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> will continue until people's ability to afford rent and children improves. Historically that's never been a requirement for people to make children. Poor peo

> will continue until people's ability to afford rent and children improves. Historically that's never been a requirement for people to make children. Poor people have tended to be pretty prolific. > hoarding more and more of the wealth In a free market society, wealth is created, it is not "concentrated".

oh_my_goodness 1y ago
'In a free market society, wealth is created, it is not "concentrated".' That's a theory from economists. Economists have a lot of theories.
- WalterBright 1y ago
  It's a fact, not a theory. The wealth in the economy did not exist 100 years ago. Therefore it must have been created. And where did Musk's money come from? Who did he transfer it from?
  - oh_my_goodness 1y ago
    Come on. Sometimes wealth gets created. Sometimes wealth just gets moved around. That is a fact. Musk's wealth is mostly notional. Most of it is based on people's guesses about the future of electric cars and so forth. It's not clear yet whether that is creation or transfer or what.
    - WalterBright 1y ago
      Musk's wealth was transferred from nobody. It was created. When wealth gets "moved around", that is not the market doing that. It's force. Like social security payments. That's why I prefaced it with "free market".
      - oh_my_goodness 1y ago
        Maybe a startup can have a high valuation for a while and ultimately be worth nothing. Maybe that has happened. Maybe Musk will turn out to have created 10x more wealth than he has now. Maybe he will screw up and go broke. Maybe both. Where did Bernie Madoff's wealth come from before he got caught? Where did Sam Bankman-Fried's wealth come from? We can't just point to a unit of wealth and automatically applaud its legal owner as having created it. Maybe they created it. Maybe they stole it. Maybe we all wigged out and handed it to them voluntarily. It's case by case. We all read Ayn Rand back in the day. And I can groove with that at a certain dosage, but you're taking way too much.
        WalterBright 1y ago
        Bernie Madoff defrauded people by selling them fake investments. Note that I remarked that free markets did not include fraud.
        oh_my_goodness 1y ago
        Excluding fraud, theft, and so forth, just by definition, means we're talking about a utopia. It's not a system, it's some beautiful subset of what's really going on. The subset would have to be carefully selected, using information we don't actually have until (maybe) much later. Maybe never. This 'free market' is a bit like clean matter-antimatter power stations. They sound like a great idea. We could build them if we knew how.
        WalterBright 1y ago
        I never claimed free markets were utopian. The purpose of government in a free market economy is to provide justice for acts of force or fraud, and provide enforcement of contracts. There is no such thing as a perfect free market. However, history shows that the closer we are to them, the more prosperous the country is. BTW, when the Soviet Union was formed, the communists did away with the police because there would no longer be a need for them. Oops.
  - jay_kyburz 1y ago
    Some wealth is created. People build new things and sell them. Video Games or Programming Languages for example. Some wealth is just transferred, like rent or interest. It would be nice if everybody had somewhere to live for free, unfortunately, most people have to pay rent or interest on a mortgage to those that came before them.
    - WalterBright 1y ago
      > Some wealth is just transferred, like rent or interest. Both of those are an exchange, not a transfer. Taxation is a transfer.
      - jay_kyburz 1y ago
        They may be an exchange, but they are not "creation". We are arguing whether wealth flows to people who already have it, rather people who "create it". My augment is both.
        WalterBright 1y ago
        An artist creates wealth by painting a beautiful painting. Then he exchanges that wealth for money. At no point was wealth "transferred" to the artist. McDonald's creates wealth by designing and building a system to deliver hamburgers. McDonald's then exchanges that wealth for cash from its customers. BTW, who gives money to people who already have it? Not me. I doubt you do, either. I don't know anybody who does. The transactions are always exchanges - you are getting something in return.
        jay_kyburz 1y ago
        I think perhaps you are discussing too many threads simultaneously. I'm fully onboard with Maccas and Artists creating something thus creating wealth. Also, yes, transaction are exchanges. Nobody is arguing that. You pay rent and in exchange you may use the land (productively or not) My argument is that people are forced to pay rent to people who didn't create anything, but because they hold a piece of paper that says they own it. The argument is, did the person who owns the land "create" anything. My argument is no.
  - SJC_Hacker 1y ago
    If I cut down trees to build a house, then I may have created "wealth" but I've also destroyed trees. Now the net affect may be that wealth has increased, but it may also have an effect which actually destroys wealth like for instance if those trees existed on a hill, and the roots were holding the soil in place, the act of cutting down "Free market" economics does not capture this destruction of value. It only cares that some value was extracted out of the trees in the form of a new home sale, etc. I'm sure all those slaves brought over to the New World created tremendous wealth, but I'm also pretty sure they would have rather preferred to stay in Africa.
    - WalterBright 1y ago
      > "Free market" economics does not capture this destruction of value. Oh, but it does. It turns out that people who own land take care of it, so that it keeps producing. People who own timber land tend to manage it so it continues to be productive. Destruction happens with government owned land. For a related example, why are we not running out of cattle, hogs, and chickens, despite slaughtering them on an epic scale? And why are we running out of fish?
      - SJC_Hacker 1y ago
