Author Topic: Does economics serve us well?  (Read 10495 times)

TheDrake

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Does economics serve us well?
« on: June 04, 2016, 07:32:50 PM »
The three largest companies are Alphabet, Apple, and Microsoft. While they have done tremendous things to improve productivity and happiness, what could that money do in the hands of other companies or organizations?

Utilitarianism says we should judge by the maximum happiness for all humans - does that dollar make more people better off than that dollar in the hands of someone else?

These technological companies often reduce job opportunity by making old skills obsolete. At the same time they create new opportunities.

There is little question that they create value, but how much? Did iTunes really make people happier in terms of utility? Google Maps? Outlook.com?

NobleHunter

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Re: Does economics serve us well?
« Reply #1 on: June 04, 2016, 08:47:57 PM »
Google probably comes fairly close given how much their ads and related services support the structure of the internet. Likewise, Microsoft (assuming one assigns a high value to standard and ubiquitous operating systems), they were pivotal in establishing how we use computers. Though how much money do they "deserve" to have now based on past accomplishments might be trickier to judge.

Apple is trickier since they've tended not to do something new but rather take something that was new and do it better (for certain values of better). They're also sitting on a massive pile of money which is doing precious little. That's definitely one way our economics and/or tax policy doesn't serve us. There's a lot of capital that's stagnant because its owners believe conserving it for the future will be more profitable than spending it now. That might be true, but it doesn't serve the needs of people who could benefit from the theoretically lower profit investments now.

TheDeamon

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Re: Does economics serve us well?
« Reply #2 on: June 04, 2016, 09:04:50 PM »
I'm not sure what your question actually is?

Seeing it consolidate in such a way is something I suspect is a net negative all things considered. And it doesn't even have to be companies as large as those three to be a "problem." Although overall I'd say they're less damaging than say something like online retailers such as Amazon, and Newegg.  WalMart also exists in something of space unto itself, but there is a list of other National Chains that have been destructive/disruptive to the 20th Century Economic model(and earlier), largely thanks to technology and telecommunications.

But then, some of this perspective is during a "transition" phase where the proverbial buggy whip manufacturers and blacksmiths are having to find new lines of work as the horseless carriage takes over the carriage and wagon markets.

A lot of skilled labor has been obsoleted, the computer did away with vast office pools full of typists who would transcribe handwritten documents into typewritten documents which may have then been typed out again multiple times after that to make additional copies.  (If it wasn't sent off to a print shop, and I don't mean Kinko's) The mimeograph(/ditto) machine, and ultimately the Xerox Photocopier helped further eliminate a lot of those jobs.

Electronics now reaching the point where the consumer will accept electronic manuals rather than print manuals also helps further diminish the market for the big (professional) printing outfits.

Telecommunications and electronic inventory control also did away with the need for a lot of skilled and specialized oversight staff being on site. Now you can have them work out of a central office and oversee 2 or 3 stores instead of just one. This becomes even more of the case when you have multiple small "mom and pop" type operations close up shop when operations like Wal-Mart, Home Depot, and a few others move into town as they cannot compete. It's a great deal for consumers, lousy deal for the local economies, as that much less money stays in the local economy.

Also in the mix, you have the online retailers such as Amazon, killing off local bookstores of just about every stripe, just as Walden Books, Borders, and Barnes and Nobel had just about finishing killing off most of the mom and pop shops in most mid-sized communities. NewEgg and some others(in particular pre-built systems like Dell, Gateway, Toshiba, et al)  helped kill off or otherwise greatly curtail the small and sometimes regional Computer store chains that had popped up during the 1980's. They even managed to kill off a couple National Chains that came into prominence during the 90's. (CompUSA anyone? BestBuy is still around, kind of, but it is a shadow of what it was in 2003)

Itunes, when paired with Wal-Mart, helped kill off most record/music stores, many of which had been around since the 1950's if not earlier, but once entirely digital versions became available, or even online ordering of physical copies, it was too much for most chains, never mind the Family owned music store.

The amazing one to watch was the Explosion and then prompt implosion of the Video Rental market. From the family business, to the national chains, where the carcases of old Blockbuster Video and Hollywood Video stores are legion across the United States. Redbox and Netflix slaughtered them all without mercy. The only thing that makes that one "worse" is that since there is little to no local manpower involved in those operations, once that money is spent, it's gone, aside from whatever kickback Redbox may give to the point of sale(Netflix and the other online only operations, there isn't even that).

Basically a lot of communities have developed a large slew of economic vampires that are much more effective at what they do over the past couple decades. The challenge is either finding ways to offset the vampires, such as the person who will never work at Blockbuster is now available for work elsewhere, wherever that may be. A lot of financial activity that used to rattle around within a community for a good long while before working its way out of the system now has no shortage of ways to be gone in one click, c/o the "vampires." While Wal-mart and other chains gives you a lesser order of vampirism as at least some of the money will stick around, you still have to pay for local staff after all(even if they are finding new ways to reduce even that), but the ratio still remains rather low.

TheDeamon

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Re: Does economics serve us well?
« Reply #3 on: June 04, 2016, 09:20:22 PM »
Google probably comes fairly close given how much their ads and related services support the structure of the internet. Likewise, Microsoft (assuming one assigns a high value to standard and ubiquitous operating systems), they were pivotal in establishing how we use computers. Though how much money do they "deserve" to have now based on past accomplishments might be trickier to judge.

That could be argued. Microsoft is a lot like Apple in this respect. They didn't invent or create practically anything that they did. They just happened to be in the right places at the right time, with the right knowledge of what was being done by others to leverage it into a workable product that saw large scale commercial success. I wouldn't even necessarily say they(MS) did it "better" they just lucked into IBM turning the keys over to the money printing press(IBM couldn't see a way to make money with it), and did a very good job of managing and leveraging what they were given.

IBM, Xerox, Apple, and a number of other entities can all assert getting there first on a number of fronts, and various others can claim the "better" option at various times. MS just happened to be the first one to consider the PC market to be a viable Business platform, something IBM missed as they opted to focus on hardware and mainframe systems instead, while Apple went for education and the arts/music/video.

MS just made a good bet that for many, if not most people, their first exposure to a PC was going to be in the workplace. As people even then tended to take their work home with them. That meant that when it came time to buy a personal computer, it wasn't the system Johnny worked with at school that decided which one was purchased. It often was which system was compatible with the computers at work which decided the purchase in most households through the 1980's. The 90's is another matter, buy by then commercial development efforts for many markets was decided by size of the install base, and MS was the hands down leader in the Home Personal Computer market by then.
« Last Edit: June 04, 2016, 09:22:33 PM by TheDeamon »

AI Wessex

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Re: Does economics serve us well?
« Reply #4 on: June 05, 2016, 04:10:59 AM »
Quote
There is little question that they create value, but how much? Did iTunes really make people happier in terms of utility? Google Maps? Outlook.com?
Interesting that you equate "value" with happiness in this proposition.  IMO that's what is wrong about our economic system.  All of those things are free services that we spend time using to help us go places and/or buy things.  But turning the question around, how much does it cost to get to the place in our daily lives where those things matter and what else would we or should we be doing with the effort, time and money it took to get there?  At what point does a habit based on convenience become an addiction and does feeding an addiction provide "value" or just satisfy an urge?
« Last Edit: June 05, 2016, 04:13:04 AM by AI Wessex »

TheDrake

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Re: Does economics serve us well?
« Reply #5 on: June 05, 2016, 03:35:06 PM »
Making the Utilitarian assumption, all those things TheDeamon talked about would be weighed according to the "needs of the many". Some people wind up out of work, a very large impact on few individuals. Many more people benefit, but more slightly.

Net productivity goes up, like in the case of google maps where people printing maps are out of luck, but people trying to reach a destination get there five minutes earlier on average. Making the assumption that arriving at your destination sooner and not getting lost makes a person happier.

Among the questions are - if the economic system values iPods more than vaccinations, does this mean that there is something economically broken? If someone chooses to pay a wireless bill before buying insurance or clothes, is it because they think that it is more valuable?


AI Wessex

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Re: Does economics serve us well?
« Reply #6 on: June 05, 2016, 04:18:10 PM »
I really don't know.  One could argue that the Luddites were right, after all.  Jefferson opposed Hamilton mainly because he thought the "purpose" of the government of the new country was to encourage it to become a libertarian agrarian paradise but Hamilton wanted centralized government in order to develop business and national security.  Nobody is right, except that if you take something away from somebody who depends on it, they'll scream that you were wrong to do it even if they end up with different things that serve them in other ways equally well.

I use Google Maps and sometimes it takes me in the wrong direction or to a slower route. A paper map never does that, so even if I save 5 minutes with it on average it might have me drive into a lake and drown one out of a hundred times.   So far so good.

Greg Davidson

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Re: Does economics serve us well?
« Reply #7 on: June 05, 2016, 06:23:31 PM »
At its best, economics should be the study of how business and consumptions decisions are made and interact, not a particular set of outcomes created by a particular economic system.

