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The analogy also holds because money is like energy, in that it has to be conserved. "It's like a fluid that flows in interactions, it's not created or destroye

The analogy also holds because money is like energy, in that it has to be conserved. "It's like a fluid that flows in interactions, it's not created or destroyed, only redistributed," says Yakovenko. Do I misunderstand, or does this model hinge on the assumption that money (wealth, value, etc) can't be created? Assuming that wealth building is a zero sum game seems fundamentally flawed. It might look good in models as snapshots of the current situation, but as net wealth increases I'm sure it would throw things off.

DougBTX 18y ago
It sounds like it hinges on money changing hands randomly. The zero-sum comment does sound like a guaff, but the correction would be (in the simple case) easy to translate into a phyical gas model: just add a heating element.
apsec112 18y ago
Money can't be created (except for the Feds printing it, which is explicitly factored out), but wealth can; they are not the same thing. $100K today and $100K a hundred years ago are the same amount of money, but the $100K today will get you a lot more wealth.
- dkokelley 18y ago
  I'm sure you mean $100k inflation adjusted. Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology. Still, the Feds do print money, and wealth is added (not necessarily related), which goes against the article's premise, regardless of how you define money.
  - anamax 18y ago
    > I'm sure you mean $100k inflation adjusted. Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology. Huh? In what sense is modern technology not wealth? Moreover, much of what passed for "wealth" in the past is common place today.
    - dkokelley 18y ago
      Correct, but to compare equivalent goods, $100k would get you much more land 100 years ago than now. The point of my comment was to say that while yes, the standard of living has gone up considerably in the past century, $1 in 1909 was 'worth' more to 1909 citizens than $1 today. I didn't mean to imply technology isn't wealth, just that you had to factor it out for my point to be made.
  - apsec112 18y ago
    "Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology." Try living on $100K in 1900 (non-inflation-adjusted!), vs. $100K today. By the standards of the time, you'd be filthy rich... only you'd have no Internet, no TV, no radio, no air travel, no air conditioning, no antibiotics, no cellphones, etc., etc., etc.

DougBTX 18y ago

It sounds like it hinges on money changing hands randomly. The zero-sum comment does sound like a guaff, but the correction would be (in the simple case) easy to translate into a phyical gas model: just add a heating element.

apsec112 18y ago

Money can't be created (except for the Feds printing it, which is explicitly factored out), but wealth can; they are not the same thing. $100K today and $100K a hundred years ago are the same amount of money, but the $100K today will get you a lot more wealth.

dkokelley 18y ago
I'm sure you mean $100k inflation adjusted. Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology. Still, the Feds do print money, and wealth is added (not necessarily related), which goes against the article's premise, regardless of how you define money.
- anamax 18y ago
  > I'm sure you mean $100k inflation adjusted. Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology. Huh? In what sense is modern technology not wealth? Moreover, much of what passed for "wealth" in the past is common place today.
  - dkokelley 18y ago
    Correct, but to compare equivalent goods, $100k would get you much more land 100 years ago than now. The point of my comment was to say that while yes, the standard of living has gone up considerably in the past century, $1 in 1909 was 'worth' more to 1909 citizens than $1 today. I didn't mean to imply technology isn't wealth, just that you had to factor it out for my point to be made.
- apsec112 18y ago
  "Otherwise $100k 1oo years ago would purchase a lot more wealth, you just wouldn't have access to modern technology." Try living on $100K in 1900 (non-inflation-adjusted!), vs. $100K today. By the standards of the time, you'd be filthy rich... only you'd have no Internet, no TV, no radio, no air travel, no air conditioning, no antibiotics, no cellphones, etc., etc., etc.