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Old 03-24-2020, 07:23 PM
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Has "money" become infinitely malleable?


With the disruption of industries by the corvid-19 quarantines, there is talk of managing the resulting financial crisis by manipulating the economy in a variety of ways: simply giving everyone money to spend, freezing enforcement of debts, bailouts for shuttered businesses, even debt forgiveness. In classic economic theory this sort of manipulation is considered unsustainable given that ultimately people won't work for free forever and that human input is necessary for producing wealth, and that therefore "bills eventually come due".

But even before the crisis pundits were asking just how much employment consists of "bullshit jobs", and whether the adage from time immemorial "he who does not work, neither shall he eat" is still applicable in an automated economy. Some are speculating that the shutdowns associated with the virus pandemic will showcase just how much work is optional. And that at this point the "virus economy" is poised to become the predecessor to a universal basic income.

So have we really reached the point where it's all just ones and zeroes in the computers and we can simply rewrite the rules to produce the result we want? Or, like every previous time people thought prosperity could be synthesized, are we eventually due for an extremely ugly fiscal hangover?
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Old 03-24-2020, 08:05 PM
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Originally Posted by Lumpy View Post
With the disruption of industries by the corvid-19 quarantines, there is talk of managing the resulting financial crisis by manipulating the economy in a variety of ways: simply giving everyone money to spend, freezing enforcement of debts, bailouts for shuttered businesses, even debt forgiveness. In classic economic theory this sort of manipulation is considered unsustainable given that ultimately people won't work for free forever and that human input is necessary for producing wealth, and that therefore "bills eventually come due".

But even before the crisis pundits were asking just how much employment consists of "bullshit jobs", and whether the adage from time immemorial "he who does not work, neither shall he eat" is still applicable in an automated economy. Some are speculating that the shutdowns associated with the virus pandemic will showcase just how much work is optional. And that at this point the "virus economy" is poised to become the predecessor to a universal basic income.

So have we really reached the point where it's all just ones and zeroes in the computers and we can simply rewrite the rules to produce the result we want? Or, like every previous time people thought prosperity could be synthesized, are we eventually due for an extremely ugly fiscal hangover?

Surprising the author doesn't include his own job as a "bullshit job".


Restaurants and bars are certainly optional jobs. There is no reason people HAVE to eat out vs cook their own food. But we like doing it so there is a demand there.

My wife is incredibly busy. Unfortunately her job is the same one that caused the last financial crisis in 2007.


To answer your question, the United States has a number of fiscal and monetary options because we are the largest economy in the world and our currency is the de facto reserve currency of the world. One of those options is that we can, for a limited time, prop up struggling businesses for a few weeks or months until the COVID-19 crisis passes.

But this is contingent on business opening up soon and everyone going back to work and spending money.
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Old 03-24-2020, 08:07 PM
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Originally Posted by Lumpy View Post
With the disruption of industries by the corvid-19 quarantines, there is talk of managing the resulting financial crisis by manipulating the economy in a variety of ways: simply giving everyone money to spend, freezing enforcement of debts, bailouts for shuttered businesses, even debt forgiveness. In classic economic theory this sort of manipulation is considered unsustainable given that ultimately people won't work for free forever and that human input is necessary for producing wealth, and that therefore "bills eventually come due".
The bills will come due.

That does not mean they aren't worth paying. Lot of suffering going on right now that is no one's fault, and it will get worse.


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But even before the crisis pundits were asking just how much employment consists of "bullshit jobs"
Are some jobs bullshit? Yes. Of course.

Is the economy built on them? No. Mismanaged firms lose market share, falter, get replaced, go bankrupt. Or sometimes the world simply changes. Look at the Dow Jones firms from the early 20th century. Look at them now. "There is a great deal of ruin in a nation", as Adam Smith said in the 18th century. What people don't get is that that is always true in every era. There is always ruin. There is always waste. There is always bullshit. But there is also, thankfully, a living process that mucks out the manure eventually, at least when it's allowed to operate.



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and whether the adage from time immemorial "he who does not work, neither shall he eat" is still applicable in an automated economy.
People do not think clearly about automation.



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Originally Posted by Lumpy View Post
Some are speculating that the shutdowns associated with the virus pandemic will showcase just how much work is optional. And that at this point the "virus economy" is poised to become the predecessor to a universal basic income.
Our society cannot afford a permanent universal basic income of the size that seems most commonly advocated.

The bills come due.



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So have we really reached the point where it's all just ones and zeroes in the computers and we can simply rewrite the rules to produce the result we want? Or, like every previous time people thought prosperity could be synthesized, are we eventually due for an extremely ugly fiscal hangover?
We cannot rewrite the rules of economics.