TheDeamon

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Re: Does economics serve us well?
« Reply #8 on: June 05, 2016, 06:48:23 PM »
At its best, economics should be the study of how business and consumptions decisions are made and interact, not a particular set of outcomes created by a particular economic system.

But then we're not really talking economics anymore, we're starting to move into the realm of the Masters of Business Administration(MBA) turf, and that group is one I'd like see get a wholesale beat down. If they can't quantify it, it doesn't exist, and doesn't need to be considered. Which is resulting in a lot of very poor long-term decisions being made in the interest of short to medium term gains to their respective bottom lines.

Cross-training is great and all, but when your organization ceases to have specialists, and is comprised entirely of generalists, you're going to start losing things you cannot anticipate. Your organization also will start to become increasingly dependent on outside contractors to come in and do that "specialized" work for you as a consequence. Now there may be a marginal utility call to be made on the difference of keeping the specialist on staff versus having him on a retainer as an outside contractor, but that is stuff that is getting missed.

This becomes particularly hazardous when you start trying to applying MBA principles to increasingly complex systems. In which case you need specialists who have specialized knowledge specific to that complex system, and realize that blueprints and plans are not fully consistent with reality, if they actually documented everything in the first place(and documents were being kept up to date).  No amalgam of specialists on retainer with detailed knowledge of specific pieces of a system is going to accomplish for you what a small team of people who live and breath that system will be able to achieve.

TheDeamon

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Re: Does economics serve us well?
« Reply #9 on: June 05, 2016, 07:18:02 PM »
Making the Utilitarian assumption, all those things TheDeamon talked about would be weighed according to the "needs of the many". Some people wind up out of work, a very large impact on few individuals. Many more people benefit, but more slightly.

Net productivity goes up, like in the case of google maps where people printing maps are out of luck, but people trying to reach a destination get there five minutes earlier on average. Making the assumption that arriving at your destination sooner and not getting lost makes a person happier.

The people making maps are still around, they're just not as numerous as they were before. Rand McNally is still kicking, most of their trade may be in more specialized niches, ones that Google hasn't moved into yet, but they're still around. Delorme still has a presence around as well from what I've seen. Google also doesn't make standalone GPS devices, yes, there are limited provisions for a cell phone to be used in such a manner, but the actual GPS device is more reliable still in terms of actual directions. Now for avoiding traffic in near real-time, well, Google is probably a better bet for that, but if you're somewhere that traffic is a problem, lack of cell phone coverage probably isn't a typical consideration for you.

As to the other things, it isn't so much "economics" that brought on a lot of the changes, it was "technology" that brought on the changes. Economics just helps explain the mechanisms by which those changes start to roll out.

A more useful discussion would probably be in regards to education and what model(s) should be used going forward, I'm generally inclined to say that the prevalent model that's been in use since the 19th Century is probably nearing the end of its useful life expectancy. What form it ultimately takes is still a giant question mark, but I do think Technology is going to become increasingly involved, and I doubt the K-12 + 4 or more years of college model that exists currently for most tech jobs is going to continue. The problem is both the University systems, and the K-12 systems are tightly interlinked together for obvious reasons, and both have powerful lobbies working to protect their status quo. How that nut ultimately gets cracked, and what takes its place afterwords is going to be something of interest to see happen.

That may ultimately be a post-singularity event, but its possible it'll start manifesting once more self-aware and adaptive AI systems come online in the next couple of decades even without reaching the point of singularity. Who needs to spend years teaching, qualifying, and re-qualifying thousands of teachers when we can just plop a kid in front of an advanced teaching AI and let it handle most of the actual teaching(and let the student work at their own pace, to boot)? Which would thus limit the "human factor" to administrative and disciplinary tasks(ironically, the most common complaint of many teachers today; spending most of their dealing with classroom discipline rather than teaching).

That isn't to say all teaching jobs would go the way of "Robo-Teacher" (who is more likely to just be a really advanced computer),  but many subjects would likely lend themselves well to such an approach, as has already been done with a number of subjects without any Artificial Intelligence being employed(with varying levels of success, having an AI that could intervene and assist/instruct would be kind of nice, and also make it less of a "just keep going through the grind until you memorize the questions" game).

This also somewhat neatly addresses a lot of issues with inner city schools, if they're using the same AI systems in the inner cities as they're using out in suburbia, teacher skill becomes less of a deciding factor. It's then a matter of discipline and other more tangible factors which can start to be identified and corrected. But that's probably a decade or more away from now, and doesn't do anything about now.
« Last Edit: June 05, 2016, 07:20:29 PM by TheDeamon »

Seriati

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Re: Does economics serve us well?
« Reply #10 on: June 06, 2016, 12:03:34 PM »
A paper map never does that, so even if I save 5 minutes with it on average it might have me drive into a lake and drown one out of a hundred times.   

If any piece of technology causes you to drive into a lake and drown, 1 in 100 times, you should stop using it.

I too think the question here is kind of muddled.  But the problem to me is that economics, like any logical system, is only as good as the inputs used, scale of outcomes considered and solutions chosen.  It doesn't handle well a situation where everyone's rationale choice, leads to a collective sub-optimal outcome. 

I'm also not sure that the collective wisdom on the pro-free trade side is ultimately correct.  The idea that lower price imports benefit the people, more than exporting the jobs that would be generated from the higher priced locally produced goods, is - to me - highly questionable.  Like a prisoner's dilemma it always makes sense for any test case you look at, but in the aggregate it seems to fall apart.  If all job's are exported or made obsolete, how to people get the money to import goods? 

How do you really account for the cost of living in a high cost area, where some items are impossibly cheap?  The cost of toys, for example, has not kept up with inflation for 30 years.  How do you make a living as a toy maker and send your kids to colleges that have increased by far more than inflation, how do you buy a house?  Food costs are kept so artificially low we have to pay farmers extra money to keep them in business. 

If a reasonably skilled but not exceptionally talented person wanted to lead an unsubsidized life, what career could they follow?

TheDeamon

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Re: Does economics serve us well?
« Reply #11 on: June 06, 2016, 12:12:36 PM »
If a reasonably skilled but not exceptionally talented person wanted to lead an unsubsidized life, what career could they follow?

Depends on the standard of living he wants to maintain, and what he is starting out with. Of course, in the US, ObamaCare also further complicates things.

If you have a few hundred acres with a decent wildlife population that you can legally hunt/kill, or otherwise raise your own livestock, you could probably do decently off of a trust fund just bringing in your annual tax(/ObamaCare) and insurance liabilities plus a couple hundred bucks a month to cover "other contingencies."

But first you'd have to have that acreage, and somewhere to live in within that acreage.

But if you're wanting high speed internet, and other near cutting edge technology items(smartphones/tablets/etc), as well as various and sundry other things that incur other significant expenses, your outlays will grow accordingly.

TheDeamon

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Re: Does economics serve us well?
« Reply #12 on: June 06, 2016, 12:35:33 PM »
I too think the question here is kind of muddled.  But the problem to me is that economics, like any logical system, is only as good as the inputs used, scale of outcomes considered and solutions chosen.  It doesn't handle well a situation where everyone's rationale choice, leads to a collective sub-optimal outcome.

Thing is economics just addresses the mechanisms involved, it isn't the actual lever. In Economic terms, that (more expensive, and presumably "more skilled" as a result) labor which is "freed up" by those jobs being sent off shore then becomes available for other work, which should, in theory create equal or greater value than what was lost.  There are some flawed assumptions made, but once again, it supposes a rationale system that isn't being distorted by other factors, such as government subsidies encouraging people to stay where they are rather than moving to where they can find (comparable or better) work.

So in a perfectly fluid system, it would be fine, where people are totally willing to be mobile as to where they live(market distortions due to government subsidies; or general stubbornness due to "irrational" reasons, such as being a family "homestead" location for generations), and people are likewise totally capable of being mobile in regards to where they live(illness within their family requiring them to live within __ miles of a particular kind of care facility, for example; or just simply having the funds and means of making the move with success).

The problem is, that isn't reality.

Quote
I'm also not sure that the collective wisdom on the pro-free trade side is ultimately correct.  The idea that lower price imports benefit the people, more than exporting the jobs that would be generated from the higher priced locally produced goods, is - to me - highly questionable.  Like a prisoner's dilemma it always makes sense for any test case you look at, but in the aggregate it seems to fall apart.  If all job's are exported or made obsolete, how to people get the money to import goods?

This is where the earlier comment I made about "transition" comes into play. Economics assumes people are going to act rationally, and that there isn't anything in play that will tend to distort the system in ways to makes transitions less than ideal. Economics also is concerned more with the "big picture" than it is with individuals, so it is literally more interested in "The needs of the many outweigh the needs of the few, or the one." Because it will literally steamroll someone if they get in the way(behave "irrationally") with little or no mercy.

Quote
How do you really account for the cost of living in a high cost area, where some items are impossibly cheap?  The cost of toys, for example, has not kept up with inflation for 30 years.  How do you make a living as a toy maker and send your kids to colleges that have increased by far more than inflation, how do you buy a house?  Food costs are kept so artificially low we have to pay farmers extra money to keep them in business. 

