AuthorTopic: The First Law of Wealth  (Read 8113 times)

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #15 on: January 09, 2017, 12:53:23 PM »
I sure as hell know what I'd prefer.

My partner and I grew up in homes in which it never occurred to us to lock our doors. Why would we?


(Actually, some of the worst threats were inside, not outside, those doors.)
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #16 on: January 09, 2017, 12:58:42 PM »
Where is the "Wealth Creation" there?

Listen carefully. I'm tired of arguing.

The wealth creation is the money that passes through my hands, to my employees, who need jobs to pay rent and eat. And the money I spend on expensive dinners and wine and good tips for waiters.

 It's the money we spend, which passing through successive hands, has a multiplier effect on the health of the general economy here locally. This is a real phenomenon. The problem is that when the economy is shrinking, then people don't spend money in my office, and all that drops down to nothing.

http://www.economicsonline.co.uk/Managing_the_economy/The_multiplier_effect.html

I want Eddie to know that my words about wealth not being reducible to money are by no means meant to detract from his excellent, valid and true statements in the above quote.

This is what makes true wealth COMPLEX. It can very much relate to money.  But it can never reduce to money.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 39178
    • View Profile
Re: The First Law of Wealth
« Reply #17 on: January 09, 2017, 01:02:54 PM »
This is what makes true wealth COMPLEX. It can very much relate to money.  But it can never reduce to money.

As I mentioned before, this is strictly an argument about MATERIAL wealth, and has nothing to do with Spiritual or Emotional Wealth.

RE
Save As Many As You Can

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #18 on: January 09, 2017, 01:38:55 PM »
This is what makes true wealth COMPLEX. It can very much relate to money.  But it can never reduce to money.

As I mentioned before, this is strictly an argument about MATERIAL wealth, and has nothing to do with Spiritual or Emotional Wealth.

RE

You have just made a statement which can only make any sense at all through the wildly distorting cognitive filter of a paradigm (in economics) which is now fully obsolete.   The problem is that this paradigm remains in use by people calling themselves "masters of economics," which is at the very root of the obsolescence of current politics.  So the masters of economics and politics, both, are obsolete -- for the same reason.  Neither know how to manage wealth because neither understand what constitutes wealth.

The hyperindustrial system destroys wealth in proportion to its "production" of wealth.  The "wealthier" folks become within the paradigm of hyperindustrialism, the less wealthy we ALL become. 

Wealth is NEVER simple.  Only pseudo-wealth is simple.  True wealth is NEVER merely "material". It is always social, ecological, emotional, spiritual.... It always factors in all of the variables which constitute well-being.  In other words, wealth is never abstract; it  is always concrete. Its concreteness does not manifest in the hands of individual owners, or families, or towns, cities ... Wealth is intrinsically embedded in community -- and it's ultimate context is Earth's biosphere itself, which itself is a community.

Wealth inheres in community.  Community exists on many nested scales.  All scales need our care.  Failure to care for wealth on any of its scales will result in the erosion of wealth on all scales.  This is as true with "material wealth" as classically misunderstood as it is in other arenas in which wealth can be understood.   

All pseudo-wealth is fragile.  All true wealth is resilient.
« Last Edit: January 09, 2017, 01:42:29 PM by JRM »
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #19 on: January 09, 2017, 01:45:16 PM »
I do not believe any amount of money can ever be properly understood as wealth. On this basis I reject the whole field of economics as obsolete.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 39178
    • View Profile
Re: The First Law of Wealth
« Reply #20 on: January 09, 2017, 02:01:42 PM »
This is what makes true wealth COMPLEX. It can very much relate to money.  But it can never reduce to money.

As I mentioned before, this is strictly an argument about MATERIAL wealth, and has nothing to do with Spiritual or Emotional Wealth.

RE

You have just made a statement which can only make any sense at all through the wildly distorting cognitive filter of a paradigm (in economics) which is now fully obsolete.   The problem is that this paradigm remains in use by people calling themselves "masters of economics," which is at the very root of the obsolescence of current politics.  So the masters of economics and politics, both, are obsolete -- for the same reason.  Neither know how to manage wealth because neither understand what constitutes wealth.

