An intellectual's review

[Ming]

Thank you gentleman... much better
Carry on!

[wodan11]

You guys are forgetting the original point about money representing actual goods (being backed by gold or whatever). I agree that yes, banks create new money. However, not all loans do this.

Most loans are guaranteed by collateral. Thus, the banks are not "creating new money" when they grant one of these loans... they money is backed by the collateral. If a mortgage, by the house.

Wodan

ps Banks in Civ create money.

[Unimatrix11]

Understand the point I made about banks poofing money into existence out of thin air.

Thanks for pointing that out, Blake. I also enjoyed your fishery example - esp. because it is exactly what we worked on in the class "simulation of ecological systems" last semester. It´s fine example of what i mean when i talk about dragging value from the future to the present and of the wickedness (as in: deranged from nature) of a system that is solely based on profit. Again i like to point out: With the credit system it is not even an option really to not overfish, because if you dont do it, someone else will. That person will just have to walk to a bank and convince it that he will get the loan out of his "enterprise". And purely economical view would also require for massive concentration of production means (big fishing boats) as this increses efficiency. Every competitor fishing there, will soon become bancrupt, because his fish is simply more expensive (or take chickens and eggs if you like those better). Result is: Overfishing. Not ivory tower marxist gospel, but simple reality observable worldwide with all its social impacts (like, for exmple, scores of western african ex-fishermen drowning each year on their way to europe as economic refugees in a sea that once, before the big european fishing trawlers clensed it, provided for all they needed). Now you might say: ´Booo´ on the bad european fishermen ! Hey, they dont have a choice ! The first one that downgrades his fleet is out and the workers will become boat-people themselves. As Blake already said, the result is passionate fighting against any quota. They derive a right to impoverish others by their right to survive. So far has Civilization taken us - it seems that in the end, humans differ themselves from animals, only by their intraspecific competition to be lethal for the looser (and, in the end, for the winners, too).

Thanks to Adam for pointing out why it is important to read Marx, esp. when one wants to ciritize him: There is just way too much history and propaganda (and historical propaganda) linked with the name to have a clear view on what the man actually wrote before reading it. Just recently i had to correct an essay posted by one of my profs, where one author (Benton) claimed that Marx did not cover extractive work (mining, farming and the like : "primary production") - which is absolutely not true. Marx also did very well see the benefits to effieciency gained by concentration. Half a book deals with little more than just that. About 30+ pages (rough estimate) is about how currency came about and what determines its worth. Also the shifting character of it, depending on the way it is used is very well covered (buy-to-use, sell-buy-sell... and so on). One doesnt need to be a communist to enjoy his writings (i suppose) and learn a lot from them. In any case his works (i only read one book so far) is not all "the world is unjust" whinning from an ivory tower. What it is, is the attempt to look at the world like it is (was), including everyone, not just abstractums like "the nation" or the accounts of the wealthy, perspectives from which Ricardo and Smith seemed to operate (but here i must apply my own standards to myself - need to read them first). Marx, for example, gives long chapters as too proove the miserable conditions under which the english worker had to live and work in the middle of the 19th century: Health and housing statistics and the like - truely appaling but 100% official (made by royal inspectors). He did not (at least not at the point where i am at) say how society should look like. That is not his achievement. It rather is shocking realism when looking at the system at hand, it´s shortcomings, it´s inhumane nature, it´s driving motivation, it´s consequences and its unjust origin. That´s why the book i read is called "the production process of capital" and not "Drafting a better world" or something like that. Thats what maybe Stalin did (only read a little bit of him: "On Leninism" - very bad propaganda there, with lots of sentences like "Read on!" which just means "dont think !"). To put in other words: If Marx had written about the planets, he would have seen that they run in orbits and concluded the existence of gravity and the tendency of moving bodies to keep their vector (lack a word here) - not that the planets SHOULD orbit in squares. But that is unfortunately what most people think he did and the USSR attempted to put into practice. So they say he is wrong. But if they read him, they would see, that he agrees that the planets run in circular orbits and merely gives an explaination as to why they do so. And all of a sudden you can say, why the planets wont suddenly start to change their orbits to squares. I guess people who read Marx dont argue with his observations really, but rather say "so what ? - you cant change gravity"... thats the core of any socialist discussion - if and by what means gravity in this allegory can be altered.