        They might take care of their land, but they don’t generally care what happens to other peoples land. So excess fertilizer creating dead zones downstream? Well sucks to be them I guess. Markets are not good at pricing in externalities such as those
        WalterBright 1y ago
        A proper function of government is to internalize the externalities (with fines or taxes).
    - nradov 1y ago
      Your first example is completely wrong. Trees are a renewable resource. In North America, most of the trees that are cut down to build houses were intentionally grown for that purpose and are selectively harvested in a way that preserves the long-term value of the land.
  - worik 1y ago
    > And where did Musk's money come from? No body (?) is contending that in a free market wealth is not created. The contention is that when wealth is created it tends to head to other wealth. When a bank lends capital and has a choice of lending to, say, Elon Musk or me, I think the bank will make that rational choice and lend to Elon. Thus once you have some wealth attracting more wealth is less difficult than from before you had wealth This pattern is repeated over a d over. See Captain Grimes' boot theory of economics: https://en.wikipedia.org/wiki/Boots_theory https://en.wikipedia.org/wiki/Boots_theory
    - WalterBright 1y ago
      Lending money is not transferring wealth, nor is it creating wealth. It nets out to zero. This is clear when one does accounting. Accounting is based on the idea that (Equity = Assets - Liabilities). When one takes out a loan, the assets go up by the amount of the loan, and the liabilities also go up by the amount of the loan. The Equity stays the same. That this balances out is literally called "balancing the books". BTW, banks are happy to lend out money to people that have a track record of paying it back. This includes poor people. Poor people have credit cards, too, which is how they borrow money.
      - oh_my_goodness 1y ago
        This part is true, and the folks who equate new borrowings with income are liable to do some real damage if anybody ever listens to them.
        worik 1y ago
        Totally and utterly wrong, a complete misunderstanding of capitalism Let me explain. Access to capital is key. If you have it you can do business, if you do not you cannot, in general terms There is more than one way to access capital, debt is very common. And to get rich you have to do business So if you are already rich getting more money, in a free market, is easier than getting started, in a free market That is the point, and one small example,e. This pattern repeates o er and over. Once you have money getting more money is much easier than getting the first money So in free markets the wealth divides tend to increase. This is very elementary, stage II economics
ok_dad 1y ago
Nice assertions, but where’s the content of your post? What’s your opinion here based on those two things? Those are just two statements, but do you believe things are different now than historically or are you arguing it’s the same as it ever was, or something else? I’m probably not old enough yet to share my opinion on societal change across generations, I was a kid until recently.
- WalterBright 1y ago
  Do you think the population of the US is all from immigration and rich people? (A relative worked out our family tree. Lots of families with 8 kids in them.)
  - bombcar 1y ago
    What amuses me is that once you’ve worked out the function to have a kid, it’s easy to have another. In theory there should be tons of childless people and some balancing number of 10+ kid families. Then the average numbers work out, everyone is from a large family, but the means of production are centralized and efficient.
SJC_Hacker 1y ago
> In a free market society, wealth is created, it is not "concentrated". The free market hasn't figured out how to create more land. Especially arable land.
- WalterBright 1y ago
  It has figured out how to make better use of the land.
cowpig 1y ago
How do you define "free market"?
- WalterBright 1y ago
  Transactions based on free negotiations, not force or fraud.
worik 1y ago
> In a free market society, wealth is created, it is not "concentrated" That is incorrect In a free market wealth has a definite tendency to clump together, to concentrate. A moment's thought will make clear why.
- WalterBright 1y ago
  > A moment's thought will make clear why. Take a moment and elaborate, please.
  - worik 1y ago
    I have a comment above about access to capital, which is much easier if you already have it, so the rich have more access than the poor to the main tool of capitalism. But another example, equity: If I am raising money for my startup, and I have no traack record (I'm poor in this context) and Sam is doing the same after Sam made a successful exit from their last startup, who would you invest in, all else equal, Sam or me? Sam if you are rational Thus the rich have more access to equity than the poor This is a pattern that repeats over and over in free markets
    - WalterBright 1y ago
      There are many books on Amazon about starting a business with no capital.
thisisthenewme 1y ago
Is there an upper bound to the creation of wealth? Is it infinite? Are there any limits to its creation? Is there any inherent value to it without being able to "transfer"?
- WalterBright 1y ago
  > Is there an upper bound to the creation of wealth? No > Is it infinite? Yes > Are there any limits to its creation? Government trying to crush it. > Is there any inherent value to it without being able to "transfer"? The only value it has is what someone else is freely willing to pay for it. There is no such thing as "inherent" value.
  - thisisthenewme 1y ago
    I find the belief that government is the only limit to wealth creation very intriguing. I also find it interesting that the talking points usually contrast "free markets", which I assume represents the best case, with just "government". Markets can be limited or impacted by forces outside of government (price fixing, monopolies, manipulation). Is there an equivalent best-case scenario for "governments" that we can use as a reference when discussing how they impact free markets?
    - WalterBright 1y ago
      Nobody has discovered any limit to wealth creation, but governments have been very successful with putting a stop to it.

