Nope my thinking is spot on. Unless you fundamentally change the way we use money then just splitting bit coins to be smaller and smaller won't work. They have a name for doing that, it's called deflation. Inflation to much money chasing to few goods and services. Deflation is to little money chasing to many goods and services. You have to create as much currency (what ever it is Dollars, bitcoins) to match the the goods and services on offer that people want. I'm a monetary reformist so I'm not against bit coins or any other community currency but, like I said. You can not use a finite resource as a currency in an exponential system. Bitcoin is not deflationary in the monetary sense. The Bitcoin economy will opperate under constant lowering prices. There is absolutely no problem with that, despite all the wackos out there trying to say the contrary. It only matters if you are talking of bitcoins as being a universal currency. If you are talking about bitcoins as a community currency same as itica hours then no not really. Let Dr Albert Bartlett explain what an exponential funtion is to you. He does a better job than I ever could. http://www.youtube.com/watch?v=F-QA2rkpBSY check out all 8 videos. Prices adjust donwards. The video proves nothing. |
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Now, in this case, the person with the imperfect knowledge is the original producer. They didn't realize that their paintings were "valued" at such a high price compared to what they were selling them for. After finding out, of course, they could now refuse to deal with the original gallery owner without much higher compensation. If they could afford to that is. But before hand, the market failed the painter. I dont see how the market failed the painter. You just have repeated the history, not addressing any argument. Knowledge will always be imperfect, this is something free marketeers have assumed since always. It was only neoclassicals and keynesians that assumed that information was perfect until recently. Btw, the art trader also suffers from imperfect information. He is also taking a risk. For example, what if the artist is a pedophile, gets famous thanks to his support and when the news gets out the art traders career gets ruined and all his efforts building a consumer base goes to nothing? Is that the market failing to the art trader? (I would also argue that capitalist free markets will generally, if not always, fail, because it is in the interest of the capitalists to without information so that they can increase their profit, and thus capital. In a non-capitalist market, where resources are not accumulated beyond what can be used, there is less incentive to do this. Where there is no profit motive at all, such as in an anarchist free market, there is more incentive to actually educate consumers about the product.) You are assuming that people will be completely different depending on the name you asign to them. It makes no sense. I have discovered that people that define themselves as austro-free-marketeers tend to be very moral and very consumer driven producers. Now, as this thread is about profit, I would like to state two things. First, that in the original example, the gallery owner exploited, immorally, the painter. But, that actually, if the paintings only costs the painter $100 to produce (labor, paint, etc.), it would also be immoral for the painter to sell those paintings at $5000. That's because, as I posted earlier, "cost [should be] the limit of price". I.e. it's immoral to sell something for more than what it cost to produce it. No its not. Just because you repeat something again and again without justification, it does not become true. Now, that doesn't work in this capitalist world we live in. But, damn it, I'm allowed to dream about a better world!
(Also, I'm bowing out of the thread now, unless someone offers a detailed response that actually addresses a point I've made.) We dont live in a free market world. We live in a social-democrat system. If by capitalism you mean the present system, then yes, we should live in a better world. The problem is that people is very selfish and prefer to believe in fantasies that make their ego feel good and not real solutions. |
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Reply to everyone who said that nothing immoral occurred in my thought experiment.
What do you think about the idea that a free market requires knowledge/information? I, as a consumer, can buy what I want. But I really only want to buy products that aren't made by slave labor. Difficult, because there is no label on goods that explains whether or not it was made with slave labor or not.* I also only want to buy food that isn't going to poison me, that don't have too much fat or sugar, etc. Now, if it were up to the corporations, I wouldn't be able to know any thing about the food they produce. Why? Because they benefit from consumers only being able to compare products based on price, advertising, and later, after the product is consumed/used the experience. So, that's why governments step in and force corporations to label their goods. No, you have it backwards. If there was a free market consumer presure would force food companies to label their products with the information, and probably there would appear other companies with higher standards hiring employees. But the governments appears and regulates so companies can avoid competition and dont have to listen to consumer demands. Then politicians go and promote the idea that regulations help you, and its easy since very few voters read and understand the regulations. You have example after example of this. For example, I remember a one man beer production company that started to get famous locally and started to take a big part of the market. The beer companies came quickly and made the government regulated sending the guy out of business. It is really naive to believe that government regulations are there to protect you. |
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I did explain my use of the term. Although I should have more properly said "when you lord over someone with a potato...", I did convey the correct meaning of the word lord as a verb. I don't understand why you wouldn't trust me over my vocabulary. We have plenty of time to consult free dictionaries while debating on a web forum. I did use the dictionary. It says to lord is to treat with arrogance. But I still dont understand what it means to "lord over someone with a potato"... You keep using subjective terms as if they were objective. How can I know if someone is "lording the potatos"? I could ask you what your feeling are about something, but that is not way to create a system. I dont understand your distinctions, they are not clear, they always use subjective terms, that basically express how you feel about something. It seems to me that the same fact could be moral and inmoral to you depending on the rethoric used. Can you please explain to me in clear terms this: You find some usable land and start farming the potatoes. Perhaps you will do so in cooperation with other farmers. Everyone will own the resulting potatoes in accordance with the work they've contributed to it. They will probably want to keep so many potatoes and trade the rest for things that they need and want.
