Can somebody explain to me what's the point of the 'modern economy'?

[TopDog]

I do not agree that we need to stop producing 'wasteful goods.' Obviously, by way of them being purchased, they have some value to people. Also, i do not like the idea of some entity deciding what is useful and what is wasteful.

I agree that we need to manage population growth and try to make our economies and production processes more efficient and 'green.'
Then again, we are very actively trying to do both of these. More investment and a more positive attitude would be helpful though.

 

[BasketCase]

Wow. Looks like a whole bunch of people have seen "Avatar" one time too many.

The point of the "modern economy" is, very simply, that all the alternatives suck. Any one of you could walk off the reservation right now and build yourself a nice log cabin in Montana and farm your own food. But you all choose not to. You stay here, inside the system, with your cars and your candy bars and your cell phones--and, of course, your Internet connections.

Yeah, the system will collapse now and then. Has in the past. Every time, we simply built it back up again. Roman Empire, Great Depression, Hurricane Katrina, Bank Crisis of 2008. Boo friggin' hoo. Next time it collapses we'll simply rebuild it.

 

[kosiosko 1]

Wow. Looks like a whole bunch of people have seen "Avatar" one time too many.

The point of the "modern economy" is, very simply, that all the alternatives suck. Any one of you could walk off the reservation right now and build yourself a nice log cabin in Montana and farm your own food. But you all choose not to. You stay here, inside the system, with your cars and your candy bars and your cell phones--and, of course, your Internet connections.

Yeah, the system will collapse now and then. Has in the past. Every time, we simply built it back up again. Roman Empire, Great Depression, Hurricane Katrina, Bank Crisis of 2008. Boo friggin' hoo. Next time it collapses we'll simply rebuild it.

agree there, each time we rebuild it we make changes to prevent it happening again, even hurricans, don't think the system responded well to that, so you change it... your response system
even the U.S. took the opportunity to make things better, at its birth, it didn't adopt some old roman idea it changed into something new, it would be silly to mindlessly rebuild something, just because it used to work in the past

 

[JohnRM]

I do not agree that we need to stop producing 'wasteful goods.' Obviously, by way of them being purchased, they have some value to people. Also, i do not like the idea of some entity deciding what is useful and what is wasteful.

People place a value on and purchase nuclear weapons, but it is hard to argue that they are good for the world.

 

[JohnRM]

Wow. Looks like a whole bunch of people have seen "Avatar" one time too many.

The point of the "modern economy" is, very simply, that all the alternatives suck. Any one of you could walk off the reservation right now and build yourself a nice log cabin in Montana and farm your own food. But you all choose not to. You stay here, inside the system, with your cars and your candy bars and your cell phones--and, of course, your Internet connections.

Wait. Really? They have places in Montana where you can do that?

You're missing something, though. Go off into the woods with a bunch of people and start living in a new way, you're a pioneer. Do it by yourself and you're Ted Kaczynski.

 

[Winner]

I do not agree that we need to stop producing 'wasteful goods.' Obviously, by way of them being purchased, they have some value to people. Also, i do not like the idea of some entity deciding what is useful and what is wasteful.

We do not only produce an awful lot of stuff we absolutely don't need at the cost of massive environmental disruption, we are also building wonderful future memorials of our folly:

I agree that we need to manage population growth and try to make our economies and production processes more efficient and 'green.'

Then again, we are very actively trying to do both of these. More investment and a more positive attitude would be helpful though.

We're doing not NEARLY enough. People seem to think that if they recycle some of their waste and buy few products with a green stamp on them, they're doing enough to protect the environment.

In reality, they'd have to profoundly change their life for that to matter. Like, sharing one car with several other families, avoiding air travel entirely, recycling everything, saving on electricity, water and heat, not buying new stuff simply because you like it and buying only the kind of stuff which was produced ecologically and which can be fully recycled afterwards. These are just few examples.

I am a naturally non-consumerist guy (in the sense that I abhor being wasteful and spending my money pointlessly), but even I would have problems adapting to the lifestyle that's necessary to sustain our first-world civilization in the long term.

Wow. Looks like a whole bunch of people have seen "Avatar" one time too many.

I was waiting till someone comes up with this allegation Nope, Avatar has nothing to do with it. If you're looking for someone to blame, go talk to Jared Diamond - his books were my "eye openers".

The point of the "modern economy" is, very simply, that all the alternatives suck. Any one of you could walk off the reservation right now and build yourself a nice log cabin in Montana and farm your own food.

