Are we slaves to money?

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Right, an idea that sounds very much like Technocracy, or the Venus Project, ideas that have already been on this forum.

The Communist projects failed because of the power-structures and incentive structures involved. Nothing to do with the price system AT ALL. The price system didn't create gulags. The price system didn't provide the misallocations as many of those were not suffered by capitalist systems. The price system within the communist system really wasn't substantually similar to that under capitalism in the first place, so unifying their problems is deeply questionable.

Also, all of these high flying claims about how our current system is struggling seem questionable. Reasonable levels of inflation are what most societies claim to experience, and once again, the monetary equation(which is really a definition) explains how to manage inflation reasonably well: MV=PY.

A society where access to goods and services is not curtailed by spending power seems like the OPPOSITE of a resource based economy. What is spending power? The allocation of resources to a given person as expressed in resource units(AKA dollars). Every society is going to end having a certain limited amount of production. Every society is going to have problems in terms of allocating this production, and is going to require for people to allocate their own labor to figuring out how to best manage the resources to allocate production effectively. Every society is going to have people who improve the production. Every society is going to have people who handle services to deal with glitches and unusual demands and people. Etc, etc, etc. So, the idea that we're past labor seems odd, we've simply allocated labor from one sector to another, and many of the jobs are not best done by machines in the service sector. So, because we need to account for resources, we'll need some form of "price system", and because we need labor, we'll need some form of labor incentives. And to combine the two, we've tied "resource vouchers"(AKA dollars) to contributions to the economic functionings of the system. Now, if we have a breakdown where people start becoming outright superfluous, then that's a reason to act. However, inflation? I'm not buying it.

They are a lot more common than you seem to think. Despite great growth, the 19th century was also full very harsh economic downturns and periods of protracted unemployment. The only thing really unique about the Great Depression was it was the first truly global crisis. The so-called "Great Moderation" of the late 20th century has been the exception to the norm and it only really held for so long in the US due to our position of economic dominance in the world. The same was not the case for Latin America and parts of Asia. I'd also say that if not for all our deficit spending the depression starting in 2008 would probably be worse then the Great Depression. Parts of Europe are in economic situation comparable to the Great Depression right now.


And it is not morally undesirable to let people starve on the streets when there isn't enough "work" to go around? That seems to be the "moral" imperative of current capitalist mindset. It's not so much that people are actually left to starve. It's the whole attitude that making sure people's needs are met is not considered an obligation of society but a "charity", even when the reason for such a precarious existence is not due to natural scarcity but a systemic failure of resource distribution.

Sorry, but this really deserves a You say this as if a country's central bank decides to cause inflation just for the hell of it. In most cases undesirably high inflation takes place when the alternative is something worse than inflation.

In any case though, inflation is just a response. It's always a symptom of a deeper problem.

Recessions or Great Depressions?

I mean, I agree that the 19th century had harsh economic downturns, but the severity limited the human cost. People had more ability to outlast it or use support networks. The Great Depression isn't unique just because it was global, but rather in how long and severe it was. The US is so parochial that it really doesn't give a damn about how global a recessionary period was, so I don't think that explains why it's so remembered. It's remembered because it was a big deal.

Hmm...... hard to say on the current situation. I mean, I'm not sure it's purely a matter of Keynesianism but also includes our institutional frameworks being maintained during this time period. But... you have a point if you just mean "laissez faire" would have had problems. Still, counter-factuals are always difficult.


..... I just said "Patchwork may be desirable to avoid problems where people get screwed over in this system". Welfare systems are not fundamental fixes, but they are patches added on to reduce the severity of the situation.

Is your only objection that I'm not being as moralistic as you are on the issue? The first obligation of any society is to make sure that this society survives and maintains the well-being of a vast number of people. No society has ever really cared about everyone. So, if we can be so generous in a manner that sustains the good of a working society, then sure, a solid utilitarian case exists. My only claim was this: "If we don't make work in some sense mandatory, many people will try to get out of it. That's not a desirable outcome." I don't think you have a real objection to that claim at all, because you know that if the labor force disintegrates, society won't work making the entire issue of welfare pointless anyway. So, the real debate between us, if there is a debate, is how to set up welfare such that it helps the less fortunate, but that working is generally much more desirable than welfare. Would you agree to that? And if that's the case, you don't have anything to object to in what I just said.

The problem is the total absence of a voluntary price system will curtail the incentive to produce certain things in proportion to demand. If a good or service is highly advantageous to society but scarce or difficult to produce, the ability to charge a high price (at least initially) creates a strong incentive to produce more until competition pushes the price down. The real problem isn't the price system IMO. The real problem is the lack of a surplus recycling mechanism. The problems occur when certain people have too much access to financial capital with not enough productive activity to invest it in due to lack of demand. In this case the money would be better spent going to public works and such but unfortunately sharing is not in some people's interest and they would rather pay politicians to prevent this from ever happening.

Undesirably high inflation is a matter of central banking though, so no, it doesn't deserve that. Now, I understand that you've got cognitive biases to be critical of what I've said, but that doesn't mean you have to be pointlessly adversarial.

