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Re: [OT] Yemen (wasRe: King Donald)

On 2017-02-04 18:44, Sailfish wrote:
Since I postulated on your economic philosophy, I will be as forthcoming
with mine. It's a quirky sprinkling of Aristotle and Yates*, neither of
which were economists:

In a monetised economy, there is only one objective law: My spending is your income, and your spending is my income. Everything else is values, beliefs, and (of course) superstition.

To put it another way: the technical problems of wealth creation are relatively simple: make prices as accurate measures of cost as possible. But then values kick in. For example, in an economy that can satisfy all needs and a goodly portion of desires (like ours), the Law of Supply and Demand is about values, not costs. Change people's values, and supply and demand change. The clearest example of this is fashion: the newest fashions are always expensive. A year or two or three later, they show up in thrift shops at a small fraction of the price when they were new. A more subtle example, perhaps, is the effect of overproduction, more precisely the capacity to over-produce. Such as cars. From the 50s onwards, cars were restyled regularly, they became fashion items. they still are, but much less so than they were back then.

The central question of any economy isn't how to distribute wealth, in fact, that's easy with money. It's what the economy is for. If you think it's for making money, you will make different choices than if you think its for creating a decent life for everyone. You will use different metrics, too. If you think a good metric is growth, you do things to improve those numbers. If you think a good metric is contentment and maybe even happiness, you'll do things to improve those numbers. And so on.


Wolf K.
It's called "opinion" because it's not knowledge.
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