The hyperindustrial system destroys wealth in proportion to its "production" of wealth.  The "wealthier" folks become within the paradigm of hyperindustrialism, the less wealthy we ALL become. 

Wealth is NEVER simple.  Only pseudo-wealth is simple.  True wealth is NEVER merely "material". It is always social, ecological, emotional, spiritual.... It always factors in all of the variables which constitute well-being.  In other words, wealth is never abstract; it  is always concrete. Its concreteness does not manifest in the hands of individual owners, or families, or towns, cities ... Wealth is intrinsically embedded in community -- and it's ultimate context is Earth's biosphere itself, which itself is a community.

Wealth inheres in community.  Community exists on many nested scales.  All scales need our care.  Failure to care for wealth on any of its scales will result in the erosion of wealth on all scales.  This is as true with "material wealth" as classically misunderstood as it is in other arenas in which wealth can be understood.   

All pseudo-wealth is fragile.  All true wealth is resilient.

This may all be true, but it's not the issue being addressed here, which is that of material wealth.  Basically, having enough money to eat and have a roof over your head.  If you cannot do that, all the rest of the issues are a moot point.

RE
Save As Many As You Can

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 17502
    • View Profile
Re: The First Law of Wealthi ALREADY DEMONSTRA
« Reply #21 on: January 09, 2017, 02:16:02 PM »
Where is the "Wealth Creation" there?

Listen carefully. I'm tired of arguing.

LOL.  Because you are LOSING.  BIG TIME.  ;D

I already demonstrated that it is a Zero Sum Game because we live in a Finite World at the Limits to Growth.

All you do is create a conduit that sends some money to your employees and  LOT of money your way.  There is no Wealth Creation in this conduit scheme.

RE

As long as there is some resource left, including being able to grow food and create any kind of valuable object (something as simple as a blanket), then the potential exists for a wealth multiplier in an economy, no matter how large or small. You obviously don't want to accept that.

Look, once all resources are used up, nobody is pumping oil, and nobody can grow food, THEN your macro argument will actually apply at the local level.  At that point however, we'll be dead already, or pretty close.
What makes the desert beautiful is that somewhere it hides a well.

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #22 on: January 09, 2017, 02:19:30 PM »
A lot of cybernetic ink has been spilled in here which seeks to address one aspect of the problem, "How can wealth be stored?" Can it best be stored (or saved) as gold, as silver, as real estate, as savings bonds, as fiat currency.... 

The consensus has been that even "material wealth" (an abstraction) is intrinsically fragile, and the discussion has been around "How can we make this material wealth (our savings) less fragile?

I contend that ultimately it cannot be stored up and saved at all, as if wealth were a thing, an object, rather than a process and a relation -- or a process-relation. The ONTOLOGY of wealth (it's being) has been misunderstood in so fundamental a way that it generates confusion and illusion when we fail to seek wealth where it lives -- including savings.  One can save gold, silver, real estate -- and it is fragile there. Always. In many diverse ways, of course. But fragile nevertheless.

It was obvious when the recent real estate bubble popped, sending the global financial and economic system into collapse trajectory.  Bubble gum and bailing wire gave that system a temporary, partial fix, yes.  But other bubbles will appear -- and have -- and will grow....  This is all symptom of a basic misunderstanding, and it is the most basic misunderstanding which is my target.

Should the familiar system be propped up a while longer while the basic misunderstanding continues, the next rupture in the system may not be yet another burst financial bubble, it may appear as a fundamental rupture of the whole fabric of society which allows us to function as communities in the first place.  In such a case, no amount of silver, gold, money or property will be safe.

Nothing other than a paradigm shift in what we take to be wealth can salvage this situation.   

If you have a pile of gold and the whole system which we call "society" comes undone, the gold will not have held or saved any wealth, in any sense of the word at all. It will be pretty to look at as long as you can feed yourself.  But it will be mighty tricky to feed yourself unless you have created real wealth as resilient community and a place within that in which you care for others who, in turn, care for you.
« Last Edit: January 09, 2017, 02:22:32 PM by JRM »
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 17502
    • View Profile
Re: The First Law of Wealth
« Reply #23 on: January 09, 2017, 02:30:14 PM »
If there's no food to buy, gold won't be worth much. I fully understand that, which is why I'm trying to learn to be food resilient.

