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I don’t really understand the economy. Here’s why: it’s entirely artificial. We, humans, make the rules. We control the input and if we don’t like the output we

I don’t really understand the economy. Here’s why: it’s entirely artificial. We, humans, make the rules. We control the input and if we don’t like the output we can just change that too. The market doesn’t actually exist. It’s just pieces of paper and bits on computers. A car can malfunction because it wasn’t built properly or because something breaks. A human can get sick because it gets damaged somehow. But the economy is a concept. So if we think houses are going to suddenly become worthless it’s because we think we’re going to, as a society, stop seeing value in houses…it’s not like something about houses makes them less valuable. They don’t have value in the first place except because we want them to. So…is it because banks have extracted all of the value out of other things? Banks want more money, so they suddenly say houses have no value and because of that they can beg for and receive money from the government? None of it is real…it can’t actually stop working.

smell-my-bacon 5y ago
It's not really fake, it's just mass gambling. Capitalism by speculation isn't good for society, but it's good for those who can afford to take risky bets and always come out ahead in the long run. We have an economy that values speculation above labor or property. It's not fake, it's just evil.
- mewpmewp2 5y ago
  How would you construct a better society? As an alternative to capitalism?
  - smell-my-bacon 5y ago
    Tweak it so that power and wealth are continuously redistributed to the masses to a large but not huge degree, such that the difference between the haves and have nots are a factor of 10x to 100x, not billions. Educate the hell out of everyone and reform democracy with proportional representation, more direct oversight (populism, referenda,etc.) and less monied influence (campaign finance) and lifetime appts. Embrace democratic collectivism as a healthier alternative to either militant nationalism or wild west individualism. I don't think you can ever really get rid of capitalism because you can't ever really get rid of greed. But you can certainly can make societal rules that make hoarding shameful and illegal, not celebrated. And capitalism doesn't have to be exorbitantly speculative the way the American system is. It just has to be strongly fettered and subservient to democratic controls, not own the government.
    - kelseyfrog 5y ago
      You can absolutely get rid of the legal concept of capital. It's supported and encoded by a set of laws. Delete the laws. Whether or not this is the best approach is up for debate.
      - smell-my-bacon 5y ago
        Capitalism is prevalent not just because it's codified into law, but because, I think, it plays well into innate human tribalism. Especially at the level of our elite cesspools of good ol boys.
        kelseyfrog 5y ago
        Of course, the legal code is simply an artifact in the construction of capital, but by no means sufficient to its existence. I'll go even further and throw in the idea that human tribalism is innate is itself also a construction that can be dismantled.
      - more_corn 5y ago
        Please describe how you would get rid of the concept of capital. I'm honestly curious. Isn't capital just money that has been saved and can be invested? Is the money in your savings account not "Capital"? Surely you're not proposing getting rid of money. That would be silly. Barter becomes an O(n^2) problem. I'm baffled trying to figure which specific laws could be removed to delete capital from our society. Maybe you've read some secret communist literature that lays out a plan or something. Or maybe you're defining "Capital" in a way that is nonstandard or otherwise unfamiliar.
        kelseyfrog 5y ago
        > I'm baffled trying to figure which specific laws could be removed to delete capital from our society. Sounds like a fantastic project filled with economic, sociological, political, and ontological questions. What's the space of categorizations and which categorizations have the most compelling explanatory power? As an example, here's a statement[1] in the tax code which defines "capital asset." Enjoy! [1] https://www.law.cornell.edu/uscode/text/26/1221#a https://www.law.cornell.edu/uscode/text/26/1221#a
  - deleted 5y ago
    [deleted]
mewpmewp2 5y ago
It's supply and demand and many other factors. Value of houses can very easily change. To illustrate, imagine a mini-economy, where there's a village. Each person in a village has their own profession, they don't have currency, but they do trade their produce with each other. Just as an example of how a value of something can change. Let's imagine there's 30 families or just maybe 30 people. Let's say there's also 3 people who build houses. Now they keep building and since each of those people needs a house, they are willing to give some of their produce to the builders. Now at some point, all of sudden there's 30 houses built. If they build another house, what will be the value of this house? As all people already have a house. But this house is identical to all the other houses, shouldn't it still have similar value and shouldn't builders be getting the same? How will builders make anything of value for others to be willing to trade some of their produce? And actually, you could in a way solve this problem if this village adopted currency of some sort. Builders could instead of asking produce which might expire in few months, ask for money and ask enough money that by building all of those 30 houses, they will be covered for life and never have to build another house. And if it would happen that builders suddenly lost their capability to work after building 15 houses, what would happen to the values of those houses? Everyone will need a house to survive, so everyone would be willing to offer whatever they possibly can. A reason why economy might be cyclical is that while trying to organise all the logistics of what gets built, supply, demand and all that things can tip out of balance. And I'd like to say, whether economy is artifical, social construct, it optimises and helps organise people. Without money you'd have hard time trading, logistically, keeping track of everything. And without banks or loans you might never be able to own a house or start your business. All of these things and economy benefit the society as a whole, it's just that sometimes things can go wrong, but it doesn't mean that we are worse off after things go wrong than we would be without economy. You can easily see from those basic and primitive examples of how economy will make life easier/better for people. You could construct modern economy out step by step, how economy came to be and it should give you understanding on how each of those steps solved a problem, helped society grow or just benefit people and make their lives easier. You can start on the personal level and ask a question: 1. Why can't I just exist alone in the wild? You can, but it's very possible you get injured by a wild animal, are unable to hunt for food and simply die from a very simple injury very early in your life. 2. Okay, sounds like it would be better to cooperate with people, so if one gets injured, others can help out meanwhile. Also this would allow for some part of the group to focus their time on one activity like hunting so they would get as good at it by experience as possible. Someone else in the group could deal with helping people with injuries, so they gather experience there and will be better and better as future comes along. And so on and on... You should understand why economy is important once you have gone through all the steps.
megameter 5y ago
Much of economic behavior and dysfunction comes from our poor ability to scale socially past the Dunbar limit. When we can keep up with everyone, we have a little accountant in our head saying who to assign credit or blame to, so our transactions happen without much physical manifestation. Once you get bigger than a small village you have to believe in the system. The system is, throughout history, a hierarchy, and the hierarchy is defined by an overarching mythology of who or what is good and pure - the religion, nation, etc. - followed by division into ranks and groups. Business and finance becomes part of this system as a mechanism to offload credit and facilitate market exchange. While business and finance can be studied in a technical sense, the way in which humans ultimately use it is socially driven, and market norms vary widely between countries. It's an enormously inexact system the way we have it, because some groups define the rules and others are enforced-upon. That dysfunction lies at the heart of why economies crash, since that allows the elite to live in a Disney fantasy for a while, at least until the rails run out. They can "afford" to ignore society's limits and set up the game to benefit them as long as their status remains in place, and likewise people want to look up to elites as the system in manifest, which is why we have so much fan worship and a sense of national competition. And so the value of money tends to revolve mostly around the overall validation of the hierarchy as it stands; break that and you break a country. This is a major part of why cryptocurrency incites strong reactions; the beliefs it validates are all premised around consent to some communally defined principle of value(with Bitcoin being an direct extrapolation of labor theory of property to computing resources), and don't have the with-us-or-against-us-by-force qualities of a national currency. That pulls it out of the competing-hierarchies framework in a disconcerting way; there's no leader to assassinate, no bureaucracy to infiltrate. You can, of course, rush in to corner the market that is already there, squash competition and attempt to enforce your preferred hierarchy by dictating the development process - and that is the thing being done at present - but the jury is out on whether controlling it is really possible or if it's going to slip through iron fists like so much sand.

