The Ideal Economy

by master255 • 5 years ago

44 142 5 years ago

thriftwy5• 5 years ago

The economy which caps maximum income at some small value removes incentive to perform. When combined with helping the poor it would encourage parasitism.

Parasitism is a very convenient life style once you adopt to it, and very hard to abandon even if you wish to.

marginalia_nu8• 5 years ago

It he only incentive to do stuff money?

Asking because I find myself building a lot of stuff despite not really making money off it.

agumonkey7• 5 years ago

building what ? I'm curious

sokoloff3• 5 years ago

Are you building hobby things for your entertainment (which I do as well) or building things which make society advance and which others benefit from?

It’s the loss of incentives for the latter that concern me.

tibbetts• 5 years ago

The idea that the only, or even primary, incentive to do stuff is money is an invention of 20th century economics. It was then tragically taught to most educated people, especially business leaders. That made it a sort of self-fulfilling prophecy, along with the shareholder value myth (the idea that companies should be (may even be required to be) entirely short term profit motivated out of a duty to shareholders. These are among the most harmful ideas from the 20th century. To answer your original question, no money is not the only incentive to do stuff. But in Econ 101 that assumption is made to make the math easy.

readflaggedcomm• 5 years ago

The author thinks so. Money isn't the only way to be compensated, but it's a measure of value.

I wonder if the author would cap all value transfers, or just monetary. What about limiting in-kind compensation by transfers of land, securities, food, or reputation?

stickfigure2• 5 years ago

For some stuff, the only incentive is money. Nobody's going to haul your garbage away because that's what fulfills them.

bart_spoon• 5 years ago

Money isn’t the only incentive to do anything, but there are plenty of things for which money is the only incentive, a lot of which are pretty critical for functioning societies.

agumonkey7• 5 years ago

I wonder if previous eras (before the massive space taken by economic principles) had a different view on incentives and performance.

The current system doesn't reward performance in general, just a few instances here and there, the rest is actually backward (good employees are ignored, sometimes hated, sometimes fired even).

mdp20212• 5 years ago

The fault is within a decadent culture that has stopped striving for excellence as an ideal and demanding quality as an underlying mental tenet.

The "performance indicators" are often calibrated permissively towards a "very pessimistic perspective taken as realism" which lets ample pools of bestiality in. When this becomes "locally" systemic, it will be a chocker for the individual potential, systemically misfit.

Jensson14• 5 years ago

The current system doesn't reward performance in general

The current system rewards performance more than any other system in history. You can go from living in poverty to earning hundreds of thousands of dollars just by doing well at enough tests. Things are stacked against you, true, but that path is still possible today. Is the system worse today than 30-40 years ago? Maybe, it is hard to tell, it is the same system though so you can't blame the system, it is other factors.

Could it reward performance more? Yes! But we have already came extremely far.

baybal22• 5 years ago

Parasitism is a very convenient life style once you adopt to it, and very hard to abandon even if you wish to.

100% agree, look no further than current communist, and ex-communist countries.

Even ones which succesfully "decommunized" still have that ex-party member class which still lives off fraud, and economic crimes 30 years after.

bserge3• 5 years ago

You actually think the political class is not full of thieves anywhere else?

It's a career path that attracts this kind of people, like flies to shit.

shitloadofbooks• 5 years ago

I think you're forgetting (or deliberately ignoring) all the great political and economic frauds that have happened in capitalist systems too.

I don't think any political/economical/social system can ever be immune to fraud and sociopaths.

dijit3• 5 years ago

How does that worldview jive with the notion that I'd do my job even if I wasn't so handsomely paid?

There will always be differentiators.

I don't work with garbage or have to break my back, this is worth "performing" for.

thriftwy5• 5 years ago

This is because you have culture which encourages performance.

Once you enable parasitism other cultures also arise, which discourage performance, and the people of those cultures just don't have that notion.

They may even look attractive. Think hippies. They surely look better and have greater outlook than wage slaves, housewives or salesmen.

And that trend is notoriously hard to reverse. Even in EU they have massive problems with even getting some minorities to attend school.

headsoup• 5 years ago

Define 'perform.'

thriftwy5• 5 years ago

If I am to be working without monetary incentive, as many here suggest, I would still do something. But I will mostly focus on things which amuse me, and not on anything in real demand by society. Even then I will only do the most exciting part while leaving a trail of technical debt.

Would you expect anything else? People fixing obscure bugs in legacy products for you instead of reinventing the wheel, poorly?

bserge3• 5 years ago

Someone from 1800 or earlier would call us parasites.

