Monetary theory

[mkm5]

Here's my question: Must economies always endlessly expand? It feels like the focus on expansion is accompanied by little regard for how it expands and little regard for who reaps the benefits of that expansion coupled with the drive for boundless expansion. Such a thing never exists in nature- at least not for long. At some point lions will have no antelope to eat. Increase the antelope and another part of the ecosystem suffers. Isn't economics just another ecosystem that requires balance? It feels like there's no balance. We talk in trillions of dollars and yet, do we really have that much more in resources than our grandparents did? It feels made up. I'm not a trusting person when it comes to money. Little strips of cotton blended paper won't keep me warm at night and they certainly won't feed me or mine. So I naturally gravitate to holdings of other kinds. But even for those into this stuff it feels like it's gotten to comical proportions.

Well said Jenni. I try to invest in things that help me sleep good at night. It's been working pretty good for a while now.

[tgregorio]

Here's my question: Must economies always endlessly expand? It feels like the focus on expansion is accompanied by little regard for how it expands and little regard for who reaps the benefits of that expansion coupled with the drive for boundless expansion. Such a thing never exists in nature- at least not for long. At some point lions will have no antelope to eat. Increase the antelope and another part of the ecosystem suffers. Isn't economics just another ecosystem that requires balance? It feels like there's no balance. We talk in trillions of dollars and yet, do we really have that much more in resources than our grandparents did? It feels made up. I'm not a trusting person when it comes to money. Little strips of cotton blended paper won't keep me warm at night and they certainly won't feed me or mine. So I naturally gravitate to holdings of other kinds. But even for those into this stuff it feels like it's gotten to comical proportions.

Economic growth is a relatively modern phenomenon, and humanity did exist without it (or at least without very much of it) for a very long time.

Growing endlessly without limit is the model of cancer.

Economists have not thought through how we can continue growing year after year after year, using ever more resources, destroying more of our natural environment, and cramming more and more people in to already crowded places. Basically, most of them just trust that technology will sort it out somehow, and figure they'll be dead by the time resource constraints become a problem for them personally.

However, this is extremely wishful thinking. In western countries, our living standards - not just economically, but also socially and culturally - peaked some time ago and we are on the downward part of the ride now.

When I was an econ student, I sat in lectures where professors would talk about how we now understand how to achieve economic growth, how we can control business cycles, and this was the biggest lie - that future generations would continue growing and be better off than earlier generations. If somebody calling themselves an economist tells you something, it's most likely total bullshit, that's a good heuristic to go by.

[Subby]

Unless someone can point to a source, I contend that the 2% inflation "target" was pulled out of a bankers arse to give the illusion of "doing something" and "a plan" Find a source to prove me wrong.

Tgregrio, Bitcoins are broken into "Satoshis" which I believe is a millionth of a bitcoin.

Here's my question: Must economies always endlessly expand? It feels like the focus on expansion is accompanied by little regard for how it expands and little regard for who reaps the benefits of that expansion coupled with the drive for boundless expansion. Such a thing never exists in nature- at least not for long. At some point lions will have no antelope to eat. Increase the antelope and another part of the ecosystem suffers. Isn't economics just another ecosystem that requires balance? It feels like there's no balance. We talk in trillions of dollars and yet, do we really have that much more in resources than our grandparents did? It feels made up. I'm not a trusting person when it comes to money. Little strips of cotton blended paper won't keep me warm at night and they certainly won't feed me or mine. So I naturally gravitate to holdings of other kinds. But even for those into this stuff it feels like it's gotten to comical proportions.

Yes they must. GDP is not "the economy" in a perfect, completely abstract sense. "The economy" us just the trade of goods for mutual gain. And theoretically it can only expand by becoming more efficient. In that you get "more" stuff, "Better" stuff or "cheaper" stuff. Theoretically in a perfect world the only way to break into a market is to improve upon what already exists. And yes there's a gulf between that abstract idea and what currently exists. In reality the 4th way is "confuse them" and take advantage of an information asymmetry.

It's the equivalent of asking "do I have to keep making the weight go up" Economies expanding is why we don't still live in mud huts like the Aborigines who went 40k + years without inventing a wheel.
Lions must always get better at hunting antelopes because antelopes are always getting better at not being eaten.

It seems to me that breaking a Bitcoin into smaller units does not increase the total amount of Bitcoins available, just like using quarters or cents to pay a bill instead of banknote would not change the amount of money in your pocket.


IPB

The argument is that as the value of a dollar goes up, a nickel becomes incredibly valuable, so you have to use half a nickel instead. The flaw is obvious of course, the more you hoard and keep off the market, the more that pile of bitcoins is worth, creating a positive feedback loop of "the rich" actually hoarding money like marxists imagine they do.