oh_my_goodness 1y ago

'In a free market society, wealth is created, it is not "concentrated".' That's a theory from economists. Economists have a lot of theories.

WalterBright 1y ago
It's a fact, not a theory. The wealth in the economy did not exist 100 years ago. Therefore it must have been created. And where did Musk's money come from? Who did he transfer it from?
- oh_my_goodness 1y ago
  Come on. Sometimes wealth gets created. Sometimes wealth just gets moved around. That is a fact. Musk's wealth is mostly notional. Most of it is based on people's guesses about the future of electric cars and so forth. It's not clear yet whether that is creation or transfer or what.
  - WalterBright 1y ago
    Musk's wealth was transferred from nobody. It was created. When wealth gets "moved around", that is not the market doing that. It's force. Like social security payments. That's why I prefaced it with "free market".
    - oh_my_goodness 1y ago
      Maybe a startup can have a high valuation for a while and ultimately be worth nothing. Maybe that has happened. Maybe Musk will turn out to have created 10x more wealth than he has now. Maybe he will screw up and go broke. Maybe both. Where did Bernie Madoff's wealth come from before he got caught? Where did Sam Bankman-Fried's wealth come from? We can't just point to a unit of wealth and automatically applaud its legal owner as having created it. Maybe they created it. Maybe they stole it. Maybe we all wigged out and handed it to them voluntarily. It's case by case. We all read Ayn Rand back in the day. And I can groove with that at a certain dosage, but you're taking way too much.
      - WalterBright 1y ago
        Bernie Madoff defrauded people by selling them fake investments. Note that I remarked that free markets did not include fraud.
        oh_my_goodness 1y ago
        Excluding fraud, theft, and so forth, just by definition, means we're talking about a utopia. It's not a system, it's some beautiful subset of what's really going on. The subset would have to be carefully selected, using information we don't actually have until (maybe) much later. Maybe never. This 'free market' is a bit like clean matter-antimatter power stations. They sound like a great idea. We could build them if we knew how.
        WalterBright 1y ago
        I never claimed free markets were utopian. The purpose of government in a free market economy is to provide justice for acts of force or fraud, and provide enforcement of contracts. There is no such thing as a perfect free market. However, history shows that the closer we are to them, the more prosperous the country is. BTW, when the Soviet Union was formed, the communists did away with the police because there would no longer be a need for them. Oops.
- jay_kyburz 1y ago
  Some wealth is created. People build new things and sell them. Video Games or Programming Languages for example. Some wealth is just transferred, like rent or interest. It would be nice if everybody had somewhere to live for free, unfortunately, most people have to pay rent or interest on a mortgage to those that came before them.
  - WalterBright 1y ago
    > Some wealth is just transferred, like rent or interest. Both of those are an exchange, not a transfer. Taxation is a transfer.
    - jay_kyburz 1y ago
      They may be an exchange, but they are not "creation". We are arguing whether wealth flows to people who already have it, rather people who "create it". My augment is both.
      - WalterBright 1y ago
        An artist creates wealth by painting a beautiful painting. Then he exchanges that wealth for money. At no point was wealth "transferred" to the artist. McDonald's creates wealth by designing and building a system to deliver hamburgers. McDonald's then exchanges that wealth for cash from its customers. BTW, who gives money to people who already have it? Not me. I doubt you do, either. I don't know anybody who does. The transactions are always exchanges - you are getting something in return.
        jay_kyburz 1y ago
