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Building an economy simulator from scratch

thomassimon.dev

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Re: Building an economy simulator from scratch

#171

Post by littlestymaar »

nvy wrote: post #132
neilwilson wrote: post #131

" tax works by pooling a percent of sellers revenue." What the public servant actually does is impose a tribute on the workers in a denomination the public servant determines . If you don't provide the denomination then the public servant confiscates your assets by force. The population then offers their goods and services in return for the denomination the public servant issues . The public servant then determines t…

>That's the source of money, and the source of the price level. The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

This isn't contradicting the GP's point: money is created by private banks, but they still create “United States dollar” that get a significant part of their value from the US government's ability to enforce taxes.

Re: Building an economy simulator from scratch

#172

Post by bwestergard »

This is super cool, but it models a non-capitalist economy, akin to the Rawlsian "property owning democracy".

There is no accounting for capital goods. Interest in terms of numeraire is modeled in an internally coherent way, but this is not reflective of how distributional struggles between owners of means of production and workers play out (or, to be precise, among agents whose property ownership levels are not unimodal, which is the inevitable result of capitalist social relations).

The distinctive characteristic of a capitalist economy is that the direct producers are separated from their means of production, such that they must sell their ability to work to those who own said means. Throughout the modern period, there has been a strong desire to have a market economy without this separation into classes.

Without capital and wage labor, the author's assumption that terms of exchange are determined by producer/consumer preferences (their "quality of life" function). But in reality world capitalist economies, the capital relation instead constrains behavior to ensure the endless expansion of capital (the so-called "valorization imperative").

It is important to note that a society with produced means of production, which are commonly referred to as "capital goods" or "producer goods", need not be a capitalist society in principle.

On a completely different note, at first glance it seems that this model could be expressed as a convex program, possibly even a linear program?

Re: Building an economy simulator from scratch

#173

Post by bthallplz »

JellyBeanThief wrote: post #129
bagpuss wrote: post #37

The MONIAC built in the 1950s by Bill Phillips (of Phillips curve fame) attempted to model economic processes with coloured water (fluidic logic) https://en.m.wikipedia.org/wiki/MONIAC

I just love whenever the roundworld equivalent of something I first encountered on the discworld pops up in front of me.

:D It goes both ways! Having known about it prior, it was very exciting to read about it in Discworld.

Re: Building an economy simulator from scratch

#174

Post by spiralx »

robertlagrant wrote: post #141
threatripper wrote: post #137

Earlier quoted context omitted.

They must only borrow the money (or get it from somebody else who got it from somebody who borrowed it from the central bank) that they need to pay you out in paper or digital cash and the money they have to keep in reserve. They do not have to borrow the whole credit value. The credit itself is created out of thin air but with some strings attached, so banks can't just create infinite amounts of credit and they cann…

> The credit itself is created out of thin air but with some strings attached Yes - via the central bank, right? I thought that was how quantitative easing worked.

QE is a separate process from the usual act of money creation by banks making loans, it's best to consider it as an out-of-the-ordinary manual intervention by the central bank where they create new central bank money ad hoc and use that to purchase assets on the market. The normal process of money creation is banks creating new commercial bank money when making loans to individuals and companies.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

Re: Building an economy simulator from scratch

#175

Post by random3 »

dragonwriter wrote: post #74
vkou wrote: post #71

Earlier quoted context omitted.

While it's true that banks can exist outside capitalism, capitalists generally can't. --- The parent's point is that an economic simulator that does not include them is probably not something that's useful to draw conclusions about capitalist societies from. It is a fun toy, though.

> While it's true that banks can exist outside capitalism, capitalists generally can't. That's not really true; people who own and profit from their ownership of the means of production exist in feudal economies; the fact that their ownership of the means of production is a sonetimes a consequence of rights associated with land tenure and, whether or not that is the case, not marketable or less freely so than under c…

That's exactly my point. It's clear both from banking history as well as general history and experience living in a communist country for a while.

Re: Building an economy simulator from scratch

#176

Post by spiralx »

imtringued wrote: post #146
nvy wrote: post #132

Earlier quoted context omitted.

>That's the source of money, and the source of the price level. The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

The bank acts as an intermediary, but not the way economists tell you. They say that the bank is an intermediary of loanable funds between debtor and creditor. That is, money exists outside the system and the bank is just efficiently distributing it, kind of like eBay. Except the bank is an intermediary of a completely different kind between creditor and lender. What the bank does is aggregate illiquid credits and de…

I think you're describing the difference between commercial bank money and central bank money, but I'm not sure.

Re: Building an economy simulator from scratch

#177

Post by context86 »

Ruddle wrote: post #19
Nezteb wrote: post #6

Is the source code for this simulator available anywhere? The post's code itself is minimized/obfuscated: https://thomassimon.dev/assets/cashloss.1fca21f6.js I couldn't find anything on the author's GitHub. I'm mostly just curious how it's built.

Author here, if there is enough interest I can clean the code up and put it on GitHub. It is basically a state machine.

[dead]

Re: Building an economy simulator from scratch

#178

Post by Draiken »

> even though we made public servants numerous and quite rich in the process. This is a communist dream.

Aside from this nonsense remark, it was an entertaining post.

We should have one that's more based on incentives instead. Separate people from companies, create labor and make companies only care about profits at all cost.

Finally, add a finite amount of resources and let's play it out.

Re: Building an economy simulator from scratch

#179

Post by nvy »

mordae wrote: post #136
nvy wrote: post #132

Earlier quoted context omitted.

>That's the source of money, and the source of the price level. The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

They still have to borrow the money from the central bank. Fractional reserves mean that the credited account's bank must deposit a portion of the money bank at central bank. So there is a limit to how much money can the bank create.

>They still have to borrow the money from the central bank. Fractional reserves mean that the credited account's bank must deposit a portion of the money bank at central bank.

Absolutely false. For starters, in many jurisdictions including the US, the reserve fraction is now 0% and has been for quite some time.

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

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