4 ms·

Thankfully? The problem is that we did make rich people the global arbiter of what people value, by giving them more units which can be used to value things.

by geofft 5y ago

Thankfully? The problem is that we did make rich people the global arbiter of what people value, by giving them more units which can be used to value things. This is a fundamentally undemocratic system. Ten billionaires have way more ability to decide on something's value than ten people making minimum wage. (This is also the fallacy in "If you don't like it, why not short it and make money instead of complaining?" I don't like it, and I know my short positions aren't going to influence the market as much as some rich guy's much larger long positions.)

exo762 5y ago
> This is a fundamentally undemocratic system. All modern democracies are representative. People themselves don't decide about things, their representatives do. This is the price we are willing to pay to get effective governance.
- geofft 5y ago
  Sure, but not all representative systems are democracies. A king may represent his subjects (in foreign policy and war, for instance, and even sometimes in rituals) and generally has way more leverage to be effective at however he chooses to govern than a president or prime minister does, but it's not a democracy. One of the usual goals of a democracy is equal representation ("one person, one vote"). You can transfer your representation to someone else - either directly, in the sense of proxy voting, or indirectly, in the sense of voting for a representative - but you don't give it up permanently. When elections next happen (and if elections don't regularly happen, it's not a democracy), you get your vote back and can freely choose what to do with it, again. If your representative isn't doing what you want, you can choose another one. That's not true of the system of money. Even if it were theoretically been true at some point, once you transfer money to someone else, the associated power of that money stays with them or whoever they choose to transfer it to. If you bought Windows 95 for $209.95 a quarter century ago, that fraction of your ability to "vote" on how society values things left you a quarter century ago, after spending it exactly once on valuing Windows 95, and it probably never returned to you (unless you became a Microsoft employee or supplier). So, someone who makes something that is (rightly or wrongly) highly valued thereby accumulates the ability to value things in the future, and have disproportionate influence on what is then going to be highly valued. This process repeats continuously and has repeated for centuries.
  - lupire 5y ago
    Democracy does not mean "one person, one vote" -- that's tyranny of the majority, and gameable in an open system with procreation, immigration/emigration, and even murder. Democracy means "rule by the people" which is far more nuanced. More simply, the US Constitution was not approved by "one person, one vote", not even with a dozen caveats and asterisks.
    - geofft 5y ago
      Sure. I'm not saying that a democracy always means one person, one vote. I'm saying it requires an ideal of trying to be meaningfully representative. One person, one vote is certainly gameable. One dollar, one vote is even more so.
- ineedasername 5y ago
  The problem is the representative frequently don't represent the interests of their people, they represent the interests of whoever will donate more money to let them keep winning elections.
elefanten 5y ago
This is a nonsensical take on how value is determined. It's not analogous to voting (or making political decisions in general) -- it's incoherent to call it "undemocratic". The overwhelming majority of valuation / price discovery does not take place in a coordinated or intentional manner. People buy what they want or need and in aggregate this determines price. Billionaires in aggregate are a minor portion of transactions that take place -- they can participate in larger transactions than most people but can't just will any market configuration into existence. They can create localized distortions, but if they're doing something unsustainable then they won't stay billionaires long and it will end up a blip. However, I suspect your position may be a cryptic way of saying "There are some human activities / endeavors that I don't like and it's easy to blame the rich people invested in that / making their money off that." This would not support your point. It takes more than just some rich people to create and sustain an industry.
- geofft 5y ago
  > They can create localized distortions, but if they're doing something unsustainable then they won't stay billionaires long and it will end up a blip. My point is precisely that this assumption is not true. A more precise way to say that you're "doing something unsustainable" is that you're persistently overvaluing something. But how is it determined that you're overvaluing something? The rest of the market assigns it a lower value than what you assign. If you and your billionaire buddies just decide to value something highly, then simply because you have money already, you can do that, and you can influence enough of the market to make sure that you're not overvaluing it relative to the market, and thus, it is sustainable. The more money you have, the more leverage you have to pull off this trick. Sometimes it works, sometimes it doesn't, but the average person on a minimum-wage strategy cannot even attempt it. People don't solely buy what they want or need. They also buy, in very large quantities, things that they expect to be able to resell later. Sometimes this happens at small scale (think toilet paper or gasoline, or even think houses); sometimes this happens at large scale (think commodities markets or mergers and acquisitions). These sorts of secondary markets have a huge influence on price discovery.

