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What is this? Economics for ants? These acquarium models of economy are so inadequate to describe real world it hurts. If the only thing we as economic agents
by snidane 7y ago
What is this? Economics for ants?
These acquarium models of economy are so inadequate to describe real world it hurts. If the only thing we as economic agents supposedly do is borrowing and transacting, the central banks keep lowering interest rates to spur demand for goods. Unbeknownst to them there is this thing called real estate market and when they lower interest rates people start parking their hard earned money into it for safety instead of spending it for goods like crazy. It's only indirect effect of people feeling safer with their money parked in houses that they start spending more for goods.
But somehow land and real estate and how it affects economics is never included in these textbook economics for ants that are used globally at schools and central banks.
Land and real estate is not just some detail to be left out. It is actually the thing which defines employment and unemployment. In the old days it was customary to set up your own farm and self subsistence if you could get hold of enough land for it. You asked yourself: why would I have to get a job with a shitty boss yelling at me when I can grow my own corn?
It's only after all land had been taken that you no longer have that option. Back then unemployment was a choice - there was always a 'job' of cultivating your own land.
Let's see if the world wakes up from blindness of their economic religions and discover other explanations of people interactions.
Ideas around universal basic income seem to gain traction in times of crisis. Perhaps this is the time Henry George's land economics start shining again after 100 years.
- Mirioron 7y agoThe problem is that nowadays your land is not your land. You can't do whatever you want on it. Everything is heavily restricted by permits and regulations. Sure, you can farm, but you can't start a factory or mine the minerals on it. You can't build even a house on it without permission from someone else. All of this means that land is only a means of realistic production if you can navigate the arcane rules of the government. I agree that real estate is an important part of the economy, but for many it essentially is just an investment or rent generator (to lower the investment costs). Our modern economy is about making stuff and land use isn't directly related to it as much as it used to be.
- blacksmith_tb 7y agoWhile this may cramp your style, it also prevents your nextdoor neighbor from tearing down their house to start an open-pit mine... I don't think you'll encounter too many building code problems if you buy a parcel of remote land, if all you wanted was to live in a geodesic dome?
- Mirioron 7y agoI don't disagree with the regulations. I'm saying that there are enough regulations that land doesn't directly translate to means of production anymore. >I don't think you'll encounter too many building code problems if you buy a parcel of remote land, if all you wanted was to live in a geodesic dome? But you probably aren't allowed to live there. You might be fine if you're entirely alone, but your kids would probably be taken away from you if you had kids.
- lonelappde 7y agoI suspect you may be right but it would help to see a model demonstrating the impact of adding/removing land from the model
- snidane 7y agoGeorgists build upon on David Ricardo's Law of rent which provides a model of land supply and its effect on employment and wealth distribution. https://youtu.be/yyv1xYDWAxk https://youtu.be/yyv1xYDWAxk https://youtu.be/FOmImcdbjfw https://youtu.be/FOmImcdbjfw http://www.henrygeorge.org/pchp11.htm http://www.henrygeorge.org/pchp11.htm
- jacques_chester 7y agoThe only thing more over-simplifying than aquarium models is people accusing economists of over-simplifying. It is a vast field with thousands of subtopics. If an economist showed up and mocked Torvalds for not using Apache to React.js, they'd look about as silly as 99% of people accusing economists of ignorance of the actual world.
- viburnum 7y agoUmm, I don’t think you actually read the article. Sam Bowles is the most accomplished radical economist in America. You’re acting like he’s a textbook neoclassical.