The "rationale" choice as Economics(and reality) would provide is that if you're a toy manufacturer, then you'd make sure you place your toy production facilities in the lowest cost per unit of production location you feasibly can put it in, and run your operations primarily from there. And for most production cases, that is pretty much what happens, until or unless that cost of transportation for the goods in question makes it acceptable to have your production happen in a more expensive location.

Of course, then you get other factors, costs of keeping production running at an already established and operational facility(and maintaining it) vs moving production to somewhere else. Which is where some producers will continue to operate in high cost areas just by virtue of that is where the infrastructure they need is at, and the cost of reproducing that infrastructure somewhere else doesn't have a fast enough projected Return On Investment to be worth pursuing.  Now if/when they hit the point that a production line needs to be retooled, major equipment upgrades are about to happen, or an expansion is needed, those calculations obviously change accordingly.

Seriati

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Re: Does economics serve us well?
« Reply #13 on: June 06, 2016, 01:41:41 PM »
If a reasonably skilled but not exceptionally talented person wanted to lead an unsubsidized life, what career could they follow?

If you have a few hundred acres with a decent wildlife population that you can legally hunt/kill, or otherwise raise your own livestock, you could probably do decently off of a trust fund just bringing in your annual tax(/ObamaCare) and insurance liabilities plus a couple hundred bucks a month to cover "other contingencies."

Becoming a wealthy, landed, hunter-gatherer is a dodge on the question.  The point of the question, was what career can someone with reasonable but not exceptional skills and no particular artistic talent, pursue, and through hard work be independent and maintain a reasonable standard of living?  You know, the American dream?  Though hardwork, success.

Seriati

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Re: Does economics serve us well?
« Reply #14 on: June 06, 2016, 01:51:34 PM »
There are some flawed assumptions made, but once again, it supposes a rationale system that isn't being distorted by other factors, such as government subsidies encouraging people to stay where they are rather than moving to where they can find (comparable or better) work.

So in a perfectly fluid system, it would be fine, where people are totally willing to be mobile as to where they live(market distortions due to government subsidies; or general stubbornness due to "irrational" reasons, such as being a family "homestead" location for generations), and people are likewise totally capable of being mobile in regards to where they live(illness within their family requiring them to live within __ miles of a particular kind of care facility, for example; or just simply having the funds and means of making the move with success).

I think there is a very flawed assumption being made, and I think the second paragraph compounds it.  It's not true that with complete mobility it would be fine. 

We live in a world where the labor pool is constantly increasing, and the efficiency of work is increasing even faster.  We have ever more people available to work, and ever more at higher levels of skill and ever less work that actually needs done.  No amount of moving around will make that work.

Quote
The "rationale" choice as Economics(and reality) would provide is that if you're a toy manufacturer, then you'd make sure you place your toy production facilities in the lowest cost per unit of production location you feasibly can put it in, and run your operations primarily from there. And for most production cases, that is pretty much what happens, until or unless that cost of transportation for the goods in question makes it acceptable to have your production happen in a more expensive location.

While I agree that individual choice is rationale, when you apply it on a collective basis, it's not just toy manufacturers that relocate, it's all jobs period.  That's the exact phenomena that causes Wallmart to run off Mom and Pop stores, Amazon to outcompete local retailers and China to put US manufacturers out of business.  My serious question is simply, if it is always more efficient to do something "elsewhere" (in large part because you can reduce and save on paying people), what's left that needs to be done to fund the consumers?  The consumption based model only works if large amounts of people make fundamentally more than survival based incomes, yet the economics pretty much demand that such incomes are wasted redundancies that can be eliminated by consolidation and offshoring.

What work is it really efficient to have vast numbers of American workers perform at ten times the base salary of equally skilled Chinese workers?  And don't say service, those jobs are often very low tier and even there more and more replaceable by technology as the wages are still a giant redundancy.

AI Wessex

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Re: Does economics serve us well?
« Reply #15 on: June 06, 2016, 02:07:55 PM »
Quote
We live in a world where the labor pool is constantly increasing, and the efficiency of work is increasing even faster.  We have ever more people available to work, and ever more at higher levels of skill and ever less work that actually needs done.  No amount of moving around will make that work.
There's a tipping point where there won't be enough work to go around. We will begin to see "guaranteed income" when we topple over.  This is something that Pyrtolin has talked about on Ornery for a long time.

D.W.

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Re: Does economics serve us well?
« Reply #16 on: June 06, 2016, 02:26:25 PM »
Quote
There's a tipping point where there won't be enough work to go around. We will begin to see "guaranteed income" when we topple over.  This is something that Pyrtolin has talked about on Ornery for a long time.
I hope this ends up being true.  Our ability to turn a blind eye to the rest of the world kinda dampens my hope that we will get there.  I think we will have to reach an entirely new level of globalization before such a concept gains traction.

Again, I hope I'm wrong about that.

Seriati

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Re: Does economics serve us well?
« Reply #17 on: June 06, 2016, 02:31:41 PM »
Guaranteed income is an absolute fail as a solution.  That's just an artificial prop on a mechanism that would no longer be functional.  It's kind of like pumping oil into the well to keep it from running dry.

D.W.

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Re: Does economics serve us well?
« Reply #18 on: June 06, 2016, 02:46:12 PM »
So you don't believe we will ever become technologically advanced to the point where there is literally not enough "work" valuable enough to deserve pay for every person?

The only solutions are wars or man made disasters designed to kill off population, strict birth restrictions or... what?  I suppose colonizing other planets / moons could increase a demand for labor / work.

Unless there is a great Luddite uprising or some cosmic event that put's us back into the dark ages... we will reach that tipping point.
« Last Edit: June 06, 2016, 02:51:44 PM by D.W. »

D.W.

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Re: Does economics serve us well?
« Reply #19 on: June 06, 2016, 02:54:06 PM »
Guaranteed income is an absolute fail as a solution.  That's just an artificial prop on a mechanism that would no longer be functional.  It's kind of like pumping oil into the well to keep it from running dry.

The "I Love My Fracking Job!" works program. 

Fenring

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Re: Does economics serve us well?
« Reply #20 on: June 06, 2016, 03:09:36 PM »
Guaranteed income is an absolute fail as a solution.  That's just an artificial prop on a mechanism that would no longer be functional.  It's kind of like pumping oil into the well to keep it from running dry.

Let's do a thought experiment for a moment.

Let's say we could construct a single machine that would simultaneously mine, produce and distribute materials and goods, as well as farm food, for billions of humans at a time, and it could do this autonomously with only a handful of people to oversee its upkeep and good function. And let's say the machine also monitored total resource levels (total mass of various ores, minerals in soil, energy reserves) and that it could sustainably keep the process going while also not depleting natural resources irrevocably. It would recycle plastics and metals, replant flora, and make use of solar and geothermal energy exclusively.

Under these conditions, would you require all human beings to work 40 hour weeks digging ditches and refilling them just to ensure they are forcibly occupied? Would you restrict their access to resources pending verification that they had done this labor? If so, why?

Unless you believe that people are - due to some a priori universal law - morally obliged to do menial tasks, it seems to me that under the conditions provided by this great machine that the only considerations worth making about resources would be how to distribute them, and how much could be afforded to each person sustainably. I assert in the premise that the machine can calculate these things flawlessly and would not screw up the balance of the Earth's resources on a mechanical level. Maybe it even mines asteroids regularly to access more materials. The next question to ask is about population levels, and therefore some mechanism must be set to roughly stabilize the birth rate. I believe this would be extremely easy to do, despite wild speculations in science fiction. You simply correlate family size to resource rationing, and set a 'market rate' such that the best lifestyle is roughly achieved by having 1-2 children, where having more would mean less resources per person in the family, and having no children would mean a more luxurious lifestyle.

The final question to ask is whether people innately deserve to receive equal rationing, or whether some factor ought to influence who gets more. Note that no one contributes more than anyone else to production because the machine can do all the work by itself. I could see a case for innovators/scientists to receive additional benefits, as well as perhaps artists or whatever else is considered to help society in a non-industrial capacity. It would be quite easy under such a theoretical system to place numerical value on important contributions by giving extra ration credit.

Without speculating on whether or not  you'd enjoy living in a system like this, assume for the moment that it is possible to achieve, and that technologically we are simply X steps away from achieving it. Now consider that the only reason not to try to achieve it is because of an a priori moral rationale that humans must toil for production. Just as forcing people to work when one machine can do all the work would require some abstract principle to justify it, so should that principle be required in choosing to abstain from achieving that machine if it is possible to create.

