humans providing the atoms and energy while it ramps up to do it itself. Maybe it is just second. It is just a theory.
Would an intelligence not subject to the availability bias ever choose to not use a form of exchange where it benefited from all uses of the exchanged material in the future vs. exchanging resources for only the perceived present value? I think it is a question worth asking.
As an aside: the local prefix for quoting is “>” at the start of the line, not the pipe character.
I think you do, you just don’t know it yet :) Your choice would be between more than what you get now or way more than you get now.
I think you’re mistaken about my preferences.
You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to “get more” I would want to get more value and you’re promising me just more money. The point is that an economy produces some amount of value and that’s all you have to redistribute. You can make money spin faster, but that will not increase the value produced—all you’ll do is increase inflation.
Essentially, if I buy a loaf of bread from a baker and the baker knows he’ll have to pay me “dividends” in the future, the baker will raise the price of bread to compensate for these future dividends. Your hopes remind me of “free energy” mechanisms in physics—if only we could set up sufficiently clever loops we can get more energy that we put in! Um...
My current understanding of your idea is that you basically want a tax on wealth (or, specifically, on money wealth) with a very complicated scheme to distribute its proceeds directly to the population bypassing the government. Is that a reasonable approach?
I would also like to point out that I think your fears of wealth accumulation are overblown. Look at empirical data. Is there, in reality, old old money dominating everything? Does the Medici family rule Europe? What happened to the Vanderbilts? The oldest rich family I can recall offhand is the Rothschilds and while they are not poor by any means, how do they do compared to Gates or Brin or Musk?
All those things are subject to entropy and have a natural carrying cost.
What about the traditionally most valuable kind of capital—land, also known as real estate? What about technology? or non-agricultural commodities like oil, coal, copper, etc?
controlled inflation(demurrage) is better than the random inflation we deal with now.
The current inflation is controlled to best of central banks’ abilities. You are not controlling it any better, you’re just setting a floor as to how low can it go.
As good a value as a $1 shirt made by a robot down the block?
I’ll take the standard capitalist approach—if the robot down the block can sell me the same shirt cheaper, I’ll buy it from the robot. If it can’t, I’ll buy it from the Vietnamese. I am not willing to pay extra for feel-good fluff.
You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to “get more” I would want to get more value and you’re promising me just more money. The point is that an economy produces some amount of value and that’s all you have to redistribute. You can make money spin faster, but that will not increase the value produced—all you’ll do is increase inflation.
Do you think that the current economy is ginning at an optimal output? How much slack would you guess there is? How much GDP is currently left ‘on the shelf’? Maybe you think we are very close to optimal. If that is the case then I’m tilting at windmills. If it is suboptimal, the the next questions is ‘why?’ Is it a lack of tech. A lack of resources? A lack of time? I’m not sure but I think it is very sub optimal.
If increasing the flow of money would not bridge the missing value, what would? I think that a lot of actors in our economy get stuck ‘waiting for the check’ to get started on production, finish production,procure the capital necessary to build, etc.
Is there some data/study you can point to that says that faster velocity doesn’t increase production? Maybe I should run the model with mv > 1 transaction a month and see what happens.
Essentially, if I buy a loaf of bread from a baker and the baker knows he’ll have to pay me “dividends” in the future, the baker will raise the price of bread to compensate for these future dividends. Your hopes remind me of “free energy” mechanisms in physics—if only we could set up sufficiently clever loops we can get more energy that we put in! Um...
The difference is that there isn’t a law of conservation of value. We regularly see massive exponential movements in the ability of human beings to produce amazing things. Would you argue that we should go back to barter because money is just a clever way of abstracting away coincidence of wants? Energy is physics. Money is an artificial construct.
Also don’t ignore the fact that a consumer may be willing to pay the increased price charged because the consumer will be getting that value back in the future. I understand that this may seem like a clever loop, except that people die. So the loop breaks down and you have to have a system for legacy. The system has a consequence of corporate death as well so you don’t end up with supercorps sucking in all the economic decay. Legacy and transition are in the details of the book, but basically, this isn’t a system that jives with immortality...it is a system to get us there.
My current understanding of your idea is that you basically want a tax on wealth (or, specifically, on money wealth) with a very complicated scheme to distribute its proceeds directly to the population bypassing the government. Is that a reasonable approach?
It isn’t really much more complicated than the fractional reserve system we have now. I have no delusions about the ease of bootstrapping such a system, but it really can be a fairly straight forward and simple system.
I would also like to point out that I think your fears of wealth accumulation are overblown. Look at empirical data. Is there, in reality, old old money dominating everything? Does the Medici family rule Europe? What happened to the Vanderbilts? The oldest rich family I can recall offhand is the Rothschilds and while they are not poor by any means, how do they do compared to Gates or Brin or Musk?