Which would be much more destructive to the environment than pretty much everything else. We cannot go back to pre-industrial, subsistence farming economy. We cannot do that, because there's bloody 7 billion of us today and if everybody was to tend his own land (which is inherently much less effective than the modern agricultural production), we'd destroy the planet's ecology much sooner than if we continued in our present-day course.

But you all choose not to. You stay here, inside the system, with your cars and your candy bars and your cell phones--and, of course, your Internet connections.

Buddy, this "look at you hypocrites" type of argument might even be effective if I hadn't pre-empted it in my opening post and if I hadn't explained the basics of my proposal in my following posts. You're again arguing against a strawmanized version of my ideas - I am not your usual trendy green guy who's just trying to impress his hippie girlfriend, so try... I don't know, read what I am writing?

Yeah, the system will collapse now and then. Has in the past. Every time, we simply built it back up again. Roman Empire, Great Depression, Hurricane Katrina, Bank Crisis of 2008. Boo friggin' hoo. Next time it collapses we'll simply rebuild it.

The ignorance of this almost burns my eyes.

Here's some civilizations which didn't recover from their collapses: Easter Islanders (descent into chaos and cannibalism which killed most of the island's inhabitant before the Europeans even arrived with their diseases to finish the job), the Greenland Norse (they all died - yes, all of them, no survivors), the Maya (ever wondered why they abandoned their cities? Estimates say roughly 90% of Maya died in the collapse of their main civilization). Oh, and there is the so-called "fertile crescent" which really used to be fertile, until its inhabitants chopped down all the forests, salinised the soil and turned it into a desert. Oh yes, people still live there and they're a pretty good example of how our life will look like if we cause the same kind of disaster on global scale

What is happening now is that we are, for the FIRST TIME IN HISTORY about to cause a GLOBAL collapse of our civilization AND the environment which sustains any sort of civilization in general. This has never happened before so stop talking about periodic economic collapses - they are nothing compared to the big one I am talking about on this forum.

 

[Dachs]

Semi-rational =/= Homo economicus...

Yeah? So? Might as well criticize NASA for taking too much account of the effect of phlogiston.

 

[Winner]

Then what do you propose that these people are made of? Stones? It is not as though the entire population of these countries are starving, all at once. It is small segments of the population, usually when there is drought or crop failure, usually due to poor farming technique. Of course, your other problem is that you're looking at rate.

Take one of your "hard to feed" nations such as Sudan, for example. They are growing at a rate of about 3 percent. With a population of roughly 42,000,000 (IIRC), that is about 1.25 million new mouths added to the rolls per annum. Just a one percent growth rate in the United States (which around where we hover) would add 3 milliom per annum. In China, at a paltry 0.5 percent (0.58% actual), they're still adding 7.5 million per annum. Pakistan, at 169 million souls, is adding almost 3.5 million per annum. Even France is adding 650,000 people per annum, at current rates. But this is all beside the point. The food being produced in the countries that have it, is making its way to the third world where it fuels further growth.

That's a fair point. I discussed this in the epic "Ethiopia" thread where I argued that it makes no sense to "bailout" these countries every time they fail to produce enough food for their ever larger populations, because this only aggravates the problem. More kids survive and grow up and give birth to still more starving kids we'll have to feed.

Yes, it is pretty cruel, but unless these countries realize that they can't allow further population boom and come to us to give them money not for more food, but for help in distributing contraception and educating people about the problem, we shouldn't support their suicidal behaviour.

This is true, but enough is sent abroad to fuel growth elsewhere. Of course, growth, even in the "first world" is still too high. At just 1 percent growth, per annum, the United States will have 400 million people in just 29 years. In just 52 years, we will have 500 million. In just 70 years, that number will top 600 million. In just 86 years, it will be 700 million. By the end of the century, we'd be well on our way to 800 million, having added 33 million in just 14 years.

Yup, I was pretty shocked when I saw these figures - US pop. growth is almost exponential, even though it is a first world country. If you guys don't stop immigrants from arriving en masse, you're going to "ThirdWorldize" your own country.

(Immigration is actually another type of "bailout" the developed countries "offer" to the irresponsible population-boomers.)

It will have taken 29 years to add 100 million souls to reach 400 million total. Toward the end of the century, it will have taken just 16 years. Do you honestly think that, even what you consider to be low growth, to be sustainable? The numbers are even more frightening when you look at China. It is expected to slow, but even by 2050, it is expected to hover around 1/2 percent.

Which is why I said in the OP that we should aim to achieve negative population growth in ALL countries, including the developed ones.