So Seriati, my question is: can you name an a priori moral principle of this sort? Basic income is simply a prototype of a system of rationing resources based on available supply and production capacity. If the only limiting factors here are production capabilities and raw materials, then it seems to me that artificially restricting the distribution of resources on abstract principle when in fact there are no real negative consequences for doing so requires some serious explaining to justify it. Note that "balancing the budget" is an example of an abstract principle that, if not being employed for the purpose of maximizing distribution of resources to the most people, seems to me to be an obsolete concept. There is certainly no 'moral' need as far as I can tell to balance arbitrary budgets if there is in fact enough resources for all. Balancing the budget is an important concept when assessing whether debts are repaid - in other words, if human labor is actually recompensed or not. But in the event where people would be recompensed with or without doing labor then the concept of a balance of debts becomes superfluous.
« Last Edit: June 06, 2016, 03:12:33 PM by Fenring »

Seriati

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Re: Does economics serve us well?
« Reply #21 on: June 06, 2016, 03:12:51 PM »
So you don't believe we will ever become technologically advanced to the point where there is literally not enough "work" valuable enough to deserve pay for every person?

No, actually I think we're already approaching the beginnings of that Event Horizon.  It's focused more on the bottom end of the work spectrum, where there are more workers to be impacted but it's definitely beginning.

My point wasn't that such a day won't come.  My point is that money is only functional in a context where we have work to do and we earn it.  It's a proxy for the value of your work.  If there is no practical work, then there is no value to your work and money will become essentially useless.  It won't happen overnight, too much inertia to it, but it will happen if you hand money out for nothing on the scale proposed.

We have to come to a new paradigm about how we live and survive if we no longer need to work.

D.W.

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Re: Does economics serve us well?
« Reply #22 on: June 06, 2016, 03:18:06 PM »
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when in fact there are no real negative consequences for doing so
I don't agree with this.  We need a serious look at how to incentivize creativity and innovation.  We may not require menial labor from people but stagnation is a real threat when we just allow people to do nothing.

Fenring

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Re: Does economics serve us well?
« Reply #23 on: June 06, 2016, 03:47:58 PM »
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when in fact there are no real negative consequences for doing so
I don't agree with this.  We need a serious look at how to incentivize creativity and innovation.  We may not require menial labor from people but stagnation is a real threat when we just allow people to do nothing.

I should specify that when I say "negative consequences" I refer strictly to mechanical factors; basically, 'does it work?' I essentially mean that it's sustainable, and wasn't referring to anything like culture or enjoyment of one's leisure.

I don't really think incentivizing certain behaviors is that difficult. Some people would choose to be creative and to innovate simply because they like it. In fact, some of history's greatest innovators succeeded in doing so despite being poor and having little economic incentive for doing so. People like Tesla, for instance, appeared to barely care about material success and did the work for its own sake, the only thing holding them back being the economic system itself. But in the event innovation lags offering benefits to motivate doing so is pretty straightforward. It is also possible to create social, rather than material, rewards for certain actions. People will do quite a lot for things like respect, prestige, or even just to help others.

As far as stagnation goes, I guess I'm a bit of an optimist, but I have faith in man's ability to continuously find interesting things to occupy one's time and make life enjoyable. The threat of repressive ennui from lack of strife would probably be offset by the ability to focus on what many people consider to be the 'important things in life', that they would be doing now except they have no time or energy for it because of work, whether that's working on human connections, exploring nature, reading, writing, or whatever else. I also imagine this future society would have a MASSIVE gaming culture. When you figure VR into it the biggest problem will probably not be ennui but rather convincing people to unplug themselves from the headset once every month and go outside (i.e. the Toyko syndrome).

Seriati

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Re: Does economics serve us well?
« Reply #24 on: June 06, 2016, 04:27:25 PM »
Guaranteed income is an absolute fail as a solution.  That's just an artificial prop on a mechanism that would no longer be functional.  It's kind of like pumping oil into the well to keep it from running dry.

Let's do a thought experiment for a moment.

The problem with this thought experiment is that it's too layered.  You've made assumptions and conclusions about what is happening, what should happen and why it's happening and some of those are faulty.  Trying to claim a motive for why a fake model would be resisted builds in an intellectual resistance that we don't need if we're trying to fairly evaluate it.  I don't for instance think that a need to make people toil is a primary motivation of resistance, you're extrapolating that idea from a very different circumstance, one where giving one group of people something for free has uniformly only be accomplished by taking it from others.  There's too much intellectual baggage there to make a "fair" claim  that the exact same mentality is the primary mover in resistance to this hypothetical.

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Let's say we could construct a single machine that would simultaneously mine, produce and distribute materials and goods, as well as farm food, for billions of humans at a time, and it could do this autonomously with only a handful of people to oversee its upkeep and good function. And let's say the machine also monitored total resource levels (total mass of various ores, minerals in soil, energy reserves) and that it could sustainably keep the process going while also not depleting natural resources irrevocably. It would recycle plastics and metals, replant flora, and make use of solar and geothermal energy exclusively.

Okay, who's paying for the machine?  Is it free?  Is it just confiscating the land and resources it needs to operate?  Are you compensating the former owners?  Is anyone granted an interest in it's output?  Whether it be owners, or governmental authorities?

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Under these conditions, would you require all human beings to work 40 hour weeks digging ditches and refilling them just to ensure they are forcibly occupied?

I can't envision any circumstance where I would require people to participate in busy work.  Let alone one where it was utterly pointless on top of being busy work.  Do you think, that I would support sentencing the human race to effectively prison and/or hard labor?

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Would you restrict their access to resources pending verification that they had done this labor? If so, why?

Interesting question, but only because you've got hidden assumptions in it that you may not be aware of.  Restricting access implies I'd be denying something they have a right to access.  You're implication is that the fruits of the machine belong to all as an entitlement.  Is that the case?  Did no one have to sacrifice or pay for the machine?  Is it taking no one's resources without compensation?

In any event, I wouldn't grant access to resources to anyone based on the performance of useless labor.  That's the dumbest standard ever, that's actually the opposite of what people who oppose this kind of belief system advocate.  They'd only grant access based on useFULL labor.  Now you've posited, in this hypo, that no such thing exists anymore.  There's no useful labor to be done.  Sure there may be artistic labor, or other labor that improves lives, but there's nothing left that has to be done. 

What then for the people that decide to do nothing?  You've written out your hypo to cost others nothing to subsidize them (well accept for not addressing the costs of the machine and the resources it takes to operate), presumably because you believe nothing but jealousy or inappropriate domination instincts would prevent people from allowing them to live like that.  I think, however, you ignore that such an existence, ie a fundamentally pointless one, may actually be unhealthy for human beings.  It's not an accident that heavily subsidized life, goes hand in hand with drug use, crime and disrespect for other humans (and this occurs in trust fund babies as well as the impoverished).

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Unless you believe that people are - due to some a priori universal law - morally obliged to do menial tasks, it seems to me that under the conditions provided by this great machine that the only considerations worth making about resources would be how to distribute them, and how much could be afforded to each person sustainably.

Or, like I said, unless you honestly believe that such a life is not healthy for human beings.  A not altogether irrational conclusion.

Or you believe that such a machine's output would be controlled by the powerful, or fought over by the desparate, in which case you may also think about it differently.

In any event, if the machine did suddenly appear, and someone didn't have to be paid for and managed not to take anyone's resources to operate, then distribution could be one question.  Though if you can build this great of a machine, why don't you have it distribute the resources too? 

You could just ask the question, if Manna fell from the skies everyday, what would happen?  Pretty sure we'd stop farming.  A bunch of people would stop all manner of other activities too.

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The next question to ask is about population levels, and therefore some mechanism must be set to roughly stabilize the birth rate. I believe this would be extremely easy to do, despite wild speculations in science fiction. You simply correlate family size to resource rationing, and set a 'market rate' such that the best lifestyle is roughly achieved by having 1-2 children, where having more would mean less resources per person in the family, and having no children would mean a more luxurious lifestyle.

And you don't see that as creepy?  To avoid the "unfairness" you're going to control people's reproduction?

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Without speculating on whether or not  you'd enjoy living in a system like this, assume for the moment that it is possible to achieve, and that technologically we are simply X steps away from achieving it. Now consider that the only reason not to try to achieve it is because of an a priori moral rationale that humans must toil for production.   Just as forcing people to work when one machine can do all the work would require some abstract principle to justify it, so should that principle be required in choosing to abstain from achieving that machine if it is possible to create.

So you're telling us why we'd have to be against it and then asking us to speculate about it?  As I said above, I think you're mixing up an unrelated issue here.

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So Seriati, my question is: can you name an a priori moral principle of this sort?

You've told me I have to assume the answer, and now you want me to repeat it back?  I don't get this game Fenring, what am I missing?

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Basic income is simply a prototype of a system of rationing resources based on available supply and production capacity.

I disagree.  Basic income has no relationship to your "wonderful" machine.  The equivalent is closer to what we have now, with food stamps, in fact the closest analog would be if the government hand delivered a "standard" grocery order to each persons house.  No luxuries, no choices, no preferences honored, everyone, vegan's included, gets there two pounds of hamburger, etc.

Adding basic income to the current system, does not create a different system.  It doesn't move us from a market based system to a great machine system, it's not even an interim step.  All it does is artificially flood the bottom of the well.  It props the current system up it doesn't change it.  All the resources flow to the exact same people as get them today (not to the great machine to be recycled), with the rich becoming richer.  At the same time it actually undermines the mechanism that returns capital from the rich to the poor because they no longer generate income through work.  They no longer have to be useful to anyone.

