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Capital is not what most people conceive of it to be. Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-ti

Capital is not what most people conceive of it to be. Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time" - but capital comes in different flavours, and when you deal with capital in the form of goods which provide an incremental benefit to the user, what you have is indeed capital, but when you deal with money... it's up to you whether it's capital or not. Often, people confuse money with capital. Money is an exchange mechanism which facilitates the transfer of value between parties through a common unit of exchange. Money can be viewed as a subset of capital (i.e. as a sedentary store of value), or it can be viewed as the destruction of the benefits of labour, as it converts an active instrument (i.e. the work I am doing, or the goods I have produced) into a sedentary instrument which provides no incremental benefit, unless it is spent. So - how this relates to the article - capitalism is a system which currently optimises for money. When you take a step back and consider that by converting labour and value into money, you are effectively freezing the benefit of that labour away, accruing money as an end of its own ceases to make sense, as much of this value ends up lying in the ledgers of corporates, governments, or wealthy individuals, doing nothing for anybody other than perhaps dealing with some of the more fragile elements of human psychology (security). We have let a means become the end, and have forgotten that the Purpose of all of this is to promote human happiness - I mean, what other possible Purpose can there be?

AndrewKemendo 11y ago
>capitalism is a system which currently optimises for money. If that were the case then cash reserves would be where the bulk of people poured their resources. In fact the majority of non-debt "capital" is held in real-estate and some combination of financial instruments (CD, bonds, common stock etc...). You are confusing how the assets are valued with what is actually being valued. What I think you are saying though is that capitalism is optimizing for having the highest dollar denominated balance sheet - which could be true, but I think that is a function of the people, not the function of open markets or the asset value function of assigning ownership to capital.
- gglitch 11y ago
  Out of my depth here, but aren't the real estate and financial instruments being held merely as a generator of more money (except in the rare case that one actually lives on the real estate, I suppose)?
  - drabiega 11y ago
    You might think so at first glance, but the telling question is whether you're holding those things to generate money to hold onto or whether you just want that money to buy other things?
  - msandford 11y ago
    Generally yes, but the yields on real estate are small relative to the notional value. Further, by necessity most things are held at a notional value and the sum of all these notional values far far outweighs the total sum of all the money people are holding in bank accounts. Now obviously everyone in the world couldn't sell everything and achieve the notional values and put those in bank accounts, because in order for everyone to sell there would have to be buyers, but we can't have buyers because everyone is selling. But if somehow we could, the amount of money in banks would probably go up 100x or so, but definitely at least 10x. That means that real assets far outweigh money in the economy and so it's kind of strange to think about 'capital' as money rather than as assets. Assets are things which are generally useful in some particular way (a car, a house, a factory, etc) rather than as their potential which is more what money is.
  - dublinben 11y ago
    Real estate, especially in major Western metropolises (London, Paris, New York, etc.) is also seen as a very stable store of value. If you are a newly-minted millionaire capitalist from an unstable developing country, parking your cash in foreign real estate is quite attractive.
  - AndrewKemendo 11y ago
    It's a mix, but in general you can look at the risk profile of these assets as a range between "storage" and "return." The left end is more (historically) stable asset classes with lower returns like government bonds and the latter with volatile and high tech startups. Again though, it's not "money" per se, ie. cash, that they are trying to generate - though in the cases of dividend yielding assets as part of a retirement portfolio that is true - but rather to put their money into an asset that beats inflation with variable levels of security and maintenance, aka Risk. I guess you could say that you always want a higher cash value over time but I think that is a vulgar interpretation of how a market works.
irln 11y ago
It depends upon whether capitalism == the current form of managing the money supply (e.g. fractional reserve loans, Federal Reserve's open market operations).
bko 11y ago
Some would disagree that the purpose of existence is to promote happiness. Robert Nozick offered this thought experiment to which I would not opt to maximize happiness: > Nozick asks us to imagine a machine that could give us whatever desirable or pleasurable experiences we could want. Psychologists have figured out a way to stimulate a person's brain to induce pleasurable experiences that the subject could not distinguish from those he would have apart from the machine. He then asks, if given the choice, would we prefer the machine to real life? [0] [0] https://en.wikipedia.org/wiki/Experience_machine https://en.wikipedia.org/wiki/Experience_machine
- kaffeemitsahne 11y ago
  Why wouldn't you?
  - karmakaze 11y ago
    A game is more fun without the cheat-code.
    - olewhalehunter 11y ago
      You live life with significantly more "cheat codes" than the rest of the world, now what makes you think you aren't already living with "cheat codes" you aren't aware of? Since you could also program your reality to enjoy the benefits of the "cheat codes" without actually being aware of them, then there's a bit of cosmic irony to your statement.
      - karmakaze 11y ago
        But what's proposed isn't any cheat-code, it's The cheat-code. I remember playing one of the Dooms once with its god cheat.. for a few minutes.
  - bko 11y ago
    Because I believe in a greater purpose in life (in the non-religious sense). But that's just me
jsprogrammer 11y ago
>Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time" Sorry, but what? I'm guessing that you don't even really believe this and that you don't even know what those phrases are supposed to mean. Why else would you put them in quotes -- twice? I can only guess that this is supposed to mean that capital somehow binds up prior effort into a claim on (others?) future effort? That is a fiction (likely told to you by someone with "capital"). It's a fine theory, but it is only that. There is no physicality to capital in your definition. It is purely a social construct. A more traditional definition of capital is that it refers to a physical machine which substitutes labor.
- madaxe_again 11y ago
  Dude. Smith (WoN) and Marx (Kapital). Know your sources before shooting your mouth off.
  - jsprogrammer 11y ago
    Read those a long time ago brah. You dispute what I said?
- dredmorbius 11y ago
  capital somehow binds up prior effort into a claim on (others?) future effort? Actually, yes. Money is a lien on future production. Or demand rights. That's specifically what debt creates: an obligation to someone else for future efforts if the debtor.
  - jsprogrammer 11y ago
    Not all money is debt, though most is. Debt is not a demand on future effort or production. Debt is merely an accounting artifact; it can make no real claims on the physical world. Many will exert effort in exchange for money, but calling it a lien on future production is incorrect. No one has any obligation to perform effort in exchange for whatever it is that you call money.

