We, humans, currently spend the resources on those things through the medium of fiat currency. Remove the necessity for profit, the need to pay a lot of people in that system incredibly more than they require - take a couple of dozen 8-figure mansions, a few 9-figure yachts, several hundred 6-figure cars, gold-plated taps, diamond-encrusted tiaras, etc., etc., and the resources targeted at the problem of producing maps go much further. And there's no reason not to have a competitive element, you don't need profit to create competition.
It's not spending people's retirement, it's spending the same resources we spend now, just not mediated in the same manner and without the waste of 40% spend on advertising (plucked that number out my ass but a few years ago pharma was spending more on advertising than on R&D) and without allowing controlling elements to steal all the output for personal gain.
So, I'd like to spend the equivalent resources we do now, but with saving on profit, over-paying wages, and de-duplication of effort. That gives much more resources applied to the actual task without touching pensions (which of course I'd like to see have the same effect).
The problem, is that moving to such an economic system requires the most greedy, most powerful, to be usurped. Humans are greedy (myself included), that leads us to waste so, so, much of our resources.
Why do you think a system where people choose the collective good (having all their needs met) - "volunteering" - rather than personal financial gain can't produce satellites, or any other good/technology we now produce?
Let me argue that allocation of resources as a zero-sum game is a deeply flawed view of the situation. There is competition, but this is not a bucket-for-bucket transfer and given the figures displayed here as well as ballpark estimations, there is more than largely room for all of those to develop simultaneously. As mikeash points out, there is an untapped audience as well as boatloads of resources going down the sink that totally dwarf the resources put in any of those endeavours (and this extends way past "wasteful" billionaires)
Yeah, that's one of the big problems with capitalism. The laws of microeconomics state that in a free market, the market will produce as many widgets as possible, using up all possible resources to do so. This isn't good for human happiness or for the environment. Who really wants to live in a world where we are buying and producing as much as possible?
You'd be right, if all value production was in utilitarian, physical stuff. Increasingly however we're spending a smaller percentage of our income on stuff, and more on services and immaterial goods.
To produce a two ton truck, you need to use more than two tons of resource, that much is obvious. But how many resources go into the production of my copy of GTAV? Or my blue-ray of The Lord of the Rings? Or my viewing of a show on Netflix? The marginal resource usage is pretty much nil, just some electricity, paper of plastic. The resources expended in producing the work itself can be significant, but they are amortized among the many millions of copies.
Now obviously there are limits. Humans need physical stuff to survive, that's not going to change any time soon. There's a limit on the amount of actual stuff we can make. But there's no clear limit on the value of that stuff. We keep finding new ways to make little pieces of plastic or bunches of electrons in wires valuable all the time.
Why do we have to make things? Or why tangible things?
Take for instance the financial sector. They make allocation decisions in essence and sell service around management, consulting, and financial engineering. A large chunk of our economy is based around resource allocation, not actually turning resources into products more efficiently than the last guy.
As an economy progresses, it moves further and further away from things and towards ideas. We went from hunters and gatherers of food and clothing, to agriculture, to machining things, to primitive banking, all the way up to modern financing.
At each step we became further and further removed from actually putting iron-to-iron and producing this. We become more involved in how to efficiently allocate resources for those that did produce.
And that population of those that do produce continues to fall as automation comes along and we become better at making more with less. Finance has really put productive resources to amazing efficient use though capitalism.
We will get to a point where almost nobody does machines or sits on an assembly line anymore, and their jobs will give way to a larger and larger pool of people who work in the meta-market, the mental-based market that really drive the physical-based market.
One of the absurd things about our modern economy (it's actually a recurring problem) is that we keep spending more and more on the same on already existing values. People complain about ever increasing debt and borrowing but most of that money isn't even being spent "into" the economy, it's just used to buy land from rich individuals.
The reason why this is not "productive", is pretty straight forward. It's unproductive because nothing is being produced. We are selling what's already there long before humans existed.
Yeah, that's the whole point of division of labor and specialization and all that -- we focus on one thing and trade for the other things. Without spending the system doesn't work anymore.
If there were only some way to allocate resources based on their most productive means.
Imagine if you could attach a number to a resource, like energy, that accounts for its various possible usages. If the resource becomes more available, this number will go down and if it becomes more scarce, the number would go up.
If you wanted to use the resource, you would have to pay this number. So naturally, you wouldn't pay to use the resource for something silly. Similarly, if it's important, you'd pay as much as you had to to use the resource. This would discourage people from using the resource foolishly.
The beautiful thing about this system is that you don't have to have moral judgements about what is or isn't worthy. It wouldn't be up to any one individual to say you should use resource for X and not Y. The number would be self adjusting as more or less resources become made available or more or less uses for the resources are discovered. And as the number went up, it would incentivize people to create more of that resource or create a resource to replace it.
Erm, the entire point of a simple metric (money) is so that complex processes don't have to be understood top-down to be managed. From first principles, the more technologically complex a society gets, the more you would expect its priorities to be weighed with money.
Now please, don't take this as an endorsement that we should let externalities go unchecked, or even that governance should shirk basic understanding of processes/industries and expect to replace that entirely with money. Nor do I have love for perverse money-generating yet counterproductive endeavors. I'm just saying the basic trend that you've characterized as "ludicrous" is actually entirely appropriate.
What you describe is a system that values the generation of wealth, and uses seemingly-logistically-foolhardly supply chains to exploit cost-of-labor imbalances to maximize profit.
And likely as long as it is profitable to do this, we will, at massive non-financial costs.
