4 ms·

> Inflation is bad to the extent that it causes the total stuff we produce to go down or to become more poorly distributed, and good to the extent that it does

by pdonis 5y ago

> Inflation is bad to the extent that it causes the total stuff we produce to go down or to become more poorly distributed, and good to the extent that it does the opposite. Even doing the opposite can be bad if it's the wrong stuff. It's not just the total amount of stuff that matters; it's how much of the stuff is stuff people actually need or want, as opposed to stuff that gets produced but never actually used because it wasn't produced to meet a customer need, it was produced because of misallocation of resources. > The more we stay focused on the production of stuff, and less on the quantity of money or inflation, the better off we will be, and inflation will take care of itself. I agree with being focused on production, as long as it's production driven by actual customer needs. But that also means not just not focusing on the quantity of money, but taking away the government's ability to manipulate the quantity of money. Otherwise you will get misallocation of resources and you'll be producing the wrong things.

ren_engineer 5y ago
>I agree with being focused on production, as long as it's production driven by actual customer needs this has always been an interesting question to me, because in theory companies like Facebook are worth hundreds of billions despite making many people miserable and actually lowering productivity by wasting time. Basically part of the sin economy, things like gambling and drugs. All bring in lots of money but we'd arguably be better off without them. Facebook makes money by getting people addicted to their app by design. Customers and markets aren't rational if the people are driven by addiction, in which case it would make sense for the government to intervene. China is doing this by incentivizing people to go into hard sciences like semiconductors instead of consumer software
- pdonis 5y ago
  > in theory companies like Facebook are worth hundreds of billions despite making many people miserable and actually lowering productivity by wasting time They are "worth" that amount not because they are creating that much wealth, but because they have developed a system that allows them to transfer that much wealth from others to themselves in a zero sum game. > Customers and markets aren't rational if the people are driven by addiction In the sense that people can be manipulated, sure. But "addiction" is by no means the only way to do that. Advertising in general (which is how Facebook makes much of its money) attempts to do the same thing. > in which case it would make sense for the government to intervene. But, as your example shows, we know what it takes for government intervention of this sort: it takes being China, i.e., having a government with virtually absolute power. And that is not a viable long term solution, because a government with such power, even if it uses it to do some good things, will use it to do many more very damaging things, and everyone ends up worse off on net.
- mdavis6890 5y ago
  In 1000 years people will see most of our current internet the same way we see the pyramids at Giza, and they will wonder why we spent so much effort on something with no obvious value.
  - peteradio 5y ago
    And then they find all the porn and it starts to make sense.
  - usrusr 5y ago
    I doubt it. Those rock piles are seriously famous! Landmark achievements of our internet will perhaps be known on the level the highlights of medieval scholasticism are known: experts exist, but people like me know as much as that Occam wasn't a barber and that somehow jokes about angels dancing on a needle are a thing. Look at how quickly the Rockefeller name faded: to people not particularly interested in the era, it's barely more a family that was so important they sponsored a cute ice rink.
mdavis6890 5y ago
Yes, this is an important refinement of my position. And the next refinement would be to quantifiably measure the value of different stuff and prioritize and allocate resources among the products, taking into account their changing value over time and with respect to how much we already have. I'm sure we could keep going with this... But really if we could just start thinking in terms of stuff rather than money I think we'd be doing well :-)
- pdonis 5y ago
  > if we could just start thinking in terms of stuff rather than money Well, there are good reasons for thinking in terms of money instead of stuff for ordinary everyday affairs. It's a lot easier to keep track mentally of transactions if there is a common unit of value to assign to lots of different kinds of stuff. The issue isn't money in itself but the supply of money, and who gets to control it. Ideally the money supply would be fixed by something that nobody could manipulate. But no society in history has been able to actually achieve that ideal.

by pdonis 5y ago

ren_engineer 5y ago

>I agree with being focused on production, as long as it's production driven by actual customer needs this has always been an interesting question to me, because in theory companies like Facebook are worth hundreds of billions despite making many people miserable and actually lowering productivity by wasting time. Basically part of the sin economy, things like gambling and drugs. All bring in lots of money but we'd arguably be better off without them. Facebook makes money by getting people addicted to their app by design. Customers and markets aren't rational if the people are driven by addiction, in which case it would make sense for the government to intervene. China is doing this by incentivizing people to go into hard sciences like semiconductors instead of consumer software

pdonis 5y ago
> in theory companies like Facebook are worth hundreds of billions despite making many people miserable and actually lowering productivity by wasting time They are "worth" that amount not because they are creating that much wealth, but because they have developed a system that allows them to transfer that much wealth from others to themselves in a zero sum game. > Customers and markets aren't rational if the people are driven by addiction In the sense that people can be manipulated, sure. But "addiction" is by no means the only way to do that. Advertising in general (which is how Facebook makes much of its money) attempts to do the same thing. > in which case it would make sense for the government to intervene. But, as your example shows, we know what it takes for government intervention of this sort: it takes being China, i.e., having a government with virtually absolute power. And that is not a viable long term solution, because a government with such power, even if it uses it to do some good things, will use it to do many more very damaging things, and everyone ends up worse off on net.
mdavis6890 5y ago
In 1000 years people will see most of our current internet the same way we see the pyramids at Giza, and they will wonder why we spent so much effort on something with no obvious value.
- peteradio 5y ago
  And then they find all the porn and it starts to make sense.
- usrusr 5y ago
  I doubt it. Those rock piles are seriously famous! Landmark achievements of our internet will perhaps be known on the level the highlights of medieval scholasticism are known: experts exist, but people like me know as much as that Occam wasn't a barber and that somehow jokes about angels dancing on a needle are a thing. Look at how quickly the Rockefeller name faded: to people not particularly interested in the era, it's barely more a family that was so important they sponsored a cute ice rink.

mdavis6890 5y ago

Yes, this is an important refinement of my position. And the next refinement would be to quantifiably measure the value of different stuff and prioritize and allocate resources among the products, taking into account their changing value over time and with respect to how much we already have. I'm sure we could keep going with this... But really if we could just start thinking in terms of stuff rather than money I think we'd be doing well :-)

pdonis 5y ago
> if we could just start thinking in terms of stuff rather than money Well, there are good reasons for thinking in terms of money instead of stuff for ordinary everyday affairs. It's a lot easier to keep track mentally of transactions if there is a common unit of value to assign to lots of different kinds of stuff. The issue isn't money in itself but the supply of money, and who gets to control it. Ideally the money supply would be fixed by something that nobody could manipulate. But no society in history has been able to actually achieve that ideal.