You don't get to the Star Trek economy by flooding the world with free money.  You get there by taking the money away.

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If the only limiting factors here are production capabilities and raw materials, then it seems to me that artificially restricting the distribution of resources on abstract principle when in fact there are no real negative consequences for doing so requires some serious explaining to justify it.

Did you just emphasize "real" in your write up of a completely made up system?  I think that's actually the "real" point, there are always negative consequences.  The easiest one to see is the lack of innovation that every communistic model to date has generated.  You can see it in every communistic country, you can see it in socialistic medical countries, you can really see it everywhere you take the incentive out of innovation.  That's basic psychology, it applies universally, take away incentives and behavior reduces.

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Note that "balancing the budget" is an example of an abstract principle that, if not being employed for the purpose of maximizing distribution of resources to the most people, seems to me to be an obsolete concept.

Don't tell me you've fallen into Pyrtolin's fake money camp.  Budgets are balanced because the alternative is to degrade you're money supply, and there are actual limits to that.  It's no mistake that the US has been under persistent inflation for more than 50 years.

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There is certainly no 'moral' need as far as I can tell to balance arbitrary budgets if there is in fact enough resources for all.

Okay.  Since there are not resources for all, where does that leave your argument?

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Balancing the budget is an important concept when assessing whether debts are repaid - in other words, if human labor is actually recompensed or not. But in the event where people would be recompensed with or without doing labor then the concept of a balance of debts becomes superfluous.

Cart before the horse.  I agree, if you define the concept of money such that you give it to whomever wants to spend it then the idea of balancing becomes nonsensical.  Of course, only a moron would loan you money if you can just create as much as you want to repay them.  Only a moron would accept your currency in exchange for goods if you can just create more if you want something. 

How's your idea really all that different than letting everyone carry around a pad of paper and just write their own currency when ever they feel they need it?  Do you really believe that such a system would work?   And that people would honor that currency, that they'd trade if for their real goods?

Even if you just limit it to the "government" doing it "for our own good"?  Why would someone accept the currency in trade when they know that by the time they go to spend it'll be deflated from other cash hand outs going to people who "need" it?

scifibum

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Re: Does economics serve us well?
« Reply #25 on: June 06, 2016, 04:43:23 PM »
So you don't believe we will ever become technologically advanced to the point where there is literally not enough "work" valuable enough to deserve pay for every person?

No, actually I think we're already approaching the beginnings of that Event Horizon.  It's focused more on the bottom end of the work spectrum, where there are more workers to be impacted but it's definitely beginning.

My point wasn't that such a day won't come.  My point is that money is only functional in a context where we have work to do and we earn it.  It's a proxy for the value of your work.  If there is no practical work, then there is no value to your work and money will become essentially useless.  It won't happen overnight, too much inertia to it, but it will happen if you hand money out for nothing on the scale proposed.

We have to come to a new paradigm about how we live and survive if we no longer need to work.

Money has never been "a proxy for the value of your work".  That would be wages.  Many people who have never had to earn a wage have money that spends just fine. 

I don't think there's any fundamental reason why money can't retain much of its commercial function when meaningfully earning wages isn't possible for many/most people.  It does mean that regulation of wealth and various markets will be even more necessary than at present (and I think we're setting ourselves up for extremely painful corrections - or, maybe, feudalist technocracy - because of how badly we're failing at that regulation now), but I think we'll always need a way to express preferences and priorities through a fungible commercial mechanism.

Fenring

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Re: Does economics serve us well?
« Reply #26 on: June 06, 2016, 05:28:01 PM »
Some good points, Seriati, and thanks for referencing specific passages. I'll do my best to address them.

I don't for instance think that a need to make people toil is a primary motivation of resistance, you're extrapolating that idea from a very different circumstance, one where giving one group of people something for free has uniformly only be accomplished by taking it from others.

Here, I suppose, we disagree. Any time there is a condition whereby parasitism is causing one group to benefit from the labor of another there is an inherent interest in keeping the latter group working. Similarly, any time a group finds themselves relatively privileged and sees their state as being higher than that of others I think they tend to resist a balancing of fortune. I think the attitude of "no one's going to take my stuff" is a very real one, even if in reality everyone would have 'enough' when all is said and done. What is enough? It's all relative, isn't it. That's a very important question to investigate, I think, and so I won't pretend that it's a simple topic to address.

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Okay, who's paying for the machine?  Is it free?  Is it just confiscating the land and resources it needs to operate?  Are you compensating the former owners?  Is anyone granted an interest in it's output?  Whether it be owners, or governmental authorities?

That's the whole point of the hypothetical. The question of the ownership of the methods of production (in other words, profiting from being the one to own production) becomes irrelevant when human labor isn't required. You don't need to know who 'owns' the products of human labor because there is no human labor. Asking whether the machine is "free" is like asking right now whether the sunlight is "free." It's available and it's there. Of course, it's certainly possible to forcibly prevent someone accessing the products of such a machine, or of sunlight, but that's not the same as asking if they're free.

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I can't envision any circumstance where I would require people to participate in busy work.  Let alone one where it was utterly pointless on top of being busy work.

Cool :)

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Restricting access implies I'd be denying something they have a right to access.  You're implication is that the fruits of the machine belong to all as an entitlement.  Is that the case?  Did no one have to sacrifice or pay for the machine?  Is it taking no one's resources without compensation?

The notion of entitlement is an interesting one because it implies that people have a right to a thing. This comes at it from the angle that they naturally don't have it and are asking for it, and implies they must have some reason (e.g. a right) for thinking they should be given it. But now think of it from the other side; what if there is a resource that the machine would just freely give to all without being asked for it. Now the question is not why the people have a right to ask for it, but rather why someone would have the right to deny it to them. Do you see how this simple reformulation turns the old notion of entitlement on its head? Now, this doesn't mean giving each person infinite of anything, but it can mean giving an arbitrary amount depending on how much there is to give. I guess you could call this a right, insofar as I guess it needs asserting that all people equally deserve to make use of the world's resources.

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They'd only grant access based on useFULL labor.  Now you've posited, in this hypo, that no such thing exists anymore.  There's no useful labor to be done.  Sure there may be artistic labor, or other labor that improves lives, but there's nothing left that has to be done.

You got it. 

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What then for the people that decide to do nothing?

That's the funny part. Based on how we're used to living it seems that we'd have to worry about what those people are doing. But actually I don't think you have to. What if you just...let them do whatever they want within the confines of the law? What is 'wrong living' when production capacity is no longer an issue?

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I think, however, you ignore that such an existence, ie a fundamentally pointless one, may actually be unhealthy for human beings.  It's not an accident that heavily subsidized life, goes hand in hand with drug use, crime and disrespect for other humans (and this occurs in trust fund babies as well as the impoverished).

This is a very important point to both make and address. At a fundamental level, if you believe in small government, personal choices, and any kind of libertarian mindset of keeping the government out of people's personal lives, then this question is actually straightforward to answer: don't decide for others what is best for them or how they should live. And for someone of the more liberal/social-net mindset, then I think the argument would be that rampant drug problems aren't a result of leisure time, but rather a result of stresses put on people by their meagre subsistence on welfare and on the pressure to find a job when they feel they don't really have any hope of making a decent living. First of all I firmly believe that easing drug laws reduces drug use rather than increasing it (and the data is now bearing this out). Secondly, I think that a lot of lifestyle problems at present are a result of unhealthy social and economic factors more so than some kind of basic human frailty. Some people would probably become addicts in any society, but I personally don't think it would be that many. And for those that do have a problem I think in a society of leisure there would be many caring people who would offer services to help them.

But as far as 'healthy lifestyle' goes, unless you think the government should dictate what sort of lifestyle a person should have based on a pre-determined script then I say let individuals and communities worry about their lifestyle and keep the systemic considerations out of that. I don't think having people work or not work should be based on whether someone arbitrarily thinks they ought to to employed, for their own good. I know you may not be suggesting this, but I am convinced many people do think along these lines. The question is not what you suspect would be healthy or unhealthy for others, but rather whether you would employ force to require others to live in a way that you considered healthy. If not, then the systemic consideration should be made bereft of this consideration and it should be assumed that generating leisure is invariably a good thing (whether or not it actually is for every single person).

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Or you believe that such a machine's output would be controlled by the powerful, or fought over by the desparate, in which case you may also think about it differently.

Yes, careful precautions would need to be in place to prevent this. The whole concept is to evaluate production capability and to get away from the notion of someone personally owning or controlling production to benefit themselves at the expense of others.

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In any event, if the machine did suddenly appear, and someone didn't have to be paid for and managed not to take anyone's resources to operate, then distribution could be one question.  Though if you can build this great of a machine, why don't you have it distribute the resources too?

I would. But people would have to decide how to calibrate its choices. Obviously we don't want to live under the rule of a master AI. It would merely be a mechanical device that was very efficient.