We work so little and own so much!

Time to go back to owning nothing and working all day every day under threat of actual violence and starvation.

Now that's performance!

(I'm afraid some rich assholes actually believe that today, of course they'd be the leaders of such a society)

There's still room for QoL improvement, and income isn't the only incentive.

johnchristopher• 5 years ago

The economy which caps maximum income at some small value removes incentive to perform.

And yet there is no shortage of t-shirts, shoes and cheap clothing. And parasites do thrive off of the worker's back.

thriftwy5• 5 years ago

This is because poor people have to make them or starve.

If those countries had safety nets, no more t-shirts for you, since producing these, not to mention cotton farming, is not exciting at all. You just do it for money.

Synaesthesia• 5 years ago

No it just removes one incentive to work, enriching yourself beyond what is needed shouldnt be necessary as an "incentive"

imtringued5• 5 years ago

I don't get it. If you cap income then some people stop working and other people start working. There is no need for parasites. The idea of an income cap is wrong because absolute income does not determine willingness to spend. It is unspent money that should be capped via taxes.

thriftwy5• 5 years ago

It would be very cool if money would need to be invested in the real sector at the end. we would be sending people to Mars already.

Right now they just fuel blowing bubbles.

master2553• 5 years ago

Why would you think that the economy would be limited to some small value? The value of the maximum limit can be very large. Other than that, the maximum is personal to each resident. It is to reduce the size of giant enterprises, such as Microsoft, Google, Amazon. Imagine that these companies would have competitors in the form of ordinary start-ups. The startups would have plenty of money to do that. Maximum restrictions will not reduce the incentive to work in any way. On the contrary, there will be even more incentive to work, because you can make a lot more money and buy a lot more things with that money. The maximum can be from 0 to infinity. No parasitism will occur. Businesses will plan their budgets properly.

I think this article is out of your hands. You didn't even realize that the discussion should be in a Telegram group. You read and do not understand what is written. I recommend you reread the article many times before commenting.

Blackhawk117• 5 years ago

The article promotes totalitarian government, caps on wealth, a social credit system and completely misses the point of cryptocurrencies. The right title would be “Let’s turn every country into China”. No thanks.

88840-8855• 5 years ago

for me it would be a "yes please". see how different people and preferences are.

mdp20212• 5 years ago

And this is why we should never forget that the brain is that organ which was developed to move (to pick your optimal direction and, directly or cunningly, go there).

How very lucky that the solution spaces are sparse and different. How very unlucky that they may not be numerous and optimal enough.

rc26342• 5 years ago

Maybe those who prefer a system like this should move to China instead of trying to bring the system to a country where most people are not in favor of such system.

the_70x• 5 years ago

Put me in the top please

EGreg• 5 years ago

That’s why we started the project https://intercoin.org

The open source code is at https://github.com/Intercoin

Documentation at https://community.intercoin.org

Interviews with economists and regulators at https://youtube.com/c/intercoin

Sound money, communities, similar to what this guy is talking about — but an autonomous and libertarian version of that.

Because if crypto doesn’t step up and become actually adopted and useful, then we are going to live in a world where megacorps like Amazon/Facebook, as well as your friendly Federal Government, issue the currency and know everything about you and centrally plan who can pay and who can be … shall we say gently excluded from the economy due to their rating.

This builds on my earlier work on https://github.com/Qbix/Platform to build an open source alternative to Web 2.0 platforms like Facebook, Twitter etc.

EDIT: I am curious. For a decade, I do the work to prevent the otherwise inevitable outcome of centralized control, freely give away the code, document it publicly, make public interviews with standards bodies, regulators, economists to get it right, spend a ton of my own money and time to get it implemented (without raising any VC etc.) but then every time I would merely mention it on HN, would always get heavily downvoted by people who prefer not to say a single word as to why. I can understand if people give me feedback, but they prefer to silently downvote. OK, what's your better plan, what have you done to prevent this outcome? Why do you take actions to bury workable solutions to avert this situation?

satvikpendem• 5 years ago

It's because you're shilling your random coin on an article not specifically about cryptocurrency. Feels like spam to many.

master2553• 5 years ago

Do you like having aligarchs? Do you like having a lot of poor people? I wrote about cryptocurrencies - for today they make no sense. There is no such economy in China. There are no limits and states of accounts of all people and organizations there.

