Category Archives: Economics

Never to the stars

Humanity will never reach the stars.

Why? Well, yeah, why? Humanity will very soon be able to exist fully in virtual reality. Once we have perfect simulation of reality, then our imaginations of what might be in the Universe will greatly exceed what is actually there. Our stories will be much more alluring and billions of times cheaper to explore and investigate. As soon as we can “think” we’re exploring the solar system, the galaxy, and the universe, while being immersed inside VR tanks, or suits or neural implants, then why would humanity spend the time and money _actually_ exploring those spaces?

The scientific community would, one suppose, continue to pursue exploration and discovery, building bots that traveled as fast as they might to other star systems. But the billions of commoners who were more than happy to just sit back and imagine they were on another planet, eating exotic foods, speaking and interacting with bizarre aliens — why would they ever want to risk actually traveling to such locations?

They wouldn’t. And the funding for such actual excursions will dwindle as VR sims become more and more real. The economic reason for exploration of other star systems will fail to compare to the economic reason for delivering an even better virtual world here. And face it, the human imagination is nearly inexhaustible. It’s unlikely that the universe can beat us in the extraordinary portrayal of diversity of life and systems. (Unlikely, not impossible.)

If humanity lives through the next fifty years (no CMEs that destroy civilization, no plagues, no nukes, no asteroids or super volcanoes) then by the time we could actually GO to Mars, we won’t have to, or want to — at least not to experience it. We’ll be able to do that right in our Almost-There-Capsules.

This is one of the solutions to the Fermi Paradox. And, really, humans are almost there.

 


Gun problem cure

Three types of gun ownership:
• hunting / recreation
• self-defense
• [other]
 
I would posit that the [other] type of gun ownership is economically driven. Such a gun can get you prestige or rank but more importantly, enhanced economic possibility.
 
So, why not address this last point in true economic fashion — buy [other] type guns at economically enabling prices.
 
For a one week period, in high gun-crime areas, offer to purchase (through philanthropic or government largess) guns at unprecedented prices. $10k for a handgun. $12k for a shotgun, $15k for an automatic rifle. During this time, all gun stores in a wide area will be closed.
 
The fallout for this program will be considerable. Those who want to keep their guns for hunting or self defense, will do so. But a gun is now worth nearly as much as silver or gold — so it would be prudent to keep them in concealed locations — or better yet — locked up in a safe.
 
Those would would benefit from $10 or 20k influx of cash — this amount of money will change peoples’ lives.
 
Guns are removed from those areas where they most likely will do the most harm.
 
This program should be repeated, around the country, randomly, to extract the most dangerous guns from circulation.
 
2nd Amendment? Leave it intact. But make gun ownership an expensive proposition. Those who are economically challenged will know what to do with their firearms.

Misery != Profit

Industries which profit from misery should not be profit seeking.

Here’s an ugly thought, and although it would never be stated as true, is true none-the-less:

• If every person on the planet became diabetic, Novo Nordisk, Sanofi, and Mannkind (among others) share holders and board members would be thrilled (they make insulin).

• If every person on earth contracted cancer, Genentech (the leading cancer drug company) and its shareholders and board members would be equally energized (despite having cancer and diabetes).

• If you STOPPED getting sick, were healthy all your days until you died of old age these pharmaceutical companies would all collapse and die AstraZeneca, GlaxoSmithKline, Merck, Pfizer, Roche, Johnson & Johnson and many others (representing nearly $500Billion in annual revenue – they MAKE that much money off of our misery every year).

There are other industries, like the entire health care system, HMOs and insurance industry. The healthcare system only makes money when you are sick or dying. The insurance industry only makes money when you THINK you are going to be sick or dying.

Lawyers who specialize in malpractice litigation are another foul industry — they only make money when you’re ill or dying AND you claim your doctor or hospital made you sicker or killed you.

For them your misery = their livelihood.

This is EVIL.

