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the biggest reason is simply financialization, which infiltrates every nook and cranny of our socioeconomic perceptions. it creates the perception that everyon

the biggest reason is simply financialization, which infiltrates every nook and cranny of our socioeconomic perceptions. it creates the perception that everyone else is getting ahead of you by hook or by crook (which is true in the minority but not the majority), rather than building stuff for the pride of having done it. that distorts all of our incentive structures for the worse, which is just one of the many adverse effects of financialization (which i define as economic activity focused solely on money itself, which includes most of real estate these days).

onlyrealcuzzo 5y ago
In modern history - nearly ever major infrastructure effort has been financed with debt. This is especially true for the US. IFF we used to be able to build things in the US, and we can't anymore - why does financing have anything to do with it?
- clairity 5y ago
  you're conflating financing with financialization, which are two very different points in a multidimensional spectrum. financing is certainly helpful to allow capital projects to shift forward (or backward) in time to deliver (and perhaps capture) greater value. and under the constraints of scarcity, it helps allocate resources more efficiently, price risk more accurately, and provides necessarily liquidity in markets. we're way beyond the constraints of scarcity and the ideals of efficient resource allocation because we've decoupled finance and the money supply from the natural constraints under which our economic theories "work" (i use that term loosely, since economics has done a poor job of accounting for actual human behavior vs. the idealized). we're at a point where economic activity is about the money itself, rather than what it represents in the real world, things like bridges, restaurants, and dry cleaning. that's financialization, when it becomes decoupled from real value. all that takes away from wanting to build real things, because the perception is that it's just easier to "get rich quick" via financialization schemes. if you can get the money without the hard work of delivering real value, why not? is the thinking. that's corrosive to social fabrics, not to mention economies themselves. that's why we're where we're at, rather than a simplistic demonization of 'financing' in isolation.
AussieWog93 5y ago
Are you sure? It sounds like you're applying a pet/fad theory to somewhere where it's not super-applicable. Some of the biggest advocates for inefficiency in construction (at least here in Australia) have been Union members getting cushy jobs for their mates.
Dracophoenix 5y ago
So what's the solution? Pay people in peanuts and words of advice?
- yobbo 5y ago
  The solution is to pay people only in return for what they deliver, on time. This would mean letting projects and companies utterly fail when they fail to deliver, but this is considered impossible in the current climate.
  - Dracophoenix 5y ago
    How do you determine the value of a "delivery" without a financial metric? Taking a laissez-faire approach doesn't change the need for financialization. At most, it changes some of the evaluated variables.
    - yobbo 5y ago
      The contractors only need to worry about the contract price, which we arrive at through a market bidding procedure before the project. What happens in reality is that contractors offer unrealistic prices to get the contract; and when the project fails they demand more time and money in order to complete. Government officials usually agree in order to save face and avoid public fiascos.
      - Dracophoenix 5y ago
        So you're back to square one. If you can't trust contractors to set a reasonable and realistic prices, then a solution should be a metric or set of metrics by which one can assess what is reasonable and realistic.
        yobbo 5y ago
        The whole point is that we don't have to trust contractors if we are willing to let them bear the risk.

onlyrealcuzzo 5y ago

In modern history - nearly ever major infrastructure effort has been financed with debt. This is especially true for the US. IFF we used to be able to build things in the US, and we can't anymore - why does financing have anything to do with it?

clairity 5y ago
you're conflating financing with financialization, which are two very different points in a multidimensional spectrum. financing is certainly helpful to allow capital projects to shift forward (or backward) in time to deliver (and perhaps capture) greater value. and under the constraints of scarcity, it helps allocate resources more efficiently, price risk more accurately, and provides necessarily liquidity in markets. we're way beyond the constraints of scarcity and the ideals of efficient resource allocation because we've decoupled finance and the money supply from the natural constraints under which our economic theories "work" (i use that term loosely, since economics has done a poor job of accounting for actual human behavior vs. the idealized). we're at a point where economic activity is about the money itself, rather than what it represents in the real world, things like bridges, restaurants, and dry cleaning. that's financialization, when it becomes decoupled from real value. all that takes away from wanting to build real things, because the perception is that it's just easier to "get rich quick" via financialization schemes. if you can get the money without the hard work of delivering real value, why not? is the thinking. that's corrosive to social fabrics, not to mention economies themselves. that's why we're where we're at, rather than a simplistic demonization of 'financing' in isolation.

AussieWog93 5y ago

Are you sure? It sounds like you're applying a pet/fad theory to somewhere where it's not super-applicable. Some of the biggest advocates for inefficiency in construction (at least here in Australia) have been Union members getting cushy jobs for their mates.

Dracophoenix 5y ago

So what's the solution? Pay people in peanuts and words of advice?

yobbo 5y ago
The solution is to pay people only in return for what they deliver, on time. This would mean letting projects and companies utterly fail when they fail to deliver, but this is considered impossible in the current climate.
- Dracophoenix 5y ago
  How do you determine the value of a "delivery" without a financial metric? Taking a laissez-faire approach doesn't change the need for financialization. At most, it changes some of the evaluated variables.
  - yobbo 5y ago
    The contractors only need to worry about the contract price, which we arrive at through a market bidding procedure before the project. What happens in reality is that contractors offer unrealistic prices to get the contract; and when the project fails they demand more time and money in order to complete. Government officials usually agree in order to save face and avoid public fiascos.
    - Dracophoenix 5y ago
      So you're back to square one. If you can't trust contractors to set a reasonable and realistic prices, then a solution should be a metric or set of metrics by which one can assess what is reasonable and realistic.
      - yobbo 5y ago
        The whole point is that we don't have to trust contractors if we are willing to let them bear the risk.