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I'm not an economist, and it doesn't seem like SAL has a general economics thread as far as I can see. I feel like I understand how the basic, industrial capitalism model of "factories + investment = growth", but I'm far less concrete on how stuff like modern white-collar service and finance capitalism grows the economy. I can understand how when you physically build a thing, it adds to the economy, stimulates demand, creates infrastructure for growing the economy further, and so on, but how does that apply when you develop a new app, or write up a new plan, and so on? It doesn't seem like you're actually making anything substantial or permanent.
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Apr 2, 2017 16:35
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In the short term, it employs people who earn money and who then spend that money on things.
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Apr 2, 2017 17:42
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It moves the money around.
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Apr 2, 2017 17:57
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DrSunshine posted:I can understand how when you physically build a thing, it adds to the economy, stimulates demand, creates infrastructure for growing the economy further, and so on, but how does that apply when you develop a new app, or write up a new plan, and so on? You can understand how people how physically building a Thing adds to the economy but not the plans which result in the design of said Thing? or the plans for how the Thing is to be manufactured? or the marketing of said Thing? these all have an enormous impact on the degree to which the Thing is bought and sold, what its price is, or whether the Thing is even known about to anyone.
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Apr 2, 2017 19:27
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Wealth is based not just on production but retaining that production. Everyone who contributes materiel or intellectual property to the economy causes growth. On a global scale most white collar / service sector jobs do not cause a net increase in economic growth. However recall that wealth is not just production but partitioning. Your boss makes makes more than you because the legal system protects his "right" to decide how much money that comes in goes to you and how much goes to him -- there are forces that operate against him making this choice like it's a king picking between harem girls but it's still his choice and often his whims matter more than actual contributions to the production do. A majority of white collar and/or service sector jobs are ways to move money from one partition to another. They do not grow the economy but they do allow us to take from other economies and fix that money here. A robust white collar sector, especially in goods that have extreme overhead concerns like weapons, drugs (legal and illegal -- overhead in illegal drugs comes from police interference), financial instruments, certain types of intellectual property (software, big budget movies and TV and music), and direct profiteering though military dominance or interference can bring in huge amounts of foreign capital but they are not generating it, they are moving it.
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Apr 2, 2017 22:16
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Finance in particular is pretty essential for divvying who gets to risk resources on the Thing, how much they have to put in and what they will get back. People can disagree with the method or whether the industry gives value for money, but any large society is going to need an absurdly complicated system for making the decisions.
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Apr 2, 2017 22:17
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Earwicker posted:You can understand how people how physically building a Thing adds to the economy but not the plans which result in the design of said Thing? or the plans for how the Thing is to be manufactured? or the marketing of said Thing? these all have an enormous impact on the degree to which the Thing is bought and sold, what its price is, or whether the Thing is even known about to anyone. I don't think anyone has an issue with how an engineer adding efficiency to some agcorp's fertilizer manufacture efficiency would increase production and grow the economy. The thing that people don't understand is how a waitress causes growth or how a banker causes growth. They don't understand it because they don't cause growth (unless you do loving backflips with your definitions and if statements). They do however move money to varying degrees from out of one concern into another. For that to be seen as growth you need some of it to be outside money coming in, and to not be concerned with the loss of money on the other party's behalf.
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Apr 2, 2017 22:20
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Strategic Tea posted:Finance in particular is pretty essential for divvying who gets to risk resources on the Thing, how much they have to put in and what they will get back. People can disagree with the method or whether the industry gives value for money, but any large society is going to need an absurdly complicated system for making the decisions. It's essential in the present environment because it's the only tool we have for doing that. It's actually an awful tool for it because it's run by people who have a vested interest in encouraging and exploiting distortions regardless of whether or not those distortions are desirable for human welfare or not.
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Apr 2, 2017 22:21
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In theory, the broad view is that white collar/management jobs are about planning, logistics, risk management, marketing, etc. These are all valuable services as merely building something doesn't mean it has value. It needs to be the "right" something, built in such a way as to be profitable, in a way where the end user can actually acquire it, and that the end user even knows that it exists. What exists in reality though is substantially far removed from any kind of Econ 101/free market situation. There are hosts of artificial monopolies and other levels of protectionism/rent seeking that distort the "ideal" , which partially explains the outsized influence and pay in "white color" professions, particularly finance. Everything from copyright to licensure to the abyss that is the global monetary system.