smell-my-bacon 5y ago

It's not really fake, it's just mass gambling. Capitalism by speculation isn't good for society, but it's good for those who can afford to take risky bets and always come out ahead in the long run. We have an economy that values speculation above labor or property. It's not fake, it's just evil.

mewpmewp2 5y ago
How would you construct a better society? As an alternative to capitalism?
- smell-my-bacon 5y ago
  Tweak it so that power and wealth are continuously redistributed to the masses to a large but not huge degree, such that the difference between the haves and have nots are a factor of 10x to 100x, not billions. Educate the hell out of everyone and reform democracy with proportional representation, more direct oversight (populism, referenda,etc.) and less monied influence (campaign finance) and lifetime appts. Embrace democratic collectivism as a healthier alternative to either militant nationalism or wild west individualism. I don't think you can ever really get rid of capitalism because you can't ever really get rid of greed. But you can certainly can make societal rules that make hoarding shameful and illegal, not celebrated. And capitalism doesn't have to be exorbitantly speculative the way the American system is. It just has to be strongly fettered and subservient to democratic controls, not own the government.
  - kelseyfrog 5y ago
    You can absolutely get rid of the legal concept of capital. It's supported and encoded by a set of laws. Delete the laws. Whether or not this is the best approach is up for debate.
    - smell-my-bacon 5y ago
      Capitalism is prevalent not just because it's codified into law, but because, I think, it plays well into innate human tribalism. Especially at the level of our elite cesspools of good ol boys.
      - kelseyfrog 5y ago
        Of course, the legal code is simply an artifact in the construction of capital, but by no means sufficient to its existence. I'll go even further and throw in the idea that human tribalism is innate is itself also a construction that can be dismantled.
    - more_corn 5y ago
      Please describe how you would get rid of the concept of capital. I'm honestly curious. Isn't capital just money that has been saved and can be invested? Is the money in your savings account not "Capital"? Surely you're not proposing getting rid of money. That would be silly. Barter becomes an O(n^2) problem. I'm baffled trying to figure which specific laws could be removed to delete capital from our society. Maybe you've read some secret communist literature that lays out a plan or something. Or maybe you're defining "Capital" in a way that is nonstandard or otherwise unfamiliar.
      - kelseyfrog 5y ago
        > I'm baffled trying to figure which specific laws could be removed to delete capital from our society. Sounds like a fantastic project filled with economic, sociological, political, and ontological questions. What's the space of categorizations and which categorizations have the most compelling explanatory power? As an example, here's a statement[1] in the tax code which defines "capital asset." Enjoy! [1] https://www.law.cornell.edu/uscode/text/26/1221#a https://www.law.cornell.edu/uscode/text/26/1221#a
- deleted 5y ago
  [deleted]