[Mark Rippetoe]

Economic growth is a relatively modern phenomenon, and humanity did exist without it (or at least without very much of it) for a very long time.

Humanity went from less than 10,000 individuals to the current 8 billion over the past 100,000 years, with fewer people living in poverty today than ever before.

Growing endlessly without limit is the model of cancer.

Clever, but not analogous.

Economists have not thought through how we can continue growing year after year after year, using ever more resources, destroying more of our natural environment, and cramming more and more people in to already crowded places. Basically, most of them just trust that technology will sort it out somehow, and figure they'll be dead by the time resource constraints become a problem for them personally.

Economists are irrelevant. We can get along quite well without them. And technology has in fact sorted it out. Were it not for government interference, we would already have abundant nuclear power and all the things that energy facilitates.

However, this is extremely wishful thinking. In western countries, our living standards - not just economically, but also socially and culturally - peaked some time ago and we are on the downward part of the ride now.

This is an absurd statement. Did they teach you this in college?

When I was an econ student, I sat in lectures where professors would talk about how we now understand how to achieve economic growth, how we can control business cycles, and this was the biggest lie - that future generations would continue growing and be better off than earlier generations. If somebody calling themselves an economist tells you something, it's most likely total bullshit, that's a good heuristic to go by.

Are you now an economist?

[tgregorio]

Humanity went from less than 10,000 individuals to the current 8 billion over the past 100,000 years, with fewer people living in poverty today than ever before.



Clever, but not analogous.



Economists are irrelevant. We can get along quite well without them. And technology has in fact sorted it out. Were it not for government interference, we would already have abundant nuclear power and all the things that energy facilitates.

This is an absurd statement. Did they teach you this in college?
Are you now an economist?

Economies 100,000 years ago weren't chasing 3-4% p.a. annual growth as in modern times. The world population has increased by about 4 times what it was 100 years ago.

I'm not convinced technology has sorted everything out so that we can keep using resources like we have been and with a growing world population.

How is the statement absurd? I guess it's just my imagination that life is getting worse for most people.

[Mark Rippetoe]

How is the statement absurd? I guess it's just my imagination that life is getting worse for most people.

That is your assertion. We are just supposed to agree with you because you're an economist? Demonstrate it.

[tgregorio]

How about:
- Stagnant or declining wages and incomes per capita and inability of current generation to build wealth as per previous generations
- Lower rates of home ownership
- Lower rates of marriage, family formation and fewer children, epidemic of single parenthood and high divorce rates
- A recent 2-3 year episode of the greatest erosion and assault on individual rights we have seen in our lifetimes, with the door open for more to come.

Just for example.

[Subby]

Here's an economic prediction. Tgregorio will use the following phrases before the 4th page:
"Sustainable growth"

"Degrowth capitalism"

"Equitable stakeholding"

[Mark Rippetoe]

How about:
- Stagnant or declining wages and incomes per capita and inability of current generation to build wealth as per previous generations
- Lower rates of home ownership
- Lower rates of marriage, family formation and fewer children, epidemic of single parenthood and high divorce rates
- A recent 2-3 year episode of the greatest erosion and assault on individual rights we have seen in our lifetimes, with the door open for more to come.

Just for example.

These are all artifacts of a Democrat Party Administration, not an expanding economy. And I'll bet you vote Democrat.

[docoftheworld]

hank you for the excellent discussion. The purpose of the post has shifted somewhat, but important conversations have started.

To summarize, tgregorio expresses skepticism about perpetual economic growth, likening it to a cancerous model. Philosophically, this sounds clever but inaccurate. One might argue that, by the same logic, medicine, which aims at perpetual health longevity, should cease attempting to prolong life. The errors in this logic are evident. He criticizes the reliance on continuous resource consumption and technological optimism, suggesting this mindset ignores finite resources and environmental degradation. He also mentions a decline in living standards in Western countries despite economic growth narratives.

I believe tgregorio is overlooking human ingenuity and market-driven solutions to address resource scarcity and environmental challenges. I agree with Rip that government interventions often exacerbate problems rather than solve them, and a free market would better incentivize sustainable practices through competition and innovation without coercive policies. However, the market is seldom free, and unseen interferences are often present. These interferences may fuel the nihilistic views held by tgregorio and others.

Furthermore, the decline in living standards may be attributed to overregulation and economic mismanagement rather than market failures. In other words, tgregorio may be underestimating the market's capacity to adapt and evolve in the face of challenges, relying instead on a pessimistic view of economic growth and resource use.

As an analogy, honey can be described as the essence of a bee or the vomit of a wasp, depending on one's perspective.