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You could just ask the question, if Manna fell from the skies everyday, what would happen?  Pretty sure we'd stop farming.  A bunch of people would stop all manner of other activities too.

Funny enough, as production capability increases this is more or less the scenario we would be approaching, plus or minus dramatic flair. So what would you say to the notion of manna falling from the sky? If you could make that happen, would you?

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And you don't see that as creepy?  To avoid the "unfairness" you're going to control people's reproduction?

In a way, but not much creepier than telling people to spay and neuter their pets or to remember to responsibly use birth control. I'd never advocate outright dictating to people how many children they can have; it would be up to them either way, but with systemic incentives in place a person could decide how much their care about reproducing a lot versus a little.  In point of fact this system is already in place unofficially, since birth rates in developed countries always get whittled down to much lower rates than in less industrialized countries. The reason is simple: when children are too expensive and don't directly contribute to labor people don't have a lot of them. In rural, agrarian cultures having lots of kids increases the worker base; in a modern city they are mostly just an expense, almost like choosing to buy a luxury item. There is also the factor of time to raise them, where now working parents don't have the time to raise many children due to work. In a post-work culture this factor would be gone, and so the economic factor would have to be the principle lever.

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Basic income is simply a prototype of a system of rationing resources based on available supply and production capacity.

I disagree.  Basic income has no relationship to your "wonderful" machine.  The equivalent is closer to what we have now, with food stamps, in fact the closest analog would be if the government hand delivered a "standard" grocery order to each persons house.  No luxuries, no choices, no preferences honored, everyone, vegan's included, gets there two pounds of hamburger, etc.

The thing that I think need to be clarified here is that I see a basic income as a stepping stone, not as the final answer. I agree that mixing a basic income with a market-capitalist system is sloppy and is a bit of an awkward fit. However I also think that it's the only clean way to shift the system over to whatever needs to come next without major strife.

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You don't get to the Star Trek economy by flooding the world with free money.  You get there by taking the money away.

Some people, myself included, see two possibilities, both of which require a fundamental revolution to eventually end the current system. One is a hot (violent) revolution, and the other a cold (peaceful) one. I do not want a hot revolution, as exciting as that sounds. "Taking away" people's money would certainly result in violence in my opinion, as those who were in a dominant or superior position previously will not take the potential change in system quietly. But if you ease the system in so that step by step the general spreading around of resources becomes the new normal it can transition quietly so that at some point it almost seems obvious to everyone to complete the transition. But if you keep things as they are now, or even worse, revert to a setup closer to true capitalism, it will derail in a bad way and cause mayhem. I'm totally in agreement with D.W. about this.

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You can see it in every communistic country, you can see it in socialistic medical countries, you can really see it everywhere you take the incentive out of innovation.  That's basic psychology, it applies universally, take away incentives and behavior reduces.

There has never been a communistic country. Actually I'm not even advocating communism, because that's about the state controlling the methods of production and the products of labor. I am quite against that. Any so-called communist country we've ever seen has either been a statist-capitalist hybrid, or else a dictatorship that employed certain terminology as an effective state religion (such as the USSR). But the main limiting factor in even these statist nightmares from working was production capability, of which they had almost none. My hypothesis erases this problem.

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Don't tell me you've fallen into Pyrtolin's fake money camp.  Budgets are balanced because the alternative is to degrade you're money supply, and there are actual limits to that.  It's no mistake that the US has been under persistent inflation for more than 50 years.

The issue isn't about whether fiat currency functions or not, but whether in its employment it's used to enrich some while oppressing others. As it stands the current fiat system has been used for ill purposes, however as a pure mechanism there's nothing wrong with establishing arbitrary credit systems so long as they are tied down to some reality. You're right insofar as the way money is employed now is frequently not tied down to reality and used as funny money. Making the currency 'mean something' is important, but I think there are many ways to do that which haven't been explored yet.

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How's your idea really all that different than letting everyone carry around a pad of paper and just write their own currency when ever they feel they need it?  Do you really believe that such a system would work?   And that people would honor that currency, that they'd trade if for their real goods?

If a person is 'entitled' (as you put it) to a certain amount of stuff, they can either take it or leave it. If they take it, and choose to take it all, then the system must be able to afford that since that's what's been rationed out. It really just boils down to natural resources. If every one of a billion people wants a car, the only real question is how much metal or other materials exist. If there's enough, then you can allot one car to each person. It kind of really is that simple at the end of the day, and the current way to discuss this is with the term "sustainable." Right now we don't think of sustainable in terms of metals so much (with exceptions in certain rare metals), but we definitely do in terms of energy sources and food sources.

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Even if you just limit it to the "government" doing it "for our own good"?  Why would someone accept the currency in trade when they know that by the time they go to spend it'll be deflated from other cash hand outs going to people who "need" it?

Now that you mention it, I think a deflationary currency is absolutely the way to go. Accumulating capital should absolutely not be a thing, and especially not leveraging capital to make more capital in a snowball effect. I think the average person already recognizes how odious this is, just as more or less everyone historically has ("usury"). How to manage the system so that this doesn't happen is a very big issue, because you don't want to every end up with de facto slavery where someone has managed to collect the lion's share of Monopoly money and "win" the game. Did you know that Monopoly's game design was actually intended to be a criticism of capitalism's inevitable destination? Oh the irony.
« Last Edit: June 06, 2016, 05:32:58 PM by Fenring »

TheDeamon

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Re: Does economics serve us well?
« Reply #27 on: June 06, 2016, 11:43:15 PM »
We live in a world where the labor pool is constantly increasing, and the efficiency of work is increasing even faster.  We have ever more people available to work, and ever more at higher levels of skill and ever less work that actually needs done.  No amount of moving around will make that work.

The above is almost Malthusian in nature, just expressed in a different way. I'm not necessarily buying that line. It doesn't mean there is less work that can be done (by humans). It just means there is less  essential work needing to be done by fewer people due to increasing productivity capabilities/automation/etc.

Which means more time, skill, and other resources are now free to pursue other less critical things, like bizzaro art scultures and/or paintings. Games for smart phones, AAA Movie titles, writing novels, or working on more advanced projects with payout horizons that may well be beyond the horizon. The "issue" there is getting the people with the resources(money) to fund such things, to be bothered to let that money circulate so it can happen. Which is where centralization of many things, and companies like Apple and Alphabet(Google) sitting on Multibillion Dollar Corporate Warchests each become problematic. That is money that has essentially left the economy globally and is no longer circulating until such time as they decide to use it.   

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While I agree that individual choice is rationale, when you apply it on a collective basis, it's not just toy manufacturers that relocate, it's all jobs period.  That's the exact phenomena that causes Wallmart to run off Mom and Pop stores, Amazon to outcompete local retailers and China to put US manufacturers out of business.  My serious question is simply, if it is always more efficient to do something "elsewhere" (in large part because you can reduce and save on paying people), what's left that needs to be done to fund the consumers?

And this is the problem a lot of the United States finds itself in, and sadly, Economics doesn't address that beyond saying that labor is now free to acquire new skills or pursue other tasks that potentially deliver a higher value. (Reality has been it's usually lower value for most people, but a lot of that goes to failing to find "the right skills" or having possibly found the "right" skill, only for everyone else and their dog to do the same and oversupply that job market, in which case Economics also explains what follows: Wages collapse for people who hold that skill set due to oversupply.)

And it isn't always more efficient to do something "Elsewhere" as some things don't outsource easily. You cannot (viably) outsource repairs that need to be made to your car to someone who lives and works in India, as the cost of transporting your car there and back(and the time lags involved) make it a nonsensical solution. As such a local car mechanic is going to get that business. Proximity remains a factor for many things beyond just workforce mobility. I've even mentioned it before in this very thread as transportation costs are a factor.

Which goes back to why computers, electronics, and advances in telecommunications has been so highly disruptive, in particular in the past 20 years, as the "transportation" cost of long-distance telecommunications for phone based support and a number of other (mostly digital) services dropped below a threshold that made the American Labor pool the more expensive option. Something that wasn't the case during most of the 90's, and in particular during the 80's and before, as the long distance charges would have made paying an American $15/hour(in that year's $ no less) to do the same seem inexpensive by comparison. You start throwing in lowering costs for automated phone answering systems on top of that, and you get even more disruption happening in those job markets.

Other factors also include whether or not the area you're considering relocating to has infrastructure that can support the facility you'd need to build. If your plant needs 10 Megawatts, and the local powergrid at the new site only supports 1 Megawatt, with no increase in capacity even in the planning stages, that's probably going to put a damper on moving... At least until a new power plant is built. Comparable case for workforce education, if you need a workforce that knows how to do certain things, or otherwise be sufficiently educated as to expect to easily train them how, then you're not going to open up a high tech software design studio in a village in Kenya that doesn't have electricity, running water, sewage treatment, or any other 20th century amenities to speak of.  Again, that isn't to say you'd never do so, just that it isn't likely to happen until a list of other preconditions are met at that location first.