We have one system now, one that's breaking down. Someday it will fail catastrophically, I'm sure, and there will be famine, hunger, disease, civil unrest, and all that goes with full-on collapse. But....we are NOT there. When will it happen? In a week or a year, or maybe five years. Perhaps ten or even twenty.

Anyone who says they know is guessing. Nobody knows and nobody can know.

Until then, life is a lot easier with a little money to spend.
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 39178
    • View Profile
Re: The First Law of Wealthi ALREADY DEMONSTRA
« Reply #24 on: January 09, 2017, 02:39:30 PM »
the potential exists for a wealth multiplier in an economy, no matter how large or small. You obviously don't want to accept that.
i

There is no "wealth multiplier" chief.  There is only wealth subtraction and addition.

What gets subtracted from my bank account when I got a dental problem gets added to yours when I come to you for help on the issue.  Under DURESS,  since I am in PAIN and unless I fly to Mejico, I got no CHOICE but to pay what you charge. This is a violation of Tort Law and makes dentists all CRIMINALS!

This is a Zero Sum Game.  The money the dentist makes is money stolen from the victims he rounds up.  There is no Wealth Creation here at all, only theft that is legalized.

I am no longer a victim of these criminals, and so have no skin in the game anymore. There are no teeth left for these criminals to destroy. I tell you the truth here, based on a lifetime of experience.

RE
Save As Many As You Can

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 17502
    • View Profile
Re: The First Law of Wealthi ALREADY DEMONSTRA
« Reply #25 on: January 09, 2017, 02:57:05 PM »
the potential exists for a wealth multiplier in an economy, no matter how large or small. You obviously don't want to accept that.
i

There is no "wealth multiplier" chief.  There is only wealth subtraction and addition.

What gets subtracted from my bank account when I got a dental problem gets added to yours when I come to you for help on the issue.  Under DURESS,  since I am in PAIN and unless I fly to Mejico, I got no CHOICE but to pay what you charge. This is a violation of Tort Law and makes dentists all CRIMINALS!

This is a Zero Sum Game.  The money the dentist makes is money stolen from the victims he rounds up.  There is no Wealth Creation here at all, only theft that is legalized.

I am no longer a victim of these criminals, and so have no skin in the game anymore. There are no teeth left for these criminals to destroy. I tell you the truth here, based on a lifetime of experience.

RE

I hear you saying it, but that don't make it so...Chief.

Theory of Local Multiplier Effect[edit]
In discussing local multipliers, regional economists focus on differences in job creation in the tradable and non-tradable sectors of the economy. Whenever a new job is created, there is a chance that additional jobs may also be created via increased demand for local goods and services.[2] Some economists argue that jobs in the tradable sector have a much higher local multiplier effect. This is due to the tradable sector market existing beyond the borders of a local region. This larger market allows the tradable sector to generate more revenue, have higher salaries, and increase in size independent of the local economic climate.

The size of the multiplier effect on the non-tradable sector is determined by the interplay of three factors: consumer preference for non-tradables, the types of jobs created, and the elasticity of local labor and housing supply. Consumer preference refers to certain non-tradable goods and services requiring more workers to provide them than others. If the tradable industry has high demand for a type of non-tradable good that needs more workers to be produced then the multiplier will be higher. Types of jobs created refers to the fact that certain job categories generally have higher pay than others. Higher pay results in larger amounts of disposable income that can be spent on the local economy. This results in a higher multiplier. Elasticity of local labor and housing supply refers to that the fact whenever there is an influx of new people with higher than average wages to an area, average prices will rise. This can in turn push out some residents with below average wages into lower cost areas. This results in a lower multiplier.[3]

Economist also argue that certain industries have stronger agglomeration economies than other industries which can magnify the strength of the multiplier effect.[4] Further, the magnitude is affected by local regional and political factors such as the unemployment levels[5] and level of government intervention in the economy and labor market.[6]



