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Capital Is No Longer Scarce

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Re: Capital Is No Longer Scarce

#101

Post by ArkyBeagle »

ChuckMcM wrote: post #51
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

I don't think you can look at a subset of capital expenditures and then conclude "capital is misallocated." You would have to look at all the businesses funded and see where the money is going. Also I would caution you about falling into the trap of confusing "valuation" with "capital". SnapChat might have had a $16B valuation but really only "allocated" a bit more than a billion dollars. If you subscribe to the 'too…

But we used to have a large number of $20-$40 million-per-year companies where people had decent jobs and worked. When that becomes a marque of a schmuck then we have a problem.

I think some of these overvalued... frankly, Pet Rock companies aid and abet this. Don't get me wrong, WE are the problem here but the effects are not good.

Re: Capital Is No Longer Scarce

#102

Post by ArkyBeagle »

m1sta_ wrote: post #92
erikpukinskis wrote: post #41

Earlier quoted context omitted.

> capitalism seems the best method for controlling innate human corruption Capitalism seems better than past failures. But it is surely a local maximum. We have thousands of years of social evolution in front of us. Experiments have hardly been exhaustive, and material conditions seem to be changing faster than ever.

Capitalism could work if greed was looked down upon. Billionaires should be taking risks. It should be culturally mandatory to try and save the world. There's also an information problem.

The fundamental problem is trying to cast individuals in heroic narratives. The mechanism for status is beside the point. People in Russia had ikons of Stalin.

I feel like somehow biasing towards nonfiction is one way to improve this, but that may just be bias speaking.

We can't be all that coherent about "greed" anyway - if we do create consumer surplus through business, then this is a good thing. If we enrich ourselves by rent-seeking and cheating, it is a not. Deciding which is which is pretty hard.

Re: Capital Is No Longer Scarce

#103

Post by vannevar »

lintiness wrote: post #79
ryandrake wrote: post #59

It's a sad situation. The world, in total, has more money than it needs, distributed to a wildly disproportionate few, who have no idea what to do with it, yet there are billions of people who suffer and struggle with issues that that money could solve. But "redistribution is bad", so we all just accept the status quo.

those few who have disproportionate capital consume and invest. they don't stuff the money in their mattresses.

But those who have disproportionate amounts of cash don't consume as disproportionally as they earn. An individual can only personally consume so much. As more wealth is concentrated in fewer and fewer people, the money that trickles down as consumption declines. And as investment becomes more and more abstract, you've got algorithms passing money back and forth between algorithms, and the rate at which cash actually makes it out into the rest of the population also slows.

Re: Capital Is No Longer Scarce

#104

Post by ArkyBeagle »

amelius wrote: post #58
erikpukinskis wrote: post #41

Earlier quoted context omitted.

> capitalism seems the best method for controlling innate human corruption Capitalism seems better than past failures. But it is surely a local maximum. We have thousands of years of social evolution in front of us. Experiments have hardly been exhaustive, and material conditions seem to be changing faster than ever.

The best way to control corruption is transparency. Eventually, IT systems will solve large-scale corruption.

I think that's just Commanding Heights on stilts. It may well be that informal systems can be more efficient.

The problem with formal systems of accountability is that it ends up serving storytelling rather than being calibrated regulation and control.

Re: Capital Is No Longer Scarce

#105

Post by clock_tower »

legulere wrote: post #98
badsock wrote: post #95

Earlier quoted context omitted.

It may happen rarely, but the positive impacts of things like, say, the printing press are too profound to be dismissed that easily

The printing press was one of the main factors making the reformation possible, which later on led to the thirty year's war. So it's actually a good example of how technology has unintended consequences.

Recent historians have been looking at how the printing press was more an instrument of state power than anything else. Remember that printing shops were state-controlled and heavily censored (_The Great Cat Massacre_ has a chapter on print shops in 18th-century Paris); most of their output was royal decrees, propaganda pamphlets, and books friendly to the regime in question.

The Reformation began for good reasons -- the Church had been dragging its feet on internal reforms for hundreds of years, and finally implemented these reforms in the Council of Trent, after the Reformation began -- but its spread was normally something that governments did to their people, not something that people chose for themselves. It wasn't an extension of liberty. Henry VIII and Edward VI flooded England with mercenaries, for example; in the Germanies, whether to turn Protestant or not was a decision made by rulers (who were legally entitled to compel their subjects to follow them; some converted to Lutheranism, seized Church property, and then switched back to Catholicism, and persecuted subjects who were slow to make the change each time). First-wave Protestants -- Lutherans and Anglicans -- generally had less religion rather than a different religion; even today, there are conservative branches of the Lutherans and Anglicans who are negotiating with the Catholic Church to return as whole congregations.