What about the traditionally most valuable kind of capital—land, also known as real estate? What about technology? or non-agricultural commodities like oil, coal, copper, etc?
Certainly somethings have more or less carrying costs. The closer you get to stable elements, the more you can decrease these (Gold, Silver). Carbon is an element but tends to be a slippery beast that takes all kind of crazy forms that break down or change in some way. Land does have a carrying cost of some form of maintenance and most has an artificial carrying cost in the form of property taxes. Gesell had some pretty crazy ideas about land that I don’t exactly buy into. I don’t have many super strong ideas about it because I think(hope) we are going to be moving past the point where land is that big of a deal for most of us.
The current inflation is controlled to best of central banks’ abilities. You are not controlling it any better, you’re just setting a floor as to how low can it go.
Actually the theory is that we can hold inflation at 0 by printing decaying dollars when we need them and decaying them faster when there is too much. Tech is always going to bring about some deflation, but the general goal is for there always to be enough money to buy all the things that are being produced.
I’ll take the standard capitalist approach—if the robot down the block can sell me the same shirt cheaper, I’ll buy it from the robot. If it can’t, I’ll buy it from the Vietnamese. I am not willing to pay extra for feel-good fluff.
I’m a humanist...I guess you are not...agree to disagree? We can’t do that on a rationality discussion board can we? If you aren’t willing to pay for the feel good fluff, do you at least want it to happen? By what means if so. If not, are you cool with the status quo going forward as long as prices always get smaller?
Do you think that the current economy is ginning at an optimal output?
I don’t know what “optimal output” is. Can the economy produce more? Of course it can. What’s stopping it? Ah, an interesting and complicated question. There are a lot of constraints, both local and global—I would say the biggest is the level of technology—and they are binding in different places. As I mentioned earlier, I do not think that the availability of capital is a major constraint at the moment. In fact, we have a glut of cheap money.
I think that a lot of actors in our economy get stuck ‘waiting for the check’ to get started on production
That’s possible, but why do you think these actors would generate value? It’s entirely possible for them to just waste resources. The fact that they have not been able to secure financing indicates that they do not have a convincing plan of creating value.
s there some data/study you can point to that says that faster velocity doesn’t increase production?
Just get yourself a plot of GDP and a plot of money velocity over time. See how correlated they are and whether you think there is a causal connection.
In any case, velocity is a calculated number—it’s just GDP divided by money supply (and you can use different money supplies—the monetary base, M2, M3, etc. to get a velocity for each of them).
a consumer may be willing to pay the increased price charged because the consumer will be getting that value back in the future
That’s the financial equivalent of lending money to the seller. Why would a consumer be interested in becoming a creditor for all purchases?
I think the empirical data is there for the r > g problem
I think that’s not quite true. Yes, Piketty has written a book. Not everyone agrees with its conclusions.
I think doing something is better than nothing.
Really, you don’t think there is a good chance to royally screw things up if you make radical changes with uncertain consequences?
Actually the theory is that we can hold inflation at 0 by printing decaying dollars when we need them and decaying them faster when there is too much.
So what’s stopping the current central banks from easily controlling inflation now in this way? Japan, for example, have been trying to get out of deflation for many years. It printed a lot of yen. Inflation is still negligible.
agree to disagree?
Sure. As long as your proposals are not mandatory :-)
If you aren’t willing to pay for the feel good fluff, do you at least want it to happen?
Depends on what. For some things I don’t care and for some things I expect voluntary consumer choice to be not an effective method to achieve anything useful.
If not, are you cool with the status quo going forward as long as prices always get smaller?
Status quo as in what we have now? I would prefer things to get better, of course, but I’m not holding my breath :-) I am a social pessimist—I believe people have a vast capacity to fuck things up…
A competent wine maker is already rewarded for being able to produce a good bottle of wine under normal capitalism—he can sell this bottle for, say, $50 and you can’t do this with your homebrew.
As to you goals, I don’t see why low velocity of money is a problem (yes, I’m familiar with Keynes). It’s a symptom of the sluggishness of the underlying economic activity, not its cause. Having bank deposits or bonds pay negative interest is also a solved problem (see contemporary Europe), and if you want all store-of-value to be subject to negative interest rates you have to outlaw cash and equivalents to start with.
I don’t know what is “good” value. I also don’t know what is “dignity of labour”.
And I don’t think you’re serious about robots :-P
The wine buyer is not rewarded for buying from a wine maker that will make a better wine bottle tomorrow though. Think for a bit on if she was.
