h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I cant. I have to say I'm not even almost any sort of expert. I sort of understand economics but I get disgusted with it all as soon as some figures in a computer are worth more than a person's well-being...

It's so complex, I dont study it, but I still feel it's wrong when money becomes an end, not a means.

But it would seem that we, human beings, build economies naturally. From bartering we build up slowly, from advances (money or goods given for future work or goods) we somehow tie ourselves up in complex systems of global economics... I believe that even if we 'got rid of money' we'd only create it again in time.

Well...as I've said, you need money basically because your bartered corn goes off. After that...the complexity is more-or-less inevitable, I'm afraid. I'm not sure how one would limit it, at what point you'd decide it was all getting too complex...etc.

As for global markets...Adam Smith is the place to start. In his 'Wealth of Nations' he explains why it's beneficial for countries to produce only those things that they can produce cost-effectively and buy the rest in.

But please don't get the impression that I'm any kind of proper economist, ( to pedro, if he's around) merely someone who's developed a interest in it lately. It's actually more interesting than you might expect. I recommend these two s for starters:
http://www.amazon.co.uk/Free-Lunch-David-Smith/dp/1861975066
http://tinyurl.com/harfordbook (ooh! that one's online.)

>>I get disgusted with it all as soon as some figures in a computer are worth more than a person's well-being...

Well, yes...I can see what you mean. But I think there are two phenomena going on, only one of which is actively morally objectionable. Finance shouldn't be confused with economics. At the level of those working in finance, the job does, indeed, consist of looking at numbers on a screen, making sure they add up, etc. It's hard to grasp what the numbers represent in human terms - but that's not necessary to do the job. The people who are good at this sort of thing are often those who enjoy sticking their heads in databases for a long time.

It's only when we step back and take a wider, *economic* perspective that we can begin to trace the long chain from the numbers on the screens to people's working hours and living conditions. (I mentions 'working hours' deliberately, in deference to Marx's Surplus Value theory.) The immoral part is to not make sure that the economy is managed not for indivisual benefit but for the benefit of society as a whole.

Which is government's job, surely? And it's our job to elect the right people...and to do this, we ought to develop at least a minimal grasp of economics.

Money is ACE it really is good.

We'd all be living in caves, mud huts would be virtual palaces, there'd be no hospitals. We would all pretty much hunter gatherers with just a few by our standards poorly developed farms.

Money allows us to do jobs that dont directly put food in our mouths. Id like see people going around asking who wants a bit of data entry done in return for a a loaf and a few eggs or who would swap a box of cross headed chipboard screws for a basket of strawberries.

Despite the feeling that we are all NOW in a perillous state finacially the credit crunch is only reality poking its ugly head through the thin sheet of ice we have all been skating on anyway.

If anyone thinks savings are the answer they should stop being as dellusional as those who accumed buying a house was a safe bet. If the economy goes truly tits up we are all going with it.

Fortunately though we might have the occassional wobble and some people can get lost overboard economies are really hard to sink. Even the Zimbabwean economy though its taking on water faster than it can be bailed out and its listing heavily still keeps going.

o_0

Of course we'd have developed economy. Even just items that are less useful and take a long time to make are worth more than something that can be thrown together by anyone but are purely functional. In a basic hunter-gatherer/farming society (depending how far back you want to go) things with genuine worth are valued and exchanged, and eventually become symbolic and therefore currency. Even if it's beads or specific items instead of what we see as money, I'm pretty certain that given time the symbolic stuff becomes currency, gets more and more formalised and eventually, more and more theoretical.

I dont think there's any such thing as no currency in a reasonably modern human social situation.

"Investment" doesn't have to mean saving the money up somewhere. A new car or TV isn't an investment, it loses value from the moment you buy it. Something intangible, like taking lessons in something that'll help you find a new job (or work in a different field, even) if you lose yours is an investment, despite no quantifiable returns.

>>they should stop being as dellusional as those who accumed buying a house was a safe bet.

In the first of the books I linked above, the author points out that *in the long run*, house prices will always increase. But as John Maynard Keynes said:
'In the long run - we're all dead.'

(I speak as someone who got badly burned by the last house price slump. I eventually sold, after unsuccessfully trying to rent out for ten years, at a loss of £12K. In fact - part of my interest in economics has been trying to work out what happened to that £12K, ie who physically has it in their hands*. Of course, if I'd held on a few yesrs longer, I'd have made a massive profit. But If I were capable of predicting such things, I'd be a good candidate for Chancellor of the Exchequer.)



* It's a genuinely tricky question. The answer's far from obvious.

I got involved with an alternative economic model once. On Arran, about 50-60 of us set up a barter-based system with units of trade called Rowans. Basically, you could sell your labour or things you made either directly in exchange for goods or for Rowans. This benefitted those who sold services - an Estate Agent would sell your house or do a survey for Rowans, a massage therapist would do the same. Or you would dig someone's garden for some home made nut-roast. For goods which required some cash outlay to produce, (a wooden turned vase requires the purchase of electricity and wear & tear on tools) the price would be partly £, partly Rowans.

