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Where does the capital come from that flows in to savings? - From wages, which are paid by enterprises that create the goods that are consumed - From investme

Where does the capital come from that flows in to savings? - From wages, which are paid by enterprises that create the goods that are consumed - From investment gains in enterprises that create the goods that are consumed Its consumption all the way down.

quadrangle 8y ago
Nonsense. Capital is ownership of raw materials and means of production, even if we use money to track that effectively. Capital comes from natural resources more than anything else. Consuming those resources destroys capital rather than generating it — except when the consumption is an investment that increases our access to more resources (i.e. using oil to run equipment to get more oil as well as examples that aren't the same resource). If we live more consuming lifestyles, we drive up the demand for resources which could increase the motivation of people to get them and thus drive economic growth short-term, until/unless we use up the resources entirely. And that all still ignores externalized costs (pollution and other harms) that can come from the extra consumption.
adventured 8y ago
Try consuming something before it's produced. There is an order to things. It all begins with first producing/making something, no matter what segment of the economy you're talking about. Sure, you can start by borrowing (from someone else that has produced something), and eventually you still have to produce to pay for that front loaded consumption.
- redahs 8y ago
  Humans, animals, plants, and single cell organisms directly consume sunlight as an input factor of production for various biological processes without paying the sun anything for it.
  - adventured 8y ago
    The sun (not sunlight) isn't part of the global economy and isn't a tradeable good. You can't sell me the sun. As such it - the sun itself - exists outside the bounds of human economy and trade (for now). It's a neutral good in the form you're talking about, generically speaking we all possess it, and that cancels out accordingly. There are edge exceptions to the concept, such as for air that is polluted (in that case we don't all equally possess eg clean air). For the most part air and sunlight are neutral, canceling goods with how you're referring to it. Further, how do you plan to continue consuming sunlight on your skin, without producing something to then get food and shelter to survive another day or week of absorbing sunlight? How did you buy that living time in the first place, without producing anything to get you food and shelter to be alive in the present? Someone had to produce first. And if you want to go more elaborately into the concept economically (sunlight based energy generation), you need land and technology to turn that sunlight into consequential electricity. You must produce first to generate and consume the sun-based electricity.
    - redahs 8y ago
      The value the sunlight provides, like all positive externalities, is capitalized in the value of land. The benefits of sunlight can only be acquired if one has acquired a place on Earth to stand, suitable places to stand have been enclosed by land titles, and land rent or profits which can be acquired from ownership of these titles without having to produce anything make up at minimum 20% of national GDP. Land and sunlight are consumed by virtue of occupying a physical space on Earth, and play an extremely large role in the economy, but land and sunlight were never produced by the economy or as a result of economic processes. They are instead the product of natural physical processes which pre-existed the evolution of humans. All goods are certainly not the result of economic production, as this would create a chicken-and-egg problem where human civilization could not exist unless another human civilization was around to produce it.
      - quadrangle 8y ago
        Okay so the earlier poster was correct that capital is consumption all the way down if you twist the semantics to say that owning land is itself consumption (and that's reasonable enough, I'd accept it for sake of discussion).
- dnomad 8y ago
  > Try consuming something before it's produced. The process starts with government who can spend money without producing anything. Where do you think the actual currency units came from? Money doesn't grow on trees.
  - adventured 8y ago
    The government derives all of its monetary power from the production of the economy they preside over (and get to tax in most cases). Just ask Venezuela how monetary production with collapsed supporting production works out.
    - dnomad 8y ago
      > Just ask Venezuela how monetary production with collapsed supporting production works out. Yeah, this isn't how it works at all. Not surprising that people like you don't grasp very basics but try to think this through carefully: Governments can and do regularly summon and dismiss debts out of thin air. It's the very definition of sovereign. Venezuela's problems, like all sovereign debt problems before and since (see Germany, Zimbabwe, Rome), are due to its external dependencies. It has external debts. That means it participates in relationships where it is not a sovereign. Do you really think if Venezuela didn't need to import certain items (and therefore didn't need to borrow dollars) it would have any problems at all? And so no, "monetary power" actually has nothing to do with production capacity.
  - quadrangle 8y ago
    While you're totally right about the government spending, that's where currency comes from, not where capital comes from. Currency in practice is our measure of capital, but it isn't inherently capital. The government could give everyone a trillion dollars, but whoever actually owns land and factories and natural resources will still be the people with capital.
    - dnomad 8y ago
      > Currency in practice is our measure of capital, but it isn't inherently capital. In fact it is the only real capital that exists. The rest is just leverage. In a real economy all debts must be settled with sovereign debt ie currency. > The government could give everyone a trillion dollars, but whoever actually owns land and factories and natural resources will still be the people with capital. You've fallen to our own confusion. This is the classic mistake of people who don't understand Marx: the mere presence of assets doesn't make you a capitalist. Everybody has assets. It is only the people with currency (more precisely, the people owed currency) that are capitalists because their assets are sovereign liabilities and therefore must be accepted for all debt settlements. The "inside economy" can actually grow as long as people accept the sovereign debt for payments. The only limit of this process are the sovereign's borders and the existence of foreigners who refuse to be paid with the sovereign debt. This is important, particularly if you want to understand what's actually happening in China, where the entire system is driven by massive amounts of sovereign debt but the country as a whole has zero external debts (including its external assets). Growth, as the last forty years of China's history makes very clear, is not limited by any kind of exogenous investment. Countries don't need to borrow money to grow despite the narrative pushed by the global bankers.

