AuthorTopic: The First Law of Wealth  (Read 8208 times)

Offline jdwheeler42

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Re: The First Law of Wealth
« Reply #75 on: January 10, 2017, 10:13:39 AM »
To be more clear, and specific, I meant only that RE has not offered any argument against the validity or truth of the concept of either the multiplier effect or the local multiplier effect. He has merely stated that it doesn't really happen, or exist.  If I remember correctly, JDW agreed with RE on this, but no one has yet to put up an argument for or against assertions on this point.
Um, the First and Second Laws of Thermodynamics?  The Law of Conservation of Matter?

You can't create things or energy out of nothing....

There can't be any multiplier effect for material wealth.  Non-material wealth is an entirely different story.
Making pigs fly is easy... that is, of course, after you have built the catapult....

Offline Eddie

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Re: The First Law of Wealth
« Reply #76 on: January 10, 2017, 11:38:46 AM »
There can't be any multiplier effect for material wealth.

The multiplier effect is for dollars. Dollars in a local economy, in particular. This has nothing to do with natural laws. Fiat currency is created from nothing, and more of it is created in a town that has jobs, as opposed to a town that has a moribund, dead economy that's shipped all the jobs overseas.

Does that make more matter or energy? No. But it does accrue benefits to people who live in the town with jobs. It's microeconomics. It doesn't matter (in the short run anyway) that printing more money might debauch the currency. That's a long term macro effect. And as we know from experience, the world's reserve currency has special status that can make it maintain value far beyond what it should.

Why do you think so many towns now go apeshit giving incentives to companies to get them to move there? Because mayors and governors know that a good employment base will result in abundance far above and beyond just the number of jobs the new company happens to bring in.

I cited my references. I have nothing left to prove, and no more to discuss.
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

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Re: The First Law of Wealth
« Reply #77 on: January 10, 2017, 12:18:17 PM »

I cited my references. I have nothing left to prove, and no more to discuss.

The references were sub-par, and you proved nothing.  It's true though that you have nothing left to prove. lol.

Dissecting this into "microeconomic" vs "macroeconomic" points is not relevant to the points made in the article.  I am treating this as a GLOBAL SYSTEM.  What you are doing is saying one place can do well while another is failing.  I got no argument with that one.  It's the same argument as the Dentist Criminal doing well and driving a Jaguar while the Dental Victim lives in squalor and drives a 10 year old Toyota Tercel 4WD Wagon.

It's ZERO SUM, and no money is multiplied here, just transferred from one balance sheet to the other.

RE
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Offline monsta666

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Re: The First Law of Wealth
« Reply #78 on: January 10, 2017, 12:38:06 PM »
Dissecting this into "microeconomic" vs "macroeconomic" points is not relevant to the points made in the article.  I am treating this as a GLOBAL SYSTEM.  What you are doing is saying one place can do well while another is failing.  I got no argument with that one.  It's the same argument as the Dentist Criminal doing well and driving a Jaguar while the Dental Victim lives in squalor and drives a 10 year old Toyota Tercel 4WD Wagon.

It's ZERO SUM, and no money is multiplied here, just transferred from one balance sheet to the other.

While you are in the ball park I don't think you quite got Eddie's point in the last post. When he is talking about a multiplier effect he is really describing how a large company can have a bigger impact on a town than simply adding jobs. By moving into town the company (at least traditionally) hires lots of people on good wages. Since those wages are taxed the town halls coffers swell and the mayor can spend more money building infrastructure such as roads, schools and hospitals. This improved infrastructure and raised incomes increases the number of business opportunities available so you get other secondary businesses like Ma and Pa shops, barbers, real estate developers, plumbers join the fray and what have you. Before you know it that small run down town becomes large and affluent with the amount of wealth/money going around seemingly multiplied!

That is the point. I don't personally agree that the people or the company create the money multiplying here. At least not directly. All that magic happens in the bank which the big company and the mayor has major access to credit. To a lesser extent the employees of the company will get access to credit and anyone who gets credit is getting new money. This is where real money generation happens. Money also comes in through outside investment so people moving into the town bring their money in with them and that increases the total money supply in the region. On a macro level though this inward investment is not money generation either as that is simply transferring money from one region to another.
« Last Edit: January 10, 2017, 12:41:07 PM by monsta666 »

Offline Eddie

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Re: The First Law of Wealth
« Reply #79 on: January 10, 2017, 12:42:29 PM »
The references were sub-par, and you proved nothing.

Your opinion of my references is duly noted. You didn't prove anything either, except that you understand the macroeconomics of resource depletion...which have nothing to do with the subject.
What makes the desert beautiful is that somewhere it hides a well.