So, sure, undesirably high inflation often comes as a result of central banking policies to maintain lower unemployment rates. However, there is reason to consider this high inflation as something that does not help these lower unemployment rates in the long run, as many economists believe in the NAIRU. Now there is some debate, and it's certainly more popular on the left to think that the Phillips curve exists in the long-run, and that the long-run unemployment doesn't just equilibriate to a normal level where inflation is simply higher. But even then, pointing out a Phillips curve model still doesn't point out inflation as an endogenous problem, but rather it still points it out as a matter of central banking decisions. So... I still don't know what you really have to about. I have said nothing incompetent, or anything to mislead. If I'm missing something, then let me know, but you certainly can't expect me to regurgitate everything in the world about the subject, and even go into every heterodox school of thought's opinion on the matter or anything of that nature as that would simply be unreasonable. You certainly didn't add a lot about the issue or flesh it out either, and in the general case, much of what I've said is reasonably true. Lowering inflation is really a matter of central banks. I mean, I guess I'm just confused, do we need some form of debate about the workings of inflation, the relevance to business cycles, or perhaps the role of inflation in the third world or something??

And hyperinflation is perhaps always a problematic governmental response. There is nothing saved by hyperinflation.

I use the word "recession" do describe a period of economic contraction (shrinking GDP). The problem of insufficient employment can linger for years after a "recession" has formally ended, so the prolonged event should really be described as a "depression" rather than a "recession".

The depression of 1873-1878 was very severe (unemployment peaked well over 20% in major cities) and lead to some extremely violent strikes. It started in Europe and was considered "The Great Depression" until the 1929-1942 depression replaced that title. The depression of 1893-1898 was also no laughing matter. I think the 1929 depression is remembered more because it occurred after a period where the standard of living had risen tremendously and more people than ever were dependent on modern conveniences so that being thrown back into abject poverty was particularly traumatic.


I am against the current way the current welfare and unemployment system works for the way it stigmatizes and creates a society that is suspicious that "other" people "on the dole" are getting a "free ride" while they are barely hanging on themselves. It creates a cruel antagonistic social dynamic and unnecessary shame. The arbitrary cutoffs and means testing are also dysfunctional as they don't provide an incentive for people to gradually ween themselves off when they do find employment. I prefer the idea of a guaranteed minimum living allowance paid for by a value-added tax on all purchases. All other income is on top of the minimum so there are no bureaucratic "cutoff" conditions and there need not even be a minimum wage. If people want to be able to afford more than a very basic life they will have a strong incentive to look for additional income with no penalty for doing so. The idea that people need to be threatened with homelessness or starvation in order to be motivated to work seems a bit "old school" and small minded for a technologically advanced society such as ours. You can still put some kind of community service or vocational training condition on receiving the living allowance while not employed.

@marshall

Have you heard of the "mincome" experiment in Dauphin, Manitoba?

http://www.winnipegfreepress.com/local/ ... iment.html

Well, I guess I do get annoyed at the way so many neoclassical economists including yourself seem to have this rather snobbish nonchalant attitude that seems to discount that there are human beings affected behind the numbers and figures. It just seems that way when you discount just how difficult it may be for a government to simply forgo all it's obligations in order to stop inflation. It's not like you can expect them to just stop paying the police and not have the government collapse. Also, if the problem gets to the point where there's hyperinflation there has to be some extremely serious externally imposed problem like an unreasonable foreign debt obligation (Germany after WWI), collapse of foreign trade, natural resource shortage, trade embargo, imposed sanctions, etc... In any case smaller countries with a lot of external dependencies and foreign debt obligations they simply cannot pay are going to be a lot more susceptible to hyperinflation.

I also never argued that deliberately perusing inflationary monetary policy is going to be effective in lowering unemployment.

Ok, are you predicting that the US and/or highly economically developed nations will tend towards having more Great Depressions in the future? It's harder to make as much out of the struggles of developing nations precisely because they are developing, and there are a number of areas where problems can emerge that are not as strictly related to the ultimate causes of the business cycle.


Ok? And Milton Friedman advocated the Negative Income Tax. Did you really have a point??? http://en.wikipedia.org/wiki/Negative_income_tax

Social dynamics are likely inherently somewhat cruel and antagonistic though because competition for limited resources, including status, is a significant part of the working of every human society.

I'm not sure what "old school" or "small minded" mean. The terms are irrelevant for any sort of prediction. At best they serve as some form of moralistic stand-in.

Last edited by Awesomelyglorious on 26 Nov 2012, 1:21 am, edited 1 time in total.

It seemed like he had a pretty obvious point

• Currently constructed welfare systems stigmatize people (which decreases their utility).
• Currently constructed welfare systems foster resentment, which causes social tensions and dysfunction.
• A basic income would be a better fix.

Marshall's guaranteed income, btw, is probably more of a basic income than negative income tax (which is still means-tested).



I really don't get how "social dynamics are inherently cruel" bears on whether systems should be changed for the better or certain memes opposed. I mean, sue, all social systems might have some element of cruelty in them but that doesn't mean that arguing "Apartheid is cruel" or "The Third Reich is cruel" is an invalid reason for abolishing/opposing those ideologies.

