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Where is Wealth Created?

FREEDO
Posts: 21,057
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5/19/2012 3:22:05 PM
Posted: 4 years ago
Very specifically, where do all the marvels of technology, infrastructure and mass production of all sorts of things come from?

Those speaking about economics have a habit of generalizing everything. It comes from demand. It comes from the market. If you have to rely on such generalizations then you can't claim that you really understand economics.

It seems apparent to me that there are three distinct ways new wealth enters the economy:
Energy production. To fuel the growth.
Resource excavation. To make everything out of.
Labor. To put it all together.

And since there are indeed distinct places that wealth is created, I see this as the reason for the colossal fallacy that left-wing economics can be better than right-wing economics or that right-wing economics can be better than left-wing economics. When in reality, all evidence shows that in some cases the left-wing economics does better and in some cases the right-wing economics does better. Left and right-wing only describe a way that resources are allocated and not actually where resources end up. The root of the fallacy here, which also stretches into all aspects of life, is that everything can be summed up with a single equation. It is a primitive common-sense survival tool that humans have a strong desire to impose on the world. But in reality, things are chaotic, complex and unpredictable. Right-wing economics is often viewed as following principles of chaotic-order but it is over-looked that left-wing economics follows the same exact principles.

Ideologies, that is, ways we fight over the method of allocation, impede economic progress. Capitalists and Socialists, the whole lot of them, are the root of economic conflict. What we should be doing is looking at this purely scientifically.

Based on the wealth-creators I pointed out, the definition of a perfect economy would be one of infinite energy production, infinite resources and infinite labor. So the primary question we should be asking about economics is how to obtain these things, not what our method of allocation. The method is secondary and relative.

Now, that is my theory that I have put out to you. Here is my opinion, with very limited experience, what we should do in the economy based on this new standard.
Labor is limited because it is run by people and people are only capable of working so much. To fix this, all industry should be swiftly automated.
As for energy and resources, it seems apparent to me that Earth does not and should not harbor all our needs for indefinite expansion. The answer to those is that we need a huge expansion of extraterrestrial activity. Start harvesting space.

This does not inherently imply it be done through the government, the free-market, a mix of the two or any other mechanism. It isn't ideology, it's just plain science.

Discuss.
GRAND POOBAH OF DDO

fnord
darkkermit
Posts: 11,204
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5/19/2012 4:06:08 PM
Posted: 4 years ago
The allocation of resources determines how to achieve those ends. The problem is that planners don't know how to achieve those ends. Or better yet, they don't know how to achieve those ends, without those in the present suffering. Resources have to be allocated for either future consumption or present consumption. Achieving the end of replacing labor with automation requires investment. If too much resources are devoted to automation, then people in the present suffer from lack of present consumption.
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FREEDO
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5/19/2012 4:42:32 PM
Posted: 4 years ago
At 5/19/2012 4:06:08 PM, darkkermit wrote:
The allocation of resources determines how to achieve those ends. The problem is that planners don't know how to achieve those ends. Or better yet, they don't know how to achieve those ends, without those in the present suffering. Resources have to be allocated for either future consumption or present consumption. Achieving the end of replacing labor with automation requires investment. If too much resources are devoted to automation, then people in the present suffer from lack of present consumption.

Yes, pretty much. It is an investment. Bad thing? We suffer in the present when we make any investment but making an investment at all implies that we get more than we put in.
GRAND POOBAH OF DDO

fnord
darkkermit
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5/19/2012 4:49:13 PM
Posted: 4 years ago
At 5/19/2012 4:42:32 PM, FREEDO wrote:
At 5/19/2012 4:06:08 PM, darkkermit wrote:
The allocation of resources determines how to achieve those ends. The problem is that planners don't know how to achieve those ends. Or better yet, they don't know how to achieve those ends, without those in the present suffering. Resources have to be allocated for either future consumption or present consumption. Achieving the end of replacing labor with automation requires investment. If too much resources are devoted to automation, then people in the present suffer from lack of present consumption.

Yes, pretty much. It is an investment. Bad thing? We suffer in the present when we make any investment but making an investment at all implies that we get more than we put in.

