Comments on: Growth

By: Rob Fisher

Rob Fisher — Mon, 19 Oct 2009 09:46:42 +0000

Thanks for the comments, all.

Agree about zero-sum. As for whether redistribution decreases wealth: possibly not. Arguments against redistribution are usually about either efficiency or morality. Morality is easy: if wealth comes from human labour then forced redistribution is slavery.

By efficiency I mean the amount of wealth created from a given amount of labour. Austrian economists have convinced me that redistributing wealth reduces this because centralised decision making does not work.

Of course, redistributionists might disagree about how to measure wealth and therefore efficiency; they probably think having armies of civil servants is a good thing.

Or in other words, it depends whether you’re looking for the best way to make individuals as wealthy as possible (free markets) or the best way to make useless, interfering, prodnose politicians and their friends as wealthy as possible.

By: Dishman

Dishman — Sun, 18 Oct 2009 01:50:23 +0000

One of the implications of the zero-sum concept of wealth is that if someone has wealth, they must have taken it away from someone else.

Another implication is that the total of wealth is not reduced by redistributing it. In theory, it could be increased or decreasd by redistribution. I believe that those who veiw redistribution as an objective will almost always reduce the total by their efforts, but I can’t prove it at this point.

I believe I have demonstrated that the zero-sum concept of wealth is false, and that therefore any philosophy which depends on it being true is without basis.

By: Michael Jennings

Michael Jennings — Sat, 17 Oct 2009 10:27:16 +0000

Physical goods can be created and destroyed too. A car factory builds a car: wealth created. I push it off a cliff and smash it to bits. Wealth destroyed.

That wealth is zero sum goes at least back to the invention of agriculture, and probably further.

By: Dishman

Dishman — Sat, 17 Oct 2009 02:16:41 +0000

I think the biggest implication of non-physical wealth is that it is not zero-sum. It can be created or destroyed.

Destroying wealth is easy, ie “Format c:”.

Creating it is a bit more difficult, and is left as an exercise to the reader.

By: Michael Jennings

Michael Jennings — Thu, 15 Oct 2009 17:50:34 +0000

The whole “exponential growth” way of looking at things is useful in the short term but useless in the long term. From one year to the next, saying that the economy produced the same thing, but 3% more of it is a reasonable way of looking at things. However, what is actually happening is that the economy is producing goods with 3% more value, and what is being produced is changing from year to year. Over a scale of decades what is being produced is entirely different, so it is not really correct to compound growth over such periods. But we do.

Adjusting the price (of anything) for inflation can also be extremely problematic. Inflation has a monetary aspect related to how much money is in circulation, but the basket of goods you use to measure inflation varies dramatically over decades, making this monetary aspect very hard to separate out.