mewpmewp2 5y ago

It's supply and demand and many other factors. Value of houses can very easily change. To illustrate, imagine a mini-economy, where there's a village. Each person in a village has their own profession, they don't have currency, but they do trade their produce with each other. Just as an example of how a value of something can change. Let's imagine there's 30 families or just maybe 30 people. Let's say there's also 3 people who build houses. Now they keep building and since each of those people needs a house, they are willing to give some of their produce to the builders. Now at some point, all of sudden there's 30 houses built. If they build another house, what will be the value of this house? As all people already have a house. But this house is identical to all the other houses, shouldn't it still have similar value and shouldn't builders be getting the same? How will builders make anything of value for others to be willing to trade some of their produce? And actually, you could in a way solve this problem if this village adopted currency of some sort. Builders could instead of asking produce which might expire in few months, ask for money and ask enough money that by building all of those 30 houses, they will be covered for life and never have to build another house. And if it would happen that builders suddenly lost their capability to work after building 15 houses, what would happen to the values of those houses? Everyone will need a house to survive, so everyone would be willing to offer whatever they possibly can. A reason why economy might be cyclical is that while trying to organise all the logistics of what gets built, supply, demand and all that things can tip out of balance. And I'd like to say, whether economy is artifical, social construct, it optimises and helps organise people. Without money you'd have hard time trading, logistically, keeping track of everything. And without banks or loans you might never be able to own a house or start your business. All of these things and economy benefit the society as a whole, it's just that sometimes things can go wrong, but it doesn't mean that we are worse off after things go wrong than we would be without economy. You can easily see from those basic and primitive examples of how economy will make life easier/better for people. You could construct modern economy out step by step, how economy came to be and it should give you understanding on how each of those steps solved a problem, helped society grow or just benefit people and make their lives easier. You can start on the personal level and ask a question: 1. Why can't I just exist alone in the wild? You can, but it's very possible you get injured by a wild animal, are unable to hunt for food and simply die from a very simple injury very early in your life. 2. Okay, sounds like it would be better to cooperate with people, so if one gets injured, others can help out meanwhile. Also this would allow for some part of the group to focus their time on one activity like hunting so they would get as good at it by experience as possible. Someone else in the group could deal with helping people with injuries, so they gather experience there and will be better and better as future comes along. And so on and on... You should understand why economy is important once you have gone through all the steps.

megameter 5y ago

Much of economic behavior and dysfunction comes from our poor ability to scale socially past the Dunbar limit. When we can keep up with everyone, we have a little accountant in our head saying who to assign credit or blame to, so our transactions happen without much physical manifestation. Once you get bigger than a small village you have to believe in the system. The system is, throughout history, a hierarchy, and the hierarchy is defined by an overarching mythology of who or what is good and pure - the religion, nation, etc. - followed by division into ranks and groups. Business and finance becomes part of this system as a mechanism to offload credit and facilitate market exchange. While business and finance can be studied in a technical sense, the way in which humans ultimately use it is socially driven, and market norms vary widely between countries. It's an enormously inexact system the way we have it, because some groups define the rules and others are enforced-upon. That dysfunction lies at the heart of why economies crash, since that allows the elite to live in a Disney fantasy for a while, at least until the rails run out. They can "afford" to ignore society's limits and set up the game to benefit them as long as their status remains in place, and likewise people want to look up to elites as the system in manifest, which is why we have so much fan worship and a sense of national competition. And so the value of money tends to revolve mostly around the overall validation of the hierarchy as it stands; break that and you break a country. This is a major part of why cryptocurrency incites strong reactions; the beliefs it validates are all premised around consent to some communally defined principle of value(with Bitcoin being an direct extrapolation of labor theory of property to computing resources), and don't have the with-us-or-against-us-by-force qualities of a national currency. That pulls it out of the competing-hierarchies framework in a disconcerting way; there's no leader to assassinate, no bureaucracy to infiltrate. You can, of course, rush in to corner the market that is already there, squash competition and attempt to enforce your preferred hierarchy by dictating the development process - and that is the thing being done at present - but the jury is out on whether controlling it is really possible or if it's going to slip through iron fists like so much sand.