4 ms·

The problem eventually seems to boil down to this: 'if you don't make stuff, then there is no stuff' (E. Musk) And there are less and less incentives to contri

The problem eventually seems to boil down to this: 'if you don't make stuff, then there is no stuff' (E. Musk) And there are less and less incentives to contribute in making / selling things vs. just making more money out of money for a living. It's an important debate that the MM is trying to facilitate. And actually quite a good historic recap of the term value over time. But while the finance economy 'feels morally wrong' (especially when being on the loser side), that doesn't make for a convincing argument yet.

amiga_500 6y ago
Finance is subject to the same dichotomy. Some activities, like identifying lending to productive endeavours, are of some value. As are derivatives for producers looking to lock in prices. Then there is also the rentier side, such as lending to non-productive enterprises. People will say, as they do with everything now, "who can make the distinction". Adam Smith could. I think we can. Not trying in case we accidentally inhibit a few rich financiers from become even more rich, where the prize of extricating ourselves from what is fast becoming a nightmare mess is left untouched, is a mistake.
- twblalock 6y ago
  > People will say, as they do with everything now, "who can make the distinction". Adam Smith could. I think we can. We already do. Finance is an extremely heavily regulated industry. The regulations make all kinds of distinctions. The hard part is deciding what the regulations should be. What, specifically, would you change?
  - amiga_500 6y ago
    Regulations are legal vs illegal, they do not attempt to disambiguate wealth creation vs wealth appropriation. I'd encourage banks to lend into productive industries by taxing land, not labour (and properly tax externalities like pollution) , capturing publicly created location value and allowing wealth creators to retain more (all?) of the value they create. --- Replying to the sibling comment as yet again after typing "rent seeking" => "you're submitting too fast". Surprise! --- I think we should tax things that have an opportunity cost or externality. If you keep gold in a vault, assuming there is enough for industrial production (if not you have a lot of gold!), then please continue to do so. It doesn't impact me. If you hold land I and others cannot use it. You did not create it, society should be compensated via a tax, as the land itself has value due to society at large. A square plot in the middle of nowhere is worth considerably less than a square plot in NY. If you dump sewage into a river or burn lots of coal, you are also damaging the common wealth.
  - Retric 6y ago
    I think the single greatest change would be an AMT style wealth tax. Hypothetically, set to say 1%/year and owning non productive assets is highly discouraged. That acts as a release valve on endlessly escalating virtual wealth in favor of productive activity. Aka a stock with a 7% dividend sees zero change, but owning a vault of gold becomes a significant expense. While it might seem to rob the global economy of vast wealth overnight, all physical and intellectual assets are still around. So, if anything it’s simply aligning the economy more closely with reality which should increase efficiency.
    - rtx 6y ago
      I am assuming you are American. A vault of gold is more important than any stocks or factories. You come to realise its value through cultural memory.
      - oh_sigh 6y ago
        A vault of gold does nothing but sit there. A factory produces things that people actually want to use. I'd prefer to live in a society filled with factories versus a society filled with gold vaults.
      - Nasrudith 6y ago
        Isn't that just a tautology? The vault of gold is valued because it is culturally valued? The only "durability" is due to irrationally viewing the potential for a stock or factory to no longer produce anything while ignoring that gold already produces nothing. Like judging ashes as the better fuel since it can't be depleted.
      - amiga_500 6y ago
        This just illustrates the warped perception most have about what constitutes economic value. What is more useful? A factory that makes shoes for your population or a vault of gold? Gold has a role, but factories are king. This is why the USA is so, so screwed in handing over manufacturing to China. Americans usually criticize China by stating that they will stop consuming and what will China do? Nuts.

amiga_500 6y ago

Finance is subject to the same dichotomy. Some activities, like identifying lending to productive endeavours, are of some value. As are derivatives for producers looking to lock in prices. Then there is also the rentier side, such as lending to non-productive enterprises. People will say, as they do with everything now, "who can make the distinction". Adam Smith could. I think we can. Not trying in case we accidentally inhibit a few rich financiers from become even more rich, where the prize of extricating ourselves from what is fast becoming a nightmare mess is left untouched, is a mistake.

twblalock 6y ago
> People will say, as they do with everything now, "who can make the distinction". Adam Smith could. I think we can. We already do. Finance is an extremely heavily regulated industry. The regulations make all kinds of distinctions. The hard part is deciding what the regulations should be. What, specifically, would you change?
- amiga_500 6y ago
  Regulations are legal vs illegal, they do not attempt to disambiguate wealth creation vs wealth appropriation. I'd encourage banks to lend into productive industries by taxing land, not labour (and properly tax externalities like pollution) , capturing publicly created location value and allowing wealth creators to retain more (all?) of the value they create. --- Replying to the sibling comment as yet again after typing "rent seeking" => "you're submitting too fast". Surprise! --- I think we should tax things that have an opportunity cost or externality. If you keep gold in a vault, assuming there is enough for industrial production (if not you have a lot of gold!), then please continue to do so. It doesn't impact me. If you hold land I and others cannot use it. You did not create it, society should be compensated via a tax, as the land itself has value due to society at large. A square plot in the middle of nowhere is worth considerably less than a square plot in NY. If you dump sewage into a river or burn lots of coal, you are also damaging the common wealth.
- Retric 6y ago
  I think the single greatest change would be an AMT style wealth tax. Hypothetically, set to say 1%/year and owning non productive assets is highly discouraged. That acts as a release valve on endlessly escalating virtual wealth in favor of productive activity. Aka a stock with a 7% dividend sees zero change, but owning a vault of gold becomes a significant expense. While it might seem to rob the global economy of vast wealth overnight, all physical and intellectual assets are still around. So, if anything it’s simply aligning the economy more closely with reality which should increase efficiency.
  - rtx 6y ago
    I am assuming you are American. A vault of gold is more important than any stocks or factories. You come to realise its value through cultural memory.
    - oh_sigh 6y ago
      A vault of gold does nothing but sit there. A factory produces things that people actually want to use. I'd prefer to live in a society filled with factories versus a society filled with gold vaults.
    - Nasrudith 6y ago
      Isn't that just a tautology? The vault of gold is valued because it is culturally valued? The only "durability" is due to irrationally viewing the potential for a stock or factory to no longer produce anything while ignoring that gold already produces nothing. Like judging ashes as the better fuel since it can't be depleted.
    - amiga_500 6y ago
      This just illustrates the warped perception most have about what constitutes economic value. What is more useful? A factory that makes shoes for your population or a vault of gold? Gold has a role, but factories are king. This is why the USA is so, so screwed in handing over manufacturing to China. Americans usually criticize China by stating that they will stop consuming and what will China do? Nuts.