BTW: If we talk about (to-be-)invested money, capital that is, then increasing its velocity and its overall amount is the same thing, basically. I think the medical analogy does hold value here: Its not the amount or the speed of capital that defines the financials of an economy, but its "pressure", which is a combination of both.

EDIT: I thought we have already said, that banks in Civ do not create money, but rather increase the abstract financial power of that civ (via loans...).

EDIT II: With Blakes fishing example: What would the guy who extincted the fish do next ? Well he has 10M now and 1M to back him up each year - and as long as there are lakes with fish in it... well... you know... with 10M we can tackle 5 such lakes at once. Plus with that much cash in our hand and the proof of our businessiness (thats even better than truthiness), we will surely be able to pick up loans for another 5 lakes... so in year 2 we tackle 10 lakes... which makes us... well... very liquid... lets see, the nation has 1.000 lakes... how long will it take us, to reap maximum profit out of all of them and what other countries can we buy into, before people there will come up with the same trick themselves ? What do you mean "fish will get really rare" ? Yeah, sure... But that just means, we can sell any one for more... aint we smart !? Success will proof us right and money will drown any doubt... Sure there wont be any fish anymore, but we can then buy all the potatoes in the world (doubling the social value of our work, by leaving the world without fish AND potatoes).

[couerdelion]

Uni,

You forgot to mention state property and the benefits this brings to food supply

[nbarclay]

The way banks "create money" is a lot like a person who wants to buy something but doesn't have the money at present giving the seller an IOU instead. If people have 100% trust in the person to pay off the IOU, or if the IOU includes an interest charge that people regard as making it a good risk, or if people are willing to take a chance because the alternative is losing a sale they'd like to make, the IOU could be traded around almost as if it were money. (Even with some risk attached, the IOU could be traded at a discount - that is, at a value lower than its face value.) For most practical purposes, if enough people are willing to accept the IOU instead of money, the IOU would increase the money supply even though the IOU is not quite the same thing as money. (Or the IOU could be viewed as a different, less reliable kind of money, depending on one's perspective. It depends on whether one defines money as legal tender, which the IOU is not, or as anything that significant numbers of people are willing to accept as a medium of exchange, which the IOU would be in this example.)

Similarly, every dollar that banks "create" is balanced by an IOU of equal value. (It could be argued that it is actually the borrower who creates the "money" by signing the IOU - the loan papers.) Since banks rely on the average value of large numbers of IOUs rather than on any one particular IOU, people who trust the IOUs in banks are not reliant on one particular person repaying one particular loan. Since banks charge enough interest to offset the anticipated number of defaults, the risk to depositors is minimal as long as the banks don't get too careless in their lending practices. (Government insurance makes the risk essentially zero to people in the U.S. who don't exceed the limit on the size of deposits insured.) And banks can move money around so that whoever needs legal tender instead of IOUs at any given time can have the legal tender they need - as long as too many depositors don't demand too much legal tender at the same time. The result is a way of IOUs increasing the effective money supply that is much safer and more stable than having people accept and trade around individual IOUs - or, even messier, IOUs for part of the value of other IOUs. (IOU $100, payable when Jim repays his IOU to me for $200.)

Going back to Blake's idea of a local currency in times of crisis, one approach would be for a group of people who trust each other to issue local currency backed by a pool of IOUs promising that when the economy improves, each person participating in the system will repay his or her share of the IOUs with official currency. That would spread around the risk of default in much the same way that banks do. The value of the local currency would have to be lower than the amount people promise to repay in order to account for the danger of default, in much the same way that loan amounts at banks are lower than the amount borrowers promise to repay. And the value of the local currency would fluctuate based on how much risk of default people who consider accepting it believe there is. But such a mechanism would make it possible to have a medium of exchange in a community where the supply of legal tender is inadequate.