AndrewKemendo 11y ago

>capitalism is a system which currently optimises for money. If that were the case then cash reserves would be where the bulk of people poured their resources. In fact the majority of non-debt "capital" is held in real-estate and some combination of financial instruments (CD, bonds, common stock etc...). You are confusing how the assets are valued with what is actually being valued. What I think you are saying though is that capitalism is optimizing for having the highest dollar denominated balance sheet - which could be true, but I think that is a function of the people, not the function of open markets or the asset value function of assigning ownership to capital.

gglitch 11y ago
Out of my depth here, but aren't the real estate and financial instruments being held merely as a generator of more money (except in the rare case that one actually lives on the real estate, I suppose)?
- drabiega 11y ago
  You might think so at first glance, but the telling question is whether you're holding those things to generate money to hold onto or whether you just want that money to buy other things?
- msandford 11y ago
  Generally yes, but the yields on real estate are small relative to the notional value. Further, by necessity most things are held at a notional value and the sum of all these notional values far far outweighs the total sum of all the money people are holding in bank accounts. Now obviously everyone in the world couldn't sell everything and achieve the notional values and put those in bank accounts, because in order for everyone to sell there would have to be buyers, but we can't have buyers because everyone is selling. But if somehow we could, the amount of money in banks would probably go up 100x or so, but definitely at least 10x. That means that real assets far outweigh money in the economy and so it's kind of strange to think about 'capital' as money rather than as assets. Assets are things which are generally useful in some particular way (a car, a house, a factory, etc) rather than as their potential which is more what money is.
- dublinben 11y ago
  Real estate, especially in major Western metropolises (London, Paris, New York, etc.) is also seen as a very stable store of value. If you are a newly-minted millionaire capitalist from an unstable developing country, parking your cash in foreign real estate is quite attractive.
- AndrewKemendo 11y ago
  It's a mix, but in general you can look at the risk profile of these assets as a range between "storage" and "return." The left end is more (historically) stable asset classes with lower returns like government bonds and the latter with volatile and high tech startups. Again though, it's not "money" per se, ie. cash, that they are trying to generate - though in the cases of dividend yielding assets as part of a retirement portfolio that is true - but rather to put their money into an asset that beats inflation with variable levels of security and maintenance, aka Risk. I guess you could say that you always want a higher cash value over time but I think that is a vulgar interpretation of how a market works.

irln 11y ago

It depends upon whether capitalism == the current form of managing the money supply (e.g. fractional reserve loans, Federal Reserve's open market operations).

bko 11y ago

Some would disagree that the purpose of existence is to promote happiness. Robert Nozick offered this thought experiment to which I would not opt to maximize happiness: > Nozick asks us to imagine a machine that could give us whatever desirable or pleasurable experiences we could want. Psychologists have figured out a way to stimulate a person's brain to induce pleasurable experiences that the subject could not distinguish from those he would have apart from the machine. He then asks, if given the choice, would we prefer the machine to real life? [0] [0] https://en.wikipedia.org/wiki/Experience_machine https://en.wikipedia.org/wiki/Experience_machine

kaffeemitsahne 11y ago
Why wouldn't you?
- karmakaze 11y ago
  A game is more fun without the cheat-code.
  - olewhalehunter 11y ago
    You live life with significantly more "cheat codes" than the rest of the world, now what makes you think you aren't already living with "cheat codes" you aren't aware of? Since you could also program your reality to enjoy the benefits of the "cheat codes" without actually being aware of them, then there's a bit of cosmic irony to your statement.
    - karmakaze 11y ago
      But what's proposed isn't any cheat-code, it's The cheat-code. I remember playing one of the Dooms once with its god cheat.. for a few minutes.
- bko 11y ago
  Because I believe in a greater purpose in life (in the non-religious sense). But that's just me

jsprogrammer 11y ago

>Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time" Sorry, but what? I'm guessing that you don't even really believe this and that you don't even know what those phrases are supposed to mean. Why else would you put them in quotes -- twice? I can only guess that this is supposed to mean that capital somehow binds up prior effort into a claim on (others?) future effort? That is a fiction (likely told to you by someone with "capital"). It's a fine theory, but it is only that. There is no physicality to capital in your definition. It is purely a social construct. A more traditional definition of capital is that it refers to a physical machine which substitutes labor.

madaxe_again 11y ago
Dude. Smith (WoN) and Marx (Kapital). Know your sources before shooting your mouth off.
- jsprogrammer 11y ago
  Read those a long time ago brah. You dispute what I said?
dredmorbius 11y ago
capital somehow binds up prior effort into a claim on (others?) future effort? Actually, yes. Money is a lien on future production. Or demand rights. That's specifically what debt creates: an obligation to someone else for future efforts if the debtor.
- jsprogrammer 11y ago
  Not all money is debt, though most is. Debt is not a demand on future effort or production. Debt is merely an accounting artifact; it can make no real claims on the physical world. Many will exert effort in exchange for money, but calling it a lien on future production is incorrect. No one has any obligation to perform effort in exchange for whatever it is that you call money.