7 ms·

The Milken Way - “The scarce resource in our society is not money but people.”

74 points by pavanyara 5y ago

aeternum 5y ago
To me it's strange to think of money as a resource especially on the societal level. Money is just a unit of account. Creating more or less of it should not create more resources or products. People, natural resources, finished products, those things are finite and thus there's a need to allocate them. Money has turned out to be a good way of doing that.
- deleted 5y ago
  [deleted]
- BBC-vs-neolibs 5y ago
  Has it?
- merpnderp 5y ago
  Creating more money steals value from everyone who has traded their work for money, and creating less of it adds value. So you are right, it doesn't create more or less resources or products, but it does change existing values of resources and labor.
  - epistasis 5y ago
    As wealth grows through greater prosperity, if we do not increase the money supply to match this growth in wealth, we start to value prior labor far more than new labor. This is incredibly unfair to people who were simply born later than others, particularly since it's far easier to accumulate more money if one already has a good amount of wealth.
    - merpnderp 5y ago
      Absolutely, which is why it is fair to err on the side of inflation instead of deflation when managing the money supply. But stability is more important than either inflation or deflation, as an erratic money supply increases uncertainty into the value of trades.
      - epistasis 5y ago
        Agreed, and IMHO inflation/deflation, for all the difficulty of measuring them, is probably the best way to know if the money supply is to high or low. This is also why I think Bitcoin rests on shaky foundations, and why I get tired of people who want a balanced federal government spending budget.
        imtringued 5y ago
        Companies borrow to increase their net worth. If necessary they don't run balanced budgets. The point of the debt is that you end up better off with it than without. If the government were to optimize its net worth, then it would be pretty obvious that borrowing money to build transportation infrastructure and providing healthcare is "good" government spending and doing tax cuts or welfare is bad with debt. I don't know why but a lot of people pretend that governments are basically private households and all government spending is consumption.
        lotsofpulp 5y ago
        > and providing healthcare is "good" government spending Not all of it though. Giving an 80+ year old dialysis or extending their life a few months or nursing home care requiring round the clock staffing is not going to net any returns for society. A third of healthcare spending was post 85 years of age, as of data 20 years ago. Surely it has skyrocketed since: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ Imagine these resources put towards children. And fewer children will lead to even higher healthcare spending, since as far as I know, much of the tasks for elder care is not yet in the wheelhouse of automation, and it is highly undesirable work.
  - imtringued 5y ago
    >Creating more money steals value from everyone who has traded their work for money, Let's say I have a car that is worth $30k. I create a car coupon that lets you buy the car for $0. I have created more money without "stealing value". Money is created by promising work in the future. Considering the huge demand for work in the future it should be pretty obvious why there is so much debt out there.
  - saint_abroad 5y ago
    > Creating more money steals value from everyone who has traded their work for money, and creating less of it adds value. Conversely, creating more debt (as is with QE) adds value to everyone who has borrowed to invest. At some point though (usually through bankrupcy) this becomes inflationary. It is inflation that steals value from producers who trade work for money: remedied only by demanding more money this is a vicious cycle.
- simorley 5y ago
  > Money is just a unit of account. Creating more or less of it should not create more resources or products. Actually creating money does create more resources and products and vice versa. It's pretty much the modern economic system. More money makes more investment possible which can make more resources accessible and therefore create more products. But there is a physical limit on the resource side. And if society fails to justify the money creation with more resources, products and services, then you have inflation and ultimately a currency collapse as everyone loses faith in the value of money. It's a balancing act between money and products - whether money has to catch up to more products or whether products have to catch up to more money.
  - hndamien 5y ago
    Creating money doesn't create more resource, it just dilutes the medium of exchange and changes the vector of the capital allocation. Now somebody with newly created money gets more say in the allocation of scarce resources to hopefully create more resources and product. The creation of money itself actually hurts the system where those who had previously been successful in creating wealth through performance of capital allocation or labour and now partially disenfranchised of the full right they had earned to continue this trend.
    - imtringued 5y ago