It is interesting to note that there isn't anything in Civ that correlates to the major improvements in the banking and financial systems that have occurred over the last century. Civ gives the impression that banks today don't play any larger a role (in percentage terms) in contributing to the economy than banks in the late renaissance era did. But if we compare the stability of modern banks with that of early banks, the difference is enormous. The early banks operated in a way that was very similar to my description of how a local currency might work - often right down to issuing their own paper money, which people used as a medium of exchange but which was not legal tender, and which therefore often traded at discounted rates.

[nbarclay]

Discussions of the form, "Is capitalism good or is capitalism bad?" miss an important point. There are some things that capitalism is better at than any other system we are currently aware of. (Remember Churchill's quote that Civ IV uses with the Democracy tech, "It has been said that democracy is the worst form of government except all the others that have been tried." Similarly, capitalism doesn't have to be perfect; just less bad than the available alternatives.) But there are other things that capitalism alone is completely incapable of handling properly, and that therefore require some other mechanism working alongside capitalism in order to make an overall economic system work well for everyone over the long term.

Capitalism is at its best in situations where the investment of additional capital can increase the quantity and/or quality of goods or services. In such situations, the long-term effect of capitalism is to enable everyone, not just the wealthy, to have more than they could otherwise.

In theory, the same results could be achieved with government taking on the role that capitalist investors normally play. But in practice, the inefficiency of government bureaucracies has consistently proven to be greater than the inefficiency of allowing private investors to make a profit if their investments succeed in exchange for agreeing to pay the cost if their investments fail. This is true not only of Soviet-style so-called communism (which really doesn't deserve the name it claimed), but also of attempts to have government take over industries in Western Europe.

The difference in efficiency of investments is extremely important in the long term because investments that improve productivity produce the same basic effect as compound interest. (Note the Civ IV quotation, "Compound interest is the most powerful force in the universe.") In the short term, it is possible for the poor in a communist economy to be better off than the poor in a capitalist economy. But in the long term, unless much better mechanisms for government to manage investments effectively and efficiently can be found, the poor are better off with a smaller share of a larger pie in a capitalist economy than they would be with a "more equitable" share of a smaller pie in a communist economy. In this type of situation, the only way communism can make the poor in the present better off is by robbing value from the poor in the future.

In contrast, when a society reaches a limit on how much of a resource can be harvested on a sustainable basis no matter how much capital is applied, capitalism can no longer function properly. Instead of a situation where increased capital results in increased production, we have a zero-sum game in which the only way capital can be used for some people to have more is to cause others to have less. Capital can be used to win a race to grab as many slices of pie as possible as quickly as possible. And in doing so, capitalism might make the harvesting of pie more efficient. But even in the best case, a significant part of the value investors receive comes from taking wealth away from others, not from an increase in productivity. And in the worst cases, such as the issue of overfishing, capitalism can reward behavior that actually reduces overall production over the long term, which is the exact opposite of what capitalism is supposed to accomplish. Thus, trusting unregulated capitalism to do a good job of managing the harvesting and distribution of scarce resources is foolish.

Capitalism also doesn't provide a reliable way of protecting people who are displaced by new, more efficient ways of doing things. I don't view that as a problem as long as the displaced people can still find reasonably good jobs, because the only thing the workers lose is their luck in having been able to find better jobs than a lot of other people were stuck with. But if capitalists don't need to compete with each other to hire all of the people who need jobs in order to produce all of the products and services that people are willing and able to buy, that can lead to very serious problems - as Marx rightly pointed out. Capitalism by itself can' t provide a safety net to protect people against that kind of situation, so any such safety net must involve other forces.

