3 ms·

Money isn't lost per se, it's transferred. ie for every loser there is a winner. Obvious ones are those who can extract value from this companies now ( high s

Money isn't lost per se, it's transferred. ie for every loser there is a winner. Obvious ones are those who can extract value from this companies now ( high salaries/bonus etc ), swapping worthless paper for real assets, Nvidia and their share holders etc. Investors who hold short positions etc.

actionfromafar 3mo ago
True but the opportunity cost is truly lost. Entropy comes for everyone. If we spend a lot of money digging holes in the ground then filling them again, maybe no money was lost.
- DrScientist 3mo ago
  Sure - but that's a meta question of whether the current economic/political systems are delivering good allocation of resources for whatever target function you favour. And that's complex - even in your simple example you can argue that people have likely improved their capability to dig and fill holes - and the latter skill is particularly valuable in the UK right now. ie Entropy includes information component :-)
mlrtime 3mo ago
You are trying to define zero sum without saying it. The market is not zero sum, a loan isn't zero sum. There isn't a winner and loser.
- DrScientist 3mo ago
  Why not? What am I missing. If you loan me 10 pounds and I simply keep it or spend it but refuse to pay you back - aren't I the winner and you the loser? Claiming that the market is a positive sum system, because I use that 10 pounds to invent something that changes world productivity is missing the fact that there is a constant stream of huge energy inputs from the sun - that's ultimately what allows the local entropy to decrease - not that you lent me 10 pounds.
  - orwin 3mo ago
    I borrow you 10 money i use to buy my chair-making tools. I make the chair, sell it 20 money, then pay you 12 money back for the service rendered. Basically money is supposed to be a tool that help us creating capital by exchanging goods.
    - DrScientist 3mo ago
      But aren't you confusing the means of exchange with the creation of value. The creation of value is me taking energy from the sun and converting that into a chair. You lending me money is you extracting value from artificially being a middleman. It would have been more efficient to write an IOU to the tool maker, make the chair and pay back the tool maker directly. Now sure that IOU isn't that fungible - however that highlights one of the absurdities ( if I understand it correctly ) of the current banking system where private banks are able to in effect issue IOU's on their own basis but put mine and your name on it as a guarantor - resulting in the public having to bail out banks when they over extend.
      - JohnFen 3mo ago
        > The creation of value is me taking energy from the sun and converting that into a chair. Which requires money to do. If you borrow that money to enable using solar to make furniture, then you can repay that money with interest and keep a profit for yourself. Both the borrower and lender come out with more money than they had when they started. That's not a zero-sum game. Now, it's 100% true that borrowing and lending can (and often is) done in a way to make it a zero-sum game, but that's just because the world (including the big-time corporate world, and especially including major IT companies) is full of scammers.
        DrScientist 3mo ago
        >> The creation of value is me taking energy from the sun and converting that into a chair. > Which requires money to do. No it doesn't require money. It requires energy. Money is often involved as a means of exchange, but it's not required. If what you said is true it would be impossible to live off grid and make a chair. By focusing on the money you are focusing on the means of exchange rather than the fundamentals - which is energy, knowledge and collaboration. Let's take a concrete example - the development of Linux - did that require some large VC backed funding models or was it simply people sharing spare cycles for shared benefit? Here the underlying resources required was people's time [1] - not money per se. [1] Sure some value was exchanged using the medium of money ( Red Hat existed, large companies shared larger cycles by explicitly paying employees etc ) - but that's not lending and interest with money somehow being the time limiting resource. Again don't confuse the means of exchange with the thing being exchanged.

actionfromafar 3mo ago

True but the opportunity cost is truly lost. Entropy comes for everyone. If we spend a lot of money digging holes in the ground then filling them again, maybe no money was lost.

DrScientist 3mo ago
Sure - but that's a meta question of whether the current economic/political systems are delivering good allocation of resources for whatever target function you favour. And that's complex - even in your simple example you can argue that people have likely improved their capability to dig and fill holes - and the latter skill is particularly valuable in the UK right now. ie Entropy includes information component :-)

mlrtime 3mo ago

You are trying to define zero sum without saying it. The market is not zero sum, a loan isn't zero sum. There isn't a winner and loser.

DrScientist 3mo ago
Why not? What am I missing. If you loan me 10 pounds and I simply keep it or spend it but refuse to pay you back - aren't I the winner and you the loser? Claiming that the market is a positive sum system, because I use that 10 pounds to invent something that changes world productivity is missing the fact that there is a constant stream of huge energy inputs from the sun - that's ultimately what allows the local entropy to decrease - not that you lent me 10 pounds.
- orwin 3mo ago
  I borrow you 10 money i use to buy my chair-making tools. I make the chair, sell it 20 money, then pay you 12 money back for the service rendered. Basically money is supposed to be a tool that help us creating capital by exchanging goods.
  - DrScientist 3mo ago
    But aren't you confusing the means of exchange with the creation of value. The creation of value is me taking energy from the sun and converting that into a chair. You lending me money is you extracting value from artificially being a middleman. It would have been more efficient to write an IOU to the tool maker, make the chair and pay back the tool maker directly. Now sure that IOU isn't that fungible - however that highlights one of the absurdities ( if I understand it correctly ) of the current banking system where private banks are able to in effect issue IOU's on their own basis but put mine and your name on it as a guarantor - resulting in the public having to bail out banks when they over extend.
    - JohnFen 3mo ago
      > The creation of value is me taking energy from the sun and converting that into a chair. Which requires money to do. If you borrow that money to enable using solar to make furniture, then you can repay that money with interest and keep a profit for yourself. Both the borrower and lender come out with more money than they had when they started. That's not a zero-sum game. Now, it's 100% true that borrowing and lending can (and often is) done in a way to make it a zero-sum game, but that's just because the world (including the big-time corporate world, and especially including major IT companies) is full of scammers.
      - DrScientist 3mo ago
        >> The creation of value is me taking energy from the sun and converting that into a chair. > Which requires money to do. No it doesn't require money. It requires energy. Money is often involved as a means of exchange, but it's not required. If what you said is true it would be impossible to live off grid and make a chair. By focusing on the money you are focusing on the means of exchange rather than the fundamentals - which is energy, knowledge and collaboration. Let's take a concrete example - the development of Linux - did that require some large VC backed funding models or was it simply people sharing spare cycles for shared benefit? Here the underlying resources required was people's time [1] - not money per se. [1] Sure some value was exchanged using the medium of money ( Red Hat existed, large companies shared larger cycles by explicitly paying employees etc ) - but that's not lending and interest with money somehow being the time limiting resource. Again don't confuse the means of exchange with the thing being exchanged.