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It is really effective at increasing the amount of gold in your vault, but The Wealth of Nations (Admin Smith) made a strong case against that primary goal. Cr

It is really effective at increasing the amount of gold in your vault, but The Wealth of Nations (Admin Smith) made a strong case against that primary goal. Crucially for the HackerNews crowd, Mercantilism increases the value of physical goods relative to services, and services becomes a smaller portion of the overall economy. Most of us sell server-time wrapped in software that performs a service…

dalemhurley 2y ago
Ironically, Adam Smith would be called a socialist in modern USA with his views on preventing monopolistic behaviours, the need for government oversight and controls, and the need for strong public goods where the private market fails. So many people would benefit from reading his works.
- WalterBright 2y ago
  Adam Smith died in 1790, a time when the world had little experience with free markets. He was a pioneer in economic thought, but that doesn't automatically mean all of his prognostications about the future are correct.
  - PaulDavisThe1st 2y ago
    His prognostications were not necessarily considered by him to be "about the future". Smith believed that most of what he was writing was about things that were true for all time. He may (or may not) have been wrong about that, just as he may have been wrong about any of the specific things he wrote. But he was generally not predicting the future in any real sense.
    - mmooss 2y ago
      > Smith believed that most of what he was writing was about things that were true for all time. Theory is incredible - when it's right, it's right everywhere for all time. I don't know why people disparage it (other than to signal their anti-intellecutallism).
- protocolture 2y ago
  I am a big believer in taking part of someones idea set doesnt mean you need to import their entire idea set.
- Straw 2y ago
  Adam Smith would be considered a right wing economist today, similar to Milton Friedman, perhaps with more support for certain government functions such as education. However, even on that issue, given the wildly different level of education available today, its not easy to predict what he would think. Often quotations from him are taken wildly out of context to support a 'progressive' viewpoint. An example (From David Friedman's blog): "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” But, if we keep reading: It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary. Adam Smith was a proponent of free trade, free markets, and flat taxation (proportional to income). Not very socialist. (https://daviddfriedman.substack.com/p/discovering-what-is-true https://daviddfriedman.substack.com/p/discovering-what-is-tr...)
WalterBright 2y ago
Gold isn't really wealth any more than paper money is. Consider Spain, which looted S America of gold and silver. How did that work out for Spain? Spain had lots of inflation as a result, and didn't get any wealthier. The same thing happened with both the California and Yukon gold rushes. The same thing happens when the government prints lots of money. What creates wealth? People creating goods and services that people want to buy. Things like making planes, trains, and automobiles. Making hamburgers. Making search engines. And so. P.S. I always laugh at Jackson's Smaug who has a hoard of gold amped up to 11^11. It was so large it was beyond absurd. If even a portion of it was dumped into the Middle Earth economy, it would promptly become worthless.
- shrubble 2y ago
  Spain had a literal Golden Age (not referencing current politics)
  - WalterBright 2y ago
    Indeed they did literally have a lot of gold. But their economy remained unproductive and poor.
- DeathArrow 2y ago
  >Gold isn't really wealth any more than paper money is. Any scarce resource people want is worth very much. Be it gold or bitcoin. You can't make gold (technically you can by transmuting elements but it will cost you more gold than the gold you will produce) but you can mine it with great cost. Why do you think Amazon warehouse workers are payed less than Amazon coders? Because it's easier to find a warehouse worker than a coder. What something is "worth" is dictated by the market. Which means it is dictated by the laws of supply and demand. If we're both on a secluded island and you have 10 tons of gold and I have one hundred kilos of potatoes, my potatoes are worth more. If we're both in NY City, my potatoes are almost worthless and you are incredibly rich.
  - WalterBright 2y ago
    As Spain discovered, when gold is used as money, and the supply of gold increases, the value of gold drops accordingly (i.e. inflation). As you said, the law of supply and demand. Looting S America of gold did not make Spain wealthy.
DeathArrow 2y ago
>Most of us sell server-time wrapped in software that performs a service… Most of us value goods more than services. We need food, we need shelter, we need a vehicle.
- bitmasher9 2y ago
  In general I value service more than (manufactured) goods. Goods are mass manufactured, with millions of exact copies made. There is no scarcity to goods. I’d rather have a great doctor, lawyer, or accountant when I need one than a great car. Having an average car is always just fine, having an average lawyer might not cut it.

dalemhurley 2y ago

Ironically, Adam Smith would be called a socialist in modern USA with his views on preventing monopolistic behaviours, the need for government oversight and controls, and the need for strong public goods where the private market fails. So many people would benefit from reading his works.