I’m not sure if the velocity of money is a result or a cause of economic activity, but my reason tells me that if it is flowing faster, ‘I’ have a better chance at having some flow to me. P(making 100k at mv 6) < P(making 100k at mv 12)
Can you name a form of non artificial capital that is a cash equivalent? Maybe gold? Any non elements that aren’t subject to entropy? Ultimately, yes, I think all artificial forms of ‘store of value’ should have an artificial form of entropy added to them because that is the way the world works.
I bet if you don’t know what good value is that you at least know bad value when you see it.
I talk more about the full output of labour in this paper: https://www.dropbox.com/s/k97dzssxc58ux1s/hypercapitalismwpv1.1.pdf?dl=0
...as for the robots. I’m a little serious. If agi emerges into a world where economic nodes are dependent upon each other and it has more to gain from cooperation than dominating, it might buy us a few years to find a balance.
If she were rewarded for buying from someone who’d get better tomorrow, she will also get punished for buying from someone who’d get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don’t see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.
As a buyer I don’t want to have a little bit of risky investment forced into every purchase I make.
Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket.
What’s “non-artificial capital”? Money itself is “artificial” to start with, the current fiat currencies for certain.
“Cash” is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid.
You can think of inflation as “entropy” for cash.
Not in your sense, I don’t. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example.
Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.
Some risk, yes. But in the models I’ve run, the risk is fairly small and is mitigated by the fact that shitty wine maker spends some of your cash with awesome barrel maker and awesome seed provider. The recursiveness of the system time shifts out some of your risk.
If shitty wine maker goes out of business, because we have a public ledger we can ‘fold the blockchain’ and connect where the money went to where the money came from and fill in a void that, in the current economy, causes all kinds of volatility.
I think you do, you just don’t know it yet :) Your choice would be between more than what you get now or way more than you get now. If I told you that your risk was between getting back 3% or 300% of what you spent over the next 50 years, even in the worst case you’ve gained 3%. You could of course choose to keep using your old money.
If you buy a lottery ticket that is good for all future drawings, and they double the number of drawings, you do have a better chance of winning. Your economic potential isn’t a lottery ticket that expires. If people have more to gain by holding their cash than spending/investing it, the chance that they will invest/spend with you goes down. If they there is a cost for holding cash they will seek ways to at least break even. Maybe you break even today, but with your experience, you turn a profit tomorrow.
A bulldozer is natural capital(non-artificial). A tree is natural. You are natural. A computer is natural. All those things are subject to entropy and have a natural carrying cost. Items whose value derive from law, psychology, math, or ideas are artificial. Money is artificial, but if you don’t make the map the territory something is going to go wonky and you’re going to have a ‘correction’.
And I’d contend that the store of value part is convenient, but ultimately misguided. It was a shortcut we needed to use to get from horse drawn carriages to databases. But we don’t need to completely preserve the ‘store of value’ anymore. We can let it decay just like the world around it.
Yes, but I’ll contend that controlled inflation(demurrage) is better than the random inflation we deal with now.
As good a value as a $1 shirt made by a robot down the block? No fossil fuels burned in shipping, no slave labor. Surely there are better and worse ways of doing things.
I don’t contend it will solve the problem, just that it might buy us some time if it can get some decent utility out of humans providing the atoms and energy while it ramps up to do it itself. Maybe it is just second. It is just a theory.
Would an intelligence not subject to the availability bias ever choose to not use a form of exchange where it benefited from all uses of the exchanged material in the future vs. exchanging resources for only the perceived present value? I think it is a question worth asking.
As an aside: the local prefix for quoting is “>” at the start of the line, not the pipe character.
I think you’re mistaken about my preferences.
You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to “get more” I would want to get more value and you’re promising me just more money. The point is that an economy produces some amount of value and that’s all you have to redistribute. You can make money spin faster, but that will not increase the value produced—all you’ll do is increase inflation.
Essentially, if I buy a loaf of bread from a baker and the baker knows he’ll have to pay me “dividends” in the future, the baker will raise the price of bread to compensate for these future dividends. Your hopes remind me of “free energy” mechanisms in physics—if only we could set up sufficiently clever loops we can get more energy that we put in! Um...
My current understanding of your idea is that you basically want a tax on wealth (or, specifically, on money wealth) with a very complicated scheme to distribute its proceeds directly to the population bypassing the government. Is that a reasonable approach?
I would also like to point out that I think your fears of wealth accumulation are overblown. Look at empirical data. Is there, in reality, old old money dominating everything? Does the Medici family rule Europe? What happened to the Vanderbilts? The oldest rich family I can recall offhand is the Rothschilds and while they are not poor by any means, how do they do compared to Gates or Brin or Musk?
What about the traditionally most valuable kind of capital—land, also known as real estate? What about technology? or non-agricultural commodities like oil, coal, copper, etc?