"Small-minded" probably refers to a contemptuous attitude towards people based on prejudice/superficial understanding.

I get annoyed by quibbling. That's what you're doing. And then you act like I'm being stupid because I don't address every single motherf****ng intricate detail that you personally would like.
1) When providing an analysis of how an economy works. I'm not even looking at numbers. I'm certainly not going to be looking at human beings. I'm looking at the abstract interrelations that make everything work to provide a framework to make sense of problems.
2) I'm not discounting anything by simply not addressing the question of seignorage or in trying to weave this complicated tale of governmental debt. I'm simply shelving the issue until it becomes relevant, as it is not relevant for every single nation and it does not fit into the generalizable case of inflation. So, because it does not fit into the generalizable case of inflation, I'm not mentioning it as it's beyond the scope of what's needed at a first glance.
3) Even as a general rule in handling issues, I don't address people. I address rules, principles, and things of that nature. My posting style always veers towards abstraction, and I often am very cold when addressing issues.

So..... I'm pissed off because you're f*****g with me due to a posting style I've generally held when I haven't actually done anything wrong in the situation. Don't continue this pattern of behavior and if you want to add something, then try to add it and try to be as direct to the point as possible, because for all of your whining about how "human beings cannot reasonably discuss issues" passive aggressive actions like this are simply contributory. You're being a part of your own self-proclaimed problem.

Last edited by Awesomelyglorious on 26 Nov 2012, 1:37 am, edited 1 time in total.

M_P, those 3 points have NO RELATIONSHIP to anything I wrote. So, if his obvious response is a response to me, then it's simply poorly done.

Secondly, an NIT *IS* a variant of basic income. So, the distinction you're drawing is actually pretty irrelevant.


It bears a lot of weight when evaluating issues of stigma. If stigma is not to be abolished, then the question is how to manage it, not to approach it as something to be abolished.

Technically, the pushback in saying "systems are inherently cruel" is to point out that more qualification and/or clarification is needed to fully understand the issue. The way that stigma is often treated is to assume that the fix will remove the stigma. In the case of persistent unemployment, this is unlikely to happen. In fact, it actually shouldn't happen, strangely enough. As marshall undoubtedly knows, material gains are actually not the biggest deal to human beings, instead, human beings love *status*. So to keep people motivated, it's often more important to make sure that status is still a potential goal. Because we can only evaluate outcomes, and not every single detail, this is going to mean status and stigma allocations will not be perfectly just.


That's nice, but once again, my point actually remains. It is either correct or incorrect. So, contemptuous based upon prejudice is more of a moral claim. You can argue that it has a truth element to it, but that's not the central meaning.

Now, if you really want to be an ass and continue to poorly interpret the discussion for no apparent gain other than... I don't even know what, for the sake of an ideology then that's whatever it happens to be, but I don't seek to be in a discussion with opponents more emotively driven to score "left-wing points" than to resolve the issue in the best manner. I may be making some mistakes, but I know that this is the driving emotive force, and that it's creating unnecessary polarization given that apparently there's more broad agreement than not.

Here's the problem. That kind of contemptuous dismissal of a moral position is just as insulting to someone on the left as I was insulting to you. It reminds me of posts by TM who is the biggest snob on this forum.

The problem is the right always uses the ruse of "choice" to create a smokescreen in situations where in reality the options are extremely limited.

More succinctly, yes.

marshall, in the context, my opposition is to irrational demands on the meaning of the word "choice". We can argue that left-wing improvements on society will increase the level of freedom, and it is true that there are definite reforms that would be considered "left-wing" in the US context that would increase freedom and be more efficient. That does not make thomas81's statement sensible. It is not a sensible statement, and it not being a sensible statement isn't a matter of it just being on the left. There are many right-wing sentiments that are also not sensible. You criticize many people of the right because they say those things, and you are correct for doing so.

So, being forced to have a job of some form isn't a denial of choice in and of itself. Unless you're arguing that the notion of "wage-slavery"(he's really not arguing about welfare policy) is a central notion to the left-wing, "just as insulting" is a load of crock. From my understanding, "wage-slavery" is not a central notion to the left-wing.

You were insulting to me mostly on grounds that you were criticizing me when I had not actually done anything wrong or taken any real steps to misrepresent reality. It wasn't a question of my values, it was a question on whether I perceived your behavior as obnoxious. This kind of obnoxiousness isn't a question of right vs left.

Additionally, I'm not willing to get sucked into your left-right morality play. I understand that it's important to you, however, not every member of this forum is as emotionally invested as you are. My general emotive reactions along the 5 or probably even the proposed 6 foundation framework developed by Haidt are pretty damned low relative to any part of the political spectrum, as noted by how many different things I've argued for that would leave people pissed off from any point in that political spectrum.(So, just earlier on this forum I explored the idea of a mandatory abortion drug for pregnant women, an action that would piss off all parts of the spectrum) So, I'm not interested in this point of tribal politics.

Also, the social situations are complicated. Yes, the right-wing should avoid putting too much on overly libertarian conceptions of free will(and projection onto different people) and instead focus on more social scientific measures. But "choice" is still occasionally a valuable framework if we're trying to explore issues.