Here is a simple question, for you, that will help you understand.

Inside of a cup, you place a bacteria whose population will double every minute. The time, when you put the bacteria in there, was 11:00. The cup will be filled by 12:00. You had to use a microscope to make sure that you actually got it in there, it was that small. At what time is that cup half-way full?

There's no need to demonstrate this problem to me, we're on the same ship here

I don't think that we have to abandon the "rural way of life" moreso that what we have to do is revolutionize it. Turn our totalitarian farming system into organic farms that produce a wide variety of goods. Forget crop rotation, mix your crops among the various fields. This also goes a long way to take care of pests. Co-exist with the world around you.

And I can assure you that in most cases, this farming is doing this either to produce a crop that he sells abroad, to wealthy westerners, or because the good farmland is already taken up for that purpose. In either case, the farmer is destructive, but you're never going to convince me that he does as much damage as the average citizen in the western world. Our consumption fuels the destruction of habit all over the world.

Granted, but they are not going to willingly accept this as long as we're still living the same way that we are, today. Its a pipe dream to think so. We have to set the example and we have the leading minds and technology to figure out this new way of life.

Again, there is nothing to argue about here, because we are basically in agreement.

We've been trying to come up with such a system for at least a hundred years. The only thing that such attempts have ever turned up was to make EVERYONE poor, with a smaller elite still at the top. The foundational economic system that we've been using for thousands of years, has to change.

I don't believe in revolution; I believe in evolution. Radical attempts to change everything rapidly and completely usually backfire and cause a disaster (do you hear this, Commies?).

But time IS running out. We still have the 50 years or so to adapt and change our lifestyle. Unfortunately I don't see much being done on global level.

We cannot very well control what they do. We can only try to change their minds through leadership, at home. It WILL certainly take a worldwide effort, but it has to start somewhere. I am an American, so for me, it has to start, at home.

Fair enough - America is a good place to start, since it epitomize the kind of lifestyle which needs to end.

 

[Yeekim]

What is happening now is that we are, for the FIRST TIME IN HISTORY about to cause a GLOBAL collapse of our civilization AND the environment which sustains any sort of civilization in general. This has never happened before so stop talking about periodic economic collapses - they are nothing compared to the big one I am talking about on this forum.

We are and I do not believe this is avoidable. However I believe that humans as species, as well as most of scientific knowledge shall survive and environment shall finally (as in, few hundreds or thousands of years) recover. Hopefully we'll see a good number of other species survive as well.

 

[Winner]

Oh I am sure many species will survive. Except most large mammals (the image of millions of desperate hungry Africans roaming the continent with AK-47s shooting anything that might be edible keeps appearing in my mind...), many bird species, all the fish that people like to eat, most amphibians and many reptile species, etc.

Plus the bad thing about this is that once you disrupt the existing food chains and symbiotic patterns, you won't be able to stop the whole system from falling apart - eventually even species not directly affected by humans will go extinct.

And it won't take just centuries, but millions of years for nature to produce their replacements through the standard evolution process (assuming we won't be there to mess with it any more).

We should better start taking DNA samples of all species we know so that we can revive them in the future, if we survive as a technologically advanced civilization.

 

[RedRalph]

Have a bit of optimism Winner. Economics will eventually evolve in the right directions.

 

[Yeekim]

Oh I am sure many species will survive. Except most large mammals (the image of millions of desperate hungry Africans roaming the continent with AK-47s shooting anything that might be edible keeps appearing in my mind...), many bird species, all the fish that people like to eat, most amphibians and many reptile species, etc.

Plus the bad thing about this is that once you disrupt the existing food chains and symbiotic patterns, you won't be able to stop the whole system from falling apart - eventually even species not directly affected by humans will go extinct.

Yeah, that's what I'd imagine.

Have a bit of optimism Winner. Economics will eventually evolve in the right directions.

But what would it take to bring about a change this dramatic? I don't think anything less than a collapse Winner predicts would be enough.

 

[Cutlass]

Yeah? So? Might as well criticize NASA for taking too much account of the effect of phlogiston.

I have no idea what point you think you are trying to make there.

 

[El_Machinae]

I think we should have some concern regarding population growth, but not too much concern. As women move towards having ~2 children, the population levels will eventually stabilise. Each region is slowly moving towards ~2 children/woman. This might cause our population to rise to 9-11 billion, but it won't grow much beyond that (if we don't screw things up).