It'd be better if more people understood that. But people like having strong opinions on policy, and they don't like doing the homework. It's curious. One might think that people with strong economic opinions would be interested in econ, but that is generally not the case. I'm not entirely sure why, but that is something that's also been true for centuries.
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Old 03-24-2020, 09:02 PM
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The bills will come due.
Yes, I am expecting Reagan's budget deficits to bite us in the butt any decade now.

Over time less and less of every dollar is going to be spent on true essentials. Food: way, way down just for getting fed, a highly automated industry that employs fewer people every decade and provides more than enough acceptable food. Clothing, decent shelter - not bid-up McMansions, but just decent housing. Any goods made in a factory. Factories are used as arbitrage between countries to get the lowest labor cost and the biggest profit for the capitalists. It's been centuries since OMG, I gotta use this river to get my material to the factory and need that railroad line nearby... We have ZERO issues pumping all the crap you might need out of a factory.

But maybe you're right, bills need to be paid. Capital must be dear, which is explained by our high interest rates. Oh wait, they've been trending downward for decades. Banks don't even want small deposits, they're too much trouble. They don't need the capital at all.

Now there may be social value in keeping people working. But in times of crisis, essentially acts of God, I'm not buying the empty pockets. Once people have the basics, you start talking insurance. More robust health care. More robust UBI or unemployment. The cushions need to become more robust as productivity continues to increase. If the pockets are empty, capitalism isn't all it's cracked up to be and then some.
  #5  
Old 03-25-2020, 07:47 AM
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Yes, I am expecting Reagan's budget deficits to bite us in the butt any decade now.
No one in this thread said anything about debt "biting us in the butt".


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Capital must be dear
No one in this thread said anything about "capital", or the necessity that it must be "dear".



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which is explained by our high interest rates.
No one in this thread said interest rates are high, nor that interest rates are the only proper way to examine the costs of a policy.
  #6  
Old 03-25-2020, 12:35 PM
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That Wiki link quoted the New York Times reviewer saying the book was "enjoyably overstated."

It also had an interesting sentence:

Quote:
he credits the Puritan-capitalist work ethic for making the labor of capitalism into religious duty: that workers did not reap advances in productivity as a reduced workday because, as a societal norm, they believe that work determines their self-worth, even as they find that work pointless. Graeber describes this cycle as "profound psychological violence",[2] "a scar across our collective soul"
I haven't read (or even heard of) the book, so I don't know what historic examples he uses. I do know from my own research that this goes back a long way. Industrial Revolution factories that used machines to make standardized parts deliberately excluded skilled workers because it was cheaper to hire naive workers that would just "mechanically" operate the machines. That created a separation between the artisan who could take pride in their handiwork and the lower-class factory worker who did numbingly repetitious labor. So this issue has been around for 200 years.

The IR also gave rise to utopian communities that tried to share all the work equally among their members. These all failed, and for many reasons, but one main one was that some people are better at some jobs. How many hippie communes devolved to the women doing the cooking because the men couldn't or couldn't bother?

I'd certainly argue that the "Puritan-capitalist work ethic" is outmoded and in many ways destructive. In my lifetime I've seen groups from hippies to millennials try to fight it, advocating for a new perspective on work. If the robot revolution really comes then everybody better adjust their attitudes.

Even so, you can't judge any of this based on what happens during a sudden crisis. In wartime all classic economic rules fly out the window. What was anathema six months earlier may be exactly what is needed in the midst of a disaster. The measures being taken in the bill before Congress right now seem to be intelligent responses to immediate needs. That doesn't - shouldn't - mean they'll go on forever. There will be a price to pay, but the assumption everyone is making is that the price will be far less than if nothing is done. That's a good thing and exactly what government should be doing.
  #7  
Old 03-25-2020, 02:25 PM
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There will be a price to pay, but the assumption everyone is making is that the price will be far less than if nothing is done.
Yes.

If anything, I'd say the policy response has been insufficient.
  #8  
Old 03-26-2020, 08:21 AM
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We cannot rewrite the rules of economics.
You say that as if there were consensus on what those rules are.
  #9  
Old 03-26-2020, 09:24 AM
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You say that as if there were consensus on what those rules are.
You say that as if the existence of disagreement on contentious topics implies that there is no consensus on anything at all.
  #10  
Old Yesterday, 10:24 PM
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Quote:
Originally Posted by Hellestal View Post
Our society cannot afford a permanent universal basic income of the size that seems most commonly advocated.

The bills come due.
The author of this piece seems to endorse the notion that the "virus economy" might serve as a trial run for UBI (#9):

https://lifeside.me/top-10-ways-coro...-life-forever/
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