Not If the investment was bad. In your example of "automation". How do you even know that the labor input is worth the labor output? (since it requires labor to create the automation equipment and the automotive equipment will require repairing and will eventually break down.). Plus the resources used for automation could have been used to achieve other goals (mining, energy withdrawing, labor could have been used for technology advancements, etc.)

This is why allocation of resources through a profit and loss method is so crucial.
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FREEDO
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5/19/2012 4:59:56 PM
Posted: 4 years ago
At 5/19/2012 4:49:13 PM, darkkermit wrote:
At 5/19/2012 4:42:32 PM, FREEDO wrote:
At 5/19/2012 4:06:08 PM, darkkermit wrote:
The allocation of resources determines how to achieve those ends. The problem is that planners don't know how to achieve those ends. Or better yet, they don't know how to achieve those ends, without those in the present suffering. Resources have to be allocated for either future consumption or present consumption. Achieving the end of replacing labor with automation requires investment. If too much resources are devoted to automation, then people in the present suffer from lack of present consumption.

Yes, pretty much. It is an investment. Bad thing? We suffer in the present when we make any investment but making an investment at all implies that we get more than we put in.

Not If the investment was bad. In your example of "automation". How do you even know that the labor input is worth the labor output? (since it requires labor to create the automation equipment and the automotive equipment will require repairing and will eventually break down.). Plus the resources used for automation could have been used to achieve other goals (mining, energy withdrawing, labor could have been used for technology advancements, etc.)

This is why allocation of resources through a profit and loss method is so crucial.

The labor output is well worth the labor input because robots can work much longer and more efficiently than humans. If they didn't, they wouldn't even exist in the first place. And the production of the robots, too, can and should be automated.

Sure, you mentioned some things that resources could be pulled out of to support this. But the things you mentioned are some of the very things I pointed out as those we need to focus on. If you face it, there are indeed plenty parts of the economy which do not serve a high practical function. Basically, there is a lot of crap. We can utilize resources from these places and direct them towards those that create wealth. And it doesn't need to be indefinitely.

Also, I think you entirely missed my point that this doesn't imply the government has to do it for us. It's the fallacy of generalization again. Not only are all free-markets not the same, but NONE of them are the same. If a free-market can't be taken directed then it isn't very free, now is it?
GRAND POOBAH OF DDO

fnord
darkkermit
Posts: 11,204
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5/19/2012 5:18:46 PM
Posted: 4 years ago
At 5/19/2012 4:59:56 PM, FREEDO wrote:
At 5/19/2012 4:49:13 PM, darkkermit wrote:
At 5/19/2012 4:42:32 PM, FREEDO wrote:
At 5/19/2012 4:06:08 PM, darkkermit wrote:
The allocation of resources determines how to achieve those ends. The problem is that planners don't know how to achieve those ends. Or better yet, they don't know how to achieve those ends, without those in the present suffering. Resources have to be allocated for either future consumption or present consumption. Achieving the end of replacing labor with automation requires investment. If too much resources are devoted to automation, then people in the present suffer from lack of present consumption.

Yes, pretty much. It is an investment. Bad thing? We suffer in the present when we make any investment but making an investment at all implies that we get more than we put in.

Not If the investment was bad. In your example of "automation". How do you even know that the labor input is worth the labor output? (since it requires labor to create the automation equipment and the automotive equipment will require repairing and will eventually break down.). Plus the resources used for automation could have been used to achieve other goals (mining, energy withdrawing, labor could have been used for technology advancements, etc.)

This is why allocation of resources through a profit and loss method is so crucial.

The labor output is well worth the labor input because robots can work much longer and more efficiently than humans. If they didn't, they wouldn't even exist in the first place. And the production of the robots, too, can and should be automated.

They wouldn't exist in a free market. I don't think you advocate a free market though. Now the question of whether robots can work more efficient is a case-by-case basis.

I'm stating that it takes labor to create robots in the first place, and the labor put into making the robots might not be worth the labor made up.