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Apr 2, 2017 22:30
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Vincent Van Goatse posted:In the short term, it employs people who earn money and who then spend that money on things. Sheep-Goats posted:Wealth is based not just on production but retaining that production. Everyone who contributes materiel or intellectual property to the economy causes growth. On a global scale most white collar / service sector jobs do not cause a net increase in economic growth. However recall that wealth is not just production but partitioning. Your boss makes makes more than you because the legal system protects his "right" to decide how much money that comes in goes to you and how much goes to him -- there are forces that operate against him making this choice like it's a king picking between harem girls but it's still his choice and often his whims matter more than actual contributions to the production do. Strategic Tea posted:Finance in particular is pretty essential for divvying who gets to risk resources on the Thing, how much they have to put in and what they will get back. People can disagree with the method or whether the industry gives value for money, but any large society is going to need an absurdly complicated system for making the decisions. LogisticEarth posted:In theory, the broad view is that white collar/management jobs are about planning, logistics, risk management, marketing, etc. These are all valuable services as merely building something doesn't mean it has value. It needs to be the "right" something, built in such a way as to be profitable, in a way where the end user can actually acquire it, and that the end user even knows that it exists. Okay, so these explanations make a lot of sense to me! Thank you!! So, in a sense, while they don't necessarily create capital-T Things they add to the economy by 1) indirectly, giving people jobs so that these people can spend on stuff that creates demand for products and other services, creating a good environment for investments and further growth, and 2) directly by ensuring that Things are made in an efficient way and decisions are made to make, allocate, or invest in Things. Is that basically correct? I just wonder if like the 1) part would be just as well served by simply giving people money. If all we need is sufficient consumer demand to drive the economy, why can't it just as well be fulfilled by paying a large enough group of people to just consume lots of stuff (or invest in lots of stuff)?
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Apr 2, 2017 23:21
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Some people count beans. Some people grow beans. Some people organizing the growing of beans. Some people invent better ways to grow beans. Some people find new things to do with the beans. Some people transport the beans. Some people invent better ways to transport the beans. Some people figure out ways to make the beans taste better. Some people store beans in the long term and send them where they're needed most. When fewer people are needed to grow the beans then you get more people that can do all those other things. That gives us better bean organization, higher efficiency in the system, and a better understanding of risk. Better understanding of risk allows us to mitigate that risk or fix any problems that do crop up. People who do bean-related things also like having people around who will play music at them. That requires a certain amount of organizational staff. That's another side of the service economy; doing all the things we don't need done but still like to exist. From a purely practical standpoint an art gallery is literally useless but it actually takes a significant number of people to run, organize, and support it. Enough people enjoy art galleries that they get to exist. Knowledge workers don't always produce anything but those people that count, organize, and handle the bean logistics are pretty drat important.
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Apr 2, 2017 23:22
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Many people feel thank bankers just skim profits off the top to enrich themselves, and don't actually add any value. I will counter that and put forth two important functions of banking: 1) It reallocates unproductive assets (piles of cash) into productive assets (loans for stuff). 2) it does #1 by managing risk. These are rather simple ideas. Good banks take the right risks while performing #1, and are rewarded with a small premium off the top. For an example, pretend you have $100 to lend out. Ten people approach you and ask to borrow $20 each, promising to repay you an amount of interest commensurate with the risk. If a third party can tell you the five riskiest people (highest interest) who have the best chance of paying you back (lowest risk), does that add value?
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Apr 11, 2017 04:27
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adorai posted:Many people feel thank bankers just skim profits off the top to enrich themselves, and don't actually add any value. I will counter that and put forth two important functions of banking: When you put it like that... No. It sounds more like a formula that can be applied by anybody at the bank.
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Apr 11, 2017 06:26
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The very act of a service is productive. Time is money. Just learning and practicing how to do something specific efficiently takes an investment. Thus, in the act of service, they've expanded their client's opportunity and leisure time by compressing necessary or indirectly fruitful/useful activity(cooking, hygine, travel, etc), they have increased quality of life, something in very high demand to basically every human being.
D.Ork Bimboolean fucked around with this message at 10:36 on Apr 11, 2017 |
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Apr 11, 2017 10:30
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Banking is important because bankers lend money. Let's say 10 people each deposit $20 in a bank. It's very unlikely they will all come at the same time and try to get their money back, so now the bank has $200. Maybe the bank keeps $50 just in case people want their money but now it essentially has $150 it can loan out to whomever. So now that $150 can go out and be productive and pay for a factory and employ people or whatever instead of just sitting somewhere doing nothing. I think this is good for the economy.