In the meantime you're going to set up shop somewhere that can support your companies need, and provide an environment that doesn't make prospective employees want to avoid the community your company is in like the plague. (And some of that is why many companies end up setting up shop in high cost of living areas, because that's where people with the specific skill sets they're looking for tend to (seemingly) want to congregate, but that goes to a scarcity issue on that front in some cases)

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The consumption based model only works if large amounts of people make fundamentally more than survival based incomes, yet the economics pretty much demand that such incomes are wasted redundancies that can be eliminated by consolidation and offshoring.

What work is it really efficient to have vast numbers of American workers perform at ten times the base salary of equally skilled Chinese workers?  And don't say service, those jobs are often very low tier and even there more and more replaceable by technology as the wages are still a giant redundancy.

Depends on how you define "service" because "Service Sector" runs everywhere from McDonald's to the shop attendants on Rodeo Drive in Hollywood, to Google and even Apple. Something tells me that the people working front line "service sector" jobs in the 5+ star tier are not making minimum wage, and likely going well beyond it in many cases. But yes, for every Gourmet 5 star Chef out there, there are armies of other aspiring and failed Chefs who aren't doing much better than minimum wage.

You're also ignoring that while Google is arguably technology, it also largely overlaps what often gets considered as service sector as well. Since they're in the business of providing services(for the purpose of advertising, which is also "Service Sector" albeit often given its own breakout too, but anyhow). Welcome to "goods and services." iTunes is a service, so is Amazon for that matter, the list goes on and on. Every (paid) app in the Google Play store is arguably "service sector" although I know you'll claim it under "technology."

But as to your general pessimism as to there being "enough work" to be done, I would throw this bone out there: and it's one I've generally held to in regards to social welfare programs. As productivity and automation increases, the ability to provide a better basic "baseline" of living conditions for all does likewise improve, as the "Expense" to any particular other ("productive") person becomes increasingly trivial.

TheDeamon

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Re: Does economics serve us well?
« Reply #28 on: June 07, 2016, 12:12:26 AM »
So you don't believe we will ever become technologically advanced to the point where there is literally not enough "work" valuable enough to deserve pay for every person?

The only solutions are wars or man made disasters designed to kill off population, strict birth restrictions or... what?  I suppose colonizing other planets / moons could increase a demand for labor / work.

Unless there is a great Luddite uprising or some cosmic event that put's us back into the dark ages... we will reach that tipping point.

Colonization, Warfare, or mass population die-offs(due to disease or famine) are the only historically proven and significant outlets for relief of population pressures; population die offs are usually bad for technology and social systems, while War and Colonization tend to accelerate scientific developments considerably, and often generate a lot of economic activity as well(so long as "your side" isn't the one hosting all of the fighting).

As we've pretty much tapped out places that can be colonized without all kinds of outcry by environmentalist groups, that leaves Space. Getting into space also helps address a number of other issues that are looming on the horizon(plenty of "rare earths" and other worthwhile mineral wealth waiting to be harvested in the solar system, in very non-trivial quantities at that; IIRC there is one asteroid that they think holds more rare metal ores than is currently in circulation on Earth). Hopefully we find the solution to "economical enough" access into LEO and beyond(so that people will consider one way travel off Earth) before something happens to cause us to backslide socially and technologically on Terra Firma.

I don't think there will ever be a true shortage of "work" for people who want to work. The challenge is getting those who truly want to work with those who have work that is suited to  their skills/tastes.

I do think that we've already crossed beyond the point where work is optional for many people(The welfare programs in most of the 1st world nations have pretty much demonstrated that, unintentionally), society just hasn't fully processed that fact yet, and hasn't come to terms with how to proceed with that knowledge. I do think we have a fair bit further to go technologically before we're to the point where more than a significant fraction of the population can just quit the workforce though.

As to birth restrictions, I think you're behind the times on that, the global population growth rate peaked in the 1970's at 2.1% and has been dropping since, it's currently sitting at around 1.2%. The fertility rate for women (number of children born per woman) was 5.1 in the 1950's, and was hovering around 2.58 in 2011, and continues to drop(keep in mind "replacement rate" is considered to be 2.1 children per woman). Projections for awhile have been that by the end of this century we'll be in full on population decline unless something changes demographically. Most of the developed world is expected to spend the last half of the century with twice as many elderly as they have children. Or to put it another way, if you want to see where the world is headed, look at what's been going on in Japan. That's the expected global population future 100 years from now.

TheDeamon

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Re: Does economics serve us well?
« Reply #29 on: June 07, 2016, 01:10:41 AM »
Let's do a thought experiment for a moment.

Let's say we could construct a single machine that would simultaneously mine, produce and distribute materials and goods, as well as farm food, for billions of humans at a time, and it could do this autonomously with only a handful of people to oversee its upkeep and good function. And let's say the machine also monitored total resource levels (total mass of various ores, minerals in soil, energy reserves) and that it could sustainably keep the process going while also not depleting natural resources irrevocably. It would recycle plastics and metals, replant flora, and make use of solar and geothermal energy exclusively.

Under these conditions, would you require all human beings to work 40 hour weeks digging ditches and refilling them just to ensure they are forcibly occupied? Would you restrict their access to resources pending verification that they had done this labor? If so, why?

Unless you believe that people are - due to some a priori universal law - morally obliged to do menial tasks, it seems to me that under the conditions provided by this great machine that the only considerations worth making about resources would be how to distribute them, and how much could be afforded to each person sustainably. I assert in the premise that the machine can calculate these things flawlessly and would not screw up the balance of the Earth's resources on a mechanical level. Maybe it even mines asteroids regularly to access more materials.

I would agree with this, so long as the people maintaining this "great machine" were being compensated for their work in some form. :)

To some extent, you're also basically outling the Star Trek economy in a round-about manner, at least as it seemed to be explored in Deep Space Nine in particular(Sisko's son outlined it IIRC). Everybody gets a basic ration of replicator credits, which is basically utilization of a form of energy because that's what the Replicator needs in order to function--(Not covered when it was brought up. But this would also suggest that it may differ from location to location depending on their(Starfleet/The Federation's) ability to meet the needs of everyone living at a given facility. So someone living on Earth, the birth place of the Federation and pretty high up on the technology infrastructure food chain, probably gets a rather substantial "ration" while someone living on remote planet with little to no technology infrastructure to speak of probably doesn't get much of one.(then again, it's possible there are exchange rates or other such things going on and they're all given the same allotment, but meh too much work on that front))--.

However, that doesn't mean that everyone gets the same amount every month, as they strongly implied that Commander Sisko gets additional credits by virtue of "doing additional work" (as implied by his position), and I imagine that applied progressively down the lower tiers of his chain of command. That there were other economic systems working on top of that, Gold Pressed Latinum, and other such things just underscored a robust and varied (galactic) trade system.

But it still boiled down to Star Trek exists in a setting where they can literally warp the space around them to propel ships at speeds greatly beyond the speed of light at very great energy expense. Powering a replicator is trivial in comparison, so the only real expense is the basic material for whatever is being replicated, and the maintenance of the replicator itself. As such, being somewhat generous with replicator privileges for all in a controlled manner works well. It doesn't impose on anyone else, besides the guy maintaining the replicator, but as previously outlined, he'd be recognized for doing "extra work" so he'd presumably get more (replicator) credits for his efforts.

But that is also where the example breaks down with the present day. We're not apportioning amounts or practically infinite energy to everybody that doesn't take much effort on the part of any particular person. We apportioning sometimes significant amounts of a person's daily/weekly/monthly/yearly efforts, and "gifting" it to somebody else. Which gives that person a reason to be justifiably cranky when they are confronted with knowing that somebody else is living the life of the "gainfully unemployed" living off of his personal efforts. Whether he considers the layabout in question to be a board member of his company, or a guy on welfare.

That is a very different thing.

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The next question to ask is about population levels, and therefore some mechanism must be set to roughly stabilize the birth rate. I believe this would be extremely easy to do, despite wild speculations in science fiction. You simply correlate family size to resource rationing, and set a 'market rate' such that the best lifestyle is roughly achieved by having 1-2 children, where having more would mean less resources per person in the family, and having no children would mean a more luxurious lifestyle.

Given that replacement level is considered to be 2.1, there would need to be provisioning for some people to have a third child, as children can, and do, have lethal accidents or illnesses(or otherwise sterilizing events) before managing to reproduce. But as also mentioned in a previous post this evening, demographic trends are we're heading for a population decline sometime after the middle of this century without needing to force the issue. So I'm not sure that much more active management needs to be done on this front.

Of course, in your abundance scenario, you do remove one of the presupposed reasons for why family sizes shrank. That between urbanization and lower child mortality. Additional children began to be viewed as an "excessive drain" (which was now unnecessary) on resources and time, thus discouraging them from having more children. Remove their concern about needing to "pay" for the additional rugrats(as the "Great machine" could simply provide for them), and you could end up with a population boom, so you might be correct to pursue things in that case. 