Knowing that we're going to get to 9-11 billion means we have to plan for it. There's nearly no way to stop this population growth (intentionally), though there are obvious ways to decrease the rate. There are no moral ways of reducing the population load within this century. Additionally, while we cannot support 9 billion people at the level of the modern poor American's consumption, there are many ways to increase lifestyle without increasing damaging consumption. We need to plan for the inevitable, instead of bemoaning it.

 

[Narz]

I think we should have some concern regarding population growth, but not too much concern. As women move towards having ~2 children, the population levels will eventually stabilise.

Not for many decades though (barring disaster). I think people should be able to "have" as many kids as they want personally. But ideally they should adopt them from countries where they are impoverished. Well thousands of kids starve a day it's selfish to have any biological children at all (though we should give people some leeway for selfishness).

There's nearly no way to stop this population growth (intentionally), though there are obvious ways to decrease the rate. There are no moral ways of reducing the population load within this century.

There are. Stop rewarding people for having so many kids. Unless they adopt. Also, remove the stigma of elder suicide. There are a lot of people making a load of money off of barely conscious old people shuffling around, forgetting their kids names & falling down (sucking money from their savings & their children) but are they really doing humanity & even those they claim to serve a good?

Additionally, while we cannot support 9 billion people at the level of the modern poor American's consumption, there are many ways to increase lifestyle without increasing damaging consumption. We need to plan for the inevitable, instead of bemoaning it.

We don't need to just not increase consumption, we need to drastically decrease this. Every new resource sucker born compounds the problem. If we increase efficiency by 30% but increase the population by 30% we've gained nothing.

 

[aelf]

Welcome to the Environmentalist movement Winner.

I don't know why you commies are equating Environmentalism with Communism.

Because you don't know anything whatsoever about where we're coming from, especially when you say it's equating Environmentalism with Communism.

 

[Cheetah]

Wow. Looks like a whole bunch of people have seen "Avatar" one time too many.

The point of the "modern economy" is, very simply, that all the alternatives suck. Any one of you could walk off the reservation right now and build yourself a nice log cabin in Montana and farm your own food. But you all choose not to. You stay here, inside the system, with your cars and your candy bars and your cell phones--and, of course, your Internet connections.

Yeah, the system will collapse now and then. Has in the past. Every time, we simply built it back up again. Roman Empire, Great Depression, Hurricane Katrina, Bank Crisis of 2008. Boo friggin' hoo. Next time it collapses we'll simply rebuild it.

I can very well see why people don't want the system to collapse. It will lead to lots of death and destruction.

Regardless, just like BasketCase, I'll continue to to spend the worlds resources like there is no tomorrow. My reasoning is simply that people in general will not change and any attempt to do so will be more or less futile. You can try to lead by example, but that will only give you a handicap when the rivers of milk and honey runs out and we finally find out who is willing to kill to live.

By continuing to gather resources and wealth for myself I'm trying to rise higher in the current society so that me and mine will have a better chance of getting through the "bottleneck" as some poster called it earlier. And being a young, healthy, well-educated, tall, white male with a Norwegian passport my starting position is actually pretty good I think.

We do not only produce an awful lot of stuff we absolutely don't need at the cost of massive environmental disruption, we are also building wonderful future memorials of our folly:

Those behemoths aren't even good memorials: They'll erode away in less than half a century if not continuously maintained...

Oh I am sure many species will survive. Except most large mammals (the image of millions of desperate hungry Africans roaming the continent with AK-47s shooting anything that might be edible keeps appearing in my mind...), many bird species, all the fish that people like to eat, most amphibians and many reptile species, etc.

You do know of course, that our Fish-Genocide is almost complete anyway? Look at the Dutch harbor logs for instance. In the 1600s each boat caught lots of fish and relative close to land as well. Today, with our many-times larger factory-trawlers we are struggling to do better than the Dutch fishermen did in the 1600s, with far cruder technology. Indeed, the world's trawlers are just finishing the jobs now.

We should better start taking DNA samples of all species we know so that we can revive them in the future, if we survive as a technologically advanced civilization.

We are. This is only for crop-plants for the time being though: Svalbard Global Seed Vault.

Again, I ask, DEFINE UNNECESSARY. DEFINE it such that you can get the vast majority of people to agree.

While such a definition may actually be impossible, it is fully possible to price in externalities into products.

I'll try to present some way to do it - though I heavily doubt it will even matter if I can. Humanity will have an actual battle royal within this century, and there is virtually no way of stopping it.