      >Creating money doesn't create more resource True, it only creates the promise to work in the future. Whether that promise is worth something is up to the person making the promise. >it just dilutes the medium of exchange and changes the vector of the capital allocation That's an odd way of saying "higher interest rates". People do investments. They pay an interest rate according to the profitability of that investment. When there isn't enough aggregate supply to allow both investment and consumption the interest rate is raised until people either stop consuming because they are getting paid interest or because there are so many investments available you only pick the best ones. > The creation of money itself actually hurts the system where those who had previously been successful in creating wealth through performance of capital allocation or labour and now partially disenfranchised of the full right they had earned to continue this trend. Money is a promise that someone will work for you. That's not wealth, that's a promise of future wealth. Letting people promise even more future wealth does in no way hurt anyone. You also have to be realistic. If the promise turns out to not be true, then lying to everyone that it's real just makes everything worse because people keep "investing" into a lie. As I said in other comments. Labor cannot be stored. Simply holding onto money doesn't mean people are still there willing to work for you. Holding onto money in that sense can be self defeating. It's like that economic pie analogy. The pie has to be baked every day. If you don't eat the whole pie it will spoil and go into the trash. Uneaten cake benefits nobody so either stop baking so much cake or eat it before it's gone. > now partially disenfranchised of the full right they had earned to continue this trend. Well, as you can see in the pie analogy he has no intention to continue this trend otherwise he would avoid monetary savings because of the labor storage problem.
- allemagne 5y ago
  In what way is money not a resource at all levels? There's a finite supply of money that can be added to, taken away, allocated, or fluctuate in its price according to any other arbitrary unit (i.e. dollars in terms of euros, or in terms of baseball cards, or pounds of steel). Just like legal entities or "social liquidity", the supply and allocation of money is an ultimately imaginary thing that nonetheless exerts real world influence on how many other resources and products are created.
  - zardo 5y ago
    The only hard constraint on the creation of money is that you have a ledger big enough to keep track of it.
cryptonector 5y ago
Malthusians hardest hit.
vc9999 5y ago
Money has no intrinsic value
- handrous 5y ago
  Trivially true, as value isn't intrinsic in the first place. Now do human lives.
  - southerntofu 5y ago
    I think the parent's point was that a complex society can exist without money without any obvious/unavoidable downsides. It's just a layer of abstraction that's useful for ensuring some people have more than others, but does not serve any function in a society of abundance where resources are more accessible to anyone regardless of "class" (monetary barriers or other forms of social status, disconnected from actual needs).
    - allemagne 5y ago
      "Actual needs", "serving a function" and "obvious/unavoidable downsides" are loaded concepts that humans disagree vehemently about, not any kind of objective formula that can tell you the intrinsic value of other concepts.
    - inglor_cz 5y ago
      Human labor is a resource too and I fail to see how it could ever be abundant, especially qualified labor, unless we really develop a general AI. In every job, people who are actually good at it are valuable, and there must be some way of managing their priorities, so that their time isn't wasted. Paying them is one such way, though I do not claim that the only possible way in the universe.
      - southerntofu 5y ago
        > In every job, people who are actually good at it are valuable, and there must be some way of managing their priorities Agreed, but i'm strongly convinced an AI is not a good approach to the problem. What problem would it be solving, and with what criteria for the solution? An AI is just a really fast and really dumb computer looking at abstract numbers, and as such what numbers (weights) and why we feed it is what matters. I would argue two things, with which you may or may not agree: - capitalist competition drains "human labor" with little benefits for society: cooperation across organizations and fields could be incentivized ; we have an abundance of skilled people in many fields, but all of them are isolated working for a manager/boss (and their interest) not cooperating for the interest of society at large, and that's a waste of "human labor" - "qualified labor" is as valuable for skillsharing as for actual problem solving; it enables more "qualified labor" to emerge (reducing the bus factor) ; companionship and other forms of crafts guilds and workers cooperatives have a lot to offer to society which no private company (with shareholders and managers) could ever offer > Paying them is one such way, though I do not claim that the only possible way in the universe. Yeah, that was exactly my point. Being born and raised in a capitalist economy, most of us fail to see what we could do without money entirely. But throughout most of history humanity has lived without any form of currency so ti's not the only way to think about incentives.
joe_the_user 5y ago
I'm no sympathetic to effort to rehabilitate people like this. Especially with "look what vacuous homilies they have to offer". Aside engaging in actual crime, Milken's career was part of a trajectory where corporate raiders forced a perspective of ultra-short-term-ism onto the corporate world, something we're still suffering from. And the association between this and actual law-breaking isn't coincidental.
- missedthecue 5y ago
  I'm elated at the rehabilitation of his image. I don't believe people must forever be defined by their pasts. Michael Milken is probably the brightest human being I've ever met and I think he has ideas worth sharing.
- inglor_cz 5y ago
  If we recycle resources such as paper and tin, surely we should recycle people if possible. Prison time should not equal social death, otherwise it would be easier and possibly more merciful just to hang the person involved.
  - joe_the_user 5y ago
    I'd generally agree that prison by itself shouldn't mean the end of a person's ability to make a life for themselves. As I said above, the problematic thing with Milken is his crime and his "paradigm" kind of walk around-in-around. Not that corporate raiding always leads to particular things that are against the law but that it overall leads to a broad situation of the already strong leveraging their strength to extract more from the weak as well as "leveraging the future", so-to speak. This approach does lead to a fundamental arrogance, which in turn leads to crossing various lines to make money as well. "The Milken Way" is kind of a combination of all this.