by geofft 5y ago

exo762 5y ago

> This is a fundamentally undemocratic system. All modern democracies are representative. People themselves don't decide about things, their representatives do. This is the price we are willing to pay to get effective governance.

geofft 5y ago
Sure, but not all representative systems are democracies. A king may represent his subjects (in foreign policy and war, for instance, and even sometimes in rituals) and generally has way more leverage to be effective at however he chooses to govern than a president or prime minister does, but it's not a democracy. One of the usual goals of a democracy is equal representation ("one person, one vote"). You can transfer your representation to someone else - either directly, in the sense of proxy voting, or indirectly, in the sense of voting for a representative - but you don't give it up permanently. When elections next happen (and if elections don't regularly happen, it's not a democracy), you get your vote back and can freely choose what to do with it, again. If your representative isn't doing what you want, you can choose another one. That's not true of the system of money. Even if it were theoretically been true at some point, once you transfer money to someone else, the associated power of that money stays with them or whoever they choose to transfer it to. If you bought Windows 95 for $209.95 a quarter century ago, that fraction of your ability to "vote" on how society values things left you a quarter century ago, after spending it exactly once on valuing Windows 95, and it probably never returned to you (unless you became a Microsoft employee or supplier). So, someone who makes something that is (rightly or wrongly) highly valued thereby accumulates the ability to value things in the future, and have disproportionate influence on what is then going to be highly valued. This process repeats continuously and has repeated for centuries.
- lupire 5y ago
  Democracy does not mean "one person, one vote" -- that's tyranny of the majority, and gameable in an open system with procreation, immigration/emigration, and even murder. Democracy means "rule by the people" which is far more nuanced. More simply, the US Constitution was not approved by "one person, one vote", not even with a dozen caveats and asterisks.
  - geofft 5y ago
    Sure. I'm not saying that a democracy always means one person, one vote. I'm saying it requires an ideal of trying to be meaningfully representative. One person, one vote is certainly gameable. One dollar, one vote is even more so.
ineedasername 5y ago
The problem is the representative frequently don't represent the interests of their people, they represent the interests of whoever will donate more money to let them keep winning elections.

elefanten 5y ago

This is a nonsensical take on how value is determined. It's not analogous to voting (or making political decisions in general) -- it's incoherent to call it "undemocratic". The overwhelming majority of valuation / price discovery does not take place in a coordinated or intentional manner. People buy what they want or need and in aggregate this determines price. Billionaires in aggregate are a minor portion of transactions that take place -- they can participate in larger transactions than most people but can't just will any market configuration into existence. They can create localized distortions, but if they're doing something unsustainable then they won't stay billionaires long and it will end up a blip. However, I suspect your position may be a cryptic way of saying "There are some human activities / endeavors that I don't like and it's easy to blame the rich people invested in that / making their money off that." This would not support your point. It takes more than just some rich people to create and sustain an industry.

geofft 5y ago
> They can create localized distortions, but if they're doing something unsustainable then they won't stay billionaires long and it will end up a blip. My point is precisely that this assumption is not true. A more precise way to say that you're "doing something unsustainable" is that you're persistently overvaluing something. But how is it determined that you're overvaluing something? The rest of the market assigns it a lower value than what you assign. If you and your billionaire buddies just decide to value something highly, then simply because you have money already, you can do that, and you can influence enough of the market to make sure that you're not overvaluing it relative to the market, and thus, it is sustainable. The more money you have, the more leverage you have to pull off this trick. Sometimes it works, sometimes it doesn't, but the average person on a minimum-wage strategy cannot even attempt it. People don't solely buy what they want or need. They also buy, in very large quantities, things that they expect to be able to resell later. Sometimes this happens at small scale (think toilet paper or gasoline, or even think houses); sometimes this happens at large scale (think commodities markets or mergers and acquisitions). These sorts of secondary markets have a huge influence on price discovery.