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The final question to ask is whether people innately deserve to receive equal rationing, or whether some factor ought to influence who gets more. Note that no one contributes more than anyone else to production because the machine can do all the work by itself. I could see a case for innovators/scientists to receive additional benefits, as well as perhaps artists or whatever else is considered to help society in a non-industrial capacity. It would be quite easy under such a theoretical system to place numerical value on important contributions by giving extra ration credit.

See the Star Trek commentary above. That and as economists will admit, regardless of what you try to do, there will always be a black and/grey market in play. The easy solution is basically generally follow something like the DS9 model, where they're provided with sufficient "credits" to take care of their basic food/drink/clothing needs, and have enough to spare to engage in additional trade with others after each "disbursement." Simply doing that would result in some form of economic activity following suit, even it is simply gambling on a game of hoops at the neighborhood park. DS9 works well as an example of that, although some of that was likely writers being lazy. Garak was ostensibly a tailor after all. A tailor working on a space station with technology on board that undoubtedly was able to easily get a person's body measurements down to the nearest picometer or even smaller, so if you wanted very precisely tailored and well made outfits fit specifically to you, it should have been trivial to simply walk up to the replicator and have the computer do the work. Which meant his services as a tailor were being used for "other reasons" probably on the order of those Service Sector people I posted about earlier tonight working on Rodeo Drive in Hollywood. They didn't NEED a tailor, they wanted to use one.

As to paying people additional credits for "services" that would presumably be a given if there is a surplus available, any social system which actively discourages socially positive behaviors is a social system which is doomed to fail. Rewarding people who involve themselves in "positive" pursuits should be rewarded accordingly. You wouldn't even necessarily need to pay all of them in such a manner, because once again, there are going to be secondary markets regardless of what happens, and the secondary markets will likely drive the rest of it.

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Note that "balancing the budget" is an example of an abstract principle that, if not being employed for the purpose of maximizing distribution of resources to the most people, seems to me to be an obsolete concept. There is certainly no 'moral' need as far as I can tell to balance arbitrary budgets if there is in fact enough resources for all. Balancing the budget is an important concept when assessing whether debts are repaid - in other words, if human labor is actually recompensed or not. But in the event where people would be recompensed with or without doing labor then the concept of a balance of debts becomes superfluous.

I already covered this in regards to the difference between the "Replicator Economy" as I understood it in DS9, vs the current economy above. I do not think the Budget of any first world nation has quite reached the point of being a proverbial "Federation Replicator" anything coming out of a government budget cost somebody something, and someone is going to have to pay for it, one way or the other, either directly, or indirectly through inflation.

TheDeamon

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Re: Does economics serve us well?
« Reply #30 on: June 07, 2016, 01:45:36 AM »
My point wasn't that such a day won't come.  My point is that money is only functional in a context where we have work to do and we earn it.  It's a proxy for the value of your work.  If there is no practical work, then there is no value to your work and money will become essentially useless.  It won't happen overnight, too much inertia to it, but it will happen if you hand money out for nothing on the scale proposed.

Ah, but in economics, money only has value if someone believes it holds some form of value to them personally. It just happens to be a more convenient means of exchange than most other forms of barter. If I only have 30 coconuts and you have a Music CD I want, you might have an interest in A coconut or two, but we'd spend awhile haggling out exactly how many coconuts are of "equivalent" value to the CD, and after the trade is made, if it's made, you're then left with a supply of excess coconuts you probably don't actually want.

Much easier(for you) if I just go into town, sell the 30 coconuts to a grocer, get a nice helping of currency for my efforts, and then come back to use that to barter with you over the CD.

Money isn't a measure of the value of your work persay, as has been pointed out, that would be wages. Money is an abstraction of "value" which is a commonly agreed upon means of trade which may or may not have any intrinsic value by itself(such as the US dollar since the early 1970's).

Although "money" has had some amusing anecdotes over the years as well, such as the price of gold rings in Roman times, where often times the jeweler was paid for the gold ring using gold coins, at least one of which was often melted down by the jeweler to melt down and provide the actual gold for the ring. The other ring was his "fee." Well, a Roman Emperor started getting strapped for funds, and as such the gold imperial coins they were minting started having deliberate impurities introduced to reduce the amount of gold needed to create equivalent weight. Well, the jewelers quickly noticed the change, being in the habit of melting the currency after all, and thus the price for a gold ring quickly changed to make up the difference in the lacking quantities of gold in the coins respectively.

So in that respect, if by some means, through technology, made the economic value of (comfortable, sustenance levels of) food for most people reach 0, nobody would normally pay for it unless they're gluttons. That isn't to say I'd be opposed to letting gluttons pay for getting more food, I just hope we're not making them resort to the black market to do so(as that means someone else is probably either having their food stolen, or deliberately starving themselves).

Of course, this also discounts "other economies" that may be going on, such as alternative sources for where the food came from. Star Trek again makes a good analog here, in this case TNG, where the Picard family gets to feature in it. They created a setup where replicated food is readily available and widely accepted by most people. However, there remained people that either "didn't trust" the replicated food, or simply preferred the "simple pleasure" or enjoying the "natural" product instead. Even though many people claimed they couldn't tell the difference. I actually do believe this is a pretty accurate representation of reality, you'd have both the tin foil hat crowd that will not trust the new system/source, and you're going to have well-off (usually) elites that are going to prefer to stick to the older ways just because they can. For both camps, I'd generally be inclined to allow them to continue on their merry way if that's what they want to do, and I think any such rational system would be able to enable them to opt out(and back in if they change their mind later).

But it still goes back to the claim that "money would be worthless" is bogus. Currencies do become practically worthless, particularly when the currency itself has no intrinsic value(because it either doesn't actually exist physically, or is paper).  However, the claim that there would no longer be a form of currency is a bit beyond believable. The form it takes may change, but there will still be some kind of currency in play, how much you, or anyone else, may need to make use of it in their daily life may be a wildly different matter, but it would still be there. Kind of like firearms for many people, they may have one in their home, or on their person for protection, but they don't use them regularly(outside of gun ranges or while hunting).

TheDeamon

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Re: Does economics serve us well?
« Reply #31 on: June 07, 2016, 02:08:54 AM »
As far as stagnation goes, I guess I'm a bit of an optimist, but I have faith in man's ability to continuously find interesting things to occupy one's time and make life enjoyable. The threat of repressive ennui from lack of strife would probably be offset by the ability to focus on what many people consider to be the 'important things in life', that they would be doing now except they have no time or energy for it because of work, whether that's working on human connections, exploring nature, reading, writing, or whatever else. I also imagine this future society would have a MASSIVE gaming culture. When you figure VR into it the biggest problem will probably not be ennui but rather convincing people to unplug themselves from the headset once every month and go outside (i.e. the Toyko syndrome).

I'd generally be agreed with this concern. I've done my share Massive Multiplayer Online Gaming, even did some semi-hardcore raiding in World of Warcraft for several years(IIRC, one my characters had over 600 DAYS /played by itself last time I checked; that's almost literally 2 years of my life I could have spent on other much more productive tasks, as to those alternative tasks actually being productive is another question entirely). Even years later I wouldn't mind getting back into it in some ways, but I know it's a massive time sink, and what I'm doing currently isn't conducive to that kind of activity anyway. The ping alone would probably drive me nuts, never mind the cell phone bill I'd probably get for data use.

But it would be nice to be in a situation where I could go traveling in a vacation context and not have to worry significantly about expenses or how long I'm gone. But even the prospect of those kinds of activities still happening means that hospitality services would still need to exist in some form, which means there would probably still be a few humans involved even if most of the work is being done by robots of some kind. So we're not talking about a world without work, we're talking about with work involving things other than we're accustomed to currently.

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Some people would choose to be creative and to innovate simply because they like it. In fact, some of history's greatest innovators succeeded in doing so despite being poor and having little economic incentive for doing so. People like Tesla, for instance, appeared to barely care about material success and did the work for its own sake, the only thing holding them back being the economic system itself.

Is the other side of the coin, being in a situation where a person able to choose to the work, rather than having to work tends to lead to other doors opening up. It means there would probably be a lot of (very) small business-like enterprises almost everywhere, even if the "proprietor" of the business only treats it as a hobby. What they potentially come up with thanks to having the time(and possibly resources) needed to develop and pursue their ideas and passions could see some really stunning developments happen. Tesla is a good example in many respects in this regard, could you imagine what he could have done if putting food on the table wasn't a concern and he didn't need to be overly concerned with getting financial backers?

Instead of spending a lot of time in dog and pony shows, or pursuing ideas "right now" that probably interested him little, but his prospective financiers a lot more, imagine what he might have accomplished otherwise. Then again, WW2 probably would have been a very terrifying thing in that scenario. :) But the example does stand when it comes to prospective modern day Tesla. So long as (s)he doesn't get sidetracked by an MMO while a teenager instead.

TheDrake

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Re: Does economics serve us well?
« Reply #32 on: June 07, 2016, 03:32:28 AM »
I'm looking forward to delving into the depth of the responses, and it was exactly what I was hoping for. I can't respond immediately to the great ideas put forth, but I promise I will get back to you all!