I believe that the best economic systems are those that take good advantage of the things that capitalism does well while at the same time using other mechanisms to deal with issues that capitalism does not handle well. People who want to discard the entire concept of capitalism merely because it doesn't work well to handle every type of situation are trying to throw the baby out with the bathwater, while people who put their faith solely in capitalism are ignoring important limitations on what it can accomplish.

[nbarclay]

Originally posted by Unimatrix11
Again i like to point out: With the credit system it is not even an option really to not overfish, because if you dont do it, someone else will.

The same thing could be done with corporations without requiring any borrowing. Note the potential for Sid's Sushi in Civ IV to buy up so much fish, clams, or crabs that a civ that wants to trade for one of those resources can't. This reflects the way that real-world corporations can use investors' money to grab as many resources as they possibly can if they can find profitable ways to use them all. Fortunately for players, in Civ IV, Sid's Sushi can't over-fish.

Granted, banking can make it easier for individuals and corporations to obtain money to finance their ventures. But taking away the ability for banks to loan out money and charge interest would not solve the underlying problem.

[Blake]

Originally posted by wodan11
You guys are forgetting the original point about money representing actual goods (being backed by gold or whatever). I agree that yes, banks create new money. However, not all loans do this.

Most loans are guaranteed by collateral. Thus, the banks are not "creating new money" when they grant one of these loans... they money is backed by the collateral. If a mortgage, by the house.

See, so few people know what money actually is.

Lets say you OWN your house already. And it's in the UK or Australia or somewhere, where the fractional reserve banking has no threshold, so the banks really can just issue loans as long as they are confident they have enough cash in the vault to cover legal tender withdrawals.

You go to the bank, and take out a $100,000 mortgage, using your property as collateral.

It doesn't matter that it's backed by something - you now have $100,000 in your bank account which you can spend on things, in other words, there is now new spendable money in the system, the money supply has increased. That money wasn't there before.

That's the nature of a bank loan. They are NOT giving you other peoples money, they create new money. You can either accept this, research it more, or remain blissfully ignorant :P.

Banks DO prefer you to think that they are giving you other peoples money. This makes what they do analogous with you lending your mate a $100. But it's not as analogous as you might think.


Note that shares (and such) actually also increase the money supply in a sense.

Say you buy $10,000 worth of shares, meaning you give the company $10,000 and they give you a piece of paper which represents say 100 shares, which at time of purchase were worth $100 each.

Now, your original $10,000 is still zipping around, it's still money supply, being used to buy things and stuff.

However now you also have this piece of paper. This piece of paper, is supposably worth $10,000. If you want to buy something worth $10,000 you could try offering the piece of paper, saying "This piece of paper can be redeemed for about $10,000", the recipient could check this, confirm that it's true and accept the piece of paper. The piece of paper, the shares, are now money supply. They can be used to enable transactions. It's not legal tender, but it is a form of money supply since it enables transactions.

Potentially there is now both the $10,000 in cash, and the piece of paper worth $10,000 - zipping around enabling transactions. The $10,000 of legal tender has become $20,000 of money supply.

However the shares are "bad money". If you want to buy something worth $10,000 and offer EITHER $10,000 in cash, or the piece of paper, then the buyer will definitely take the cash - it's "good money", it's legal tender, they KNOW it's worth $10,000 - they could use that $10,000 to buy another piece of paper, so they still have that option. They gain nothing by accepting the piece of paper when they can accept the $10,000. Furthermore the $10,000 can be easily split into smaller denominations, while the piece of paper; not so easily so.

People are reluctant to accept bad money (but eager to get rid of it), because they don't know whether other people will be "foolish" enough to accept it, it might be more unwieldy, and so on. But it is potentially money - something which can be used to enable a transaction.

Of course shares are not usually used as money, usually they are purchased in the hope they will increase in value. But they CAN be used as money! (unless there are laws or regulations forbidding it, so in principle at least they can be used as money)

But anyway, what money is, and what money supply is, it's a complex topic and it's not easy to understand, if you've not spent a lot of time researching it and also thinking about it for yourself, then you probably don't understand it... not belittling anyones intellect, but that's how it is. It's NOT EASY TO UNDERSTAND. And if you think it is, you don't understand it :P.