Offline JRM

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Re: The First Law of Wealth
« Reply #80 on: January 10, 2017, 03:43:45 PM »
To be more clear, and specific, I meant only that RE has not offered any argument against the validity or truth of the concept of either the multiplier effect or the local multiplier effect. He has merely stated that it doesn't really happen, or exist.  If I remember correctly, JDW agreed with RE on this, but no one has yet to put up an argument for or against assertions on this point.
Um, the First and Second Laws of Thermodynamics?  The Law of Conservation of Matter?

You can't create things or energy out of nothing....

There can't be any multiplier effect for material wealth.  Non-material wealth is an entirely different story.


"Money" doesn't come close to what RE is describing, "riches" is too vague.... "Goods" is probably the closest term in common use, but it doesn't quite capture it, because what RE is talking about include electrons streaming through a wire or methane molecules streaming through a natural gas pipeline, which aren't exactly what are brought to mind by the term "goods".  I feel like there is a term out there that does adequately encompass it, I am actively trying to figure it out.

Me too!

I strongly suspect that the underlying pattern to our various confusions and disagreements here relates to the problem I'm interested in solving, which is the problem of how we may now sincerely employ the word "wealth".  As I said, I believe the traditional concept of wealth is now both obsolete and moribund.

Moribund is probably the better word, given the strict definition of obsolete in most dictionaries. Moribund: "being in the state of dying :  approaching death"  -- Merriam Webster Dictionary.

Obsolete:

1. out of use or practice; not current
2. out of date; unfashionable or outmoded

 "no longer used or needed, usually because something newer and better has replaced it"

American Heritage Dictionary.

If I'm correct, Adam Smith's term "wealth" is currently of little utility in our world, for various reasons.  It is not yet obsolete, in any strict sense, only in that an obviously superior definition has yet to be offered, vetted and widely embraced. If a paradigm shift in economics has begun, which would radically reframe and redefine wealth, that shift is only at its incipient stage, at best.  But that does not, by any means, mean that it isn't underway.

Thomas Kuhn popularized the concept of a "paradigm shift," by which he meant a fundamental change in the basic concepts and experimental practices of a scientific discipline. His classic example was the Copernican Revolution, which was the paradigm shift from the Ptolemaic model of the heavens, which described the cosmos as having Earth stationary at the center of the universe, to the heliocentric model. 

As we all know here, the notion of a "social science" has long been considered dubious by practitioners of the physical sciences, but it is just this which the field of economics is supposed to be.  I any case, if economics is overdue for a paradigm shift, as I suspect, it will bear only vague resemblances to paradigm shifts in cosmology or any other physical science. It would more likely bear resemblances to a paradigm shift in social or cultural anthropology, or philosophy.  The latter, philosophy, may be agreed to have undergone something at least parallel or analogous to a paradigm shift as Kuhn used the term. But it would probably be a more loosely, analogous usage of the phrase.  This would probably be a little less so with regard to various sweeping changes which have occurred in social and cultural anthropology.  An example in that field would be the shift from Anthropology's origins, in which it was a widely held assumption of modern Euro-centric anthropologists that the best vantage point whereby to comprehend non-modern, non-Eurocentric cultures was through the lens of the cultural assumptions of the anthropologist's own cultural setting, time and place.  The result of such anthropology was a lot of biases which the anthropologist or ethnographer was simply unaware of, blind to. He or she could therefore not subject his or her own observations to scrutiny.  You may call these "blind biases".

We are all in a similar situation when we talk about "wealth" from within the blind biases of our culture and it's sense of economy and economics.  But..., but ... many of the blind biases surrounding our popular notion of "wealth" have been drawn out into the light where they may be examined.

One of these -- and there are very many! -- is spoken of by JDW above:  Methane gas and electricity.  In Adam Smith's usage of the word wealth, methane and coal and oil would all be considered an obvious form of wealth.  We, today, cannot be so sanguine.  For to utilize such "wealth" here is to reduce wealth over there.  Same could be said for industrial fertilizer, jet planes, automobiles, military equipment and education for industrialism.  On and on and on... ad, almost infinitem.  The associated "externalities" now have a cost far and above any benefit which we could sincerely name "wealth".

However!!  There are genuine forms of material wealth!!

This point is crucial.  The science of ecology, which is in fact a physical and not a social science -- for the most part -- explains the fundamental principles of such wealth.

Social sciences further flesh them out, and so on and so forth, and this is my general point.  But the entire scope of the significance of all I'm saying here is not yet gathered together into one place, such as Nicolaus Copernicus’s De revolutionibus orbium coelestium.

The implications of all of this are showing up whenever intelligent people discuss wealth.  The term is in critical disarray, and signals a fall into the moribund.  But just because an idea or theory is no longer proving useful or explanatory is not also to presume that a general theory of wealth is anywhere near maturity.  There will likely be a time of confusion and ignorance, even of foolishness, as we learn gradually how to talk again about such matters.  In the mean time, we will not find much common agreement, other than to discover together that something is terribly wrong, disjointed, confusing and broken about how we HAVE been talking about such matters.