How do you fix it? It’s obvious I’m afraid. Many progressive countries have made the switch over to cure this egregious misanthropy: socialized medicine.

What entity does NOT want you to get sick, or be unhealthy causing you to be unproductive and becoming a costly burden on society? Society of course! And what is the central representation of society in every country on the planet? Government.

In a socialized healthcare system government loses money when you’re sick and can’t work, when you can’t be productive in society. So, government and the offices they create will try and make sure you are cured as quickly and effectively as possible. They’ll advance medicine and care systems to try and keep you healthy and reduce costs not increase them.

Society wants its citizens to be healthy and productive. Corporations want citizens to be sickly and profitable. Novo Nordisk does NOT want your diabetes cured — they want you to be forced to buy insulin for the rest of your life. Novo Nordisk loves the booming trend of obesity – get fat and get sick is their mantra.

That is EVIL!

Industries that make money off of our misery should be severely regulated and taxed or better yet – nationalized.

 

 


Communism – the end of the capitalist rainbow

MillienialMarx

Karl Marx should have been born a Millennial

Our automated future is coming. In fact, under most of our awareness, automation has already begun to negatively impact the middle and lower classes’ economic viability. This is to be expected. Karl Marx speculated this one hundred and fifty years ago. He was just a bit early that’s all.

If Karl Marx had been born a Millennial his theories would evolve with what humanity is seeing as the “elimination of work”; eliminated through the automation, the robotization of all human labor. He would have been witness to the fulfillment of what I propose is the much maligned dream of humanity — Communism.

From Wikipedia:

Communism … As the development of the productive forces end scarcity, goods and services are made available on the basis of free access. … The result is communism: a stateless, classless and moneyless society, structured upon common ownership of the means of production.

The “development of the productive forces.” Or in other words, full on robotic automation of all labor.

If you read more of that segment found on Wikipedia you’ll realize that Marx theorized that capitalism was a transition component in the development of humanity’s ultimate economic state; the state of equality. How prophetic his thoughts seem today. But during Marx’s era the possibility that labor could be automated, releasing all humans from the drudgery of work-a-day manual toil was only a dream. Any attempt to circumvent automation and jump straight to Communism was doomed. Work had to get done and back then humans were the only source of labor for such work. Yet, humans are greedy. Most people would work but some wouldn’t. Some would rather oversee than work. Greedy humans in positions of authority in a communist state are destined to corrupt the economic machine (just as humans in a capitalistic state are also destined to corrupt — to their benefit — their own economic machine.)

But if Marx were, oh, say 25 today, he could bear witness to the burgeoning disassembly of labor. A disassembly orchestrated and funded by capitalism. For what fundamental tenet governs capitalism but the drive to increase profits through the maximization of productivity and the minimization of costs. And the greatest cost to capitalists is — labor. And what means of the elimination of labor is favored by all? Automation. “All” you say? Why yes, we all ache for the elimination of labor. Labor that we each cringe from, labor we all dread (farm, yard, industrial, cleansing, preparation, etc.) labor no one enjoys, labor that we do because we must not because we want to.

So human labor is destined for elimination. This is a good thing, eventually. The transition from here to there however, is going to be fraught with unrest, and there is a possibility that humanity fails to make the full transition. But for the sake of argument, let’s say we do…

Let’s jump forward to a time when our Millennial Marx is now 75 years old, what might he see?

  • Raw foods are grown, harvested, processed, shipped and used in automated end product food factories producing breads, cereals, cheeses, juices, sauces, meat substitutes, and fresh and frozen entrees of every cultural origin — which are delivered to your doorstep, free of charge.
  • Every community is clean and manicured, every domicile is cleansed and vacuumed, every transportation hub is spotless as are all the roads, buildings and public spaces — all sanitized and purified for free.
  • Transportation to anywhere is free.
  • Materials to create anything you might fancy with regards to the arts or creativity — free.
  • Your health, monitored and maintained all at no cost.