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Apr 24, 2017 19:45
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Economic growth is just people buying and selling more things. They don't need to be physical things. So when people sell services or do things that help other people sell things or increase the value of the thing the economy grows. edit: This seems like a good explanation: http://www.economicshelp.org/macroeconomics/economic-growth/causes-economic-growth/ AKA Pseudonym fucked around with this message at 08:02 on Apr 25, 2017 |
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Apr 25, 2017 07:10
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DrSunshine posted:I just wonder if like the 1) part would be just as well served by simply giving people money. If all we need is sufficient consumer demand to drive the economy, why can't it just as well be fulfilled by paying a large enough group of people to just consume lots of stuff (or invest in lots of stuff)? * - While rich people do buy big expensive things, they stay rich by investing, saving, and doing things with their money other than spending it.
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Apr 26, 2017 01:17
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Your question is about how certain jobs grow the economy, which is a very different thing than whether or not a job produces value. It's obvious how many service sector jobs produce value. What is less clear is how these jobs (or any) "grow the economy". The short answer to that question is that they don't, and for the most part neither do most other jobs. For context, bear in mind that for developed economies GDP growth is at best a few percent per year. No matter how you look at it, the vast majority of economic activity is just moving things around, or creating and destroying value in equal amounts, not creating "new" net wealth. There are a lot of economic arguments about how the service sector produces net economic growth, e.g. the finance sector by making movement of capital more efficient or some other voodoo, or knowledge workers enabling new and better processes allowing value to be created where before there was none. In general these sort of "market efficiency" arguments occupy one end of a spectrum On the other end of that spectrum, there are arguments that economic growth is fundamentally limited by and dependent on resource extraction. There is an argument that economic growth is fundamentally driven by growth in energy production, for example. This may seem like an oversimplification, but consider that at the end of the day virtually all forms of consumption depend on energy, and increasing consumption of anything is almost inevitably dependent on increased use of energy. Looking at it this way, the only jobs that directly grow the economy are those that increase energy production; everything else is just taking energy as an input and producing value as an output.
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Apr 26, 2017 03:51
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AKA Pseudonym posted:Economic growth is just people buying and selling more things. They don't need to be physical things. So when people sell services or do things that help other people sell things or increase the value of the thing the economy grows. Yeah except at the end of the day people need to be paid in food, and other physical things. You can't, for example, grow the economy by adding a million hairdressers, a million life coaches, and a million dog sitters to the economy, who just exchange services with each other. Actually, you can, if you just keep expanding credit and rely on the collective delusion that all this debt will at some point lead to real returns down the line and assume that the perpetual servicing of that debt will never be a problem despite it expanding far faster than wages or profits. But nobody is that stupid.
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Apr 26, 2017 04:13
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I like to think of survivors of the apocalypse in a subterranean shelter, who have a stock market that is set up to a random number generator. Everyone in the shelter has been informed that it is a random number generator and the stock are completely valueless in any real terms. Despite this, traders still panic, spend 20 hours a day "analyzing" the market, creating incredibly advanced mathematical theorems that don't apply to the situation, rapidly age, tear their hair out (literally) and commit suicide when there is a few low numbers from the generator. This goes on until a faction decides that the way to increase profitability (from again, a random number generator) is to set off the self-destruct device of the shelter, leaving the survivors to trade exclusively with said cartel, until they realize that the actual supplies to survive were all destroyed along with the shelter, leaving everyone to die of thirst. The last man to die spends his last moments gloating over owning all the meaningless stock certificates.
