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Where has all the money in the world gone?

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Re: Where has all the money in the world gone?

#81
post #78

I just finished David Graeber's "Debt", and it really enlightened me on this subject more than anything in that reddit thread. It's one of the most scholarly, informative, provocative books I've read in a very long time. I'm actually reading it a second time through, just to make sure I understand it all.

I've been reading large chunks of that and it's both good and bad. The good parts are where he sticks to his core strength of anthropology -- it's filled with fascinating descriptions of how commerce and law worked in various societies, ancient and modern, from the Irish monks who sat down and figured out the precise compensation that you need to pay if one of your bee stings another man [the regular price of the sting minus the cost of the bee] to the spear/cloth bartering festival slash orgies of some Aboriginal tribe. Lots of fascinating stuff there.

He is on much shakier territory when he starts to enter into the economists' domain. He's probably correct when he declares that the inefficient pre-money "barter economy" has never actually existed, but then he breaks his arm patting himself on the back to say he's smarter than all the economists who always use this as an example when explaining why we have money.

When it comes time to actually try to explain debt itself, he's really lost. He starts the book by posing a question: how is it that the language of debt got so wound up in the language of morality; by extension, why do we think it's immoral to not pay our debts? He never seems to come around to the obvious answer: that a debt is a promise, a promise of money later in exchange for money now, and that breaking your promises is seen as immoral because it breaks the reciprocity that underlies almost all human interactions. He seems to have a mental image of "debt" as something that a loan shark puts you in so that he can break your legs afterwards, rather than the vast majority of the world's responsible debt arrangements which wind up beneficial to both parties.

Anyway, I'd say Graeber's "Debt: The First 5000 Years" has some interesting bits but a bunch of flaws. And this comment is only this long because I don't have an account on Amazon.

Re: Where has all the money in the world gone?

#82
post #74
post #70

Earlier quoted context omitted.

The problem isn't socialism, it's a divergence of productivity between the northern and southern regions of the euro area. When you combine this with a shared currency you're asking for trouble. Note that the socialist nordic countries have stellar economies. I've noticed a lot of Americans blame the euro crisis on socialism which,is interesting since it doesn't seem to hold up to scrutiny. I'd be interested in heari…

People use the word Socialism when they mean something like "perversion of incentives". We perceive that Socialism incentivizes bad choices, like having more children than you could afford without government benefits, or making investments that appear less risky because you assume a government bailout will protect you. As you point out, the nordic countries show that perverse incentives don't necessarily follow from…

Thanks for the good explanation.

However you end your comment by an unfounded claim that more socialism tends to imply perverse incentives. The same could be claimed of capitalism (or probably any other ..ism), see the banking sector and American healthcare for good examples.

In the rather socialist Denmark (where I happen to be from) when you break a leg you go to the doctor to get it fixed for free, and then you call your employer and tell him you won't be working for the next week, but you'll receive your paycheck nonetheless. When you get a child you take 9 months off work with full pay so that your offspring can get a good introduction to life. When you're out of a job the state will take care of you indefinitely.

Despite of this denmark has a consistently strong economy, is one of the richest countries in the world, and has for many years been in the top three of both the happiest country and the least corrupt country in the world.

Re: Where has all the money in the world gone?

#83
post #3

Watch Zeitgeist Moving Forward and you'd understand.

It is so easy to find just plain wrong information on the internet these days. The problem is people don't know what they can and cannot trust, so it continues to perpetuate itself even amongst more intelligent people.

Re: Where has all the money in the world gone?

#85
"E.g., a new farmer with no track-record might have to promise me twice as many potatoes in exchange for a deer haunch, due to the risk that I might never see any potatoes at all."

This part of our system doesn't make any sense to me. What makes you think someone's gonna have more incentive to "pay up" if they now have to work twice as hard?

Re: Where has all the money in the world gone?

#86
Keep in mind this is a great primer on macroeconomics, or how the economies and money supplies of societies as a whole work.

It's equally fascinating and important to learn about the basics of microeconomics, the other side of that coin (pun intended), or how individual people and businesses make decisions about production and consumption. You've probably heard of the laws of supply and demand which are really important for understanding things like how and why prices change and why some businesses and industries are more successful than others.

Re: Where has all the money in the world gone?

#87
post #82
post #74

Earlier quoted context omitted.

People use the word Socialism when they mean something like "perversion of incentives". We perceive that Socialism incentivizes bad choices, like having more children than you could afford without government benefits, or making investments that appear less risky because you assume a government bailout will protect you. As you point out, the nordic countries show that perverse incentives don't necessarily follow from…

Thanks for the good explanation. However you end your comment by an unfounded claim that more socialism tends to imply perverse incentives. The same could be claimed of capitalism (or probably any other ..ism), see the banking sector and American healthcare for good examples. In the rather socialist Denmark (where I happen to be from) when you break a leg you go to the doctor to get it fixed for free, and then you ca…

[deleted]

Re: Where has all the money in the world gone?

#88
post #70

Earlier quoted context omitted.

The problem isn't socialism, it's a divergence of productivity between the northern and southern regions of the euro area. When you combine this with a shared currency you're asking for trouble. Note that the socialist nordic countries have stellar economies. I've noticed a lot of Americans blame the euro crisis on socialism which,is interesting since it doesn't seem to hold up to scrutiny. I'd be interested in heari…

I've noticed that socialism is definitely a pejorative term in the US - which dismays me as a socialist-leaning Canadian. It's like economic Godwin - call someone a socialist and effective discourse just kind of grinds to a halt. It's the modern "communism", without invoking the spirit of McCarthy.

It's a pejorative among conservatives, not among liberals.

Re: Where has all the money in the world gone?

#89
post #7

Corral everyone into centralized monetary dictatorships, and this is what happens. What did you expect? It doesn't matter how you design the monetary system, what matters is that it's centralized -- a mandated system backed by SWAT teams. Create that, and you've just created a system that will inevitably result in sweeping financial destruction throughout the economy. What we need is the diversification a free market…

It doesn't matter how you design the monetary system, what matters is that it's centralized -- a mandated system backed by SWAT teams. Create that, and you've just created a system that will inevitably result in sweeping financial destruction throughout the economy.

I don't follow. Can you elucidate how the first sentence leads to the second?

Re: Where has all the money in the world gone?

#90
post #75
post #70

Earlier quoted context omitted.

The problem isn't socialism, it's a divergence of productivity between the northern and southern regions of the euro area. When you combine this with a shared currency you're asking for trouble. Note that the socialist nordic countries have stellar economies. I've noticed a lot of Americans blame the euro crisis on socialism which,is interesting since it doesn't seem to hold up to scrutiny. I'd be interested in heari…

This also amazes me too. The US has neither a working, efficient health care nor education system, but blames others for "socialism"?

Not sure about the health care system, but the non-socialist portion of the US education system is the best in the world, and only the socialist portion of it is terrible. I find those to be reasonable grounds to dislike socialism.
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