And your comment is clearly spam.

platonis• 5 years ago

whenever there is money, there is a distribution. The poor are those with less, it cannot be avoided. There is nothing wrong with having oligarchs.

Mave83• 5 years ago

Lol, why should I work day and night? Why should I build a company and hire people if nothing good will it bring me?

If I do not earn a great amount by giving up my personal free time and risk my entire life, i wouldn't do it. That's easy.

dijit3• 5 years ago

I'm not sure I understand, are you saying this is a good or a bad thing?

Maybe I've been living in Sweden too long and the emphasis on living your life is maybe a bit too high here but the idea of working day and night to earn "a lot more" feels like game theory.

If I _don't_ break my back and give up my life then someone else will and I will lose out in the big picture!

We shouldn't live to work, we should work to live.

If you're not getting fulfilled in your work and/or you're giving your life to your job then you're not really living- you're a meat robot.

imtringued5• 5 years ago

the idea of working day and night to earn "a lot more" feels like game theory.

Yeah because it is a prisoners dilemma type situation. If everyone starts working harder but people don't start consuming harder there is less work to be done which consolidates work to the hardest working members without actually helping the overall economy.

The economy wants 10 cars (aggregate demand), 10 people build 10 cars, 5 decide to build them twice as fast which means 10 cars are being built which means the last 5 don't have to work but they also didn't get paid and cannot afford the 5 extra cars which means aggregate demand is now 5 cars and some of the hard workers also get fired. If everyone built one car then nobody would be worse off.

https://youtu.be/EKd6WURBqOY

bjornsing2• 5 years ago

But your standard of living largely comes from people who step out of that comfort zone, work hard and take economic risk… Your local pizza guy or startup founder, are those the people you call “meat robots”?

dcolkitt2• 5 years ago

Look I think “work to live not live to work” is a great philosophy, and one that probably makes for a fulfilling life. But virtually everything you take for granted about modern civilization only exists because of work-obsessed lunatics.

At the very least if someone chooses to work day and night to build, society should be celebrating them— not discouraging them. It may be bad from their perspective, but civilization as a whole cannot advance without people like this. All of the rest of us are free-riding off people like this both past and present.

I think it’s really great the European culture of la vita dolce. But the reality is virtually all new products and companies come from places with less cultural aversion to working nights and weekends than The Continent.

amelius4• 5 years ago

I'd say that a fair economy should always reward those who decide to work more than average.

However, those people should not be able to use their extra earned money against the rest of us, who made different life choices.

lotsofpulp13• 5 years ago

Define "against the rest of us". The whole point of earning "extra" money is to be able to lay claim to scarce resources. Inevitably, outbidding someone for something will be felt as using the extra earned money against them. If you cannot outbid someone, then the extra money is worth nothing, and hence there is no reason to work more than average.

avgcorrection• 5 years ago

/deleted

stuaxo• 5 years ago

Although it's working an unhealthy amount and it pulls everyone else to do the same, perhaps not ?

sokoloff3• 5 years ago

What would reward be useful for if not to trade it for scarce goods? Literally there are only so many miles of coastline, so many front-row tickets to the Super Bowl, so many square feet of land within a 5 minute walk of any given place on Earth, etc.

At some point, that reward is going to be traded for something else that's in demand and where the demand exceeds the supply. If you interpret that as "use their extra earned money against the rest of us", then it seems that you are going to have to disallow the notion of rewarding those who decide to work more than average.

imtringued5• 5 years ago

Your criticism is too simplistic. The fact that you stop working once you reach the cap is actually the point of the cap.

littlestymaar2• 5 years ago

Success.

Mots people work hard because they want to succeed, not because they want to get rich.

You never become a great athlete for the money, you become a great athlete because you want to win. You never start a business for the money, you go $BIG_CORP if you want money, you start a business because what you want is success.

In 90 years the western world has never been as inegalitarian as today, do you think people in the sixties didn't create anything?

evancox1002• 5 years ago

If capital gains rates were a lot higher than they are now, we would never have such innovative companies as Apple and Microsoft.

newsclues3• 5 years ago

To me the ideal economy has multiple choices for regulations so that there is regulatory competition.

Decentralized regulators, and if things are open and transparent, people can pick what works best for them.

delusional• 5 years ago

What do you do when the choices of two people conflict? What if you want to throw me in jail for stealing your house, but in my regulatory framework houses aren't owned but merely occupied?

You can't have "personal choice" as the foundation of government.

newsclues3• 5 years ago

I’m thinking more about consumers and businesses.

Think about a food truck.

