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The real problem is how demand curve behaves when the price is approaching zero (which is what you eventually get as productivity increases). Traditional econo

by rumcajz 11y ago

The real problem is how demand curve behaves when the price is approaching zero (which is what you eventually get as productivity increases). Traditional economics assume that if the price of an egg is $1 you'll eat one a day. If the price drops to 1c, you'll eat 100 a day. But: Would you? In other words, at some point we are going to live in the world where consumption cannot catch up with the production. What then? Surely, economy would collapse: Goods won't be purchased and people producing them would be fired. Those fired would not have money to buy goods. The demand would decrease. More people will be fired. And so on until last human being dies of hunger. I would even argue that in developed world we've already reached the limit and the economy is kept afloat only by desperate measures such as whipping up the consumption using ads, lowering the productivity by employing large numbers of paper pushers and so on.

TeMPOraL 11y ago
And all of that doesn't even begin to address the resource limits of our planet. We can keep artificially sustaining the system by making more throwaway products for ad-driven consumption; we can keep people employed by inventing more bullshit jobs, introducing more managers of managers of managers into advertising industry, etc. - but at that rate, we'll soon hit the energy limit and the entire system will collapse back into middle ages. Or we'll all starve and die as the planet says "fuck it, I had enough" and shuts down the ecosystem for a while.
- rumcajz 11y ago
  That's an interesting question as well. We may be saved by the fact that as literacy and wealth increases, natality rates go down. I've heard all kinds of estimates of when we'll reach the peak, ranging for 30 to 100 years. Whether the ecosystem will support us until population grows smaller and more sustainable is unknown.
  - reagency 11y ago
    Nope. Westerners with 2 babies consume 100x as much resources as rural Africans with 7 babies. And they can continue to consume more as the productivity increases. And we have room (in the population, not in resources) to double the number of high consuming people eveery 30 years for many generations.
    - TeMPOraL 11y ago
      The westerners aren't as scary as the developing nations are, actually. We're starting to care about our energy sources, (sometimes) pushing for clean alternatives. Compare with the rest of the world, in the process of rising from poverty. They need cheap energy, and they will need even more. What will they turn to? Coal, probably. And who are we, the rich west, to deny them access to things we treat as basic human rights - like wash machines or hot showers? It would be in our best interest as a civilization to help them build solar and nuclear infrastructure, to skip the fossil fuels. But the way things look right now, I don't see it happening.
reagency 11y ago
Surely if the economy collapsed a you say, the price of eggs would increase again, saving the economy. Something is wrong with your analysis
- rumcajz 11y ago
  There would be lot of eggs but no people with money to buy them. Whether price is high or low is completely irrelevant. (The analysis assumes that there's no wellfare, basic income, single worker feeding large extended families or any such non-markety stuff.)

by rumcajz 11y ago

TeMPOraL 11y ago

And all of that doesn't even begin to address the resource limits of our planet. We can keep artificially sustaining the system by making more throwaway products for ad-driven consumption; we can keep people employed by inventing more bullshit jobs, introducing more managers of managers of managers into advertising industry, etc. - but at that rate, we'll soon hit the energy limit and the entire system will collapse back into middle ages. Or we'll all starve and die as the planet says "fuck it, I had enough" and shuts down the ecosystem for a while.

rumcajz 11y ago
That's an interesting question as well. We may be saved by the fact that as literacy and wealth increases, natality rates go down. I've heard all kinds of estimates of when we'll reach the peak, ranging for 30 to 100 years. Whether the ecosystem will support us until population grows smaller and more sustainable is unknown.
- reagency 11y ago
  Nope. Westerners with 2 babies consume 100x as much resources as rural Africans with 7 babies. And they can continue to consume more as the productivity increases. And we have room (in the population, not in resources) to double the number of high consuming people eveery 30 years for many generations.
  - TeMPOraL 11y ago
    The westerners aren't as scary as the developing nations are, actually. We're starting to care about our energy sources, (sometimes) pushing for clean alternatives. Compare with the rest of the world, in the process of rising from poverty. They need cheap energy, and they will need even more. What will they turn to? Coal, probably. And who are we, the rich west, to deny them access to things we treat as basic human rights - like wash machines or hot showers? It would be in our best interest as a civilization to help them build solar and nuclear infrastructure, to skip the fossil fuels. But the way things look right now, I don't see it happening.

reagency 11y ago

Surely if the economy collapsed a you say, the price of eggs would increase again, saving the economy. Something is wrong with your analysis

rumcajz 11y ago
There would be lot of eggs but no people with money to buy them. Whether price is high or low is completely irrelevant. (The analysis assumes that there's no wellfare, basic income, single worker feeding large extended families or any such non-markety stuff.)