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Again, you're using a totally non-standard definition of capital. Google "capital definition" > wealth in the form of money or other assets owned by a person o

Again, you're using a totally non-standard definition of capital. Google "capital definition" > wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. So yes, if you redefine the word capital to fit whatever you like, then sure, I agree with you.

lottin 4y ago
I'm not redefining anything. I'm an economist, and I know the terminology of economics well. Capital can refer to two things, either 'capital' (or 'real capital') or 'financial capital'. The definition that you've posted matches (more less) the definition of financial capital. But, either way, this is not complicated. The fact remains that destroying money doesn't destroy wealth. Mistaking money for real wealth is a common mistake.
- halpmeh 4y ago
  Ok, so I think we’re in the same page: there is a definition of capital that includes money but is for some reason not applicable to this conversation because you’re an economist and know better. And if you burn your money in your bank account, then you’re less wealthy but that cannot be referred to as destroying [your] wealth or capital.
  - somewhereoutth 4y ago
    To help out a little - money is only a signalling protocol for resource allocation. Nothing more. Burning the money in your bank account does not destroy any resources anywhere. It does, however, rather screw with being able to get some of those resources allocated to you.
    - halpmeh 4y ago
      So now we're redefining "resource?" Resource. Noun. a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. Even if the commonly accepted definition of "resource" didn't explicitly state that money is a resource, the ability to acquire resources is itself a resource.
      - lottin 4y ago
        No, it isn't. Let's say I take a piece of paper and write: "I will give the bearer of this piece of paper my car." Do I have created a new car? No. The piece of paper is still a piece of paper, and there aren't any more cars in the economy than there were before. And likewise, if I proceed to destroy the piece of paper no cars will be destroyed in the process.
        halpmeh 4y ago
        Have you created value by writing on the piece of paper? No. But if the entire world agrees that your piece of paper has value, then you would lose wealth by giving away the piece of paper and the person you gave it to would gain wealth by receiving it. When we talked about burning money you said: "[burning your money], however, rather screw with being able to get some of those resources allocated to you." If you burn your "car IOU", does that screw with your ability to have resources allocated to you? No it doesn't. So you can see that your car IOU is not an appropriate analogy to money.
        lottin 4y ago
        Because this only happens once the IOU has been put in circulation. In my example, the paper money I created was not put in circulation, consequently no redistribution effect took place. The analogy is solid and appropriate.
        halpmeh 4y ago
        Ok, so what would be involved in putting it into circulation? In your original analogy, you simply you said you wrote an IOU. Unless putting it into circulation is trivial, then your analogy is neither solid nor appropriate. A substantial amount of work goes into providing a stable currency. Just being perfectly honest here, I think your position has been shown to be logically inconsistent in multiple ways. 1. We started this discussion by talking about whether or not investment in BlockFi represented a destruction of capital. You said it didn't because money invested is not capital. You then later admitted that there are definitions of capital that include money. I would consider this an uncharitable reading of the initial point regarding investment in BlockFi. If there is a valid definition of the word "capital" in which the original point is true, that it is charitable to assume that was the intended definition. 2. You agree that burning money in your bank account would make you less wealthy, but somehow disagree that you cannot consider this destroying your wealth. That's inconsistent. 3. The "car IOU" analogy has an obvious flaw in that burning it does not reduce your wealth as was the case in the burning money example. Despite this absolutely crucial difference, you maintain it is somehow valid without an explanation of the difference.
  - Dylan16807 4y ago
    If you smash your machines, you destroy real capital. If you burn your money, the financial capital doesn't just go away. It's effectively reallocated to everyone else via deflation. That's why "destroying capital" isn't a good way to describe it. If you destroy half the machines in the world, evenly distributed, the economy crumbles. If you destroy half the dollars in the world, evenly distributed, nothing really happens. And back to this case, the VC money wasn't burned at all. It went to paychecks and service providers and customers and scammers. It didn't disappear, it moved.
    - halpmeh 4y ago
      You’re conflating the money supply with money. The inherent value of the money supply is constant. That’s why you could halve it uniformly without impacting much. But that also necessarily means that each unit of currency does in fact have value. So if you invest it in scams, you can call that destroying wealth. Also worth nothing that we’re not really talking about money. We’re talking about equity in companies with the statement that billions of capital was destroyed by investing in BlockFi.
      - Dylan16807 4y ago
        > But that also necessarily means that each unit of currency does in fact have value. I don't dispute that. But the value of each unit can be complicated. > So if you invest it in scams, you can call that destroying wealth. Colloquially I might say that, but the wealth isn't actually destroyed, it went to the scammers.
        halpmeh 4y ago
        I think there was an implication that the wealth belonged to the investors in BlockFi. Their wealth was destroyed in a very real way.
        Dylan16807 4y ago
        "Wealth" is getting a double use here, to mean both "the fact that they are wealthy" and "the assets they have that make them wealthy". The fact was destroyed. The assets were not destroyed; they went to other people. Capital doesn't have a double meaning like that. Capital is the latter. Capital was not destroyed here.