[Unimatrix11]

Originally posted by nbarclay

In contrast, when a society reaches a limit on how much of a resource can be harvested on a sustainable basis no matter how much capital is applied, capitalism can no longer function properly. Instead of a situation where increased capital results in increased production, we have a zero-sum game in which the only way capital can be used for some people to have more is to cause others to have less. Capital can be used to win a race to grab as many slices of pie as possible as quickly as possible. And in doing so, capitalism might make the harvesting of pie more efficient. But even in the best case, a significant part of the value investors receive comes from taking wealth away from others, not from an increase in productivity. And in the worst cases, such as the issue of overfishing, capitalism can reward behavior that actually reduces overall production over the long term, which is the exact opposite of what capitalism is supposed to accomplish. Thus, trusting unregulated capitalism to do a good job of managing the harvesting and distribution of scarce resources is foolish.

Capitalism also doesn't provide a reliable way of protecting people who are displaced by new, more efficient ways of doing things. I don't view that as a problem as long as the displaced people can still find reasonably good jobs, because the only thing the workers lose is their luck in having been able to find better jobs than a lot of other people were stuck with. But if capitalists don't need to compete with each other to hire all of the people who need jobs in order to produce all of the products and services that people are willing and able to buy, that can lead to very serious problems - as Marx rightly pointed out. Capitalism by itself can' t provide a safety net to protect people against that kind of situation, so any such safety net must involve other forces.

I believe that the best economic systems are those that take good advantage of the things that capitalism does well while at the same time using other mechanisms to deal with issues that capitalism does not handle well. People who want to discard the entire concept of capitalism merely because it doesn't work well to handle every type of situation are trying to throw the baby out with the bathwater, while people who put their faith solely in capitalism are ignoring important limitations on what it can accomplish.

I think we are getting somewhere now. I really do acknowledge the technical and also some social achievements of capitalism. It is simply the most efficient way to get things done. Problem is: Some things shouldnt be done, others need to be done slowly. Another problem is that capitalism does not easily accept any boundaries given to it. Combined it makes for a dangerous temptation: Total economic liberalism. To advocate that is to simply ignore that power exists by nature and if it is not shared by some regulation it will accumulate and eventually be misused.

You mention the main reason that lies beyond just sociology that makes capitalism extremely dangerous in our times: The limits to growth. A system that must grow perpetually cannot be suitable for any given living-space. This is obviuous at least since the early 70´s (we are kinda closing the circle here, cause it was one of the first (computer-)simulations that showed us when any given ressource would be completely exploited - in some cases it was way off, but who could imagine digital photography in 1971 and predict it will reduce the demand for silver so much for example?). In the fishery example: Okay now the guy is in agreement with every single actor on stage and they all say: "We will only fish what will grow back". Normally with that the problem would be solved pretty much. But not in capitalism - it must grow. Our fishing community will not be able to live sustainable for long, because some company will buy them out; just because it needs profitable application for its capital. And - schwups- we are back in the competition cycle of companies - the biggest pig will eat them all.

See the problem also is: I hear you all talking about "creating job opportunities". What god set it to stone, that we all have to work our asses off, destroying the very basis of our existence, for things we do not need ? We do not need jobs - the jobs need us, damn it ! In arts class (10th grade maybe) i once made a colage: In its center was the giant word "labor" (well, "Arbeit" actually) in stone and people running towards it over a desert plain at its foot like it was free beer. Above the word was Wilhlem II. and many many tanks and soldiers. I wrote above and under it: "Erst wenn diese Festung fällt, verändert sich die Welt" (Only when this fortress falls, the world will change). Now, some 15 years later, i wish i knew where i put it, for i think it was probably the best piece of imaginary art i ever made. Of course people want the feeling that they actually "earn" the money in their pockets - good people these are. But how much work is really needed to make a living ? Can it be, with all that (capitalistically) enhanced productivity, that people still have to work 8 hours a day ? Why is it not 6 ? And what if, hypothetically (!!!), we arrive at a point, when human work wont be needed at all anymore. Will we just keep working in order to work ? Well, with capitalism the answer can only be ´yes´. Please do concieve: Often work is not done for its materialistic results (like the product), but to solidify a social system and the positions of the actors in it. If we all stopped working, when it was not needed anymore, why would some be rich and others not ? Yeah... no reason, uh ? Bad thing - may not happen. But fear not: We will always invent new things to consume and thus new work to be done. The old system, was it operating in a limitless space, could go on forever. The funny thing would still be that if we´d (be able to) abolish work, the reason for inequality would cease to exist - but as long as it does exist, it works in some kind of reverse scheme - those who´d deserve to be rich are not and vice versa... odd, isnt it ?