Calvinism was (if I remember rightly) never imposed from the top down, and typically took power through revolts by the middle class or the lower aristocracy; but Calvinist states tended to be oppressive, warlike, aggressively-middle-class theocracies -- very bad places to be poor or dissident. (_Albion's Seed_ is revealing on this; the modern Islamic Republic of Iran is a less theocratic, less anti-commercial, less oppressive place than 17th-century Puritan Massachusetts was.)

Re: Capital Is No Longer Scarce

#106

Post by _9vpl »

mdemare wrote: post #13
_9vpl wrote: post #3

> That means we have massive amounts of capital available to invest in new endeavors. It explains why interest rates are low and there is fairly little that central banks can do about it unless they figure out a way to dramatically reduce investable capital – they can certainly shorten their balance sheets but even that impact is likely to relatively small in the overall scheme of things (eg US Fed about $3 Trillion)…

Just imagine what would have happened if the Fed would have used their current strategy in 1995, or 2005. The same as what's happening now? Sure, then blame the Fed. Something dramatically different? Then maybe there's something else going on, and the Fed is merely responding to that.

How the Fed interacts with the economy, I don't think is too different from any other speculator in the market. They just look at different charts, have more degrees, and have greater propensity for groupthink.

Re: Capital Is No Longer Scarce

#107

Post by OvidNaso »

hellbanner wrote: post #29
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

When Value is defined as "more money", then this will happen. Money often functions as a lack of efficiency and is prone to re-produce itself. For example: if cancer was cured with a pill, forever, the total revenue from curing cancer is pill sales price * people born, which would be less than current treatment costs. Maybe https://en.wikipedia.org/wiki/Gross_National_Happiness isn't such a bad idea.

"Money is a sign of poverty" --The Culture

Re: Capital Is No Longer Scarce

#108

Post by et2o »

merpnderp wrote: post #39
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

Capitalism has never been about making the world a better place. All systems deal with humans and humans inevitably prefer helping out themselves and people close to them over others, which leads to corruption regardless of the system. And capitalism seems the best method for controlling innate human corruption (see China's incredible economic growth once socialism was all but abandoned for capitalism in the 80's pul…

I have to disagree with you about research funding. There is not nearly enough-most people are dissuaded from pursuing research as a career because it is unbelievably competitive to get research grants, which is why we don't have enough research scientists.

The caveat is that we are training more than enough research scientists, but we simply don't have enough jobs for them. There are some jobs in industry, but biology is not like engineering-you can't know when you will find the next breakthrough. Pharma companies are more focused on iterating on established pathways and targets (much lower risk and higher short-term ROI) and are absolutely dependent with government-funded basic research.

The clinical trials bit that you mentioned is a red herring-recruiting patients is often challenging for completely unrelated issues. I've also never heard of being unable to conduct a clinical trial for lack of patients.

Re: Capital Is No Longer Scarce

#109

Post by harryh »

gherkin0 wrote: post #93
lintiness wrote: post #77

Earlier quoted context omitted.

front running is illegal, and flash boys is a book packed full of ignorance. there is no outrage over one consumer buying a house or an apple ahead of another. there's no demand for "fair" auctioning of toyota corollas. speed isn't illegal, and it's been a determining advantage in markets for eternity.

If Flash Boys is full of ignorance, perhaps you could recommend a better book? It also sounds like the term front running refers to many different practices, this is from the Wikipedia article: > One common practice of high-frequency traders (HFT) is a form of front running, where they peer into various exchanges and try to detect orders as they propagate from a broker's order router. > HFT traders place many small o…

> If Flash Boys is full of ignorance, perhaps you could recommend a better book?

http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-F...

Re: Capital Is No Longer Scarce

#110

Post by harryh »

badsock wrote: post #37

And yet there's a 50% tax break for capital gains in my country. What possible reason is there for such a massive subsidy for something that we don't need, other than corrupt influence on the political system by the wealthy to give themselves a tax break?

The Chamley Judd result.
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