An immediate band aid is to institute a deposit on all products that are affected by fashions and trends, and on all containers that can be used over again. Norway and many other countries already have this for cars, bottles and aluminium cans. For bottles and cans this deposit is less than 10% of the consumer price for the product, and we have about an 80% return rate.

I suggest that we heavily extend this deposit legislation. For mobile phones, let's say a 80% deposit added to the price. For clothes, I suggest a 250% deposit. Producers will of course be legally bound to arrange a proper return procedure that is easily accessed by people - usually at the same location where they originally bought the item.

This will limit consumption somewhat, and also make sure that a large amount of raw materials are available to be reused instead of having to constantly mine more and more resources.

A final solution of course is to properly calculate the usage of the commons.

And I boldly present a crude algorithm:

Resources
Cannum = (Rnow / (Ptot * Lavg)) + (Rannum / Pnow)

Rnow = Current amount of resource. How much we believe there is left of a specific resource today.
Ptot = The number of current and future people who hold a stake in a specific resource.
Lavg = Average lifespan for a person.
Rannum = How much the resource will grow during a year. I.e. how much can be harvested sustainably.
Pnow = Number of people currently living in the world.
Cannum = How much each person may consume of a specific resource every year.

Pollution
Wannum = (Wearth - Wold) / Pnow

Wearth = Amount of specific pollution the Earth can handle every year.
Wold = Small factor of pollution already in the system, calculate with this factor greater than 0 to remove current pollution levels.
Pnow = Number of people currently living in the world.
Wannum = How much each person may pollute with a specific pollutant every year.

Personal Optimalisation Equation
Sum(Cannum,i + Cperson,i) = Sum(Wannum,j + Wperson,j)

i and j is the number of specific resources and pollutants respectively.
Cperson,i and Wperson,j is how much more or less than the average a person wants of a resource or to pollute.

This equation should be optimalised for each person to maximise his utility for consumption. Note that Cannum,i and Wannum,j should be recalculated every year (or any other interval I suppose), while Vperson stays constantly linked to the default year.

We'll also need some GDP numbers:
M = GDP of entire world.
Mp = Each person's share of the world's GDP (simple average).
Mpr = Each person's share of the world's GDP divided by each counted resource.
Mpw = Each person's share of the world's GDP divided by each counted pollutant.

Finally, calculate the total desired usage of each resource and divide by the availability of that resource:

Cannum,i,tot = Sum(Cannum,i + Cperson,i; i = specific resource)
Wannum,j,tot = Sum(Wannum,j + Wperson,j; j = specific pollutant)

Vprice,i = (Cannum,i,tot * Mpr) / (Cannum * Pnow)
Vprice,j = (Wannum,j,tot * Mpw) / (Wannum * Pnow)

And thus, we have the value of a piece of the commons! Q.E.D.

Anything like this will never be implemented properly and within time, but it's a bit fun to look at anyway. I'm really tired now, so I'm sure I left some big logical flaws in my very general calculations. But what do you think?

 

[Brighteye]

By forcing small business across the board, such a system would raise overall prices and reduce welfare simply by not allotting for economies of scale in production and sale

At what point do the inefficiencies of being small cost society more than the problems associated with inefficient competition, barriers to market entry created by large cash reserves (for advertising etc.) and possible influence over other powerful entities?

You don't see Bushman walking around rocking bling.

Some earrings, a nice bow, maybe a bird feather in your hair, all sustainable status symbols, but a private limo & 20 acres of manicured lawn? Neither natural nor practical. Everyone wants to be special to some extent but advertisers be pushing us to be special thru branding ourselves & not thru stuff like friendship & building skills.

The scale is simply a function of the size of their economy. Since before humans settled down they had status symbols. Long ago it might simply have been a hand axe carved from a pretty rock that couldn't be found in the local area, but nowadays anyone can get such a thing.

We don't need to just not increase consumption, we need to drastically decrease this. Every new resource sucker born compounds the problem. If we increase efficiency by 30% but increase the population by 30% we've gained nothing.

Sometimes I wonder if I'll ever be told why people think we've broken the 'Malthusian trap' about which we hear so much.

 

[Dachs]

I have no idea what point you think you are trying to make there.

You have implicitly criticized economists as a whole for the use of a flawed concept that is not used as a purportedly accurate representation of human decision-making by the majority of economists.

 

[Cutlass]

You have implicitly criticized economists as a whole for the use of a flawed concept that is not used as a purportedly accurate representation of human decision-making by the majority of economists.

No, I didn't. I criticized that subset of economists that stick to a disproved theory, or subset of people that still hold on to that disproved theory.