quadrangle 8y ago

Nonsense. Capital is ownership of raw materials and means of production, even if we use money to track that effectively. Capital comes from natural resources more than anything else. Consuming those resources destroys capital rather than generating it — except when the consumption is an investment that increases our access to more resources (i.e. using oil to run equipment to get more oil as well as examples that aren't the same resource). If we live more consuming lifestyles, we drive up the demand for resources which could increase the motivation of people to get them and thus drive economic growth short-term, until/unless we use up the resources entirely. And that all still ignores externalized costs (pollution and other harms) that can come from the extra consumption.

adventured 8y ago

Try consuming something before it's produced. There is an order to things. It all begins with first producing/making something, no matter what segment of the economy you're talking about. Sure, you can start by borrowing (from someone else that has produced something), and eventually you still have to produce to pay for that front loaded consumption.

redahs 8y ago
Humans, animals, plants, and single cell organisms directly consume sunlight as an input factor of production for various biological processes without paying the sun anything for it.
- adventured 8y ago
  The sun (not sunlight) isn't part of the global economy and isn't a tradeable good. You can't sell me the sun. As such it - the sun itself - exists outside the bounds of human economy and trade (for now). It's a neutral good in the form you're talking about, generically speaking we all possess it, and that cancels out accordingly. There are edge exceptions to the concept, such as for air that is polluted (in that case we don't all equally possess eg clean air). For the most part air and sunlight are neutral, canceling goods with how you're referring to it. Further, how do you plan to continue consuming sunlight on your skin, without producing something to then get food and shelter to survive another day or week of absorbing sunlight? How did you buy that living time in the first place, without producing anything to get you food and shelter to be alive in the present? Someone had to produce first. And if you want to go more elaborately into the concept economically (sunlight based energy generation), you need land and technology to turn that sunlight into consequential electricity. You must produce first to generate and consume the sun-based electricity.
  - redahs 8y ago
    The value the sunlight provides, like all positive externalities, is capitalized in the value of land. The benefits of sunlight can only be acquired if one has acquired a place on Earth to stand, suitable places to stand have been enclosed by land titles, and land rent or profits which can be acquired from ownership of these titles without having to produce anything make up at minimum 20% of national GDP. Land and sunlight are consumed by virtue of occupying a physical space on Earth, and play an extremely large role in the economy, but land and sunlight were never produced by the economy or as a result of economic processes. They are instead the product of natural physical processes which pre-existed the evolution of humans. All goods are certainly not the result of economic production, as this would create a chicken-and-egg problem where human civilization could not exist unless another human civilization was around to produce it.
    - quadrangle 8y ago
      Okay so the earlier poster was correct that capital is consumption all the way down if you twist the semantics to say that owning land is itself consumption (and that's reasonable enough, I'd accept it for sake of discussion).
dnomad 8y ago
> Try consuming something before it's produced. The process starts with government who can spend money without producing anything. Where do you think the actual currency units came from? Money doesn't grow on trees.
- adventured 8y ago
  The government derives all of its monetary power from the production of the economy they preside over (and get to tax in most cases). Just ask Venezuela how monetary production with collapsed supporting production works out.
  - dnomad 8y ago
    > Just ask Venezuela how monetary production with collapsed supporting production works out. Yeah, this isn't how it works at all. Not surprising that people like you don't grasp very basics but try to think this through carefully: Governments can and do regularly summon and dismiss debts out of thin air. It's the very definition of sovereign. Venezuela's problems, like all sovereign debt problems before and since (see Germany, Zimbabwe, Rome), are due to its external dependencies. It has external debts. That means it participates in relationships where it is not a sovereign. Do you really think if Venezuela didn't need to import certain items (and therefore didn't need to borrow dollars) it would have any problems at all? And so no, "monetary power" actually has nothing to do with production capacity.
- quadrangle 8y ago
  While you're totally right about the government spending, that's where currency comes from, not where capital comes from. Currency in practice is our measure of capital, but it isn't inherently capital. The government could give everyone a trillion dollars, but whoever actually owns land and factories and natural resources will still be the people with capital.
  - dnomad 8y ago
    > Currency in practice is our measure of capital, but it isn't inherently capital. In fact it is the only real capital that exists. The rest is just leverage. In a real economy all debts must be settled with sovereign debt ie currency. > The government could give everyone a trillion dollars, but whoever actually owns land and factories and natural resources will still be the people with capital. You've fallen to our own confusion. This is the classic mistake of people who don't understand Marx: the mere presence of assets doesn't make you a capitalist. Everybody has assets. It is only the people with currency (more precisely, the people owed currency) that are capitalists because their assets are sovereign liabilities and therefore must be accepted for all debt settlements. The "inside economy" can actually grow as long as people accept the sovereign debt for payments. The only limit of this process are the sovereign's borders and the existence of foreigners who refuse to be paid with the sovereign debt. This is important, particularly if you want to understand what's actually happening in China, where the entire system is driven by massive amounts of sovereign debt but the country as a whole has zero external debts (including its external assets). Growth, as the last forty years of China's history makes very clear, is not limited by any kind of exogenous investment. Countries don't need to borrow money to grow despite the narrative pushed by the global bankers.