What is Wealth?

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Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

Volkerball posted:

How exactly does the Stalin slush fund guarantee a society in which everyone gets better off and not just a few? It's going to be subject to the same forces at play in the current capitalist system. Greed will exist with or without capitalism, and power will corrupt with or without capitalism. The only way to bypass these things if you have a belief in a sort of benevolent governance that could manage a fund like that in a way that ensures that 100% of the proceeds go towards the benefit of society. And if your end goal is a government with that as its central principle, then such a government could accomplish the same exact benefits through tax reform, enhanced welfare, social security, funding for secondary education, etc etc, regardless of what label they use for their economic system. I'm an Occam's razor man myself.

The basic assumption would be that democratizing the workplace, eliminating the current conceptual barrier between the economy and the rest of society and eliminating the current mode of ownership would change the incentive structure of the economy, thereby changing people's behaviour. A socialist would say that the current system creates different economic classes who come into conflict and that this conflict prevents the system from delivering those outcomes, necessitating the end of class conflict in order to truly solve those problems.

You're free to disagree with that belief but you should at least understand what the argument is first.

# ? Apr 4, 2019 14:39

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# ? Apr 29, 2024 13:47

OwlFancier: Aug 22, 2013

Yeah, if you're describing a government that enforces an actual level playing field and is effectively upheld by massive democratic participation, you're describing socialism.

# ? Apr 4, 2019 15:07

roomforthetuna: Mar 22, 2005; I don't need to know anything about virii! My CUSTOM PROGRAM keeps me protected! It's not like they'll try to come in through the Internet or something!

Helsing posted:

Equating profit with social utility is quite a stretch

Yeah, again, a super simple disproof of that correlation is the existence of profitable companies whose sole purpose is to advertise - and hardly any of it is "making people aware of a thing" advertising, that could arguably have utility. Everyone is already aware of coca cola, and still millions are spent on advertising it. It is negative social utility.

# ? Apr 5, 2019 04:36

Eschat0n: Jan 16, 2019

Looks like this thread has gone in a different direction, which is fine, so don't take this as me trying to derail that tack for more than a few posts, but if anyone is still interested in following the earlier discussion that I began, I've been asked to try to be more concrete with my theorizing, and since then I've found out that much of what I had been thinking about really preexisted me in the form of a heterodox school of economic thought called Thermoeconomics. That seems like viable name for what I have in mind, which is basically that with a mix of Distributism thrown in (another heterodox line of economic thought).

I don't have a coherent essay written up to lay out my thinking so far, but I have got the raw elements of one; bullet-points summarizing the salient points of a "manifesto":

Concepts and Initiatives Based on a Thermodynamic Understanding of Economics

Concepts

The primary and primal economy is the natural world; its markets the trophic exchanges of its biosphere. There is a non-metaphorical relationship between the mechanics of ecology and economics; human economies of any kind are secondary exchanges of the very same sort, only more useful to human endeavors.

Wealth is to be considered in Marxist terms of the use-value, a concept closely related to the Labor Theory of Value (LVT):
"A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values�. Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value."
Marx, Karl (1887) [1867].�Capital: A Critique of Political Economy. Vol. I. p.�30.

The reason wealth is to be considered in terms of the use-value is that it makes explicit the relationship between labor and wealth; without work there is very little, if any, wealth � and even if none of this work were work performed by human agents, then it would be done by robots and computers, or more traditionally, by plants and animals. It is because there is a necessary link between work and wealth that we can say there is a relationship between ecologies and economies.

Markets distribute that which can be transacted to create use-values, because even useful work is not wealth if it is not accessible to those who can use it. In the process of performing this service, however, markets are not 100% efficient, because it takes some amount of work to perform the transaction, handle risk, etc. More is not got out than is put into an economy in the sense that economies require profits and profits require use-values be sold at a cost added to the cost of the work and materials required to make them; while items like penicillin have far more use-value than their constitutuent parts, the use-value would be the same if it were produced according to need and provided to the enduser without ever passing through a market (e.g. by the enduser themselves or by family, etc).

Whereas an ecology�s efficiency is measured by its ratio of energy input to biomass output, an economy may also be measured in the ratio of its man hours input to use-values output.

A thermodynamic economist is wary of centrally-planned economies because they represent, at best, an efficient but specialized monoculture with little resiliency � and quite often, due to inept command and control mechanisms or easily gamed systems, are quite inefficient.

A thermodynamic economist is equally wary of non-socialist conceptions of free market economies because these economies in truth rely on rigorous enforcement of rules to keep the market �free� - it is a matter of fact that the unregulated primal economy of the natural world gave rise to the variously regulated human economies, themselves only extant because the anarchy of the natural system was found wanting. Far from unnatural, management of economies is intrinsic to their very existence, and in the power vacuum of a truly �free� economy, participating agents soon intervene to create de facto regulation of the markets in their favor � an uneven process in any real economy that will create winners and losers entirely regardless of their efforts and qualities.

To the extent that different economic classes of consumer mirror the trophic levels of consumers in ecologies, one would expect that a society of many classes is a natural trend which does self-limit to some extent. One would expect most agents to spend most of their time in the lower classes. Higher classes are significantly more efficient at using the resources available to them, but because they are incapable of using resources not preprocessed by the lower classes, their numbers will always be significantly lower, by the ecological �10% rule� that dictates roughly only 10% of the energy available to one trophic level is rendered to the one that feeds on it. The above neatly predicts class warfare in that it is incumbent on the rich always to be pushing the poor to more efficiently render them their excess resources, and the poor will feel that the rich are always more efficiently depriving them of any safety net. While there are economic classes, there are also market classes which play a dynamic role in this and, like trophic levels, form prerequisites: the Agricultural class is the prerequisite of the Industrial class, and the Industrial class is the prerequisite of the Intellectual class. Unlike the relationship between ecologies and economies, this is mostly a metaphorical relationship: for example, the parity breaks down when we consider that the Intellectual and/or Rich class provides real resources (use-values) to the Agricultural and/or Poor classes at times; there is a cooperative aspect to human social organization which does not have a neat corollary in ecology.