The set of things that are valuable to mankind and the set of things that are profitable to mankind only partially overlap, and we should optimize for the former
There is still the underlying point of resource distribution. When you have some people buying things they do not need, while other people cannot afford things they do need, that means that resources went into producing the things that are needed less. Becuase of the decreasing value of money, it is in your best interest to convert your money into stuff, wheather or not that stuff is a good use of resources. I think this inefficiency is invevitable in an economy based around a concept of money simmilar to our own, but we should acknowledge that it is sub-optimum in terms of societal interests.
You want to make it more expensive to increase productivity? (Because that’s what capital does - it gets invested to increase profits).
The logical path you’re going down would replace road builders with people with spoons to move dirt around and file down rocks with spoons to put them in the ground to walk on.
Seriously, if you consider the logical conclusion of your argument, we end up in madness.
I see what you mean, but let's not confuse 'productive' with 'lucrative'.
Even a lot of people with seemingly 'good jobs', I would argue, are not necessarily providing a ton of material value.
For example, I'm coming to the point where I believe the vast majority of 'Data Science' is 'Business Academia' and a giant pile of over-optimization and busy work.
The surpluses are concentrated in groups that have power, but those dollars are not necessarily used to maintain or support those systems directly, rather, they become applied R&D shops.
That's a straw man. It's a good thing that there is specialization for tasks (automation is even more efficient) but with that comes other consequences. The organization always seeks to grow and expand, to create demand even if there isn't any. That is a consequence of the fact that the money it gets is more valuable to it than the services, since it can be spent on anything. Meaning it is more widely accepted so trading services for money is a net gain, and the more they do it the better for them. However on the collective level, this results in exploiting any externalities that they can including people's attention, free time, the planet's resources, polluting etc. The incentive is always to expand at the expense of the environment, until ecosystem collapse is threatened (see for example logging forests, etc. or yeast making beer). In short, the tragedy of the unmanaged commons.
Thanks for asking, I don't think I've been able to tie it all in under one overarching picture so clearly before.
OK, to be honest I've been looking for someone to actually debate this with.
First of all, "proxy for efficiency" is my own terminology and seems quite sensible to me. We talk about productivity in terms of GDP per capita. Implicit in that is the assumption that money is its own value, which it isn't - money is at best a marker of value. But we reward people with the marker, not the value.
Second, your point of money being more efficient than other goods as a unit of value doesn't go anywhere. It does not get at the point Eisenstein presents, which is that the concept of trade exists because of ownership of scarce resources. If nobody owns anything, trade is nonsense.
Third, the Eisenstein thesis doesn't mention interest. Negative interest is mentioned in the form of demurrage in one of his closing chapters, as another way to define money. But his overall thesis is non-economic: that we have set ourselves up, in a variety of ways, to battle against nature and against each other. "Separation of self" is the term he uses, along with a variety of colorful New-Agey terms. I'm focused on the economic points in part because I hold a B.A. in economics myself, and there are some solid points made about economic systems outside our mainstream viewpoint - particularly with respect to prehistoric gift economies.
Your claim that the current wave of technology - by which you presumably mean online communications - was driven by monetizing efficiencies....that one seems a bit faulty. The Internet started as a military/academic project, not as an attempt to build a consumer market. As well, most open source software isn't built with a monetization in mind, but rather is a way for others to reduce their costs. In general the market doesn't build the technology, the market commercializes the technology after it becomes self-evident. The reason we have zillions of web startups is that the web still has so many new concepts to explore that everyone can be a do-gooder and monetize at the same time. The fact that a lot of people aren't monetizing the things they do online(for example, HN being free and user-driven) is the interesting part. That's a huge reversal of so much of history.
Your statement of technology not giving power to individuals seems incredibly wrong. The Industrial Revolution was organization-driven, but our current revolution, whatever you might call it, is acting to take apart organizations. Blogs vs. newspapers. Social media vs. mass media. Central office vs. virtual office.
What economic value do all airlines, cars, factories in the world produce? They are the reason we don't live in mud huts, poking at eachother with sharp sticks.
Now, what economic value do all rockets in the world produce? Satellite TV and GPS? Satellite weather reports that we complain about, and climate studies that we ignore?
And those are the low-hanging fruits. The ROI of a GPS network, a communication network, and orbital climate satellites is miles better then that of asteroid mining.
We, humans, currently spend the resources on those things through the medium of fiat currency. Remove the necessity for profit, the need to pay a lot of people in that system incredibly more than they require - take a couple of dozen 8-figure mansions, a few 9-figure yachts, several hundred 6-figure cars, gold-plated taps, diamond-encrusted tiaras, etc., etc., and the resources targeted at the problem of producing maps go much further. And there's no reason not to have a competitive element, you don't need profit to create competition.
It's not spending people's retirement, it's spending the same resources we spend now, just not mediated in the same manner and without the waste of 40% spend on advertising (plucked that number out my ass but a few years ago pharma was spending more on advertising than on R&D) and without allowing controlling elements to steal all the output for personal gain.
So, I'd like to spend the equivalent resources we do now, but with saving on profit, over-paying wages, and de-duplication of effort. That gives much more resources applied to the actual task without touching pensions (which of course I'd like to see have the same effect).
The problem, is that moving to such an economic system requires the most greedy, most powerful, to be usurped. Humans are greedy (myself included), that leads us to waste so, so, much of our resources.
Why do you think a system where people choose the collective good (having all their needs met) - "volunteering" - rather than personal financial gain can't produce satellites, or any other good/technology we now produce?
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