You have the right to refuse to associate with someone as well as the right to defend yourself from thieves. You have no right to lord your surplus over anyone. Isnt this contradictory? Why someone selling a potato and obtaining a surplus is just trading and its moral, but someone else selling a potato and obtaining a surplus is "lording the potatos" and its inmoral? |
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No. When you sell a potato, you now own whatever you got in exchange for it and have no more ownership over that potato. When you lord a potato, you might take a portion of all the potatoes that anyone might ever grow from it, like how Monsanto operates. You might become that person's lord as long as they eat your potatoes. I was laughing when I read that and I dont even know what it means. You can not keep introducing new terms, you are complicating the debate, not making things more understandable. You know what they say: if someone is using complicated words and mudding the debate it can be because of two reasons: 1) He/she has no idea what he/she is talking about, or 2) deception. Try to explain things clearly. "Lording a potato" is not a clear or self-explanatory concept. |
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It is not that complicated... Please follow along.
In a debt-based economy there must always be more money owed than is in circulation, otherwise there would be no money. No. Even if you count government debt at the central bank as real debt (in reality its not), you have as much money as debt in circulation. Since this is true the only way to keep it going is to continually accelerate the rate of growth of the economy... Even accepting the previous as true (its not), I dont see how "the only way to keep this going is to continually accelerate the rate of growth of the economy"... I dont really understand what this sentence mean. Because that is how all Ponzi schemes perpetuate. Once the rate of injection into this type of economy slows down it can quickly collapse. This injection comes in the form of actual physical resources that have to be extracted.  I dont understand what you are saying. Injecting physical resources?!? It requires energy to extract these resources. The problem is, that over time, as you extract the resources that are easiest first, it costs more and more in terms of energy to extract those resources. You reach a point of diminishing returns. At some point, the rate at which you inject new value into the economy is slower than is required to keep a debt-based economy running. No. The reason why the inflationary cycle becomes unsustainable is because the distortion in the capital structure create inefficiencies and malinvestment. As the system becomes less and less efficient at the end the system collapses. Interest rates get lower and lower (diminishing returns), and it eventually stops working. Interest rates go down as a way to keep the malinvestments that the inflationary cycle created going (that obviously produces diminishing returns). It has nothing to do with diminishing returns from resources or technologic advances. There were economists some decades ago trying to relate business cycles with technology changes but it was a complete failure, basically because they are not really related. In order to keep the engine running (so to speak) Keynesians rely upon the 'business cycle'... Which is to say, periodically pulling away from the brink of unsustainability, that is until there is eventually a brink you can not pull away from. This also acts as a means to make massive transfers of wealth from those that have access to few financial markets to those few that have access to all financial markets. Yes, this is absolutely true. Although I am not sure if keynesians in general know what they are doing or are just completely clueless and the whole thing just blows up because its not sustainable. Maybe some at the top know, there really is no way to tell. "discoordination in the economy and stops growth" is just another way to say 'not sustainable'. I think we kind of agree but the problem is how you use the word "growth". I never mentioned GDP. GDP is expressed in units of the currency for the economy in question, and as such is not really an objective measure. IMO it wold be best to represent such growth in terms of total resources consumed versus total resources produced... But economists generally refuse to track metrics that tell the truth. From how you are using the word growth it really seems you mean GDP. How do you define growth? It would be interesting to have statistics in terms of real resources and not money. But it is impossible or extremely difficult; its not that someone is trying to avoid that type of analysis. How do you clasify objects?. Imagine only the computer industry. How many types of computer do you report? If you aggregate too much you are loosing valuable information, if you dont the data becomes unmanageable. That is why the price system works. The problem is that the price system is so completely distorted by the monetary