6 ms·

Do I care if someone has 1000x the artistic talent I do? Is there a shared river of inspiration we're all drinking from? You seem to believe there's a fixed pi

Do I care if someone has 1000x the artistic talent I do? Is there a shared river of inspiration we're all drinking from? You seem to believe there's a fixed pile of money in the world that every human competes for (e.g., 16th century Mercantilism). Go into the woods and turn a tree into a chair. Where did that value come from? Will it run out?

hoaw 8y ago
I think it is hard to make that into a constructive argument. Either you care and the 'allocation' is unfair. Or you don't care, which means that the market doesn't work since you caring is what is supposed to allocate resources fairly, and it is still unfair.
- throwawaymsft 8y ago
  The word 'allocate' presupposes a fixed pie that we're expected to split in a zero-sum game. That works for redistributing the fraction of wealth captured in taxes. But the parent's argument is about the process of accumulating wealth itself being zero-sum somehow. Thinking "someone earned money which would have gone to me otherwise" is like thinking "someone got in shape and that physical fitness would have gone to me otherwise".
  - wasdfff 8y ago
    Where does the dollar come from? A printer in a U.S. mint building. Every single one. No dollar can come into existance without being printed in one of these buildings. This is not like working out or singing a song, you can’t will money into existance and into your pocket, ultimately someone in charge of a larger pile of money wrote you a check. There is a finite amount of money in the world.
    - throwawaymsft 8y ago
      Banks will money into existence every time they issue a loan. https://en.wikipedia.org/wiki/Money_creation https://en.wikipedia.org/wiki/Money_creation When I deposit $1k in the bank and you take a $500 loan, $500 is created out of nowhere. You are using my deposit yet I still have a balance of $1000 on the books.
      - wasdfff 8y ago
        Banks cant will money into existance. If you withdrew your money the bank has to pay you from other funds. During the great depression banks collapsed this way, the only thing stopping that today is banks have enough funding to buffer people withdrawing from their accounts.
  - hoaw 8y ago
    I don't really matter if it is a growing pie or not, you are still getting a share. I am sure Uber creates a lot of new wealth, but the average driver most likely isn't seeing a lot of it.
    - throwawaymsft 8y ago
      Why doesn't the absolute share matter? If I give everyone an iPhone and a few people get an iPhone + Macbook, is that "bad"? Isn't everyone better off? (Yes, humans can be petty and jealous, but they are objectively better off.) Uber created a lot of wealth. Some got more than others. Is that objectively bad if the wealth didn't exist before?
wasdfff 8y ago
Eventually you will run out of wood to make chairs or people who want chairs, you can’t make infinite value as every product ever made requires commodities going in one end and customers with disposable income on another. The problem is when a company makes x, ceo takes 0.1x in compensation, while everyone else on the payroll combined also takes 0.1x in compensation just because they didn’t show up to work with the same provenance as the ceo. For a company, there is very much a fixed pile of money that every employee competes for.
- throwawaymsft 8y ago
  (As people use forests, others will notice and start making tree farms.) I don't see how it's inherently wrong for a CEO to take 10% of revenue and employees split 10%. And why do companies have a fixed pile: shouldn't an effective CEO grow top-line revenue? What if employees are splitting twice the revenue compared to a year ago? (If the company isn't growing, replace the CEO for someone who earns their 10%.) Money-making inequality, on its face, doesn't seem different than artistic inequality. Should I be angry that Warren Buffet gets 20% annual return on his investments while index funds only do 8%?
  - Tade0 8y ago
    (As people use forests, others will notice and start making tree farms.) Stories of countless species hunted to extinction show that this is not what happens. Let's look at the physics(?) of the economy: where does wealth actually come from? It's either from transforming things into more useful things or increasing efficiency of processes. There are limits to both of those things. We live on a planet that's in a rough equilibrium in terms of both matter and energy. So we have a finite maximal amount of value that we can extract from a constant amount of matter - which means that overall wealth is limited - we're just moving it around and at a finite rate at that - somebody is getting a bigger slice of this pie than the others.
    - throwawaymsft 8y ago
      Is wealth truly proportional to matter? How many physical resources are used when making software, music, art, theater, writing? How much wealth did the internet create and how much matter did it use? There may be a finite limit on potential wealth but it’s effectively limitless for human planning purposes. (For the trees, we can certainly mismanage our resources; it doesn’t mean it’s a priori impossible to create a growing and sustainable form of wealth.)
orthecreedence 8y ago
> You seem to believe there's a fixed pile of money in the world ...there is. not in the sense of "money" but in the sense of "wealth" and ownership of private property. Wealth is not "created" it is diverted. If wealth grows in one place it's because it shrank in another. Unless you believe that growth and resources are infinite, like many capitalist economists.
- throwawaymsft 8y ago
  When you invent the wheelbarrow, stack bricks into a house, plant a seed, where is wealth diverted from? Who is losing? What shrank? Potential wealth is ‘finite’ because humans are finite but there’s no practical limit. (Just like there’s no practical limit to how much art can be made. If art isn’t being made it isn’t because there’s only so much creativity to go around.)
  - orthecreedence 8y ago
    Where did you get the land to grow your seed? Where did you buy the bricks to build your house? And the fence to keep the deer away? What of the police and army to keep people from killing you and taking your seedling? The water to nourish it? You described one of the only scenarios in which wealth is "created" and the only reason it's created is because it derives "free" energy from the sun. But that is just one of the economic inputs of the seed, and there are many more (the labor to water it, the water to grow it, the land on which it grows). The sun's energy in this case is a small portion of the actual economic inputs the seed requires. And those economic inputs are diverted from somewhere else. They do not appear out of thin air. So yes, I agree, we should harness the sun's energy, or other "free" energy sources, as economic inputs. That doesn't change the fact that the overwhelming majority of wealth already exists and is not created out of thin air, but diverted.
    - throwawaymsft 8y ago
      It's helpful to separate natural resources (land, woods, oil, etc.) from wealth (valuable possessions). We take natural resources, often plentiful, apply labor + skill, and get a more valuable product. We're wealthier as a result. Yes, natural resources are finite, but not the limiting reagent for most things. There's a zero-sum game in that land used for farming is not available for an entertainment complex. But we have so much used for "nothing" that switching it to "something" is a giant increase in wealth. You can buy an acre in Kansas for a month's worth of minimum wage work. Las Vegas was built in a desert surrounded by hundreds of miles of wasteland. Did turning land, earth, trees, and iron ore into Las Vegas add zero value? (Not saying it was the best use of resources, just that assembling buildings improved the value of the raw materials.) As a counterexample, consider melting down a car into slag. Are you less wealthy with your charred steel than a working car? Of course -- charred steel is less valuable. The number of atoms is the same. In other words, is an assembled watch worth the same as a pile of gears? Are you indifferent to the two? If wealth were fixed in the earth, we must be getting poorer as the population grows. A few thousand years ago we had 1M people on earth. Were those peasants 7000x wealthier than us?
throwawaymsft 8y ago
Many people think the economy is a fixed pie. Do a quick google: inflation adjusted gdp per capita is increasing exponentially(!) over time as we find new ways to create wealth. If the pie were fixed our living standards should decrease over time as there’s more mouths to feed. https://www.google.com/search?q=world+gdp+per+capita+over+time&tbm=isch https://www.google.com/search?q=world+gdp+per+capita+over+ti... I’m not saying local deviations don’t exist - I can lose my job - but globally wealth has been growing continuously and poverty is being eradicated. This is only possible with wealth creation. Look up Hans Rosling’s work. https://goo.gl/images/QejAcY https://goo.gl/images/QejAcY