One may not underestimante the influence of personal motivation on the behaviour of the society as a whole. And social status is a very strong personal motivation. When a manager fears to close up shop, why does he fear it ? Is it because he is so sad, that his factory can not produce anymore stuff of what others seem to produce more efficiently anyways ? Sometimes maybe, but in the big majority it rather "oh my god, what a shame - i am such a looser..."... he simply feels bad (if he is one of the more morale ones, i wanna add) - others seem to be better than him to him.

You should have seen that coke-nose of TUI-manager i mentioned a couple of pages before. "We are the biggest *sniff*... the others tried to come close to us, but we bought more companies so we are clearly the biggest again *sniff*" (i doubt he had a cold). "So how are you gonna merge the busniess model of mytravel into TUI - the former is activity-orientated and yours is clearly destination-orientated ?" - "uhem, yeah, actually thats gonna be quite a challange and i am glad i wont be responsible for that as i will be leaving strategic department next year" Great ! That means that he identifies with his company and is proud of his position in it, but doesnt give so much about if he does a good job, as long as he would be the big man in the big(gest !! - very important for him) company. If you look at the actual heads of the company and that of Thomas Cook, you could get the impression that these two men are directly competing with each other over who is the biggest on the block. Reminds you of gangsters ? Yeah me, too (actually whenever i had that impression in class i just raised my hand with thumb and index-finger marking a distance of about 2 inches, if you know what i mean). The (not so) funny thing is that they are being advised by the same advising bureau - so naturally they do the same strategy (and the bureau gets paid twice for the same market analysis, which gets absolutely useless at least in parts this way, too). To contrast all this deranged absurdity, we heard on the same day the manager of a smaller travel agency (10M euro yearly turnover as opposed to 14B). Oh what contrast ! Here the costumer actually still was more than a number. It was really touching. The boss himself would travel around looking for suitable hotels (max 200 beds) for his family-travel business - every single one of them had to offer something special for families (on top of being just nice): Reading goodnight stories, football camps and such things... They had a 75-80% costumer return rate, which is extraordinary for a company that doesnt own half the market like the TUI - their guy didnt care too much about costumer satisfaction: as long as enough people travel, a good share will HAVE to use his facilities even if unknown to them, because of the many subbrands they are running. They were rather concerning themselves with the idea of having a complete value-added-chain (and empty containers on their return route from the US to China - they run container ships, too): Everything concerning a travel should come out of their hands and in every step the costumer takes there is profit (so they thought) to reap - so they wanted control over all the steps. Turned out, esp. after 9/11, that all those steps suddenly produced costs rather than profits... buts thats another story...

[wodan11]

Originally posted by Blake
See, so few people know what money actually is.

Lets say you OWN your house already. And it's in the UK or Australia or somewhere, where the fractional reserve banking has no threshold, so the banks really can just issue loans as long as they are confident they have enough cash in the vault to cover legal tender withdrawals.

You go to the bank, and take out a $100,000 mortgage, using your property as collateral.

It doesn't matter that it's backed by something - you now have $100,000 in your bank account which you can spend on things, in other words, there is now new spendable money in the system, the money supply has increased. That money wasn't there before.

