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in fixed resources like land... What is this resource you talk about? Land values are f(productivity, past productivity). That is they are derivatives of inc

by 001sky 13y ago

in fixed resources like land... What is this resource you talk about? Land values are f(productivity, past productivity). That is they are derivatives of income and wealth. Notwithstanding the critique of the author, the GP has a point that the science of economics is about the relationship between (production, distribution). Eliminate that feedback loop, and ... yes, you are just looking at the diffusion of "fake games" people play. Which are only insightful in the assumptions, but broadly speaking, not so much All of that in mind, this type of essay/article is just a demonstration of ~technique in a very broad sense. Its useful to mention/caveat any extrapolations are problematic, but no need to dwell or be overyly crtitical here. IMHO.

dllthomas 13y ago
I don't think the parent meant that land has fixed value, but that we can't willy-nilly create more of it through the sweat of our brow, in the way that we could make more widgets.
saraid216 13y ago
To clarify dllthomas' comment, Land acreage is a fixed resource. This is one of the reasons that a lot of economic models depend on land: there is a very real scarcity there to drive the equations with, and it forms a foundation for virtually every other form of scarcity besides labor.
- dredmorbius 13y ago
  More subtle is the point, particularly in early economic thought, that land is a proxy for the master economic input: energy. With sufficient energy, you can provide other inputs (raw materials, labor, capital). Without it, you're sunk. In a preindustrial society, energy == land (and sea), in the form of food and fuel production (agriculture, grazing, fuelwood, wild herds, fish, all by way of direct or indirect sunlight conversion), as well as in the form of wind and water power resources which can be tapped through mechanisms. Ricardo's "law of rent" was in part a lament that all the good ones -- that is, most productive acres -- are taken. He was complaining about asset allocation in his day (he also saw economic surpluses accruing to landowners and labor rather than hard working capitalists and bankers, which is a tad curious). With an industrialized society, energy's become something we extract from the land (coal, oil, gas, uranium), rather than which is produced or converted by it. But the fundamental truth remains. In a future sustainable world, we'll again either be at the point where what we take from the land matches the rate at which it's created, or we'll have found some entropy gradient so abundant (fusion? thorium?) that it can be used extractively for tens to hundreds of thousands of years or more without exhaustion, despite the very formidable technical challenges to its utilization. My leaning is more toward the former than the latter.
  - saraid216 13y ago
    Economics would be a lot more interesting if they discussed things in terms of joules rather than in terms of dollars.
    - dredmorbius 13y ago
      I've been exposed to the idea of an energy-backed currency since reading Arthur Clarke's Imperial Earth as a kid (it's actually got a lot to do with energy economics in general, among other themes). More recently I've been looking at some of the principles of dissipative systems and wondering if one of the fundamental inequality equations of that field isn't applicable as a general concept of capital accumulation. Let's see if I can't find that ... OK: the storage function here: https://en.wikipedia.org/wiki/Dissipative_system#In_control_theory https://en.wikipedia.org/wiki/Dissipative_system#In_control_... I've also been kicking around the ideas of, variously, an organism (say, a human), or a herd, or an ecosystem, as an economic analog, and trying to figure out what the equivalent systems within them are. For the body analog, there's the long-standing metaphor within economic literature of the banking system and money as the heart and blood. My read is that these are mistaken -- those correspond to physical constructs within the economy (transportation systems and energy), not the control and signaling systems of the economy. There I think you'd want to map something more on the lines of Ca+ ion exchange or endocrine signaling, though honestly my understanding of biology and systems is pretty loose. I've been meaning to look at how biological and ecological systems signal for resource utilization.
cma 13y ago
I was thinking just take the ledger of all transactions and exclude everything but land transfers.. that doesn't work though because none of his transaction functions would properly model the way the real land transactions would happen due to feedback with the hidden transactions etc. I guess the Norvig approach would be to feed in all data from the real economy and tally random sequences of transactions of various lengths, like linguistic n-grams, then for the model just generate transactions using Markov chains derived from that data. If it works for translating languages and modeling human thought, no reason it shouldn't work here.

by 001sky 13y ago

dllthomas 13y ago

I don't think the parent meant that land has fixed value, but that we can't willy-nilly create more of it through the sweat of our brow, in the way that we could make more widgets.

saraid216 13y ago

To clarify dllthomas' comment, Land acreage is a fixed resource. This is one of the reasons that a lot of economic models depend on land: there is a very real scarcity there to drive the equations with, and it forms a foundation for virtually every other form of scarcity besides labor.

dredmorbius 13y ago
More subtle is the point, particularly in early economic thought, that land is a proxy for the master economic input: energy. With sufficient energy, you can provide other inputs (raw materials, labor, capital). Without it, you're sunk. In a preindustrial society, energy == land (and sea), in the form of food and fuel production (agriculture, grazing, fuelwood, wild herds, fish, all by way of direct or indirect sunlight conversion), as well as in the form of wind and water power resources which can be tapped through mechanisms. Ricardo's "law of rent" was in part a lament that all the good ones -- that is, most productive acres -- are taken. He was complaining about asset allocation in his day (he also saw economic surpluses accruing to landowners and labor rather than hard working capitalists and bankers, which is a tad curious). With an industrialized society, energy's become something we extract from the land (coal, oil, gas, uranium), rather than which is produced or converted by it. But the fundamental truth remains. In a future sustainable world, we'll again either be at the point where what we take from the land matches the rate at which it's created, or we'll have found some entropy gradient so abundant (fusion? thorium?) that it can be used extractively for tens to hundreds of thousands of years or more without exhaustion, despite the very formidable technical challenges to its utilization. My leaning is more toward the former than the latter.
- saraid216 13y ago
  Economics would be a lot more interesting if they discussed things in terms of joules rather than in terms of dollars.
  - dredmorbius 13y ago
    I've been exposed to the idea of an energy-backed currency since reading Arthur Clarke's Imperial Earth as a kid (it's actually got a lot to do with energy economics in general, among other themes). More recently I've been looking at some of the principles of dissipative systems and wondering if one of the fundamental inequality equations of that field isn't applicable as a general concept of capital accumulation. Let's see if I can't find that ... OK: the storage function here: https://en.wikipedia.org/wiki/Dissipative_system#In_control_theory https://en.wikipedia.org/wiki/Dissipative_system#In_control_... I've also been kicking around the ideas of, variously, an organism (say, a human), or a herd, or an ecosystem, as an economic analog, and trying to figure out what the equivalent systems within them are. For the body analog, there's the long-standing metaphor within economic literature of the banking system and money as the heart and blood. My read is that these are mistaken -- those correspond to physical constructs within the economy (transportation systems and energy), not the control and signaling systems of the economy. There I think you'd want to map something more on the lines of Ca+ ion exchange or endocrine signaling, though honestly my understanding of biology and systems is pretty loose. I've been meaning to look at how biological and ecological systems signal for resource utilization.

cma 13y ago

I was thinking just take the ledger of all transactions and exclude everything but land transfers.. that doesn't work though because none of his transaction functions would properly model the way the real land transactions would happen due to feedback with the hidden transactions etc. I guess the Norvig approach would be to feed in all data from the real economy and tally random sequences of transactions of various lengths, like linguistic n-grams, then for the model just generate transactions using Markov chains derived from that data. If it works for translating languages and modeling human thought, no reason it shouldn't work here.