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Apr 30, 2017 03:13
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Definitions first. The size of an economy is the sum total of all economic activity during the year. An economic acitivity is one that results in something of value. what is a thing of value? Something that someone is willing to buy. Imagine that you are a subsidence farmer. You work all year and you manage to produce exactly enough eggs to feed you and your neighbor. You agree to split your haul with her, and in return you get enough clothing to last you the next year (that's the result of her yearly effort). Now, you figure out some way to make your hens lay more eggs, better feed perhaps, suddenly you have enough eggs to feed three people. The economy has grown, provided someone is willing to trade you for your extra eggs. This is the simplest way, figure out how to make more with the same amount of labor, or even just work more. Next year, you discover that your hens will lay even more eggs if they can make nests with old scraps of clothing. that is, you can take something which formerly had no value because it had no use and no one would buy it, and find a use for it which results in the creation of value. By this time you might discover that there is no more extra value to be created by more eggs. Perhaps there are no more people willing to buy eggs, since everyone have more than they want. Instead, you figure out that with all your new efficiency you can get enough eggs to feed you and your neighbor for a year, but only work half as much of the time. With your new spare time you decide to learn to play the guitar. If you can become so good at playing that your neighbor will be willing to pay you to play for her, and provided that she has found some surplus with which she can pay you, at that point the economy has grown once again, (provided that you do not stop producing the same amount of eggs still). Notice that you grew the economy even though you did not produce more "stuff"? Playing the guitar, and being paid, is an economic acitivty. As long as someone is willing to pay, the activity has value, economically speaking. So the limit to how big the economy can grow is determined by: 1) How much stuff you can produce in a given time 2) How efficiently you can use the stuff produced 3) How much of your time you can devote to economic acitivites 4) Your ability to come up with new activities that someone is willing to pay you for doing It is difficult to say how efficient it is possible to become with a given raw material, but after 300 years of industrialization there are still found new ways of utilizing whatever is laying around, more efficiently, the gains just tend to become smaller with time. On point 4 I will just say that the number of youtubers in the world, as a career, has seen a drastic increase, along with greater and greater amounts of online entertainment. Many people are very sceptical of calling this a growth in the economy, but from the other side, the world would not have been able to afford to clothe and feed all those people sitting around in front of webcams, producing gently caress all bread or hammers, if we hadn't figured out how to free up so much work through automation. Many people tend to involve money in the discussion but that's a distraction. Money is only a means of exchange, they are only involved in growing an economy in as much as they are a tool which facilitate trade, and trade in general grow the amount of stuff there is available for sale, which in turn means that more stuff gets bought, which grows the economy. Btw there is an economics thread, it's not very active tough: https://forums.somethingawful.com/showthread.php?threadid=3433130 catfry fucked around with this message at 23:58 on Apr 30, 2017 |
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Apr 30, 2017 23:52
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catfry posted:Definitions first. The size of an economy is the sum total of all economic activity during the year. An economic acitivity is one that results in something of value. what is a thing of value? Something that someone is willing to buy. Counterpoint: The Labour Theory of value. Some of these analyses are pretty well-developed, and Paul Mason's Post-Capitalism and Srnicek's Inventing the Future both make a pretty convincing case for Soviet labour theories still being relevant today. Obviously the most famous labour theory is Marxist economics (Das Kapital and its descendents). According to Marxist economics, many white-collar jobs do not grow the economy. Some people, like engineers, may shrink the economy. This is because labour theories see the value of an object as a sum of the amount of labour that went into creating it. As you reduce the amount of labour needed to produce an object, that object loses value - therefore, automating production actually reduces the value of the product. David Graebler's The Phenomenon of Bullshit Jobs goes further down the rabbithole and argues that many jobs do not create value because they don't create a product. He argues that many jobs (e.g. Business Management Consultancy) exist for non-economic reasons, such as managers wanting to increase their personal power. So whether white-collar jobs grow the economy is a bit contentious, and is one of the major reasons Marxists (especially environmentalists who like Marxism) often say the white-collar economy does not produce any real value. The development of technology for Marxism is a way to reduce the need for labour, and reduce the value of objects (hence the role of money). In the utopian socialist end-game, everything would be automated and nobody would have to work, because the resources produced by automation would be so abundant that people would share them. Purple Prince fucked around with this message at 00:38 on May 1, 2017 |
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May 1, 2017 00:36
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Jane Jacobs's Cities and the Wealth of Nations and The Economy of Cities pretty much nails it and she's pretty non ideological. I thought this was a good write up: http://www.zompist.com/jacobs.html
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May 3, 2017 03:19
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Anyone that refers to bankers as bankers doesnt know poo poo about bankers or anything else
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May 6, 2017 16:34
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Tony Montana posted:Anyone that refers to bankers as bankers doesnt know poo poo about bankers or anything else That's dumb.
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May 8, 2017 01:04
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Nope
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May 8, 2017 01:08
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Tony Montana posted:Nope A strong defense of your argument. I know I've seen the light and have been swayed to your way of thinking. Surely you must be a master debater.
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May 8, 2017 04:20
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