All this and more provided for by the complete automation of human labor by the creation of a multi-billion strong robotic workforce. Created by the capitalists, true, but unbeknownst to them created for the benefit of all. And the only contention still held by humans is where and for how long they live. The old adage, location, location, location, can never fully be equalized. But a lottery with timed stays can solve this without too much strife.

What our Karl might observe is a society where there truly are no “have-nots.” Where resources are shared without the need for social stratification based on wealth. Where, aside from the location x 3 issue, the only other conflict is the political squabbling regarding issues driven by weather or environmental calamity such as hurricanes, tornadoes and earthquakes.

This world, that our now old Marx might smile over, certainly looks a lot like Communism.

However, the vast and ugly missing piece in this bucolic scene looms as an ominous storm cloud over the whole story; why would capitalists ever surrender their ever increasing profits as automation expands and eliminates the need for human labor? Is this Marxist premise not the exact opposite of what capitalism represents? That is, profit above all, profit for profit’s sake? I agree. Our Millennial Marx may never experience humanity’s vision of equality, its communistic future for the indomitable greed of humans. But I ask you, when half or more of the world’s people are jobless, wageless, homeless and starving all due to the robotization of labor what else can society do but to complete the capitalistic rainbow and evolve into Communism?

~~~

The evolution of human economic systems may indeed drift toward Communism by this very simple eventuality: the automation and robotization of labor.

What happens when 50% or more of all work is being done by billions of laborbots? When the picking and cleaning and processing and packing and shipping and handling of most stuffs is all done by a workforce built by capitalists in the name of productivity and cost reduction — what happens to the billions of people who no longer work? Indeed when all food stuffs are grown and harvested and shipped by robots who is to benefit? Should food then be free? And what of all the other necessities and sundries? When the clothing bots, the shoe bots, the tool, toys and gadget bots; what happens when all of these bots produce all of this stuff for the industrial production owners? What shall the people do to earn a wage to buy such stuff? Should these items too be free?

When the means of production are robots — who shall benefit? The capitalists who own the production? But to whom can they sell their stuffs without a populace with working wages to buy it? Or should the people benefit having the means of production passed to communal ownership for the benefit of all? There may not be a choice in the end.

 


Greed and charity – a human cycle

I wonder if humanity, humans, progress through stages of greed and charity depending on certain external and internal conditions that arise. Here, let me elaborate…

Imagine you’re starving and about to die. You happen upon a morsel of food that you realize will save you. But there’s another human who has come across this gift at the same time. What will you do? What would most humans do? I’m guessing that, due to the savage influence hunger has on a human’s (or any mammal’s mind), you’ll dart forward, snatch up the life giving morsel and gobble it down. Greed in its most innate manifestation.

Imagine you’re traveling with enough food to last you for some time. You happen upon another human who is starving. What will you do? What would most humans do? I propose that, even though sharing your food will likely reduce your possible future viability, you bestow some of your store of food upon this individual thereby saving  their life. Charity at its kindest.

Imagine you’re the CEO of a mega-food company. A competitor has fallen on hard times and you realize that you can perform a hostile takeover and swallow them up. Your resulting company will have near total control over this one critical foodstuff that the world needs to survive — you’ll be in charge of a near monopoly. Your company will be able to raise prices which will boost your dividends, your stock price and your personal fortune. What will you do? What would most humans do? I’m thinking you will buy your competitor and raise prices. Greed — again.

Last one…

Imagine you are this CEO of this corporate monopoly and you’ve grown enormously rich over the decades. But as you approach your death you realize your incredible wealth was achieved at the expense of your soul. That you’ve probably been indirectly responsible for the deaths of thousands of humans who have starved due to your oppressive price controls and general avaricious behavior. What will you do? What would most humans do? I posit that you will repent; you will seek to remedy the pain and suffering you’ve caused over the years and vow to donate the balance of your fortune to the Red Cross and the World Food Bank. Your philanthropy is cheered. Charity has returned.