        I think perhaps you are discussing too many threads simultaneously. I'm fully onboard with Maccas and Artists creating something thus creating wealth. Also, yes, transaction are exchanges. Nobody is arguing that. You pay rent and in exchange you may use the land (productively or not) My argument is that people are forced to pay rent to people who didn't create anything, but because they hold a piece of paper that says they own it. The argument is, did the person who owns the land "create" anything. My argument is no.
- SJC_Hacker 1y ago
  If I cut down trees to build a house, then I may have created "wealth" but I've also destroyed trees. Now the net affect may be that wealth has increased, but it may also have an effect which actually destroys wealth like for instance if those trees existed on a hill, and the roots were holding the soil in place, the act of cutting down "Free market" economics does not capture this destruction of value. It only cares that some value was extracted out of the trees in the form of a new home sale, etc. I'm sure all those slaves brought over to the New World created tremendous wealth, but I'm also pretty sure they would have rather preferred to stay in Africa.
  - WalterBright 1y ago
    > "Free market" economics does not capture this destruction of value. Oh, but it does. It turns out that people who own land take care of it, so that it keeps producing. People who own timber land tend to manage it so it continues to be productive. Destruction happens with government owned land. For a related example, why are we not running out of cattle, hogs, and chickens, despite slaughtering them on an epic scale? And why are we running out of fish?
    - SJC_Hacker 1y ago
      They might take care of their land, but they don’t generally care what happens to other peoples land. So excess fertilizer creating dead zones downstream? Well sucks to be them I guess. Markets are not good at pricing in externalities such as those
      - WalterBright 1y ago
        A proper function of government is to internalize the externalities (with fines or taxes).
  - nradov 1y ago
    Your first example is completely wrong. Trees are a renewable resource. In North America, most of the trees that are cut down to build houses were intentionally grown for that purpose and are selectively harvested in a way that preserves the long-term value of the land.
- worik 1y ago
  > And where did Musk's money come from? No body (?) is contending that in a free market wealth is not created. The contention is that when wealth is created it tends to head to other wealth. When a bank lends capital and has a choice of lending to, say, Elon Musk or me, I think the bank will make that rational choice and lend to Elon. Thus once you have some wealth attracting more wealth is less difficult than from before you had wealth This pattern is repeated over a d over. See Captain Grimes' boot theory of economics: https://en.wikipedia.org/wiki/Boots_theory https://en.wikipedia.org/wiki/Boots_theory
  - WalterBright 1y ago
    Lending money is not transferring wealth, nor is it creating wealth. It nets out to zero. This is clear when one does accounting. Accounting is based on the idea that (Equity = Assets - Liabilities). When one takes out a loan, the assets go up by the amount of the loan, and the liabilities also go up by the amount of the loan. The Equity stays the same. That this balances out is literally called "balancing the books". BTW, banks are happy to lend out money to people that have a track record of paying it back. This includes poor people. Poor people have credit cards, too, which is how they borrow money.
    - oh_my_goodness 1y ago
      This part is true, and the folks who equate new borrowings with income are liable to do some real damage if anybody ever listens to them.
      - worik 1y ago
        Totally and utterly wrong, a complete misunderstanding of capitalism Let me explain. Access to capital is key. If you have it you can do business, if you do not you cannot, in general terms There is more than one way to access capital, debt is very common. And to get rich you have to do business So if you are already rich getting more money, in a free market, is easier than getting started, in a free market That is the point, and one small example,e. This pattern repeates o er and over. Once you have money getting more money is much easier than getting the first money So in free markets the wealth divides tend to increase. This is very elementary, stage II economics