That's the nature of a bank loan. They are NOT giving you other peoples money, they create new money. You can either accept this, research it more, or remain blissfully ignorant :P.

Let's refrain from attacking each other, shall we?

I think you're tied up in terminology. Instead of the term "money", let's use the word "capital".

http://dictionary.reference.com/browse/capital

Money, using your definition, would be a form of capital. When I talked about a loan and a mortgage, the house would also be a form of capital.

The bank, in issuing the mortgage, did NOT create additional capital.

If you defaulted on the mortgage, the bank would sieze the house, and would presumably sell it for its value, thus they would not suffer a loss. (Note that the value of the note would be less than the value of the house, which is where the bank makes their profit. If you did not default, this would translate into interest that you would have to pay before you could eventually satisfy the note and regain ownership of your house.)

Please note that I do not disagree that banks create money. I am simply saying that most loans do not create capital. They simply change the form of capital (from property into money), and they charge you a fee (interest) for that service.

Note that shares (and such) actually also increase the money supply in a sense.

Say you buy $10,000 worth of shares, meaning you give the company $10,000 and they give you a piece of paper which represents say 100 shares, which at time of purchase were worth $100 each.

Now, your original $10,000 is still zipping around, it's still money supply, being used to buy things and stuff.

However now you also have this piece of paper. This piece of paper, is supposably worth $10,000. If you want to buy something worth $10,000 you could try offering the piece of paper, saying "This piece of paper can be redeemed for about $10,000", the recipient could check this, confirm that it's true and accept the piece of paper. The piece of paper, the shares, are now money supply. They can be used to enable transactions. It's not legal tender, but it is a form of money supply since it enables transactions.

See now you're the one confusing money and capital. You can't have it both ways. Decide whether your definition of the word "money" is equivalent to the dictionary definition of "capital", or whether you want "money" to be a subset of capital (and closer to the dictionary definition of money).

Wodan

ps in Civ, it would be interesting to consider Commerce as capital, gold as money, production hammers as property, and research as services.

[Unimatrix11]

2xpost - sorry...

[Unimatrix11]

Capital is simply money used to make more money - dont make such a big fuzz about it... - and in civ-terms, gold would be capital (including loans - not state-owned money), right, adam ?

[wodan11]

Originally posted by Unimatrix11
I think we are getting somewhere now. I really do acknowledge the technical and also some social achievements of capitalism. It is simply the most efficient way to get things done. Problem is: Some things shouldnt be done, others need to be done slowly.

I agree. What does that have to do with Capitalism? Every form of economic government suffers from this. It's endemic to the human race. Those are general statements that are a strawman to say are negatives of capitalism.

Another problem is that capitalism does not easily accept any boundaries given to it. Combined it makes for a dangerous temptation: Total economic liberalism. To advocate that is to simply ignore that power exists by nature and if it is not shared by some regulation it will accumulate and eventually be misused.

Hmm. We could either take that statement at face value or try to interpet your meaning.

By that I mean, what do you mean by "regulation"? For example, there are many forms of regulation. I suspect that you mean "regulation by the government".

However, regulation also exists in nature. Many, many processes have self-feedback mechanisms. If they didn't, the world would have dissolved into biochemical chaos millennia ago.

Regulation also exists by the nature of a self-regulating system. Some aspects of Capitalism (not all, I fully admit) are this way.

But how much work is really needed to make a living ? Can it be, with all that (capitalistically) enhanced productivity, that people still have to work 8 hours a day ? Why is it not 6 ?

Define "make a living".

Some people are perfectly content to live on the streets, homeless, with very few luxuries or comforts. These people work a very few hours of the day, and it is fine for them. (Some people are genuinely disadvantaged and that is why they are homeless... I'm not talking about them.)

Other people are in between. If someone is content working 20 hours a week, they can do this in a capitalist society. As long as they can "make a living", who are we to say that this is wrong? So they can only afford a 19" television instead of a 60" television? They are happy and that's fine for them.