Sufficiently expansive and advanced human economies can become thermodynamically �limited� systems � an intermediate between classical �open� and �closed� thermodynamic systems in which the unlimited resource inputs like solar radiation or iron ore are only unlimited in the sense of a rate of harvesting which exceeds the rate at which the economy demands them � that is, more could be done with more resources but the ability to gather the resource fast enough to use it is not sufficient to maintain the rate of production. Thermodynamic economics focuses on these kinds of economies because they are increasingly common, just as they may have been prior to the advent of agriculture, and because they stand to benefit the most from thermoeconomic policy.

Free Market Capitalism (FMC) is a highly competitive economic system in terms of wealth creation (the creation of use values) and its ability to support national systems which suppress the wealth creation of other national systems. Because regulations of markets will restrain their function (to distribute use-values), markets with more careful regulation than FMC markets will generally have higher entropy generated in their operation, leaving them at a disadvantage. To overcome this disadvantage and avoid harmful externalities and dangerous instabilities inherent in FMC, Socialist economies in competition need to direct substantial, deliberate steps to regulate their economies in such a way that the inefficiencies introduced are offset by increased efficiencies elsewhere. The goal of regulation is to make the economy simultaneously more sustainable and at least as profitable as FMC markets.

The Thermoeconomist does not assume that FMC is cyclic or that it must inevitably fail. It is held equally possible that, like some ecosystems, equillibrium might be reached at a local maximum instead of a global maximum; FMCs may exist indefinitely even if better alternatives are possible, because they are self-perpetuating via psychologically addictive mechanisms.

Initiatives
(in no particular order of importance, not exhaustive)

Open source production of material, knowledge, and culture is a priority because it creates use-values without needing to be exchanged on a market; this creates use-values and incurs very little transactional inefficiency.

Intellectual property like copyright, patent, and trademark are to be viewed explicitly as (perhaps necessary) inefficiencies.

Libraries and their online corollaries should be funded more aggressively

Monopoly of any market in an economy is to be assiduously avoided for many reasons: because they remove jobs via economies of scale, do not utilize resources (including human resources) as efficiently as smaller businesses, because they represent a threat to the state, and because economies reliant on large players are not as resilient to collapse, which can result in a less efficient recovery period and boom-bust cycles.

Worker ownership of capital via cooperatives, stock options, etc. should be incentivized.

Manufacturing which produces things which are durable and long-lasting should be incentivized.

Unions may represent monopolies of worker markets; such situations also are to be avoided for much the same reason � but their right to exist must be protected just like any other legitimate aspect of an economy involved with the negotiation of the values of commodities.

Mandatory union fees constitute rent-seeking

The Right-to-Repair is to be viewed as essential for efficient and sustainable economies.

Sustainable energy sources circular economies are a priority to promote efficient use of available resources.

Population growth, primarily via immigration and population retention (because more rapid and sustainable), is a means of increasing wealth because labor is the ultimate source of wealth. Efficient employment of that population should be the primary driver of any policies retarding the rate of immigration.

There is likely a certain ratio of affluence to population which represents the most sustainable and efficient distribution of wealth, which ought to be the static target of government economic initiatives which affect the distribution of wealth in their societies.

Fractional-reserve banking has a place in modern economies, but should probably be regulated by tying the degree to which it is available to banking institutions to projected national growth of GDP or some other measurement.

Credit Unions are to be incentivized

Because �middle-men� represent parts of the trophic exchange mechanism of an economy which may introduce unnecessary inefficiencies therein, it may make sense to specially tax agents (companies, individuals, etc) which do not produce use-values or sell use-values directly to the end consumer, or perhaps even these as well as the original producer.

It may make sense, where possible, to have the government employ schoolchildren, military personnel, idle disaster response workers, the mentally handicapped/ill, and the retired in low-intensity, localized activities such as vegetable gardening, forestry, animal husbandry, aquaculture, open-source knowledge or production work, biofuel production, etc. This could follow the same basic concept as the WWII-era �victory garden� movement. Proceeds of this effort could be divided up according to personal attainment or made available freely to local users.

Widespread incentivization of solar energy capture.

It may make sense to utilize a form of welfare like Universal Basic Income � only in concert with an aggressively progressive tax such that those who make much above poverty effectively receive no benefit � (or perhaps some other, better method) to encourage risk-taking in potential entrepreneurs. Avid entrepreneurship ensures an organic means of ensuring a relatively good use of available resources and a healthy economic ecosystem composed of competitive small businesses (obviously this is not exactly UBI as it has recently been espoused by some, but the term neatly encompasses much of what I have in mind).

Crowdfunding should be promoted (but probably not incentivized)

Incentivize gymnasiums to store and sell power generated by exercise

To the extent possible, deregulation should be done that favors small businesses and entrepreneurs; rent-seeking legislation and regulatory capture should be aggressively purged

The minimum wage should not be strictly enforced and deemphasized or abolished

Telepresent work and virtual offices should be incentivized

Durable government infrastructure projects focused on transportation, energy, and communication should be crowdfunded.

There should be a tax on packaging for durable goods. Durable goods do not need packaging except for convenience, and mostly this is just marketing. The tax should lower waste and encourage companies to drive marketing dollars into product improvements instead. The tax (or tariff for foreign origins) should be on the manufacturer or importer.

# ? Apr 11, 2019 05:34

Harold Fjord: Jan 3, 2004

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