manipulations of the governments that it just becomes too dificult to know what changes come from supply and demand of the goods and what part comes from monetary manipulation. It is a big issue. Part of the reason that the German economy is still strong is that Angela Merkel clamped down on foolish derivatives trading which would have resulted in higher inflation. It will not continue to be strong unless it de-couples itself to some extent from the EU economy. While I agree that in some way it would be good for Germany to decouple from the euro (it has the problem that it loses a big market that controls), the other part is just not true. The Germany economy has always been strong, way before the derivatives growth. Since Weimar and the National Socialists, the germans have always had a strong currency policy that has allowed them to build industry. The reason why a strong and stable currency helps to build industry is simple. Inflationary monetary systems distort the natural interest rates and produce a series of malinvestments. While the manipulation goes on this investments appear profitable (this is the bubble), but then they come crashing down and they reveal as malinvestment and waste. Now this is a lost opportunity and wasted resources, that could have been dedicated to built a sustainable industry. In the short run inflationary countries can give the appareance of growth, because of all the econimic activity of the bubble, but in the medium and long run its ruinous. I would point out that the currency that Germany is using now is the Euro... Yes, that is the 'Capital' in 'Capitalism'. Capital is defined as the goods that help create other goods. For example, a shovel is a capital good. It helps you produce other stuff. Its not the stuff you want to consume. This definition is the traditional definition. Even Karl Marx uses this definition. But in the financial circles because they only see money, capital has started refering to money, and this has moved onto some economists. But the definition of capital is stuff that helps you produce other stuff. Money, except in the financial world, is not strictly capital. And yes, when governments start messing and centrally planning the currencies bad things happen. Can you explain to me how the Bitcoin algorithm is not 'central planning'? I dont really see the connection. Central planning means organizing the production of a society. How is the Bitcoin algorithm central planning? Again, GDP = fictitious metric. Its not really ficticious, it measures economic activity, but it can be distorted if the price system is distorted. But I really think you are using the word growth as increase in the GDP. I would like to know your exact definition of growth. |
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FatherMcGruder:
I don't think I really see what you're proposing. To help me understand could you:
-define "capitalism"
-give an example of how one would go about avoiding it.
Capitalism is a system wherein one, as a capitalist, tries to gain as much as he can, however he can, from someone else, or some group of people, while giving back as little as possible. This is the most ridiculous definition of capitalism I have yet read. Come on, you are using all type of subjective concepts as if they were objective. It does not make sense at all. |
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Yes.
Also, you are only considering consumption in your model. But savings are usually used for investment through the financial system, so an increase in savings is not less money in the economy, its just less money being used for final consumption and more money being used for capital building. The transmission from savings to investment is not 100% but with a competitive financial system it does not create problems.
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And yes, when governments start messing and centrally planning the currencies bad things happen.
And when they don't, equally bad things happen. completely centralized and completely decentralized economies are both bad things, but there is a good balance somewhere in the middle. Please, lets keep a sane debate. The middle point is not an argument. If it were slavery would still be around because you dont want to completely remove slavery, you want to find a good balance somwhere in the middle, right?  Governments messing in the currency markets have always created problems and poverty. And please, from the previous comments, always remember that increase in GDP is an increase in economic activity, not necesarely growth. |
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That has been the whole problem with an economy that requires ever increasing growth to operate, like an economy dependent on debt-backed currency. The rate of inflation required tries to drive the rate of resource extraction, No, it doesnt. but it can not do this once that rate becomes unsustainable, as it has now become. In this case the entire economic system that is dependent on that arbitrary rate of inflation than becomes unsustainable itself.