WalterBright 2y ago
Adam Smith died in 1790, a time when the world had little experience with free markets. He was a pioneer in economic thought, but that doesn't automatically mean all of his prognostications about the future are correct.
- PaulDavisThe1st 2y ago
  His prognostications were not necessarily considered by him to be "about the future". Smith believed that most of what he was writing was about things that were true for all time. He may (or may not) have been wrong about that, just as he may have been wrong about any of the specific things he wrote. But he was generally not predicting the future in any real sense.
  - mmooss 2y ago
    > Smith believed that most of what he was writing was about things that were true for all time. Theory is incredible - when it's right, it's right everywhere for all time. I don't know why people disparage it (other than to signal their anti-intellecutallism).
protocolture 2y ago
I am a big believer in taking part of someones idea set doesnt mean you need to import their entire idea set.
Straw 2y ago
Adam Smith would be considered a right wing economist today, similar to Milton Friedman, perhaps with more support for certain government functions such as education. However, even on that issue, given the wildly different level of education available today, its not easy to predict what he would think. Often quotations from him are taken wildly out of context to support a 'progressive' viewpoint. An example (From David Friedman's blog): "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” But, if we keep reading: It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary. Adam Smith was a proponent of free trade, free markets, and flat taxation (proportional to income). Not very socialist. (https://daviddfriedman.substack.com/p/discovering-what-is-true https://daviddfriedman.substack.com/p/discovering-what-is-tr...)

WalterBright 2y ago

Gold isn't really wealth any more than paper money is. Consider Spain, which looted S America of gold and silver. How did that work out for Spain? Spain had lots of inflation as a result, and didn't get any wealthier. The same thing happened with both the California and Yukon gold rushes. The same thing happens when the government prints lots of money. What creates wealth? People creating goods and services that people want to buy. Things like making planes, trains, and automobiles. Making hamburgers. Making search engines. And so. P.S. I always laugh at Jackson's Smaug who has a hoard of gold amped up to 11^11. It was so large it was beyond absurd. If even a portion of it was dumped into the Middle Earth economy, it would promptly become worthless.

shrubble 2y ago
Spain had a literal Golden Age (not referencing current politics)
- WalterBright 2y ago
  Indeed they did literally have a lot of gold. But their economy remained unproductive and poor.
DeathArrow 2y ago
>Gold isn't really wealth any more than paper money is. Any scarce resource people want is worth very much. Be it gold or bitcoin. You can't make gold (technically you can by transmuting elements but it will cost you more gold than the gold you will produce) but you can mine it with great cost. Why do you think Amazon warehouse workers are payed less than Amazon coders? Because it's easier to find a warehouse worker than a coder. What something is "worth" is dictated by the market. Which means it is dictated by the laws of supply and demand. If we're both on a secluded island and you have 10 tons of gold and I have one hundred kilos of potatoes, my potatoes are worth more. If we're both in NY City, my potatoes are almost worthless and you are incredibly rich.
- WalterBright 2y ago
  As Spain discovered, when gold is used as money, and the supply of gold increases, the value of gold drops accordingly (i.e. inflation). As you said, the law of supply and demand. Looting S America of gold did not make Spain wealthy.

DeathArrow 2y ago

>Most of us sell server-time wrapped in software that performs a service… Most of us value goods more than services. We need food, we need shelter, we need a vehicle.

bitmasher9 2y ago
In general I value service more than (manufactured) goods. Goods are mass manufactured, with millions of exact copies made. There is no scarcity to goods. I’d rather have a great doctor, lawyer, or accountant when I need one than a great car. Having an average car is always just fine, having an average lawyer might not cut it.