The current inflation is controlled to best of central banks’ abilities. You are not controlling it any better, you’re just setting a floor as to how low can it go.
I’ll take the standard capitalist approach—if the robot down the block can sell me the same shirt cheaper, I’ll buy it from the robot. If it can’t, I’ll buy it from the Vietnamese. I am not willing to pay extra for feel-good fluff.
Do you think that the current economy is ginning at an optimal output? How much slack would you guess there is? How much GDP is currently left ‘on the shelf’? Maybe you think we are very close to optimal. If that is the case then I’m tilting at windmills. If it is suboptimal, the the next questions is ‘why?’ Is it a lack of tech. A lack of resources? A lack of time? I’m not sure but I think it is very sub optimal.
If increasing the flow of money would not bridge the missing value, what would? I think that a lot of actors in our economy get stuck ‘waiting for the check’ to get started on production, finish production,procure the capital necessary to build, etc.
Is there some data/study you can point to that says that faster velocity doesn’t increase production? Maybe I should run the model with mv > 1 transaction a month and see what happens.
The difference is that there isn’t a law of conservation of value. We regularly see massive exponential movements in the ability of human beings to produce amazing things. Would you argue that we should go back to barter because money is just a clever way of abstracting away coincidence of wants? Energy is physics. Money is an artificial construct.
Also don’t ignore the fact that a consumer may be willing to pay the increased price charged because the consumer will be getting that value back in the future. I understand that this may seem like a clever loop, except that people die. So the loop breaks down and you have to have a system for legacy. The system has a consequence of corporate death as well so you don’t end up with supercorps sucking in all the economic decay. Legacy and transition are in the details of the book, but basically, this isn’t a system that jives with immortality...it is a system to get us there.
It isn’t really much more complicated than the fractional reserve system we have now. I have no delusions about the ease of bootstrapping such a system, but it really can be a fairly straight forward and simple system.
I think the empirical data is there for the r > g problem(http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X/r). I think most of use here probably fall on the side that assumes technology will keep g > r, but with no promises, I think doing something is better than nothing.
Certainly somethings have more or less carrying costs. The closer you get to stable elements, the more you can decrease these (Gold, Silver). Carbon is an element but tends to be a slippery beast that takes all kind of crazy forms that break down or change in some way. Land does have a carrying cost of some form of maintenance and most has an artificial carrying cost in the form of property taxes. Gesell had some pretty crazy ideas about land that I don’t exactly buy into. I don’t have many super strong ideas about it because I think(hope) we are going to be moving past the point where land is that big of a deal for most of us.
Actually the theory is that we can hold inflation at 0 by printing decaying dollars when we need them and decaying them faster when there is too much. Tech is always going to bring about some deflation, but the general goal is for there always to be enough money to buy all the things that are being produced.
I’m a humanist...I guess you are not...agree to disagree? We can’t do that on a rationality discussion board can we? If you aren’t willing to pay for the feel good fluff, do you at least want it to happen? By what means if so. If not, are you cool with the status quo going forward as long as prices always get smaller?
I don’t know what “optimal output” is. Can the economy produce more? Of course it can. What’s stopping it? Ah, an interesting and complicated question. There are a lot of constraints, both local and global—I would say the biggest is the level of technology—and they are binding in different places. As I mentioned earlier, I do not think that the availability of capital is a major constraint at the moment. In fact, we have a glut of cheap money.
That’s possible, but why do you think these actors would generate value? It’s entirely possible for them to just waste resources. The fact that they have not been able to secure financing indicates that they do not have a convincing plan of creating value.
Just get yourself a plot of GDP and a plot of money velocity over time. See how correlated they are and whether you think there is a causal connection.
In any case, velocity is a calculated number—it’s just GDP divided by money supply (and you can use different money supplies—the monetary base, M2, M3, etc. to get a velocity for each of them).
That’s the financial equivalent of lending money to the seller. Why would a consumer be interested in becoming a creditor for all purchases?
I think that’s not quite true. Yes, Piketty has written a book. Not everyone agrees with its conclusions.
Really, you don’t think there is a good chance to royally screw things up if you make radical changes with uncertain consequences?
So what’s stopping the current central banks from easily controlling inflation now in this way? Japan, for example, have been trying to get out of deflation for many years. It printed a lot of yen. Inflation is still negligible.
Sure. As long as your proposals are not mandatory :-)
Depends on what. For some things I don’t care and for some things I expect voluntary consumer choice to be not an effective method to achieve anything useful.
Status quo as in what we have now? I would prefer things to get better, of course, but I’m not holding my breath :-) I am a social pessimist—I believe people have a vast capacity to fuck things up…