Research[edit]
United States[edit]
Several scholars have found strong evidence for the presence of the local multiplier effect. Within tradable industries, Enrico Moretti discovered that, for each additional skilled job created, 2.5 jobs were also generated in the local non-tradable goods and services sectors, and an additional unskilled job created 1 job in the local non-tradable sector.[10] Highly skilled sectors such as technology have the highest multiplier effect with five non-tradable jobs for each technology job. Moretti cites the example of Apple Computers which directly employs only 13,000 workers but generates 60,000 additional service jobs in the area. Of those 60,000, 36,000 are unskilled, such as restaurant or retail workers, while 24,000 are skilled jobs such as doctors or lawyers.[11] Other academics have taken issue with the large magnitude of the local multiplier effect claimed by Moretti. One study reanalyzes the claim of Enrico Moretti that five non-tradable jobs are created for each highly skilled tradable job. Using a modified version of Moretti’s method it found that the true multiplier effect was only 1.02 non-tradable jobs created. Furthermore the study finds that there is no difference on the local multiplier effect between whether the tradable job is skilled or unskilled.[12]

Sweden[edit]
A comparison study of local multiplier effects in Sweden revealed similar multiplier effects as those found in the United States. The study found that while sizable effects did occur, on average, they were smaller than the effects found in the United States. For Sweden, adding a high-skilled job to the traded sector resulted in the creation of 3 additional jobs in the non-traded sector, as opposed to the 5 additional jobs created in the United States. The authors argue the difference is due to the difference in local factors. For example, Sweden’s relatively smaller wage difference between skilled and unskilled workers negatively impacts the overall multiplier effect.[13]

Italy[edit]
Another study conducted in Italy using the same methodology as Morretti concluded that, in Italy, there was no evidence of a local multiplier effect from the creation of tradable jobs on the rest of the local economy. The study found the local multiplier effect to be zero and occasionally negative in all regions of Italy. In explaining this discrepancy, the authors points to excessive government regulation in the non-tradable sector, the government’s role in wage setting, and barriers to labor mobility.[14]



https://en.wikipedia.org/wiki/Local_multiplier_effect
What makes the desert beautiful is that somewhere it hides a well.

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #26 on: January 09, 2017, 02:59:48 PM »
But it will be mighty tricky to feed yourself unless you have created real wealth as resilient community and a place within that in which you care for others who, in turn, care for you.

This means we need to take good care of our dentists!  They have worked hard and long to learn their trade / skills.  And our dentists are sometimes also the owners of the businesses which also employ other dentists. This is also their contribution to ourselves in a community context. 

We've all been told that a "free market" will result in appropriate competition ... which should result in some kind of "fair market value" for everything, including access to dental care.  But this is obviously not working as we had been told it would. (Many folks cannot afford the dental assistance they require.)  THAT'S THE REAL ISSUE IN THIS THREAD, I think. But the dentists -- and owners of dentist offices -- are not to be blamed for the failure of market economies to do what they "should do".  That responsibility belongs to all of us!  And the result should not be for us to withhold our respect, appreciation and care for dentists in our community / communities.

We're in a bad way because The Market has failed to do what it was supposed to do -- not just with dentistry, but with EVERYTHING. 

The Market never should have been handed that task.  It never could have done what we tasked it to do.  "If the only tool you have is a hammer," said   
Maslow, "you will tend to treat everything as though it were a nail" (paraphrase?). 

In the modern world, the field of politics was once expected to serve as another tool, with which we were supposed to manage our collective affairs.  But a subset of the field of The Market (corporations, mostly) threw a monkey wrench into the workings of the total system which is sometimes called the "political economy".  It was a coup. The corporations gave birth to a child, which I call hyperindustrialism.  That child grew up big and strong and is now the embodiment of the whole "civilization" and culture.  It tells us what to think and how to think (its 'education' branch and its propaganda machinery...), it decides what constitutes "legitimate politics".... It stamps the Universal Product Code on the backs of our necks. http://tattoo-journal.com/wp-content/uploads/2015/08/barcode-tattoo-18-650x867.jpg  It "wants" us to see itself in our mirrors.

Even the CEOs don't control the corporations, which sustain and fuel hyperindustrialism.  If a CEO were to seek to retool the organization to serve real wealth, that CEO will either be fired or will have a "private jet accident". 

