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So many intellectuals are thinking about the wrong ideas. Return to the basics of trade and charity then focus on the flow of real goods and services as abstra

So many intellectuals are thinking about the wrong ideas. Return to the basics of trade and charity then focus on the flow of real goods and services as abstracted by the velocity of money from agent to agent. Fundamentally, economic crashes are caused by dead money that represents concentrated, slow one-way trade patterns. Ideally, money flows across the people with perfect inclusion and closed-loops.

jimbob45 7y ago
Charity isn't charity if I'm benefiting from it in any way. It's a business deal at that point, though likely asymmetrical.
- tuesdayrain 7y ago
  You wouldn't do charity, or anything for that matter, if it truly did not benefit you in any way.
- donw 7y ago
  I strongly disagree. Economic transactions are rarely zero-sum. If I spend $100, I expect to get something back for that. If I spend it on a charity, then I'm supporting something I value -- helping homeless veterans, supporting national parks, promoting gun safety education, whatever it may be -- then I'm benefitting. As long as I've got the rest taken care of -- food, shelter, internet, and the power bill for my gigantic neon sign of Freddie Mercury -- then practically speaking, that $100 was doing nothing in my pocket, and now, it's actively doing work on my behalf towards doing good in the world.
Barrin92 7y ago
>economic crashes are caused by dead money that represents concentrated, slow one-way trade patterns. Ideally, money flows across the people with perfect inclusion and closed-loops. I don't think this is sustainable in a complex world. Maybe a long time ago on small scales this is what economic activity looked like, but today we have huge institutions that lend and borrow across the globe in obligations that span tens of years, and that is reasonable because the kind of things we're building are so complex that those large concentrations of capital and those obligations over time are necessary. This introduces more risk because it creates asymmetries but it also enables projects of sorts that aren't possible in some 'closed-loop' environment.
jariel 7y ago
No, crashes happen because of a common misunderstanding of some important market variables (or war, or cataclysms like bad weather). The last crash happened because of systematic soft-fraud all the way through the housing chain from individual borrowers, to lenders, VPs, ratings agencies, bankers, fund managers not doing their jobs, excessive risk etc.. No single issue would have caused a problem but collectively it meant everything was vastly mis-priced. The next break will happen because of the China slowdown when the world discovers more materially how much China numbers have been fudged for the last 30 years. We know it, but kind of ignore it. China won't crash but it'll slow down more quickly than anticipated which could cause some bubbles to pop where there was that dependency. Markets can also over-correct. If most market participants have really good information, ahead of time, and act rationally - there's no need for crashes. The Canadian economy doesn't go into hard recession - almost all of Canadian 'swings' are due to American pull. Canada has always been focused on 'stability' more than anything else (i.e. freedom, growth, exceptionalism).

jimbob45 7y ago

Charity isn't charity if I'm benefiting from it in any way. It's a business deal at that point, though likely asymmetrical.

tuesdayrain 7y ago
You wouldn't do charity, or anything for that matter, if it truly did not benefit you in any way.
donw 7y ago
I strongly disagree. Economic transactions are rarely zero-sum. If I spend $100, I expect to get something back for that. If I spend it on a charity, then I'm supporting something I value -- helping homeless veterans, supporting national parks, promoting gun safety education, whatever it may be -- then I'm benefitting. As long as I've got the rest taken care of -- food, shelter, internet, and the power bill for my gigantic neon sign of Freddie Mercury -- then practically speaking, that $100 was doing nothing in my pocket, and now, it's actively doing work on my behalf towards doing good in the world.

Barrin92 7y ago

>economic crashes are caused by dead money that represents concentrated, slow one-way trade patterns. Ideally, money flows across the people with perfect inclusion and closed-loops. I don't think this is sustainable in a complex world. Maybe a long time ago on small scales this is what economic activity looked like, but today we have huge institutions that lend and borrow across the globe in obligations that span tens of years, and that is reasonable because the kind of things we're building are so complex that those large concentrations of capital and those obligations over time are necessary. This introduces more risk because it creates asymmetries but it also enables projects of sorts that aren't possible in some 'closed-loop' environment.

jariel 7y ago

No, crashes happen because of a common misunderstanding of some important market variables (or war, or cataclysms like bad weather). The last crash happened because of systematic soft-fraud all the way through the housing chain from individual borrowers, to lenders, VPs, ratings agencies, bankers, fund managers not doing their jobs, excessive risk etc.. No single issue would have caused a problem but collectively it meant everything was vastly mis-priced. The next break will happen because of the China slowdown when the world discovers more materially how much China numbers have been fudged for the last 30 years. We know it, but kind of ignore it. China won't crash but it'll slow down more quickly than anticipated which could cause some bubbles to pop where there was that dependency. Markets can also over-correct. If most market participants have really good information, ahead of time, and act rationally - there's no need for crashes. The Canadian economy doesn't go into hard recession - almost all of Canadian 'swings' are due to American pull. Canada has always been focused on 'stability' more than anything else (i.e. freedom, growth, exceptionalism).