4 ms·

Your logic seems to require labour to be the primary creator of value. Returning to your desert island analogy, both castaways could spend their youth planting

Your logic seems to require labour to be the primary creator of value. Returning to your desert island analogy, both castaways could spend their youth planting coconut trees close to their shelter, thereby reducing the amount of work needed to gather coconuts as their mobility decreases. It seems to me that any economic system which invests in productivity and automation could similarly replace the labour required to subsidize the 'retired' population by investing in labour replacement technologies.

nicoburns 7y ago
Right, but money sitting in a bank account isn't necessarily being invested in a meaningful way. A lot of "investment" these days is in financial instruments, which don't generate value in the way that would be realise these benefits.
- SuoDuanDao 7y ago
  Ah, I understand the criticism now. I was thinking of these investments as buying shares in companies that make automated nurses etc.
- Fjolsvith 7y ago
  Wrong. Money sitting in a bank account is loaned out by the bank to people who will use that money profitably. The only place that money can sit without contributing to the economy is in a piggy bank or under a mattress.
  - gnosis89 7y ago
    False. Trillions of dollars are simply re-invested in financial activities (many of which are risky and borderline illegal as well as insured by your taxes) that serve only to generate more numbers with 0 physical contribution to the world. At least you can lift your mattress up with money underneath it or use your piggy bank as a paper weight.
    - Fjolsvith 7y ago
      Do explain where they get the interest they pay the depositor of the cash.
      - candybar 7y ago
        Interest rate has nothing to do with profitability - it's just a price that balances the supply and demand of funds and on the short end, it's heavily influenced by monetary policy and on the long end, it's heavily influenced by the inflation and growth expectations. Lots of consumers borrow at very high rates and it's not because they expect to be profitable with the money they borrow.
  - candybar 7y ago
    Whether you put your money in a piggy bank or a bank account doesn't impact the productive capacity of an economy. Keep in mind that money can be created out of thin air and that's effectively what would happen if enough people cashed out - it would reduce the supply of money and the central bank would make up for it until the desired level as measured by inflation would be reached. Other than some volatility this would create if it was coordinated, it would have little impact on the real economy.
bryanlarsen 7y ago
The services that elderly need are labour dominated. Japan is working hard on eldercare robots, but I'm skeptical.
tlholaday 7y ago
> both castaways could spend their youth planting coconut trees close to their shelter, Addressed by graeme as "build infrastructure and tools while young."
cryptica 7y ago
This is true. That's why it's alarming that most people's energy today is wasted on useless zero-sum activities like social media, finance, marketing, bureaucracy... The problem is actually quite simple, the people who control capital today are not intelligent enough and so they don't have the confidence to take the measured risks that are necessary to really innovate. If you look at the generations who were working between 1980 and 2000 (spanning 20 years), they delivered mind-blowing innovations: personal computers, graphics cards, databases, the internet, countless vaccines... It's impossible to list everything. What did the newer generations do in the last 20 years? Facebook, Twitter, Snap, Youtube, Netflix, Uber, Bitcoin... The only genuinely impressive thing that we achieved was the successful commercialization of the electric car. Our generation sucks. We are stupid and unwise. We can't allocate capital.
- folbec 7y ago
  not sure that we cannot allocate capital, the previous generation harvested most of the low hanging fruits, it can be argued that most modern progress needs more and more energy, and we are on a path of diminishing returns. See the various options under : https://en.wikipedia.org/wiki/Secular_stagnation https://en.wikipedia.org/wiki/Secular_stagnation and https://en.wikipedia.org/wiki/Energy_returned_on_energy_invested https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve... the world is not infinite, and economic growth can not be infinite. I have no proof if we are effectivelly at "the limits to growth" or not. It sure starts to feel like it.

nicoburns 7y ago

Right, but money sitting in a bank account isn't necessarily being invested in a meaningful way. A lot of "investment" these days is in financial instruments, which don't generate value in the way that would be realise these benefits.

SuoDuanDao 7y ago
Ah, I understand the criticism now. I was thinking of these investments as buying shares in companies that make automated nurses etc.
Fjolsvith 7y ago
Wrong. Money sitting in a bank account is loaned out by the bank to people who will use that money profitably. The only place that money can sit without contributing to the economy is in a piggy bank or under a mattress.
- gnosis89 7y ago
  False. Trillions of dollars are simply re-invested in financial activities (many of which are risky and borderline illegal as well as insured by your taxes) that serve only to generate more numbers with 0 physical contribution to the world. At least you can lift your mattress up with money underneath it or use your piggy bank as a paper weight.
  - Fjolsvith 7y ago
    Do explain where they get the interest they pay the depositor of the cash.
    - candybar 7y ago
      Interest rate has nothing to do with profitability - it's just a price that balances the supply and demand of funds and on the short end, it's heavily influenced by monetary policy and on the long end, it's heavily influenced by the inflation and growth expectations. Lots of consumers borrow at very high rates and it's not because they expect to be profitable with the money they borrow.
- candybar 7y ago
  Whether you put your money in a piggy bank or a bank account doesn't impact the productive capacity of an economy. Keep in mind that money can be created out of thin air and that's effectively what would happen if enough people cashed out - it would reduce the supply of money and the central bank would make up for it until the desired level as measured by inflation would be reached. Other than some volatility this would create if it was coordinated, it would have little impact on the real economy.

bryanlarsen 7y ago

The services that elderly need are labour dominated. Japan is working hard on eldercare robots, but I'm skeptical.

tlholaday 7y ago

> both castaways could spend their youth planting coconut trees close to their shelter, Addressed by graeme as "build infrastructure and tools while young."

cryptica 7y ago

This is true. That's why it's alarming that most people's energy today is wasted on useless zero-sum activities like social media, finance, marketing, bureaucracy... The problem is actually quite simple, the people who control capital today are not intelligent enough and so they don't have the confidence to take the measured risks that are necessary to really innovate. If you look at the generations who were working between 1980 and 2000 (spanning 20 years), they delivered mind-blowing innovations: personal computers, graphics cards, databases, the internet, countless vaccines... It's impossible to list everything. What did the newer generations do in the last 20 years? Facebook, Twitter, Snap, Youtube, Netflix, Uber, Bitcoin... The only genuinely impressive thing that we achieved was the successful commercialization of the electric car. Our generation sucks. We are stupid and unwise. We can't allocate capital.

folbec 7y ago
not sure that we cannot allocate capital, the previous generation harvested most of the low hanging fruits, it can be argued that most modern progress needs more and more energy, and we are on a path of diminishing returns. See the various options under : https://en.wikipedia.org/wiki/Secular_stagnation https://en.wikipedia.org/wiki/Secular_stagnation and https://en.wikipedia.org/wiki/Energy_returned_on_energy_invested https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve... the world is not infinite, and economic growth can not be infinite. I have no proof if we are effectivelly at "the limits to growth" or not. It sure starts to feel like it.