Is it possible that humans, depending on the circumstances, cycle through periods of charity and greed? Humans are unique in that we do have some sort of sharing gene. That we have altruistic tendencies and that these tendencies have given rise to our domination over the natural world. We cooperate, coordinate, contribute and are stronger as a group.

Yet we retain the greed gene. At times, throughout our evolution, both personal and as a species, our selfishness surpasses our predilections of sharing and we covet and hoard. But what determines these behaviors? Which will you choose under what circumstances? And is there a way to influence humanity such that they, we, choose charity over greed?

 

 

 

 


The Prosperous Society

Assumption #1
Prosperity provides the opportunity of health, home, family, education, creative expression, moderate travel and moderate leisure.

Assumption #2
Prosperity is derived from the production and exchange of diverse effort combined with diverse resources, i.e. goods and services.

Assumption #3
A prosperous society is more resilient, long lasting and self sustaining.

Assumption #4
A peoples would want to develop into a prosperous society.

Assumption #5
The most prosperous of societies is one in which all members are themselves prosperous.

Assumption #6
Conditions which reduce the prosperity of some while increasing the prosperity of others will arise.

Assumption #7
A prosperous society is one where the most and the least prosperous are within reasonable economic reach of each other.

Assumption #8
A prosperous society would want to govern itself such that the range between the most and least prosperous retained this dynamism.

Assumption #9
A prosperous society and its members respect the fundamental prosperity features of all its members.

Assumption #10
A prosperous society respects the fundamental rights and freedoms for all of its members; the rights of verbal, written and media expression, the right of religion, the right of gender orientation, the right of dignity, the freedom from oppression, the freedom from discrimination… See: Universal human rights…


A call to periodic auction markets

Professor Budish,

I’ve read your papers on auction markets with increasing conviction that you have a fundamental understanding that when it comes to the exchange of value for value, between market participants, a human timescale might be a reasonable goal for all manner of exchanges.

I’ve long held that the speed at which equity, futures and even foreign exchange markets are executed is one which benefits no one but the exchange agents and society none at all. When it comes to trading anything, value for value, that such transfers need only ever occur at human conscious frequencies. I’m curious as to what your opinion of such a position might be.

When humans transact in any exchange, outside that of the financial markets, they do so at humans speeds. When you buy a car, it make take days or hours. When you buy a coffee, a minute perhaps. When you sell an item on eBay or Craigslist, hours to days. And even, when, as an investor, you move to purchase or sell shares in an ETF or equity, you do so with hourly, daily, if not weekly deliberation. Humans trade at human speeds.

Why so must we be told that the financial markets must transact at microsecond frequencies? Are not all of these transactions done for human purposes? What overarching body dictates that when it comes to Wall Street, that we must abandon our human heritage and be forced to do business at speeds which, frankly, only benefit Wall Street?

Your theories on auction technologies applied to markets mirrors beliefs I’ve been developing for some time, years and years. Specifically, that periodic auctions can allow fair value to be exchanged, that price discovery can be done at human understandable frequencies and that the need for technology, beyond that required to execute the auctions, record the transactions and perform the clearing, is not required.

By embracing auctions executed periodically at daily, hourly or if necessary, minutely frequencies, we can cleanse the markets of those whose sole industry is the extraction of, as you say, “rent”, from the machine that is the market exchange. Like grist from a mill, traders sap friction produced income which benefits only them. True investors, those whose intentions are to act with future purpose, have no need to feed these parasitic traders. Periodic auctions can eliminate such so called jobs in the finance sector; sending those, with no doubt high intellect, back into society where they might enjoin society benefiting occupations.

My core tenet is just this, at what cost to society does the furious frequency of the finance industry operate? What benefit, across all of society, is provided by this sector? And is it not in society’s best interest to guide the practice of exchange, value for value, toward a more reasonable frequency? Using a periodic auction, I believe, is the key.

My ideas are radical. I admit. I hope however, you might have insight that may parallel them, however slightly.

Many thanks for any reply.