lottin 4y ago

I'm not redefining anything. I'm an economist, and I know the terminology of economics well. Capital can refer to two things, either 'capital' (or 'real capital') or 'financial capital'. The definition that you've posted matches (more less) the definition of financial capital. But, either way, this is not complicated. The fact remains that destroying money doesn't destroy wealth. Mistaking money for real wealth is a common mistake.

halpmeh 4y ago
Ok, so I think we’re in the same page: there is a definition of capital that includes money but is for some reason not applicable to this conversation because you’re an economist and know better. And if you burn your money in your bank account, then you’re less wealthy but that cannot be referred to as destroying [your] wealth or capital.
- somewhereoutth 4y ago
  To help out a little - money is only a signalling protocol for resource allocation. Nothing more. Burning the money in your bank account does not destroy any resources anywhere. It does, however, rather screw with being able to get some of those resources allocated to you.
  - halpmeh 4y ago
    So now we're redefining "resource?" Resource. Noun. a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. Even if the commonly accepted definition of "resource" didn't explicitly state that money is a resource, the ability to acquire resources is itself a resource.
    - lottin 4y ago
      No, it isn't. Let's say I take a piece of paper and write: "I will give the bearer of this piece of paper my car." Do I have created a new car? No. The piece of paper is still a piece of paper, and there aren't any more cars in the economy than there were before. And likewise, if I proceed to destroy the piece of paper no cars will be destroyed in the process.
      - halpmeh 4y ago
        Have you created value by writing on the piece of paper? No. But if the entire world agrees that your piece of paper has value, then you would lose wealth by giving away the piece of paper and the person you gave it to would gain wealth by receiving it. When we talked about burning money you said: "[burning your money], however, rather screw with being able to get some of those resources allocated to you." If you burn your "car IOU", does that screw with your ability to have resources allocated to you? No it doesn't. So you can see that your car IOU is not an appropriate analogy to money.
        lottin 4y ago
        Because this only happens once the IOU has been put in circulation. In my example, the paper money I created was not put in circulation, consequently no redistribution effect took place. The analogy is solid and appropriate.
        halpmeh 4y ago
        Ok, so what would be involved in putting it into circulation? In your original analogy, you simply you said you wrote an IOU. Unless putting it into circulation is trivial, then your analogy is neither solid nor appropriate. A substantial amount of work goes into providing a stable currency. Just being perfectly honest here, I think your position has been shown to be logically inconsistent in multiple ways. 1. We started this discussion by talking about whether or not investment in BlockFi represented a destruction of capital. You said it didn't because money invested is not capital. You then later admitted that there are definitions of capital that include money. I would consider this an uncharitable reading of the initial point regarding investment in BlockFi. If there is a valid definition of the word "capital" in which the original point is true, that it is charitable to assume that was the intended definition. 2. You agree that burning money in your bank account would make you less wealthy, but somehow disagree that you cannot consider this destroying your wealth. That's inconsistent. 3. The "car IOU" analogy has an obvious flaw in that burning it does not reduce your wealth as was the case in the burning money example. Despite this absolutely crucial difference, you maintain it is somehow valid without an explanation of the difference.
- Dylan16807 4y ago
  If you smash your machines, you destroy real capital. If you burn your money, the financial capital doesn't just go away. It's effectively reallocated to everyone else via deflation. That's why "destroying capital" isn't a good way to describe it. If you destroy half the machines in the world, evenly distributed, the economy crumbles. If you destroy half the dollars in the world, evenly distributed, nothing really happens. And back to this case, the VC money wasn't burned at all. It went to paychecks and service providers and customers and scammers. It didn't disappear, it moved.
  - halpmeh 4y ago
    You’re conflating the money supply with money. The inherent value of the money supply is constant. That’s why you could halve it uniformly without impacting much. But that also necessarily means that each unit of currency does in fact have value. So if you invest it in scams, you can call that destroying wealth. Also worth nothing that we’re not really talking about money. We’re talking about equity in companies with the statement that billions of capital was destroyed by investing in BlockFi.
    - Dylan16807 4y ago
      > But that also necessarily means that each unit of currency does in fact have value. I don't dispute that. But the value of each unit can be complicated. > So if you invest it in scams, you can call that destroying wealth. Colloquially I might say that, but the wealth isn't actually destroyed, it went to the scammers.
      - halpmeh 4y ago
        I think there was an implication that the wealth belonged to the investors in BlockFi. Their wealth was destroyed in a very real way.
        Dylan16807 4y ago
        "Wealth" is getting a double use here, to mean both "the fact that they are wealthy" and "the assets they have that make them wealthy". The fact was destroyed. The assets were not destroyed; they went to other people. Capital doesn't have a double meaning like that. Capital is the latter. Capital was not destroyed here.