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If the economy today is 10 billion quatloos, and it grows to 11 billion quatloos next year, you would also want the money supply to grow by 10% over the same pe

If the economy today is 10 billion quatloos, and it grows to 11 billion quatloos next year, you would also want the money supply to grow by 10% over the same period of time. Capital can make money because it increases productivity. If you use your 10,000 quatloos to buy a machine that makes a worker more productive, your reward comes from the interest on that. Everyone can increase the value of their savings if everyone does this. If everyone is hiding their quatloos in the mattress, there is no input of capital to increase productivity. Yet a deflationary spiral exactly encourages people to hide their quatloos in their mattress. Why bother taking even minimal market risks when you can make 10% from the growth of the rest of the economy? And economies can grow not just from increased productivity. EDIT: As a fraction of total buying power you are still were you were before. This is a really, really, really bad idea. If I have shillings equal to 5% of GDP, and I put myself into cryosleep for 100 years, there is no reason I should expect my uninvested shillings to still have 5% of GDP. This is a child's view of an economy.

vrotaru 14y ago
What does exactly happen when an economy grows from 10 billion quatloos to 11 billion quatloos? Until you tell me that, we are measuring woomdums in quatloos and while that can be kind of fun.. it not very rewarding. If you speaking about physical output.. than the only way achieve this is to learn to produce woomdums cheaper.. Then there is no harm in selling them cheaper. So do I want the money to grow to a degree that it will anihiliate the increase in productivity? Certainly not.
vrotaru 14y ago
> If I have shillings equal to 5% of GDP, and I put myself into cryosleep for 100 years, there is no reason I should expect my uninvested shillings to still have 5% of GDP. This is a child's view of an economy. Can your elaborate? Actually it an argument against the idea that hoarding gives some kind rent. It doesn't. But again, can you elaborate? If own 5% of land and go to a cryosleep for a hundred years, how much of that do you expect to own when you wake up?
- danielweber 14y ago
  (I'm going to have to stop with this comment. Maybe you can find someone else willing to go over the basics of wealth with you.) If you were to just abandon your land, there is no reason to expect it to belong to you when you come back 100 years later. Instead, say you set up a corporation and hire people to use the money made renting it out to pay for taxes and management on it. You might still own the land in 100 years. Or not, if the people you left in charge of it couldn't manage it well enough. But people got to use the land in the meantime, so there was economic activity being assisted by your asset. This would not, of course, give you any claim on any new land that is made, like new landfill in Boston. Bitcoins sitting out on the chain while you are sleep do not provide any benefit to growing the economy. They have not bought any factory equipment. They have not trained any workers. They have not invented any new technology. Any system in which people can end up with the same portion of an economy after sitting both their labor and their capital out on the sidelines for 100 years is fundamentally broken. Exactly how is an exercise for the reader, but like anyone purporting to have a perpetual motion machine, while the exact problem may be different from machine to machine, the laws of physics mean that there is some definite failure in it.
  - vrotaru 14y ago
    > Any system in which people can end up with the same portion of an economy after sitting both their labor and their capital out on the sidelines for 100 years is fundamentally broken. Assertions. Words. Some of those strong.. To be frank, I'm disappointed, but.. I'll manage that, no need to worry.

vrotaru 14y ago

What does exactly happen when an economy grows from 10 billion quatloos to 11 billion quatloos? Until you tell me that, we are measuring woomdums in quatloos and while that can be kind of fun.. it not very rewarding. If you speaking about physical output.. than the only way achieve this is to learn to produce woomdums cheaper.. Then there is no harm in selling them cheaper. So do I want the money to grow to a degree that it will anihiliate the increase in productivity? Certainly not.

vrotaru 14y ago

> If I have shillings equal to 5% of GDP, and I put myself into cryosleep for 100 years, there is no reason I should expect my uninvested shillings to still have 5% of GDP. This is a child's view of an economy. Can your elaborate? Actually it an argument against the idea that hoarding gives some kind rent. It doesn't. But again, can you elaborate? If own 5% of land and go to a cryosleep for a hundred years, how much of that do you expect to own when you wake up?

danielweber 14y ago
(I'm going to have to stop with this comment. Maybe you can find someone else willing to go over the basics of wealth with you.) If you were to just abandon your land, there is no reason to expect it to belong to you when you come back 100 years later. Instead, say you set up a corporation and hire people to use the money made renting it out to pay for taxes and management on it. You might still own the land in 100 years. Or not, if the people you left in charge of it couldn't manage it well enough. But people got to use the land in the meantime, so there was economic activity being assisted by your asset. This would not, of course, give you any claim on any new land that is made, like new landfill in Boston. Bitcoins sitting out on the chain while you are sleep do not provide any benefit to growing the economy. They have not bought any factory equipment. They have not trained any workers. They have not invented any new technology. Any system in which people can end up with the same portion of an economy after sitting both their labor and their capital out on the sidelines for 100 years is fundamentally broken. Exactly how is an exercise for the reader, but like anyone purporting to have a perpetual motion machine, while the exact problem may be different from machine to machine, the laws of physics mean that there is some definite failure in it.
- vrotaru 14y ago
  > Any system in which people can end up with the same portion of an economy after sitting both their labor and their capital out on the sidelines for 100 years is fundamentally broken. Assertions. Words. Some of those strong.. To be frank, I'm disappointed, but.. I'll manage that, no need to worry.