The problem is that the debt-based economy was designed to maximize growth... Not for sustainability. Wrong again. The central bank system (which is what I am guessing you mean by debt-based economy) creates discoordination in the economy and stops growth. It creates malinvestments and crisis. If by growth you mean an increase on the GDP then yes, inflating away and then reporting a funny CPI will increase the GDP. But increase in GDP does not mean growth. GDP reports economic activity, not growth. Such is the folly of short-sighted capitalists, that they would sacrifice perpetual profits (sustainability) for short-term profits. err... The central bank is a central planning system. Even Karl Marx advocated a central bank. Now, when it comes to economies that are coupled with different rates of inflation (like Japan and the U.S.) then capital will tend to flow to the economy with the higher inflation rate. Why? I dont see why. Germany has had strong currency compared to the rest of the world and has built a lot of capital. Notice, I said 'capital' not 'wealth'. This is because 'wealth' depends on the ultimate value of that 'capital'. This would happen in the form of Japan purchasing U.S. debts that pay a higher interest rate than Japanese debts. In the short term this results in a flow of capital from Japan to the U.S. The danger is that the U.S. could just say "I think I will just keep those peanuts" and choose not to pay it back, which would be a sucker deal for the Japanese. But this would also result in the U.S. having to pay higher interest rates, which would require issuing more capital (quantitative easing) and feed into a hyperinflationary scenario (unsustainable). Never mind, you are using capital as money, not as machines and objects that help produce stuff. And yes, when governments start messing and centrally planning the currencies bad things happen. In the short term it looks like a raw deal for the Japanese, but in the longer term they end up with a more stable economy (sustainable) even though it may temporarily grow at a slower rate. Standing pat is not a bad thing if the alternative is collapse... Again, increase in GDP does not mean more growth. |
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Suppose that tomorrow, or next week, or sometime soon, some really big merchant were to announce that they accept payment in Bitcoin. For the sake of concreteness, I'll say Amazon. What effect would this have on our economy? It seems to me that, right now, Amazon could effectively dictate exchange rates, since their "vote" would far outweigh the rest of our tiny community. In fact, it would probably be in their interest to manipulate the price of BTC, in something like the following scenario: - Amazon says, "We are now accepting payment in Bitcoin, at a rate of 2 USD per BTC" (or whatever)
- "Gold rush": We get about 1,000,000 new miners in the space of a few days as the value of BTC has increased by over 100%
- Most of these miners spend nearly all their earnings through Amazon, since it's the only well-known vendor accepting the currency
- With a semi-captive market, Amazon now starts dropping its exchange rate while selling off their own BTC for USD
- Profit!
I understand that markets are supposed to be efficient, so there may be some counterforce that would keep this scheme from working. What is it? Amazon is not that stupid. Right now the price of bitcoins go for under 1 dollar. Why would Amazon start accepting bitcoins at 2 dollars? But hey, lets suppose they do because I guess you mean they want to raise the price. Two things could happen: 1) Everybody starts selling (or using) their bitcoins to Amazon since they are paying more than double their present price. Now Amazon has all the bitcoins. Now the Bitcoin community starts a new bitcoin chain and the Amazon bitcoins are worth nothing. Amazon has lost a lot of money (and if I remember correcly the value of the bitcoin economy is over 4 million dollars, thats a lot of money) and has given us a free ride. 2) Not everybody sells (or uses) their bitcoins to Amazon, but Amazon setting that price affects the market pushing the exchange rates towards those 2 dollars. Now amazon has a lot of bitcoins because its buying them to keep that rate. You explain that Amazon could start selling them, but what would happen is that as Amazon stops buying at 2 dollars/bitcoin and starts selling the price would drop abruptly. Amazon would have buyed a lot of bitcoins at 2 dollars and would have to sell way under that price. Amazon loses a lot of money again, and gives a free ride to some of us. There is no way Amazon (or anyone) is that stupid. |
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You find some usable land and start farming the potatoes. Perhaps you will do so in cooperation with other farmers. Everyone will own the resulting potatoes in accordance with the work they've contributed to it. They will probably want to keep so many potatoes and trade the rest for things that they need and want.
You have the right to refuse to associate with someone as well as the right to defend yourself from thieves. You have no right to lord your surplus over anyone. Isnt this contradictory? |
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Is there an organized effort to add translated subtitles to the video? I volunteer myself to do the catalan and spanish translation, but it would make my life much easier if I could get the english subtitles (if they exists).
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Some of you on here are rand zealots. Just because you think one way, doesn't mean everybody thinks the same. If you could find one motivator for human actions then you would win a nobel prize and be hailed the world over as famous. It's like some of you are consigned to being selfish bastards so to ease that cognitive dissonance you assume everybody is the same and make these contrived arguments about how it's done to "make yourself feel good" or some other bullshit reason. - Why do people vote? It's -EV - Why do people make anonymous posts on 4chan? I sometimes make posts there, then instantly leave the thread. - Or help people out on IRC? Doesn't feel good at all, but I recognise that people help me out a lot and I have an obligation to do the same. Even when I join new channels + with unknown users I've never been to before. Not everyone is blind profit maximisers. Even the evolutionary science says that humans are altruists to some degree as a result of group level selection (altruist groups are more likely to survive in the wild and therefore are selected for). A better theory for human behaviour (incidentally that is accepted by mainstream psychology) is to say that each person has a self image. All actions we take are to try and stay congruent with this self image to minimise cognitive dissonance. If you're a cutthroat salesman ripping off customers with junk, then you're going to reason that you're doing nothing wrong in this competitive world. If you're religious, you might reason that all non-religious people are deliberately denying God/trying to ignore him. If you're atheist, you reason that religious people are in self-denial. If you're an artist, you may reason that everything is about feeling. A scientist reasons that it's about hard facts & evidence. Here's an email snippet for your amusement, showing at least one example (me) that not everyone is profit oriented and can in fact have other goals in life (horror!) We're still waiting on legal before we can dive into the BTC exchange. Have
you got the site up and running? Been trying to get an SSL certificate. I've been trying to get one, but the registrars don't seem to be working. Aside from that I was wondering if you'd want to come here to work on a
poker bot with me. You'd have to sign non-disclosures and nothing would be
open sourced. If you're interested what would all your requirements be
financially and otherwise? We'd provide housing and you could continue
working on the BTC exchange among other Bitcoin related projects. Another
perk is MTT and Cash game backing if you want it.