What controls the CEO, the corporations, governments, the world... is, on one level, an ideology.  On another level it is a fundamental misunderstanding of who and what we are as human beings.  These two are deeply intertwined, and comprise a culture.  It has been called a "death culture," because it does not seem to serve life so much as death.  Even the living are barely alive, more often than not. 

The illusions which nourish and support the "death culture" are thick, pervasive, almost ubiquitous.  They almost can't be pointed at directly. It's almost like a finger pointing at the moon now.  "Yeah, I see the moon. So what?"

"But do you see the question the moon asks?"

     "Nonsense, a moon cannot ask a question!"

"But can you?"

     "Whatever could you possibly mean? Have you gone mad?"

"Who is asking this question?"
« Last Edit: January 09, 2017, 03:08:25 PM by JRM »
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 39178
    • View Profile
Money Multiplier Bullshit
« Reply #27 on: January 09, 2017, 03:17:33 PM »

I hear you saying it, but that don't make it so...Chief.

Oh Good Grief Chief:icon_mrgreen:  Use some CFS for crying out loud!  ::)

Does Multiplying up Money also multiply up the Oil in the ground?  Does multiplying money make desert land any more productive of food?

The "Money Multiplier" effect is a complete bullshit concept of modern economics. If you believe in Gold as Money, it's the equivalent of saying you could multiply up Gold infinitely.  YOU CANNOT DO THIS!  You can create infinite debt money, paper or digibit, but you CANNOT multiply up wealth indefinitely.  Eventually you run up against the LIMITS TO GROWTH!

Once that occurs, everything that you take from the environment is something lost from someone else.  There is no infinite "multiplier" here.

RE
Save As Many As You Can

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: The First Law of Wealth
« Reply #28 on: January 09, 2017, 03:18:12 PM »
We have one system now, one that's breaking down. Someday it will fail catastrophically, I'm sure, and there will be famine, hunger, disease, civil unrest, and all that goes with full-on collapse. But....we are NOT there. When will it happen? In a week or a year, or maybe five years. Perhaps ten or even twenty.

We can, and should, be shoring up some aspects of that system now, while allowing yet other aspects of that system to collapse fully.  Shoring up means "encouraging and supporting the resilience of".  Doing so could potentially buy us enough time to leap out of one system, and its attendant paradigm, into another system and it's attendant paradigm.  The systems would be mixed for a while in transition.  And that's fine. It's as it should be.

Wen a caterpillar gradually transitions into a butterfly the caterpillar is slowly consumed by the butterfly.  The alchemical vessel is a chrysalis. 

We should become a chrysalis.  The time is ripe.

« Last Edit: January 09, 2017, 03:20:43 PM by JRM »
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: Money Multiplier Bullshit
« Reply #29 on: January 09, 2017, 03:25:57 PM »

I hear you saying it, but that don't make it so...Chief.

Oh Good Grief Chief:icon_mrgreen:  Use some CFS for crying out loud!  ::)

Does Multiplying up Money also multiply up the Oil in the ground?  Does multiplying money make desert land any more productive of food?

The "Money Multiplier" effect is a complete bullshit concept of modern economics. If you believe in Gold as Money, it's the equivalent of saying you could multiply up Gold infinitely.  YOU CANNOT DO THIS!  You can create infinite debt money, paper or digibit, but you CANNOT multiply up wealth indefinitely.  Eventually you run up against the LIMITS TO GROWTH!

Once that occurs, everything that you take from the environment is something lost from someone else.  There is no infinite "multiplier" here.

RE

The multiplier effect is real enough.  Eddie is right about that. The evidence for it is abundant and sufficient -- especially on the scale of small local communities.

The multiplier effect is also subject to other factors, such as limits to growth -- which, in today's world situation, is best understood on the global scale, which is the scale of our current predatory capitalist system.

Complex systems tend to have multiple, convergent and intertwined -- often (not always) countervailing -- forces.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

 

Related Topics

  Subject / Started by Replies Last post
The Wealth Grab

Started by RE « 1 2 3 4 » Economics

48 Replies
7353 Views
Last post July 12, 2014, 04:27:08 PM
by RE
63 Replies
9352 Views
Last post February 11, 2017, 03:12:29 PM
by John of Wallan
0 Replies
343 Views
Last post October 31, 2018, 10:48:42 AM
by azozeo