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Financialization is eating the rest of the economy. That is the beast that must be slain if we wish to survive. Since that is not going to happen I think it is

Financialization is eating the rest of the economy. That is the beast that must be slain if we wish to survive. Since that is not going to happen I think it is wise to instead prepare for the worst.

eru 2y ago
The question is, how would you do that preparation?
- cjbgkagh 2y ago
  Some countries will fair better than others, so perhaps move to a country that maintains cordial relationships with both China and the US. I'm preparing by learning how to design and make things so I can do my own manufacturing in-house to minimize dependency on supply lines that could be disrupted. Manufacturing technology is has improved in leaps and bounds. It's much easier that it used to be. And I can do all this from a self sufficient homestead deep in the forest.
  - eru 2y ago
    > Some countries will fair better than others, so perhaps move to a country that maintains cordial relationships with both China and the US. I moved to Singapore a while ago. Not for those reasons, but being on good terms with almost anyone certainly is a nice bonus. Though my question was rather, what policies would a country want to adopt? > Manufacturing technology is has improved in leaps and bounds. It's much easier that it used to be. And I can do all this from a self sufficient homestead deep in the forest. Yes, but that's essentially just a hobby or at most craft production. So that is neither competitive as mass production in peace time, nor of much use for mass production in wartime. (It definitely sounds like a great hobby, though!)
    - Teever 2y ago
      A mostly self-sufficient homestead isn't a hobby, it's a way of life. And the user you're replying to is advocating for that way of life because they are predicting a severe downfall in the quality of life for those who stay in the global system. I have a sneaking suspicion that they're going to be right.
      - eru 2y ago
        > I have a sneaking suspicion that they're going to be right. Over what time horizon? The market consensus is definitely not giving this a big probability any time soon.
        Teever 2y ago
        I'm skeptical that market consensus (whatever that really means anyways) is good at predicting events like ecological collapse and deranged authoritarians launching senseless wars of aggression.
        eru 2y ago
        > [...] market consensus (whatever that really means anyways) [...] If we had proper prediction markets for arbitrary events, I would just directly talk about what those prices are. In the real world, we have to look at the prices of existing financial instruments and see which of these can be used as proxies for the events we are interested in. For some events that fairly easy: if Russian government bonds trade at high prices in 2021, it's unlikely that Russia's dictator will start a senseless war of aggression soon. (In reality, the price of Russia's bonds went down in the runup to the war.) For other events you have to be more clever: if you want to get a sense of the market estimate for the probability that an asteroid impact (or similar) will erase all life on earth, you can't just look at the price of a straightforward bet that pays out one dollar, if the asteroid hits: most of us would be dead, and the dollar would likely be worthless. However you can create a bet that has the right structure: Alice gives Bob 100 dollar now, and in five years, Bob gives Alice 500 dollars (but obviously only if the asteroid hasn't killed Alice and Bob). The market price of such a contract can tell you something about the market consensus estimate of a collapse. My argument wouldn't be that the market consensus is particularly good at prediction, just that it's better than any other prediction mechanism we have; because it can and will incorporate those other prediction mechanisms, and people have a financial incentive to do so. Btw, why do you think markets would be particularly bad at forecasting ecological collapse? Is there any ecology you are particularly worried about?
    - cjbgkagh 2y ago
      Being on nice terms is a policy. One way is by having a defensive oriented army and not getting involved in conflicts. Big chunks of the world already do this. While I am treating it as a hobby I do have a garage full of CNCs, 3D printers, laser cutters, a pretty complete machine shop and the ability to do some foundry work. I am not expecting a complete collapse of society, mainly the collapse of the middle class as gradually the things they need get more expensive and they earn less. Being able to make stuff myself is already saving me money - you’d be surprised that for many of the bespoke things I need it is far cheaper to make it myself than send it out to a job shop. The idea is to be able to make replacement parts to contribute to the success of my local community so that it’s in their interest to shield me from whatever is going on beyond my gates.
- logicchains 2y ago
  Bring back something like Bretton Woods. When it ended in the 70s and the dollar was no longer tethered to anything physical, is when the financial system started eating up more and more of the economy. Using the financial system as the middleman for money creation (as opposed to e.g. directly depositing helicopter money into people's accounts, or having a non-inflationary currency) necessarily entailed a continuous transfer of wealth from main street to wall street.
  - eru 2y ago
    Haha, Bretton Woods wasn't magical. The dollar had long been unmoored in practice, that's why the Bretton Woods agreement collapsed. So if you see any trends that only show up after Bretton Woods was _formally_ abandoned, then those trends can't have been kicked off by the unmooring. What trends are you worried about anyway?