Sure, you mentioned some things that resources could be pulled out of to support this. But the things you mentioned are some of the very things I pointed out as those we need to focus on. If you face it, there are indeed plenty parts of the economy which do not serve a high practical function. Basically, there is a lot of crap. We can utilize resources from these places and direct them towards those that create wealth. And it doesn't need to be indefinitely.

Even stuff that seems to be "largely crap" does serve a higher purpose. There's of course that it makes people happy. People also seek status, so people who provide productive goods and services, need "largely crap" to incentivize them to produce goods and services. I agree that the economy as it is has wasteful stuff, but then again I don't advocate the current system.

I'd also add that advances in entertainment can also be used for advances in science and technology. For example, the wii controller actually has medical use.

Also, I think you entirely missed my point that this doesn't imply the government has to do it for us. It's the fallacy of generalization again. Not only are all free-markets not the same, but NONE of them are the same. If a free-market can't be taken directed then it isn't very free, now is it?

Why of course culture, and what incentive people matter. But so what? What system do you advocate?
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FREEDO
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5/19/2012 5:24:32 PM
Posted: 4 years ago
At 5/19/2012 5:18:46 PM, darkkermit wrote:
What system do you advocate?

Everything should be run by robot overlords.
GRAND POOBAH OF DDO

fnord
darkkermit
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5/19/2012 5:29:56 PM
Posted: 4 years ago
At 5/19/2012 5:24:32 PM, FREEDO wrote:
At 5/19/2012 5:18:46 PM, darkkermit wrote:
What system do you advocate?

Everything should be run by robot overlords.

And I made the mistake of taking your topic seriously.

How do you plan for the transition to occur?
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FREEDO
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5/19/2012 5:32:32 PM
Posted: 4 years ago
At 5/19/2012 5:29:56 PM, darkkermit wrote:
At 5/19/2012 5:24:32 PM, FREEDO wrote:
At 5/19/2012 5:18:46 PM, darkkermit wrote:
What system do you advocate?

Everything should be run by robot overlords.

And I made the mistake of taking your topic seriously.

How do you plan for the transition to occur?

It will start with the voting machines electing in their own kind.
GRAND POOBAH OF DDO

fnord
darkkermit
Posts: 11,204
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5/19/2012 5:34:55 PM
Posted: 4 years ago
At 5/19/2012 5:32:32 PM, FREEDO wrote:
At 5/19/2012 5:29:56 PM, darkkermit wrote:
At 5/19/2012 5:24:32 PM, FREEDO wrote:
At 5/19/2012 5:18:46 PM, darkkermit wrote:
What system do you advocate?

Everything should be run by robot overlords.

And I made the mistake of taking your topic seriously.

How do you plan for the transition to occur?

It will start with the voting machines electing in their own kind.

So your saying Mitt Romney is going to win?
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FREEDO
Posts: 21,057
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5/19/2012 5:36:19 PM
Posted: 4 years ago
At 5/19/2012 5:34:55 PM, darkkermit wrote:
At 5/19/2012 5:32:32 PM, FREEDO wrote:
At 5/19/2012 5:29:56 PM, darkkermit wrote:
At 5/19/2012 5:24:32 PM, FREEDO wrote:
At 5/19/2012 5:18:46 PM, darkkermit wrote:
What system do you advocate?

Everything should be run by robot overlords.

And I made the mistake of taking your topic seriously.

How do you plan for the transition to occur?

It will start with the voting machines electing in their own kind.

So your saying Mitt Romney is going to win?

One of them.
GRAND POOBAH OF DDO

fnord
sadolite
Posts: 8,834
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5/19/2012 10:03:23 PM
Posted: 4 years ago
Very specifically "Real Wealth" not to be confused with speculative gambling otherwise known as the stock market as it is used today, is created when someone or a group of people take money or assets and risk it all or a portion of it to create a business or industry that makes something of "value" to then be sold at a profit. Retail sales are an integral part of this formula as a distribution hub to the masses. The masses buy the "product of value" at a price that is higher than production costs plus retail expenses and mark up thus creating a profit for the manufacturer and the retailer thus creating wealth that can either be reinvested or distributed among it's investors.

The service industry works the same way.
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

If liberal democrats would just stop shooting people gun violence would drop by 90%