Lost me at 'not open'. My interest is freedom + technology, not money. I agree. Profit in the monetary sense is not the only motivator (although it is a motivator), it might not even be the most powerful one (its all about sex...  ). And this is a problem I often find in the freedom movement. Saying that people are profit maximaxers is a simplification and its a wrong simplifications. In economics even austrian economists does not assume people are pfofit maximazers. For me profit and loses are important, but not mainly as a motivator, but more as a signal for resource allocation. Without a system of profit and loses there would be no economic coordination and there would be no progress. From a society point of view that is the value of profits and loses. |
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["The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it."
This is very difficult to measure. It's a game of whims and desires in the end. The best measurement is, frankly, the market at hand; whatever anyone is willing to pay and accept. This whole game of defining what people are truly owed is silly. It only reminds me of today's absurd concept of a "living wage". Thought experiment: I'm a painter. I paint a piece, and sell it to a gallery owner. The gallery owner says, great, here's your 100 bucks. I go and buy some paint, brushes, etc. Rinse, repeat. Some time later, a friend points me to a website. Huh? I think, that's my name, and those are my paintings. And, wholly-shit! they are being sold for $5000 a piece! I confront the gallery owner, who says, that they are in fact selling my works for a massive, massive markup. And that there's nothing wrong with that. I voluntarily sold the paintings to the gallery owner. I accepted the price paid for my work. I should be happy that I got what I thought was a fair price for my work, and the gallery owner was happy to have paid that fair price. The fact that the gallery owner can turn around and sell each piece for a huge profit is nothing to do with me. Is this immoral? (Scenario taken from a very good fiction book I read once. I can neither remember the name of the author, nor the title of the book.) No its not inmoral. The painter gained two things: 1) Exposure thanks to the previous work of the art merchant who worked his ass to gain a costumer base and a reputation. 2) Exerience. Next time he wont sell so cheap and will bargain more. This is actually the biggest benefit the painter got, but this is just my (obviously subjective) opinion. |
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If you do not control it you do not own it.
So do you use force to remove them from your home, or do you allow them to continue to interfere with your use of it? Yes, you use force to defend from the agression. |
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In Europe the working class was able to grab the state by the throat after the war-years, and ... MAKE the state provide them with decent (decommodified) healthcare, housing and education and the right to eat.
...thereby dooming them to miserable lives of semi-poverty and blocking them from fulfilling their potential. There are plenty of statistics showing that people who receive government benefits have lower job satisfaction, lower educational attainment, poorer health, shorter lifespan, are more likely to be in prison, etc. Some of these are quite good controlled studies (e.g. of families on opposite sides of the same street who happen to be in different towns and therefore qualify for different government "benefits"). However, time is short and I'm not going to dig out the references right now. I accept that this makes this post fairly unconvincing. And yet, somehow, the Nordic countries consistently rank high in education, health and life satisfaction studies, despite having rather generous welfare programs. Well, most Nordic countries have privatized government programs (meaning private companies are payed by the government to provide services like school, health care, etc... No public employees). Its a mixed system. Also, there is petrol there. And if you look the statistics the nordic countries are not that well off compared to the USA. The Nordic countries would be one of the poorest states (GDP per capita) if they joined the USA. Also, the nordic countries builded their industry during their more free market era. During the 80's they went more into social-democracy and went bankrupt. Since then the social-democrats were voted out of the government and changes towards more free market policies were implemented. |
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All I'm saying is that when you take things to extremes, bad things tend to happen. A little less law is a good thing, but never none at all.
Right. I guess that when people were debating about slavery, you would not have sided in favor of ending slavery completely because it was too extreme. Lets just stay in the middel and defend a bit of slavery, otherwise you would be defending an extreme option and "bad things tend to happen". The idea that the center point is the right answer is not only ridiculous, but also depends on how you focus the debate. Its basically nonsense. |
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