It's like they said in an article I read recently... the world has learned about Ponzi schemes, and now everything is a Ponzi scheme.
At these macro-economic levels, there can be no talk of "Ponzi schemes".
The economy is not an investment vehicle, it's a huge, loose, and fantastic agreement that enables all of us to get far more (in terms of technology, resources, comfort, life expectancy, health, happiness, etc) than we would if we didn't have it. It doesn't exist for its own sake, and it certainly has no need to be a mathematically correct, long-term sustainable, rigorous system designed by a computer scientist.
The capitalist system, with all its problems, is the best system that we have. Who cares that it's not sustainable indefinitely into the future? By the time we get there, things may well have changed so drastically that it becomes completely irrelevant.
A human being is not a sustainable thing either. It overspends its resources instead of maintaining itself in good working condition and eventually dies. Oh shit. We better cancel humanity. It's a Ponzi scheme!
This Ponzi trend is really, really getting ridiculous. Enough with all that crap already! This article is a fancy label placed on a collection of dodgy conclusions drawn from dubious axioms.
This is a straw man argument. Saying "now everything is a Ponzi scheme" doesn't address his point that we're going to have to start looking at how a global steady state economy will work.
He isn't saying Capitalism isn't the best system, he's saying (precisely as you have said) that it won't last forever in it's current form. That we should start thinking about the repercussions of our current model so when this model becomes unsustainable, we'll already be transitioned into the new.
I certainly see no problem in thinking about our future instead of refusing to look ahead because... well it's going so well right now we shouldn't rock the boat.
Capitalism works just fine in a steady state economy because things break down. Buildings need to be repaired, styles change etc. Just look look at the plumbing industry it can grow or shrink but when your sink is broken and you don't know how to fix it you call someone.
Unless you're suggesting some form of utopia where people don't need to eat and nothing ever breaks. But even then someone is going to setup an MMO and the cycle of pretend money can start all over again.
start looking at how a global steady state economy will work
Err, except that we don't. That kind of thinking is a fallacy, that there is only economic value in tangible items. There is literally (in the sense that it is not bounded by how much stuff there is) no limit on the economic value that can be created through services and intangible assets such as information.
A microprocessor is worth more than the sand it's made from. Where did that value come from?
what the article talks about is not a ponzi scheme... so it's not a straw man, the article may be of merit but any comparison to a ponzi scheme merely confuses the issue.
You could look at Yahoo in the boom years as a Ponzi scheme. They made a lot of money from advertising start ups which was funded in part because Yahoo was making a lot of money. You can say the same thing about most bubles but a true Ponzi scheme runs out of money where after a housing bubble there are a lot of houses even if there are far more than we need.
The secret to macro-economic effects is how they alter the overall efficiency of the economy. Does people overpaying for housing cause damage? Yes, because people build much better houses than they need and people who think they have a lot of money waste a lot more of it. However, the US housing bubble was still fairly minor and it's only really scary because things are still over priced and few living people know how to deal with really hard times.
PS: Money is a signal for wealth creation, but it's not wealth. Forget it and things start to break down.
It's simply being used as a metaphor. Two words that get you to look at X from a particular angle.
The function of metaphors has never been to imply complete equivalence, obviously. Rather, some aspects of the concept used as a metaphor are shared with aspects of the concept it's being likened to. By invoking the metaphor, those aspects are made salient.
Notions like the "Ponzi economy", I think, are to actual Ponzi schemes what Searle's Chinese Room is to Chinese speakers. Or, to put it another way, the Ponzi economy is simply a grand Ponzi scheme, minus the scheming.
Another annoying thing is that people think a certain structure is a Ponzi scheme, when really it is the parameters of the structure. What might be a Ponzi scheme in one generation is social security in a shorter living, more prolific generation.
Comments
Oh come on now.
It's like they said in an article I read recently... the world has learned about Ponzi schemes, and now everything is a Ponzi scheme.
At these macro-economic levels, there can be no talk of "Ponzi schemes".
The economy is not an investment vehicle, it's a huge, loose, and fantastic agreement that enables all of us to get far more (in terms of technology, resources, comfort, life expectancy, health, happiness, etc) than we would if we didn't have it. It doesn't exist for its own sake, and it certainly has no need to be a mathematically correct, long-term sustainable, rigorous system designed by a computer scientist.
The capitalist system, with all its problems, is the best system that we have. Who cares that it's not sustainable indefinitely into the future? By the time we get there, things may well have changed so drastically that it becomes completely irrelevant.
A human being is not a sustainable thing either. It overspends its resources instead of maintaining itself in good working condition and eventually dies. Oh shit. We better cancel humanity. It's a Ponzi scheme!
This Ponzi trend is really, really getting ridiculous. Enough with all that crap already! This article is a fancy label placed on a collection of dodgy conclusions drawn from dubious axioms.
This is a straw man argument. Saying "now everything is a Ponzi scheme" doesn't address his point that we're going to have to start looking at how a global steady state economy will work.
He isn't saying Capitalism isn't the best system, he's saying (precisely as you have said) that it won't last forever in it's current form. That we should start thinking about the repercussions of our current model so when this model becomes unsustainable, we'll already be transitioned into the new.
I certainly see no problem in thinking about our future instead of refusing to look ahead because... well it's going so well right now we shouldn't rock the boat.
Capitalism works just fine in a steady state economy because things break down. Buildings need to be repaired, styles change etc. Just look look at the plumbing industry it can grow or shrink but when your sink is broken and you don't know how to fix it you call someone.
Unless you're suggesting some form of utopia where people don't need to eat and nothing ever breaks. But even then someone is going to setup an MMO and the cycle of pretend money can start all over again.
start looking at how a global steady state economy will work
Err, except that we don't. That kind of thinking is a fallacy, that there is only economic value in tangible items. There is literally (in the sense that it is not bounded by how much stuff there is) no limit on the economic value that can be created through services and intangible assets such as information.
A microprocessor is worth more than the sand it's made from. Where did that value come from?
what the article talks about is not a ponzi scheme... so it's not a straw man, the article may be of merit but any comparison to a ponzi scheme merely confuses the issue.
You could look at Yahoo in the boom years as a Ponzi scheme. They made a lot of money from advertising start ups which was funded in part because Yahoo was making a lot of money. You can say the same thing about most bubles but a true Ponzi scheme runs out of money where after a housing bubble there are a lot of houses even if there are far more than we need.
The secret to macro-economic effects is how they alter the overall efficiency of the economy. Does people overpaying for housing cause damage? Yes, because people build much better houses than they need and people who think they have a lot of money waste a lot more of it. However, the US housing bubble was still fairly minor and it's only really scary because things are still over priced and few living people know how to deal with really hard times.
PS: Money is a signal for wealth creation, but it's not wealth. Forget it and things start to break down.
It's simply being used as a metaphor. Two words that get you to look at X from a particular angle.
The function of metaphors has never been to imply complete equivalence, obviously. Rather, some aspects of the concept used as a metaphor are shared with aspects of the concept it's being likened to. By invoking the metaphor, those aspects are made salient.
http://books.google.com/books?hl=en&id=xpYZoVNzdykC&...
Notions like the "Ponzi economy", I think, are to actual Ponzi schemes what Searle's Chinese Room is to Chinese speakers. Or, to put it another way, the Ponzi economy is simply a grand Ponzi scheme, minus the scheming.
Metaphors are a Ponzi scheme.
Another annoying thing is that people think a certain structure is a Ponzi scheme, when really it is the parameters of the structure. What might be a Ponzi scheme in one generation is social security in a shorter living, more prolific generation.