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A more general statement can be made: A central problem in all modern economies -- whether socialistically or capitalistically organized -- is the accumulation
by api 13y ago
A more general statement can be made:
A central problem in all modern economies -- whether socialistically or capitalistically organized -- is the accumulation of monolithic stores of wealth exceeding the cognitive capacity of small groups of human beings to intelligently allocate it.
We might call this the "big dumb money problem." As the original article points out, it's a bigger problem than merely one of waste. Big dumb money often operates in ways that are actively harmful.
- logfromblammo 13y agoCombine the big dumb money problem with the agency problem, and you will see that no one capable of allocating a huge pile of capital intelligently could ever be trusted to do it. The logical thing to do is to allocate as much as possible to yourself as quickly as possible, before someone else can come along and do exactly the same thing. The financial sector really needs an ever-aware watchdog standing behind it at all times, pointing a big, scary gun at its skull. When the only consequence to taking everything you can get is having more than you can use, guess what happens. The only alternative is to decentralize completely, which no nation on the planet will attempt, because they benefit from living at the center of the money web almost as much as the banks.
- dkuntz2 13y agoPerhaps banks could implement a negative interest rate. Money you don't use goes to science (or something equally "good" for humanity)?
- skylan_q 13y agoa negative interest rate Guess what drives consumption and consumerism. :)
- dkuntz2 13y agoPerhaps. The whole system would need some redoing as well, such as providing everyone with basic necessities. Part of the negative interest could be used to help provide those.
- breischl 13y agoYeah, but then nobody would ever deposit money in the bank. Much more clever to call it something seemingly unrelated, like "inflation".
- twic 13y agoThis is called "tax".