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> Having IIRC 10% of the GDP used for allocating resources is wasteful when there is technology available to do this very thing. With regard to that 10%, don't
by sheefrex 13y ago
> Having IIRC 10% of the GDP used for allocating resources is wasteful when there is technology available to do this very thing.
With regard to that 10%, don't forget that much of it is spent on the salaries of the individuals actually allocating capital (i.e taking money from some source, such as depositors or investors, and acting on their behalf to invest or loan it elsewhere), such as bank managers, fund managers and investment bankers. Bitcoin cannot decide whether a firm or individual has a good chance of paying capital back, and so its role in allocating capital in nil I would say. An algorithmically-determined money supply would however render infeasible the idea of discretionary or near-discretionary monetary policy, which would free up many economists from the ECB, Fed and Bank of England, and so would free up resources in that regard (whether that is optimal would depend on the algorithm of course).
For any computer system to do allocate capital optimally, it would need to have to sort of assessment ability a human has - or else have a very, very good dataset.
- untog 13y agoWith regard to that 10%, don't forget that much of it is spent on the salaries of the individuals actually allocating capital This, in itself, is worth considering. This 10% doesn't disappear from the economy- a good part is distributed to salaries, which are in turn spent on the economy. Not as efficiently as it could be of course, but still.
- rdl 13y agoWrong way to look at it. Paying a brilliant guy 300k/yr to execute noops is a 300k/yr waste even if he uses the money to support himself. The broken window fallacy.
- dsl 13y ago"waste" yes, but no wealth is being destroyed.
- jgross206 13y agoexcept the wealth that could be created if the brilliant guy spent the year on other pursuits instead of noops
- dsl 13y agoWell by that logic, we shouldn't work for startups that have the potential to fail... because you could be creating negative value!
- rdl 13y agoThe expected return of a startup is usually higher than the expected return of a bigco job and almost always higher than doing nothing. The actual return is more often lower, but sometimes turns out to be really high.
- XorNot 13y agoWhich is why you should evaluate the risk/reward of a start up carefully. It's also why, for example, bank robberies aren't worth it.
- bjourne 13y agoTrue, but the key point is that it is his brilliance that is being wasted, not the 300k.
- kragen 13y agoThe problem isn't that the currency disappears when you pay it. We aren't suffering from a lack of currency! The problem is that expenditure of money represents an expenditure of resources, namely, the time and attention of these individuals allocating capital, some of whom maybe just have rich daddies but many of whom actually have to be among the best and brightest to win those positions; and as a result, those brilliant people are not able to spend their time and attention doing something that would actually be productive for society, such as sending rockets to Mars, inventing new ways to harness solar energy, remediating nutritional deficiencies that turn poverty into mental retardation, or writing peer-to-peer discussion-group software.