As the owner I can pick a high standard regulator that has a higher cost of compliance but more customers are interested in the cleanest standard food service.

Or I can go for low cost regulations and maybe exceed them on my own and pocket the difference in regulations.

However, I think the US states originally was intended to more like what you say before the federal government overreach began.

Dazdraperma5• 5 years ago

To me the ideal economy has multiple choices for regulations so that there is regulatory competition.

That's called free market. And voluntary certification (by independent standards committees) for the "regulatory part".

newsclues3• 5 years ago

Independent regulators tend to grow in power become gatekeepers to the industry and harm innovation.

I think having competing regulation/certifications is different than the status quo and offers benefits.

As a consumer and business operator, I want to be able to choose.

Yes, a free market, something that doesn’t largely exist!

hamilyon23• 5 years ago

The article somehow misses many different points, perhaps deliberately, as a satire of sorts.

The point of money creation and subsequent inflation is funding for infrastructure, real estate and public projects. There will be outsized returns to road building, city sewers systems and such. However, good luck collecting funding for them without banks issuing money. Good luck fundung any project which has large upfront costs and time to return investment of more than a decade.

The system currently exists is in place party because we historically knew how to capture positive spillover effects of such projects. Naive systems which does not even consider credit against future spillover effects will be very much like ours, but will develop slower and eventually collapse.

Credit is good. Banks printing money with credit is a feature. Opaqueness of banks is a feature.

nly2• 5 years ago

Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year).

The interesting side of things is really about the different ways money is created and where it goes. Money created through lending is paid back, it's ultimately backed by consumption or investment. Money created through QE is more onerous and can lead to financial repression instead of deleveraging of an overleveraged economy.

I don't see why you tie this to infrastructure projects. Infrastructure projects are funded by government because it's government who can reap taxes to pay for them. It's government who can coordinate huge projects on a state scale, compulsory purchase land, and regulate and ensure fair access, etc etc. The alternative of thousands of miles of private roads and tolls would be hell.

Monetary vs fiscal intervention is definitely important. If the government wants to go spend $1T on research and development or infrastrucmture for the next 100 years, fine. But a lot of what's been happening over the last 13 years is just robbing savers (lower savings and pension annuity rates) and driving inequality (the rich leveraging up)

imtringued5• 5 years ago

If we didn't create money we'd have deflation (prices would drop year on year).

Calling deflation a drop in prices is misleading in my opinion. What really is happening is that money gets more expensive. People then start speculating on money the same way they speculate on stocks, real estate or Bitcoin.

Dazdraperma5• 5 years ago

Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year).

Then why the guy from the FBI showed up the last time I tried to create more money to save the world from deflation?

anm89• 5 years ago

This is a pretty rosy picture you are painting. So where do the tomahawk missiles and multi decamillion dollar police budgets for military gear, and the funding to run Iran Contra schemes get accounted for?

We put a VERY small percentage of government spending into infrastructure so making that out to be the entire point of the system is just misleading IMO

evancox1002• 5 years ago

New slogan: "Missile Systems are Infrastructure"?

hamilyon23• 5 years ago

Well-funded military is remarkably similar to well-maintainad roads if we look at consequences.

Putting questions about what is the optimum amount to spend to each. Both promote trade and large-scale division of labour. Both directly (road-pavers specialize at that, infantry specialize at application of force) and indirectly, by promoting people and goods movement.

Trade creates wealthy merchants, banks, and eventually further division of labour, manufacturing, large-scale specialized manufacturing and agriculture.

In a sence, it is military who we should thank for silicon integrated circuits.

We could agree or disagree about certain parts of military spending, but current global world would be unthinkable if huge armed forces didn't ensure peace for everyone.

missedthecue2• 5 years ago

Banks don't print money. A double ledger accounting system does not create new dollars.

imtringued5• 5 years ago

For the convenience of calculating, the sum of money was made not 100 rubles, but 0 rubles. To do this, from the state of the account of all participants was subtracted, half of all money. Instead of 0 rubles, it is now -50 (minus fifty). 0 means 50 rubles in the account, and 50 means 100 rubles in the account. With each transaction between residents, the one who paid got minus to his account, and the one who sold plus. Thus, regardless of the amount of money, the sum did not change, and money was created at the time of the transaction and there was exactly as much as was needed.

What a revolutionary idea. Why haven't governments adopted this system? Oh wait. They did. Add up all debt and all credit and you end up with exactly 0 dollars left over.