Our difficulties in such discussions spring largely from the fracturing of the historical "natural philosophy" and philosophy more generally, into various university departments and their associated disciplines, each with a somewhat arcane language and discourse of their own.  What I seek to do is to reverse some of this, not to eliminate these categories but to see how what we may call the physics and chemistry of wealth may relate to the philosophy (e.g., ethics) and social science (e.g., psychology), etc.   

I realized a while ago that what is required for this paradigm shift to continue to evolve is what may be called a General Theory of Well-being, which may be said to be a subset of ethics and aesthetics.  But it would need to address things just as observably real as the motion of the planets or the first and second laws of thermodynamics!  Gawd help us that anyone should bring up  C. P. Snow's "Two Cultures," but I suspect it may be obliquely relevant, nonetheless.
« Last Edit: January 10, 2017, 03:56:02 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

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Re: The First Law of Wealth
« Reply #81 on: January 10, 2017, 03:46:48 PM »
Furthermore, the conceptual category "material wealth" is an abstraction, meaning it has no concrete existence in the real world. It is a very, very convincing abstraction which we take for granted only because we wrongly imagine we can draw a nice, clean, straightforward line encompassing that concept and segregating it from "non-material wealth". 
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

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Re: The First Law of Wealth
« Reply #82 on: January 10, 2017, 03:59:37 PM »
The references were sub-par, and you proved nothing.

Your opinion of my references is duly noted. You didn't prove anything either, except that you understand the macroeconomics of resource depletion...which have nothing to do with the subject.

Is it just me, or did RE fail to explain or argue for Eddie's references being "sub par"?
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

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Re: The First Law of Wealth
« Reply #83 on: January 10, 2017, 04:46:54 PM »
I strongly suspect that the underlying pattern to our various confusions and disagreements here relates to the problem I'm interested in solving, which is the problem of how we may now sincerely employ the word "wealth".

If this is the problem you are concerned with, you should write a blog about it and we can discuss it in another thread.  It's not what my article was about.

Stop trying to hijack the thread.

RE
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Offline RE

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Re: The First Law of Wealth
« Reply #84 on: January 10, 2017, 04:49:14 PM »
The references were sub-par, and you proved nothing.

Your opinion of my references is duly noted. You didn't prove anything either, except that you understand the macroeconomics of resource depletion...which have nothing to do with the subject.

Is it just me, or did RE fail to explain or argue for Eddie's references being "sub par"?

I didn't explain it.  It's JMHO.

RE
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Offline JRM

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Re: The First Law of Wealth
« Reply #85 on: January 10, 2017, 05:00:21 PM »
I strongly suspect that the underlying pattern to our various confusions and disagreements here relates to the problem I'm interested in solving, which is the problem of how we may now sincerely employ the word "wealth".

If this is the problem you are concerned with, you should write a blog about it and we can discuss it in another thread.  It's not what my article was about.

Stop trying to hijack the thread.

RE

I apologize. I didn't mean to hijack the thread.   

I'm not sure if or when I may write a blog essay on the topic.  So, in the mean time, I'll either find an appropriate existing thread for my tangent or create a new one. 

Everyone in here is generally prone to chit-chat and tangents within threads, and I've rarely (perhaps never) seen a call for staying on topic.  So I thought it was okay to range widely.  Again, I apologize.
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

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Re: The First Law of Wealth
« Reply #86 on: January 10, 2017, 05:03:04 PM »
I strongly suspect that the underlying pattern to our various confusions and disagreements here relates to the problem I'm interested in solving, which is the problem of how we may now sincerely employ the word "wealth".

If this is the problem you are concerned with, you should write a blog about it and we can discuss it in another thread.  It's not what my article was about.

Stop trying to hijack the thread.

RE

I apologize. I didn't mean to hijack the thread.   

I'm not sure if or when I may write a blog essay on the topic.  So, in the mean time, I'll either find an appropriate existing thread for my tangent or create a new one. 

Everyone in here is generally prone to chit-chat and tangents within threads, and I've rarely (perhaps never) seen a call for staying on topic.  So I thought it was okay to range widely.  Again, I apologize.

No apology necessary.

This topic and your spin on it seems to be very important to you.  I am trying to motivate you to write a blog about it so we can discuss it independently.

RE
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Offline JRM

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Re: The First Law of Wealth
« Reply #87 on: January 10, 2017, 05:08:57 PM »
I'll eventually write that blog.

Meanwhile, any further discussion which continues my tangent here can occur in a new thread I'll post in a moment. I may as well title my blog post by the same title.  It will be "Getting a Handle on Wealth".  I'll find a good place for it.

Thanks for your patience and understanding.
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 azozeo

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Re: The First Law of Wealth
« Reply #88 on: February 19, 2017, 12:49:47 PM »
2017-02-17 - Big US banks to push for easing of money laundering rules:
http://www.reuters.com/article/us-usa-banks-moneylaundering-exclusive-idUSKBN15V1E9
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

 

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