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The zero-sum model bears no relation at all to reality. Consider the total planetary economy. We get many inputs from outside. We get free sunlight powering so

The zero-sum model bears no relation at all to reality. Consider the total planetary economy. We get many inputs from outside. We get free sunlight powering some solar panels and the whole ecosystem. We tap that ecosystem for many valuable resources. We get vast troves of pre-existing minerals that can dig up at will. We also have innovators that come up with inventions and systems and are compensated for their contributions, but never to the full extent that they benefit society. (Nobody can capture all of the value they add.) Growth seems almost inevitable.

hgomersall 4y ago
Whether or not real wealth can increase or decrease is besides the point in this discussion. Financial assets must sum to zero across the system.
koyanisqatsi 4y ago
What innovations are going to maintain infinite economic growth on a finite planet that is going to be 2C degrees warmer in the coming decades?
- 6510 4y ago
  You sort of answer your own question, off world resources. Infinity is out there not down here.
  - 6510 4y ago
    I should add, we are hysterically bad at predicting innovation (or predictions in general). We seem to repeatedly do things that the far most experts in that field would have angrily rejected for sounding preposterous. Perhaps not often enough but we do see those things regularly on the HN front page.
mellavora 4y ago
You might be right, and I was clear that it was only a model. This gives a starting point. You can then measure the value added by the externalities you mention. Or, as the author of the source article did, you can also measure the value added by low interest rates and low tax rates, then make some guesses as to what happens when those reverse.
- FredPret 4y ago
  Fair enough. I think interest rates cannot add value; the stability that makes low rates possible is the thing that adds value. I’m no economist though
  - mellavora 4y ago
    I saw a long-term study of interest rates, going back hundreds of years (like to the 1300s or so). The long-term trend is for a decline, and probably due to the increasing stability reducing risk, thus the loans get a lower premium. Interest rates don't add value; they are the cost of money. Money should be expensive enough that it is encouraged to only use it on investments which are likely to add value. When money becomes too cheap, it is "worth it" to invest in things with very little real chance of payout. What that level is, I certainly don't know.

hgomersall 4y ago

Whether or not real wealth can increase or decrease is besides the point in this discussion. Financial assets must sum to zero across the system.

koyanisqatsi 4y ago

What innovations are going to maintain infinite economic growth on a finite planet that is going to be 2C degrees warmer in the coming decades?

6510 4y ago
You sort of answer your own question, off world resources. Infinity is out there not down here.
- 6510 4y ago
  I should add, we are hysterically bad at predicting innovation (or predictions in general). We seem to repeatedly do things that the far most experts in that field would have angrily rejected for sounding preposterous. Perhaps not often enough but we do see those things regularly on the HN front page.

mellavora 4y ago

You might be right, and I was clear that it was only a model. This gives a starting point. You can then measure the value added by the externalities you mention. Or, as the author of the source article did, you can also measure the value added by low interest rates and low tax rates, then make some guesses as to what happens when those reverse.

FredPret 4y ago
Fair enough. I think interest rates cannot add value; the stability that makes low rates possible is the thing that adds value. I’m no economist though
- mellavora 4y ago
  I saw a long-term study of interest rates, going back hundreds of years (like to the 1300s or so). The long-term trend is for a decline, and probably due to the increasing stability reducing risk, thus the loans get a lower premium. Interest rates don't add value; they are the cost of money. Money should be expensive enough that it is encouraged to only use it on investments which are likely to add value. When money becomes too cheap, it is "worth it" to invest in things with very little real chance of payout. What that level is, I certainly don't know.