And what if, hypothetically (!!!), we arrive at a point, when human work wont be needed at all anymore. Will we just keep working in order to work ? Well, with capitalism the answer can only be ´yes´. Please do concieve: Often work is not done for its materialistic results (like the product), but to solidify a social system and the positions of the actors in it. If we all stopped working, when it was not needed anymore, why would some be rich and others not ? Yeah... no reason, uh ? Bad thing - may not happen. But fear not: We will always invent new things to consume and thus new work to be done. The old system, was it operating in a limitless space, could go on forever. The funny thing would still be that if we´d (be able to) abolish work, the reason for inequality would cease to exist - but as long as it does exist, it works in some kind of reverse scheme - those who´d deserve to be rich are not and vice versa... odd, isnt it

The hypothetical situation you're talking about is if "make a living" constitutes not only all needs, but all wants that every human could have. There is no scarcity of resources. Note that labor and services are a resource. Thus, this situation would never arise unless the human race were infinite in number. I would predict that art, opera, live performances, etc would demand quite high prices in such a society.

Wodan

ps In Civ, labor and services are represented by citizens (workers and specialists). This is truly a limited resource, as is the products they create (hammers), the revenue they generate (commerce), etc.

[wodan11]

Originally posted by Unimatrix11
Capital is simply money used to make more money - dont make such a big fuzz about it...

I disagree. Capital includes money as well as property and other assets.

The point I was making is that we can talk about money (currency) or we can talk about money (currency, property, and other assets such as services/labor value).

What we choose to talk about will have very different implications and conclusions. And, if one of us talks about one, while another talks about the other, then we will get such statements as, "See, so few people know what money actually is."

Wodan

[nbarclay]

Originally posted by Unimatrix11

But how much work is really needed to make a living ? Can it be, with all that (capitalistically) enhanced productivity, that people still have to work 8 hours a day ? Why is it not 6 ? And what if, hypothetically (!!!), we arrive at a point, when human work wont be needed at all anymore. Will we just keep working in order to work ? Well, with capitalism the answer can only be ´yes´.

The length of time people work is driven largely by the amount of work people have to do in order to have the standard of living they want. All else being equal, people who want a higher standard of living have to work more, while those who are willing to settle for a lower standard of living can afford to work less. Taxation and government spending also have a significant impact because the more money government takes away from people, the more they have to work to maintain the same standard of living.

The reason why the length of the typical work day has not been going down dramatically is that people and governments keep inventing more and more things to spend money on, or become willing to spend money on things that their parents or grandparents would have considered too expensive. As long as the standard of living keeps going up, it limits opportunities for the average work day to go down. But individuals who are willing to live less expensively can afford to look for jobs where they work fewer hours for less pay than most workers do.

Thinking about whether this concept could be translated into Civ terms raises some interesting questions regarding what the impact would be if more people would work less. If people would use the time they save for purely selfish reasons, the practical benefits to society as a whole would be questionable. But if people would use at least part of the time they save by working less to build stronger families and other relationships, or especially for volunteer work or other things that produce benefits even though they don't provide income, the benefits to society of spending less time working just to support unnecessary consumption could be considerable.

If technology would improve to a point where machines could do everything, making human labor no longer truly necessary, there would still be a trade involving things like antiques, hand-made goods, and very possibly creative endeavors, that machines can't simply make more of. (Today's copyright system wouldn't work properly in such an environment, but if nothing else, there would almost certainly be a system where people could donate credits to people whose creative work they enjoy.) People would participate in that economy as much or as little as they want to, weighing the cost of participating against the benefits.

Keep in mind that the laws of supply and demand apply to the labor side of a capitalist system, not just to the consumption side. Employers can't get people to work if they can't offer workers something with enough value to make working for them worth the workers' time. So if machines could give a person everything he particularly wants for free, why would he do any work that he doesn't either enjoy or find rewarding because of the pleasure it gives others? The only people who would "have" to work would be those who want something the machines can't give them.