hoaw 8y ago

I think it is hard to make that into a constructive argument. Either you care and the 'allocation' is unfair. Or you don't care, which means that the market doesn't work since you caring is what is supposed to allocate resources fairly, and it is still unfair.

throwawaymsft 8y ago
The word 'allocate' presupposes a fixed pie that we're expected to split in a zero-sum game. That works for redistributing the fraction of wealth captured in taxes. But the parent's argument is about the process of accumulating wealth itself being zero-sum somehow. Thinking "someone earned money which would have gone to me otherwise" is like thinking "someone got in shape and that physical fitness would have gone to me otherwise".
- wasdfff 8y ago
  Where does the dollar come from? A printer in a U.S. mint building. Every single one. No dollar can come into existance without being printed in one of these buildings. This is not like working out or singing a song, you can’t will money into existance and into your pocket, ultimately someone in charge of a larger pile of money wrote you a check. There is a finite amount of money in the world.
  - throwawaymsft 8y ago
    Banks will money into existence every time they issue a loan. https://en.wikipedia.org/wiki/Money_creation https://en.wikipedia.org/wiki/Money_creation When I deposit $1k in the bank and you take a $500 loan, $500 is created out of nowhere. You are using my deposit yet I still have a balance of $1000 on the books.
    - wasdfff 8y ago
      Banks cant will money into existance. If you withdrew your money the bank has to pay you from other funds. During the great depression banks collapsed this way, the only thing stopping that today is banks have enough funding to buffer people withdrawing from their accounts.
- hoaw 8y ago
  I don't really matter if it is a growing pie or not, you are still getting a share. I am sure Uber creates a lot of new wealth, but the average driver most likely isn't seeing a lot of it.
  - throwawaymsft 8y ago
    Why doesn't the absolute share matter? If I give everyone an iPhone and a few people get an iPhone + Macbook, is that "bad"? Isn't everyone better off? (Yes, humans can be petty and jealous, but they are objectively better off.) Uber created a lot of wealth. Some got more than others. Is that objectively bad if the wealth didn't exist before?

