[Dismal Operator]

(06-28-2014 10:58 AM)scorpion Wrote:  

Traditional economics' obsession with growth at any cost is both destructive and insane. It's like if a father was disappointed that his 20 year old son hadn't grown in three years, so he stretched him out on a medieval torture rack in an effort to squeeze out another inch or two of height.

Modern economists view the economy itself as the end, rather than as the means of delivering goods and services to human beings. They literally have their view of reality completely backwards - human beings are viewed as means serving the economy, and the growth of the economy (which is simply an abstraction derived from a host of manipulated calculations) is the primary end goal.

Spot on. Except if the torture rack fails there's one last trick: changing the measurement definitions. Whereas a foot used to equal 12 inches, redefine as 10 inches. Remeasure. Boom, instant growth. This is essentially what economists have done over the last 50 years, with the tool of redefinition being inflation. Print money, expand debt, prices keep rising, paper wealth rises, boom growth.

As for the cyclical nature of things mentioned by The Father above:

There is a distinction between absolute and relative progress that goes a long way to helping people reconcile some of the contradictory pieces of evidence thrown at us. On one hand, as The Father has said, the progress that has been made in the last 100 years has been remarkable. I'd much rather live in a 2014 world than a 1914 world. The issue I have with the 2014 world is that the 'underlying foundation' as it were is less conducive to making sure that the fruits of progress are easily spread to the masses.

The reasons for this are extensive, but to simplify, taxes, regulations, constant inflation and the need for constant debt. This ensures that in order to get ahead you already have to be ahead in some manner. It's next to impossible to start from scratch and build an empire because you'll run into some sort of ceiling soon enough. The most common ceiling is student loans, which for most people act as an albatross that retards the ability to buy a house, have children or even marry (given that marriage also means inheriting a portion of your spouses' debt). Things like business suffers too, because once you get big enough, you'll have to deal with the costs of complying with regulation, taxes, possible law suits etc, which will also be a drag on your ability to ascend in the respective field. None of these impediments existed in 1914. In today's world the only place that sort of economic freedom still exists in abundance is the internet. The internet is the closest thing to the business environment of 100+ years ago. All you needed was an idea and the willingness to see it out no matter what. That's why so many immigrants came to America in the first place. Today, you need to be rich already, or a huge corporation. In that event, the costs of compliance and costs of college for your kid are negligible, and you are in a much better position to thrive.

That is a superficial analysis, but it represents a relative decline for me, within the absolute progress we have made. It's worth noting that the 1914 world was at the cutting edge of progress in its own right, just like today is. The difference is that, in my view, the system was a better one then. The pushback I usually get from people is arguments to the effect of 'How could a system that allowed for child labor/extremely dangerous working conditions/racism/slavery/etc. be better than what we have today?' That line of thinking misses the distinction between absolute and relative progress. Children not working, and the shift from dangerous mines to air conditioned cubicle farms is the product of absolute progress. Way back when, most people had two options: 1. Have their 10 year old working on the farm, with his father risking his life shift after shift mining, or 2. Starve. That was the harsh reality of life before sprawling metropolises and modern amenities. Those sprawling metropolises and amenities did come in time, owing to an economic system that incentivized production and rewarded people with the fruits of their labor.

That same system, having transported us from point A to point B has been eroded over the last 100 years or so, particularly the last 50. The 'doom and gloomers' recognize this, and worry about it because relative decline doesn't happen in a vacuum. To this point, absolute progress has still been made, and it overwhelms the bad such that we can comfortably paper over the cracks. But at the rate we're going the continuation of that decline will mean that at some point the absolute progress will stop too. Put another way, if there's a biblical flood, it's all well and good to keep 'innovating,' by finding new ways to keep your head above the water as it keeps rising. But what happens when you're standing on top of Everest and you find yourself ankle, and then waist deep? At some point you have to recognize that the flood is the real problem.