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> Give this 20m to "the rich", they will invest it in food creation machinery. At least there would be more food produced after the investment. That's the fala

> Give this 20m to "the rich", they will invest it in food creation machinery. At least there would be more food produced after the investment. That's the falacy. Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m

chii 5y ago
> Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m let's say for argument's sake, that they ended up doing this - what's the difference than the food buyers in this case? Both is generating economic activity. And if the $20m was spent on food, wouldn't those people also then ask for another $20m after having eaten their food? My point is, gov't handouts are better off being invested into productivity producing investments, rather than consumption. The productivity investments would allow cheaper consumption in the future, and in the mean time, generate jobs for people to produce for consumption.
- TheOtherHobbes 5y ago
  Your point is still wrong, because "productivity investments" are more likely to destroy jobs - certainly stable, well-paid jobs - than to create them. In a very obvious and mundane way, how often do people find that when someone leaves a job they're suddenly doing their own work and the work of the person who left? But without a pay rise? That's a productivity increase. It is very much not a "generated job." Add automation to this and it's even more obvious. The only time jobs are generated is when new markets are opened and this allows new kinds of activity which weren't possible before. The textbook example is government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public. And at the cost of many traditional jobs. (Secretaries, clerks of all kinds, etc.) Traditional economic theory has almost nothing of value to say about processes like these. There's plenty of mythology, but nothing that will accurately quantify wider social costs/benefits in a strategically useful way. In reality technologies have downsides as well as upsides, not just in terms of direct externalities but in terms of job losses - and sometimes in terms of productive value losses. It's exactly this feature of "economic progress" which conventional economics fails to analyse, quantify, or - often - even notice.
  - chii 5y ago
    > government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public this is exactly my point - "food" (computing) wasn't available, and the gov't "handed out" lots of money to "the rich" (aka, seed funding) to perform this sort of research and development. The end result is that new "food" (computing) became available where none was before.
    - iso1631 5y ago
      > lots of money to "the rich" (aka, seed funding) No, you're conflating two different things, targetted seed funding for r&d, and just giving money to wealthy people
- iso1631 5y ago
  > My point is, gov't handouts are better off being invested into productivity producing investments So fund companies doing useful work directly. If you don't like the government deciding, and want to say spend $350b to stimulate the economy and be useful, give everyone a $1000 "investment voucher" that can be invested in exchange for a share, into companies with a net worth of say between $1m and $50m, to be spent on R&D.
- cycomanic 5y ago
  ? But the money for the poor to spend on food, is then paid to the people producing food, which have a direct interest in productivity investments in food production. While giving it to the billionaire would go into productivity investments of how to make a superyacht more cheaply, which is arguably less desirable from a societal perspective. Moreover, the argument ignores the fact that the richer people are the less price sensitive they become, in fact many rich people desire rare items that are expensive (and thus exclusive) by their very nature. For example how does investing in a villa that stays empty or a painting that is locked in some vault an investment in productivity?

chii 5y ago

> Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m let's say for argument's sake, that they ended up doing this - what's the difference than the food buyers in this case? Both is generating economic activity. And if the $20m was spent on food, wouldn't those people also then ask for another $20m after having eaten their food? My point is, gov't handouts are better off being invested into productivity producing investments, rather than consumption. The productivity investments would allow cheaper consumption in the future, and in the mean time, generate jobs for people to produce for consumption.

TheOtherHobbes 5y ago
Your point is still wrong, because "productivity investments" are more likely to destroy jobs - certainly stable, well-paid jobs - than to create them. In a very obvious and mundane way, how often do people find that when someone leaves a job they're suddenly doing their own work and the work of the person who left? But without a pay rise? That's a productivity increase. It is very much not a "generated job." Add automation to this and it's even more obvious. The only time jobs are generated is when new markets are opened and this allows new kinds of activity which weren't possible before. The textbook example is government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public. And at the cost of many traditional jobs. (Secretaries, clerks of all kinds, etc.) Traditional economic theory has almost nothing of value to say about processes like these. There's plenty of mythology, but nothing that will accurately quantify wider social costs/benefits in a strategically useful way. In reality technologies have downsides as well as upsides, not just in terms of direct externalities but in terms of job losses - and sometimes in terms of productive value losses. It's exactly this feature of "economic progress" which conventional economics fails to analyse, quantify, or - often - even notice.
- chii 5y ago
  > government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public this is exactly my point - "food" (computing) wasn't available, and the gov't "handed out" lots of money to "the rich" (aka, seed funding) to perform this sort of research and development. The end result is that new "food" (computing) became available where none was before.
  - iso1631 5y ago
    > lots of money to "the rich" (aka, seed funding) No, you're conflating two different things, targetted seed funding for r&d, and just giving money to wealthy people
iso1631 5y ago
> My point is, gov't handouts are better off being invested into productivity producing investments So fund companies doing useful work directly. If you don't like the government deciding, and want to say spend $350b to stimulate the economy and be useful, give everyone a $1000 "investment voucher" that can be invested in exchange for a share, into companies with a net worth of say between $1m and $50m, to be spent on R&D.
cycomanic 5y ago
? But the money for the poor to spend on food, is then paid to the people producing food, which have a direct interest in productivity investments in food production. While giving it to the billionaire would go into productivity investments of how to make a superyacht more cheaply, which is arguably less desirable from a societal perspective. Moreover, the argument ignores the fact that the richer people are the less price sensitive they become, in fact many rich people desire rare items that are expensive (and thus exclusive) by their very nature. For example how does investing in a villa that stays empty or a painting that is locked in some vault an investment in productivity?