wasdfff 8y ago

Eventually you will run out of wood to make chairs or people who want chairs, you can’t make infinite value as every product ever made requires commodities going in one end and customers with disposable income on another. The problem is when a company makes x, ceo takes 0.1x in compensation, while everyone else on the payroll combined also takes 0.1x in compensation just because they didn’t show up to work with the same provenance as the ceo. For a company, there is very much a fixed pile of money that every employee competes for.

throwawaymsft 8y ago
(As people use forests, others will notice and start making tree farms.) I don't see how it's inherently wrong for a CEO to take 10% of revenue and employees split 10%. And why do companies have a fixed pile: shouldn't an effective CEO grow top-line revenue? What if employees are splitting twice the revenue compared to a year ago? (If the company isn't growing, replace the CEO for someone who earns their 10%.) Money-making inequality, on its face, doesn't seem different than artistic inequality. Should I be angry that Warren Buffet gets 20% annual return on his investments while index funds only do 8%?
- Tade0 8y ago
  (As people use forests, others will notice and start making tree farms.) Stories of countless species hunted to extinction show that this is not what happens. Let's look at the physics(?) of the economy: where does wealth actually come from? It's either from transforming things into more useful things or increasing efficiency of processes. There are limits to both of those things. We live on a planet that's in a rough equilibrium in terms of both matter and energy. So we have a finite maximal amount of value that we can extract from a constant amount of matter - which means that overall wealth is limited - we're just moving it around and at a finite rate at that - somebody is getting a bigger slice of this pie than the others.
  - throwawaymsft 8y ago
    Is wealth truly proportional to matter? How many physical resources are used when making software, music, art, theater, writing? How much wealth did the internet create and how much matter did it use? There may be a finite limit on potential wealth but it’s effectively limitless for human planning purposes. (For the trees, we can certainly mismanage our resources; it doesn’t mean it’s a priori impossible to create a growing and sustainable form of wealth.)

orthecreedence 8y ago

> You seem to believe there's a fixed pile of money in the world ...there is. not in the sense of "money" but in the sense of "wealth" and ownership of private property. Wealth is not "created" it is diverted. If wealth grows in one place it's because it shrank in another. Unless you believe that growth and resources are infinite, like many capitalist economists.

throwawaymsft 8y ago
When you invent the wheelbarrow, stack bricks into a house, plant a seed, where is wealth diverted from? Who is losing? What shrank? Potential wealth is ‘finite’ because humans are finite but there’s no practical limit. (Just like there’s no practical limit to how much art can be made. If art isn’t being made it isn’t because there’s only so much creativity to go around.)
- orthecreedence 8y ago
  Where did you get the land to grow your seed? Where did you buy the bricks to build your house? And the fence to keep the deer away? What of the police and army to keep people from killing you and taking your seedling? The water to nourish it? You described one of the only scenarios in which wealth is "created" and the only reason it's created is because it derives "free" energy from the sun. But that is just one of the economic inputs of the seed, and there are many more (the labor to water it, the water to grow it, the land on which it grows). The sun's energy in this case is a small portion of the actual economic inputs the seed requires. And those economic inputs are diverted from somewhere else. They do not appear out of thin air. So yes, I agree, we should harness the sun's energy, or other "free" energy sources, as economic inputs. That doesn't change the fact that the overwhelming majority of wealth already exists and is not created out of thin air, but diverted.
  - throwawaymsft 8y ago
    It's helpful to separate natural resources (land, woods, oil, etc.) from wealth (valuable possessions). We take natural resources, often plentiful, apply labor + skill, and get a more valuable product. We're wealthier as a result. Yes, natural resources are finite, but not the limiting reagent for most things. There's a zero-sum game in that land used for farming is not available for an entertainment complex. But we have so much used for "nothing" that switching it to "something" is a giant increase in wealth. You can buy an acre in Kansas for a month's worth of minimum wage work. Las Vegas was built in a desert surrounded by hundreds of miles of wasteland. Did turning land, earth, trees, and iron ore into Las Vegas add zero value? (Not saying it was the best use of resources, just that assembling buildings improved the value of the raw materials.) As a counterexample, consider melting down a car into slag. Are you less wealthy with your charred steel than a working car? Of course -- charred steel is less valuable. The number of atoms is the same. In other words, is an assembled watch worth the same as a pile of gears? Are you indifferent to the two? If wealth were fixed in the earth, we must be getting poorer as the population grows. A few thousand years ago we had 1M people on earth. Were those peasants 7000x wealthier than us?

throwawaymsft 8y ago

Many people think the economy is a fixed pie. Do a quick google: inflation adjusted gdp per capita is increasing exponentially(!) over time as we find new ways to create wealth. If the pie were fixed our living standards should decrease over time as there’s more mouths to feed. https://www.google.com/search?q=world+gdp+per+capita+over+time&tbm=isch https://www.google.com/search?q=world+gdp+per+capita+over+ti... I’m not saying local deviations don’t exist - I can lose my job - but globally wealth has been growing continuously and poverty is being eradicated. This is only possible with wealth creation. Look up Hans Rosling’s work. https://goo.gl/images/QejAcY https://goo.gl/images/QejAcY