Financialization is eating the rest of the economy. That is the beast that must be slain if we wish to survive. Since that is not going to happen I think it is wise to instead prepare for the worst.

eru 2y ago

The question is, how would you do that preparation?

cjbgkagh 2y ago
Some countries will fair better than others, so perhaps move to a country that maintains cordial relationships with both China and the US. I'm preparing by learning how to design and make things so I can do my own manufacturing in-house to minimize dependency on supply lines that could be disrupted. Manufacturing technology is has improved in leaps and bounds. It's much easier that it used to be. And I can do all this from a self sufficient homestead deep in the forest.
- eru 2y ago
  > Some countries will fair better than others, so perhaps move to a country that maintains cordial relationships with both China and the US. I moved to Singapore a while ago. Not for those reasons, but being on good terms with almost anyone certainly is a nice bonus. Though my question was rather, what policies would a country want to adopt? > Manufacturing technology is has improved in leaps and bounds. It's much easier that it used to be. And I can do all this from a self sufficient homestead deep in the forest. Yes, but that's essentially just a hobby or at most craft production. So that is neither competitive as mass production in peace time, nor of much use for mass production in wartime. (It definitely sounds like a great hobby, though!)
  - Teever 2y ago
    A mostly self-sufficient homestead isn't a hobby, it's a way of life. And the user you're replying to is advocating for that way of life because they are predicting a severe downfall in the quality of life for those who stay in the global system. I have a sneaking suspicion that they're going to be right.
    - eru 2y ago
      > I have a sneaking suspicion that they're going to be right. Over what time horizon? The market consensus is definitely not giving this a big probability any time soon.
      - Teever 2y ago
        I'm skeptical that market consensus (whatever that really means anyways) is good at predicting events like ecological collapse and deranged authoritarians launching senseless wars of aggression.
        eru 2y ago
        > [...] market consensus (whatever that really means anyways) [...] If we had proper prediction markets for arbitrary events, I would just directly talk about what those prices are. In the real world, we have to look at the prices of existing financial instruments and see which of these can be used as proxies for the events we are interested in. For some events that fairly easy: if Russian government bonds trade at high prices in 2021, it's unlikely that Russia's dictator will start a senseless war of aggression soon. (In reality, the price of Russia's bonds went down in the runup to the war.) For other events you have to be more clever: if you want to get a sense of the market estimate for the probability that an asteroid impact (or similar) will erase all life on earth, you can't just look at the price of a straightforward bet that pays out one dollar, if the asteroid hits: most of us would be dead, and the dollar would likely be worthless. However you can create a bet that has the right structure: Alice gives Bob 100 dollar now, and in five years, Bob gives Alice 500 dollars (but obviously only if the asteroid hasn't killed Alice and Bob). The market price of such a contract can tell you something about the market consensus estimate of a collapse. My argument wouldn't be that the market consensus is particularly good at prediction, just that it's better than any other prediction mechanism we have; because it can and will incorporate those other prediction mechanisms, and people have a financial incentive to do so. Btw, why do you think markets would be particularly bad at forecasting ecological collapse? Is there any ecology you are particularly worried about?
  - cjbgkagh 2y ago
    Being on nice terms is a policy. One way is by having a defensive oriented army and not getting involved in conflicts. Big chunks of the world already do this. While I am treating it as a hobby I do have a garage full of CNCs, 3D printers, laser cutters, a pretty complete machine shop and the ability to do some foundry work. I am not expecting a complete collapse of society, mainly the collapse of the middle class as gradually the things they need get more expensive and they earn less. Being able to make stuff myself is already saving me money - you’d be surprised that for many of the bespoke things I need it is far cheaper to make it myself than send it out to a job shop. The idea is to be able to make replacement parts to contribute to the success of my local community so that it’s in their interest to shield me from whatever is going on beyond my gates.
logicchains 2y ago
Bring back something like Bretton Woods. When it ended in the 70s and the dollar was no longer tethered to anything physical, is when the financial system started eating up more and more of the economy. Using the financial system as the middleman for money creation (as opposed to e.g. directly depositing helicopter money into people's accounts, or having a non-inflationary currency) necessarily entailed a continuous transfer of wealth from main street to wall street.
- eru 2y ago
  Haha, Bretton Woods wasn't magical. The dollar had long been unmoored in practice, that's why the Bretton Woods agreement collapsed. So if you see any trends that only show up after Bretton Woods was _formally_ abandoned, then those trends can't have been kicked off by the unmooring. What trends are you worried about anyway?