74 points by pavanyara 5y ago

To me it's strange to think of money as a resource especially on the societal level. Money is just a unit of account. Creating more or less of it should not create more resources or products. People, natural resources, finished products, those things are finite and thus there's a need to allocate them. Money has turned out to be a good way of doing that.

deleted 5y ago
[deleted]
BBC-vs-neolibs 5y ago
Has it?
merpnderp 5y ago
Creating more money steals value from everyone who has traded their work for money, and creating less of it adds value. So you are right, it doesn't create more or less resources or products, but it does change existing values of resources and labor.
- epistasis 5y ago
  As wealth grows through greater prosperity, if we do not increase the money supply to match this growth in wealth, we start to value prior labor far more than new labor. This is incredibly unfair to people who were simply born later than others, particularly since it's far easier to accumulate more money if one already has a good amount of wealth.
  - merpnderp 5y ago
    Absolutely, which is why it is fair to err on the side of inflation instead of deflation when managing the money supply. But stability is more important than either inflation or deflation, as an erratic money supply increases uncertainty into the value of trades.
    - epistasis 5y ago
      Agreed, and IMHO inflation/deflation, for all the difficulty of measuring them, is probably the best way to know if the money supply is to high or low. This is also why I think Bitcoin rests on shaky foundations, and why I get tired of people who want a balanced federal government spending budget.
      - imtringued 5y ago
        Companies borrow to increase their net worth. If necessary they don't run balanced budgets. The point of the debt is that you end up better off with it than without. If the government were to optimize its net worth, then it would be pretty obvious that borrowing money to build transportation infrastructure and providing healthcare is "good" government spending and doing tax cuts or welfare is bad with debt. I don't know why but a lot of people pretend that governments are basically private households and all government spending is consumption.
        lotsofpulp 5y ago
        > and providing healthcare is "good" government spending Not all of it though. Giving an 80+ year old dialysis or extending their life a few months or nursing home care requiring round the clock staffing is not going to net any returns for society. A third of healthcare spending was post 85 years of age, as of data 20 years ago. Surely it has skyrocketed since: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ Imagine these resources put towards children. And fewer children will lead to even higher healthcare spending, since as far as I know, much of the tasks for elder care is not yet in the wheelhouse of automation, and it is highly undesirable work.
- imtringued 5y ago
  >Creating more money steals value from everyone who has traded their work for money, Let's say I have a car that is worth $30k. I create a car coupon that lets you buy the car for $0. I have created more money without "stealing value". Money is created by promising work in the future. Considering the huge demand for work in the future it should be pretty obvious why there is so much debt out there.
- saint_abroad 5y ago
  > Creating more money steals value from everyone who has traded their work for money, and creating less of it adds value. Conversely, creating more debt (as is with QE) adds value to everyone who has borrowed to invest. At some point though (usually through bankrupcy) this becomes inflationary. It is inflation that steals value from producers who trade work for money: remedied only by demanding more money this is a vicious cycle.
simorley 5y ago
> Money is just a unit of account. Creating more or less of it should not create more resources or products. Actually creating money does create more resources and products and vice versa. It's pretty much the modern economic system. More money makes more investment possible which can make more resources accessible and therefore create more products. But there is a physical limit on the resource side. And if society fails to justify the money creation with more resources, products and services, then you have inflation and ultimately a currency collapse as everyone loses faith in the value of money. It's a balancing act between money and products - whether money has to catch up to more products or whether products have to catch up to more money.
- hndamien 5y ago
  Creating money doesn't create more resource, it just dilutes the medium of exchange and changes the vector of the capital allocation. Now somebody with newly created money gets more say in the allocation of scarce resources to hopefully create more resources and product. The creation of money itself actually hurts the system where those who had previously been successful in creating wealth through performance of capital allocation or labour and now partially disenfranchised of the full right they had earned to continue this trend.
  - imtringued 5y ago
    >Creating money doesn't create more resource True, it only creates the promise to work in the future. Whether that promise is worth something is up to the person making the promise. >it just dilutes the medium of exchange and changes the vector of the capital allocation That's an odd way of saying "higher interest rates". People do investments. They pay an interest rate according to the profitability of that investment. When there isn't enough aggregate supply to allow both investment and consumption the interest rate is raised until people either stop consuming because they are getting paid interest or because there are so many investments available you only pick the best ones. > The creation of money itself actually hurts the system where those who had previously been successful in creating wealth through performance of capital allocation or labour and now partially disenfranchised of the full right they had earned to continue this trend. Money is a promise that someone will work for you. That's not wealth, that's a promise of future wealth. Letting people promise even more future wealth does in no way hurt anyone. You also have to be realistic. If the promise turns out to not be true, then lying to everyone that it's real just makes everything worse because people keep "investing" into a lie. As I said in other comments. Labor cannot be stored. Simply holding onto money doesn't mean people are still there willing to work for you. Holding onto money in that sense can be self defeating. It's like that economic pie analogy. The pie has to be baked every day. If you don't eat the whole pie it will spoil and go into the trash. Uneaten cake benefits nobody so either stop baking so much cake or eat it before it's gone. > now partially disenfranchised of the full right they had earned to continue this trend. Well, as you can see in the pie analogy he has no intention to continue this trend otherwise he would avoid monetary savings because of the labor storage problem.
allemagne 5y ago
In what way is money not a resource at all levels? There's a finite supply of money that can be added to, taken away, allocated, or fluctuate in its price according to any other arbitrary unit (i.e. dollars in terms of euros, or in terms of baseball cards, or pounds of steel). Just like legal entities or "social liquidity", the supply and allocation of money is an ultimately imaginary thing that nonetheless exerts real world influence on how many other resources and products are created.
- zardo 5y ago
  The only hard constraint on the creation of money is that you have a ledger big enough to keep track of it.