The first thing that matters in it - is it possible to steal? is who releases the money. The government does that.
They estimate the rate of inflation and try to affect it by releasing money.

No, the central bank tries to find the interest rate that balances individual demand for labor with the individual supply for labor. People borrow money themselves. Businesses who borrow to invest drive inflation just as much as consumers and governments. In fact, my opinion is that the Fed is unable to introduce additional money into the economy beyond what actors in the economy borrow. QE does absolutely nothing if people don't borrow. If anything the Fed should be thought of as a brake to the economy. If you are going downhill too fast the Fed will slam the brakes. Low interest rates don't stimulate anything, they merely stop enforcing reckless driving(=borrowing). The idea that governments "release" money through fiscal policy is actually a modern idea called MMT.

So they print a billion, but how do they pass it on to the people?

They do not print a billion. They borrow a billion by creating both $1 billion as an asset and $1 billion as a liability.

it was decided to introduce a maximum of money. A store could not earn more than a certain amount of money. The money that the store made more than the maximum went to charity.

Just force the store to spend all its money eventually. There is no meaningful difference between letting the store spend money itself and letting a charity spend the money. Capping income has the obvious downside that every industry needs a different cap (e.g. semiconductors need tens of billions just for a single fab). The idea of setting a maximum size to prevent monopolies does make sense but it would have to be flexible. This is probably something that could be solved with good old progressive taxation by taxing corporate income as personal income.

hamilyon23• 5 years ago

Add up all debt and all credit and you end up with exactly 0 dollars left over.

Congratulations, you are are a part of lucky 10000 today. Please read about https://en.m.wikipedia.org/wiki/Fractional-reserve_banking

losvedir• 5 years ago

Try really thinking about it and I think you'll see that even with fractional reserve banking, if you add up all the debt and credit, you'll still end up with exactly zero dollars.

Jensson14• 5 years ago

In order to fight monopoly, it was decided to introduce a maximum of money. A store could not earn more than a certain amount of money. The money that the store made more than the maximum went to charity.

When you can't earn more by working fairly then people start to work unfairly, meaning they start taking bribes or perform other corrupt acts. Current capitalism has problems but at least the system doesn't encourage corruption. Some people will still be corrupt, of course, and some companies will work like a communist state and limit income for its workers encouraging those workers to become corrupt, but corruption will always be way worse when you put national caps on income like this.

matheusmoreira2• 5 years ago

at least the system doesn't encourage corruption

Corporations literally buy laws via lobbyists. Capitalism doesn't have to encourage corruption: it's already corrupted.

Jensson14• 5 years ago

It is less corrupted. Without capitalism personal connections is the only source of power, so the only ones with power would be politicians and their friends. With capitalism we create another bastion of power, the capital class. Communists are politicians who don't want to share power with the capital class and instead hog it all for themselves. We all know what happens when politicians has no group to oppose them, everything goes to shit.

Maybe you could think of some other system where personal connections isn't the only source of power, but so far democratic capitalism is the only thing we have.

Edit: As for your scenario with capital paying money to influence politicians. The alternative is that the politician already have all the power (and money), nobody has to pay them. To me it is better that there is some corruption with money going to politicians rather than politicians just having all the money from the start.

Dazdraperma5• 5 years ago

Corporations literally buy laws via lobbyists.

Both elected and unelected officials are so corrupted that they take money from the corporations to choke the competition on the free market. To fix this issue, let's give them even more power. That will show them and they'll stop being corrupted.

zzzeek• 5 years ago

I am not an economist, but in light of current events with cryptocurrencies and the economy in general, I would like to share my thoughts on some kind of ideal economy, around which everything is happening now.

OMG sorry, i haven't read the article. i can't believe someone wrote that paragraph and pressed "publish". OK, well let's read on. cant wait!

m_ke2• 5 years ago

An ideal economy would limit the aggregation of power, hit compounding with a logarithm to make it harder to amass more political and economic power.

Jensson14• 5 years ago

How would you limit political power? Would you assign a person to ensure nobody else has too much political power? Congratulations, you just invented dictatorship!

m_ke2• 5 years ago

Term limits for all positions, ranked choice voting and more direct democracy.

crawfordcomeaux• 5 years ago

False premise: "In general, buying and selling services and goods is all that interests modern society."

Everything that follows from this is merely a thought experiment disconnected from reality and, as such, is unsafe.

https://lethain.com/how-to-safely-think-in-systems/

Any economic theory that doesn't account for gifting as the root of human behavior is going to start off skewed.

The Ideal Economy

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