ok_dad 1y ago

Nice assertions, but where’s the content of your post? What’s your opinion here based on those two things? Those are just two statements, but do you believe things are different now than historically or are you arguing it’s the same as it ever was, or something else? I’m probably not old enough yet to share my opinion on societal change across generations, I was a kid until recently.

WalterBright 1y ago
Do you think the population of the US is all from immigration and rich people? (A relative worked out our family tree. Lots of families with 8 kids in them.)
- bombcar 1y ago
  What amuses me is that once you’ve worked out the function to have a kid, it’s easy to have another. In theory there should be tons of childless people and some balancing number of 10+ kid families. Then the average numbers work out, everyone is from a large family, but the means of production are centralized and efficient.

SJC_Hacker 1y ago

> In a free market society, wealth is created, it is not "concentrated". The free market hasn't figured out how to create more land. Especially arable land.

WalterBright 1y ago
It has figured out how to make better use of the land.

cowpig 1y ago

How do you define "free market"?

WalterBright 1y ago
Transactions based on free negotiations, not force or fraud.

worik 1y ago

> In a free market society, wealth is created, it is not "concentrated" That is incorrect In a free market wealth has a definite tendency to clump together, to concentrate. A moment's thought will make clear why.

WalterBright 1y ago
> A moment's thought will make clear why. Take a moment and elaborate, please.
- worik 1y ago
  I have a comment above about access to capital, which is much easier if you already have it, so the rich have more access than the poor to the main tool of capitalism. But another example, equity: If I am raising money for my startup, and I have no traack record (I'm poor in this context) and Sam is doing the same after Sam made a successful exit from their last startup, who would you invest in, all else equal, Sam or me? Sam if you are rational Thus the rich have more access to equity than the poor This is a pattern that repeats over and over in free markets
  - WalterBright 1y ago
    There are many books on Amazon about starting a business with no capital.

thisisthenewme 1y ago

Is there an upper bound to the creation of wealth? Is it infinite? Are there any limits to its creation? Is there any inherent value to it without being able to "transfer"?

WalterBright 1y ago
> Is there an upper bound to the creation of wealth? No > Is it infinite? Yes > Are there any limits to its creation? Government trying to crush it. > Is there any inherent value to it without being able to "transfer"? The only value it has is what someone else is freely willing to pay for it. There is no such thing as "inherent" value.
- thisisthenewme 1y ago
  I find the belief that government is the only limit to wealth creation very intriguing. I also find it interesting that the talking points usually contrast "free markets", which I assume represents the best case, with just "government". Markets can be limited or impacted by forces outside of government (price fixing, monopolies, manipulation). Is there an equivalent best-case scenario for "governments" that we can use as a reference when discussing how they impact free markets?
  - WalterBright 1y ago
    Nobody has discovered any limit to wealth creation, but governments have been very successful with putting a stop to it.