cryptonector 5y ago

Malthusians hardest hit.

vc9999 5y ago

Money has no intrinsic value

handrous 5y ago
Trivially true, as value isn't intrinsic in the first place. Now do human lives.
- southerntofu 5y ago
  I think the parent's point was that a complex society can exist without money without any obvious/unavoidable downsides. It's just a layer of abstraction that's useful for ensuring some people have more than others, but does not serve any function in a society of abundance where resources are more accessible to anyone regardless of "class" (monetary barriers or other forms of social status, disconnected from actual needs).
  - allemagne 5y ago
    "Actual needs", "serving a function" and "obvious/unavoidable downsides" are loaded concepts that humans disagree vehemently about, not any kind of objective formula that can tell you the intrinsic value of other concepts.
  - inglor_cz 5y ago
    Human labor is a resource too and I fail to see how it could ever be abundant, especially qualified labor, unless we really develop a general AI. In every job, people who are actually good at it are valuable, and there must be some way of managing their priorities, so that their time isn't wasted. Paying them is one such way, though I do not claim that the only possible way in the universe.
    - southerntofu 5y ago
      > In every job, people who are actually good at it are valuable, and there must be some way of managing their priorities Agreed, but i'm strongly convinced an AI is not a good approach to the problem. What problem would it be solving, and with what criteria for the solution? An AI is just a really fast and really dumb computer looking at abstract numbers, and as such what numbers (weights) and why we feed it is what matters. I would argue two things, with which you may or may not agree: - capitalist competition drains "human labor" with little benefits for society: cooperation across organizations and fields could be incentivized ; we have an abundance of skilled people in many fields, but all of them are isolated working for a manager/boss (and their interest) not cooperating for the interest of society at large, and that's a waste of "human labor" - "qualified labor" is as valuable for skillsharing as for actual problem solving; it enables more "qualified labor" to emerge (reducing the bus factor) ; companionship and other forms of crafts guilds and workers cooperatives have a lot to offer to society which no private company (with shareholders and managers) could ever offer > Paying them is one such way, though I do not claim that the only possible way in the universe. Yeah, that was exactly my point. Being born and raised in a capitalist economy, most of us fail to see what we could do without money entirely. But throughout most of history humanity has lived without any form of currency so ti's not the only way to think about incentives.

joe_the_user 5y ago

I'm no sympathetic to effort to rehabilitate people like this. Especially with "look what vacuous homilies they have to offer". Aside engaging in actual crime, Milken's career was part of a trajectory where corporate raiders forced a perspective of ultra-short-term-ism onto the corporate world, something we're still suffering from. And the association between this and actual law-breaking isn't coincidental.

missedthecue 5y ago
I'm elated at the rehabilitation of his image. I don't believe people must forever be defined by their pasts. Michael Milken is probably the brightest human being I've ever met and I think he has ideas worth sharing.
inglor_cz 5y ago
If we recycle resources such as paper and tin, surely we should recycle people if possible. Prison time should not equal social death, otherwise it would be easier and possibly more merciful just to hang the person involved.
- joe_the_user 5y ago
  I'd generally agree that prison by itself shouldn't mean the end of a person's ability to make a life for themselves. As I said above, the problematic thing with Milken is his crime and his "paradigm" kind of walk around-in-around. Not that corporate raiding always leads to particular things that are against the law but that it overall leads to a broad situation of the already strong leveraging their strength to extract more from the weak as well as "leveraging the future", so-to speak. This approach does lead to a fundamental arrogance, which in turn leads to crossing various lines to make money as well. "The Milken Way" is kind of a combination of all this.