It fell apart after a year. Some people ran up huge Rowan deficits whilst others had oodles of Rowans, but little of interest to spend them on. I don't know if it would have succeeded with more people contributing and thus more services/goods on offer, but it certainly seemed to me to be just following and repeating the template set by every other currency model.

Yes, aren't "Rowans" just another currency of more limited usefulness?

Like Zimbabwean Dollars?

>>If anyone thinks savings are the answer they should stop being as dellusional as those who accumed buying a house was a safe bet. If the economy goes truly tits up we are all going with it. <<

Absoultely but then if it goes truly tits up then there's not much we can do anyway.
The real ways to make it go tits up is for *everybody* to stop saving or for *everybody* to save everything.
Both extreme scenarios would screw things up.
Some money needs saving/investment and some need to change hands for the economy to function.

I don't save *everything* nor do I have savings that will last me more than a few weeks if I lost my job - but I do put some aside and save up for things to buy. Fortunately for me at the moment that includes a holiday still.

There's a lot of overdoom or overdramatising of things going on here from various quarters. Our savings aren't suddenly worthless, nor are our houses. They dipped in value and are getting worse but we're not, nor likely will be the Zimbabwe economy yet (BTW I disagree, that really has gone kaputt - how can it function at all with 94% unemployment and half the population eating poisonous roots and their carpets?).

Saving is still worth it here imo and if I had the deposit at the moment (as I did 18 months ago darn it! ) I'd buy a house like a shot. Damn that crystal ball of mine.
I nearly bought RBS shares a couple of weeks ago when they were worth 12p and should have done as now they're worth 20p.

The economy is ill at the moment but not dead and doom and gloom make it worse. We need to get off our backsides and collectively do some work to improve our lives and that will knock off on the community and business alike.
Sitting around bitching about it doesn't help. Grafting will, in the main,

>I'd buy a house like a shot<

Oh were that possible! Get lawyers and estate agents involved and it's glacial at best of course

No Robyn.

See what you are supposing is that beads or ornaments fashioned by people who developed those skills for no econmic gain would hold their value when people lost *interest* in them. People are only interested in gold amulets when they have food in their bellies. People will only make gold amulets when they can be sure that making them puts more food on the table or a better roof over their head than going oout to build a better roof or put food on the table.

That's how societies/economies grow. Money is something that in a sense comes out of growth but adoption of the concept of money is not a certitude.

If beads or gold are not scarce enough or food is too scarce economies will not grow. Once we have enough food to kick start a money economy the more complicated jobs can begin to be profitable and money can have a value, but that value is entirely dependent on our access to the basics of life.

As can be seen in Zimbabwe money loses its value very quickly, no one is going to work in an office if foraging will get you more food than the wages you get for typing will buy.




Id also argue that while in a very narrow sense houses prices will always rise as its a rigged set up. However this is based on the house prices of one country and a country where disposable income has also been rising most importantly of all on a country where there are artificial restrictions on the market.

I doubt that worldwide property prices are as safe a bet and that when all things are considered in countries where a sufficient dwelling can be knocked up relatively easily property prices have no meaning at all.

There goes my future as an architect, then

Oh, I agree Blicky, sorry I wasn't clear. My example/theory was based on a society that is becoming, for the most part, more efficient (i.e. having more spare time not being used purely for feeding and sheltering itself). A 'successful' society then. Of course, in that state and at those stages, such things will not become more important than or come before food, clothing, shelter. The necessities of life.

Financial and monetary economic theories with a little B.S. could be seen as ends in themselves. An end that is of little value other than to confuse understanding and allow the manipulation of money in order to make more money. Unless the money that is made, is made to work effectively and is used to generate growth and improvement, it stands as profit. When profit becomes an end in itself (eg. 'skimming off' and hoarding money over and above your needs.) the system breaks down. Even outside the financial and economic environment, to profit at the expense of others, must in the end lead to trouble.

>>to profit at the expense of others, must in the end lead to trouble.

That's possibly the most pithy summary of 'Das Kapital' I've ever seen.

Of course, in a Capitalist economy, profit *has* to be an end in itself. Unless Capitalist continually improve their margins by ever greater exploitation of labour, they fail to turn a profit, their shareholders withdraw teir investment...and everyone is out of a job. Profit, I'm afraid, has a function.

The ploy of asking a question (post 60) when you already have an answer is indicative of someone who is either trying to prove how clever they are or someone trying to provoke an argument. From the elegant flow of B.S. emanating from previous posts I suspect the former. So let's look at the latter. What is it that is being argued about?
I am accused of stating the obvious and then bombarded with much of the same. You have to read and think about what I say.
Let's put it this way. Profit ( an end in itself in a capitalist world ) if taken beyond excess becomes greed. Surely if 'greed' was taken out of financial and economic thinking we could be moving in the right direction ?

Post 60 was mine, so it must be *my* bullshit you mean. . I wasn't *trying* to show off - for once. My question was simply a prompt to Robyn to clarify what she meant by finance as an end in itself.

But taking on your point:

>>Let's put it this way. Profit ( an end in itself in a capitalist world ) if taken beyond excess becomes greed. Surely if 'greed' was taken out of financial and economic thinking we could be moving in the right direction ?

Well...I see where you're going. But I question whether it's useful to attribute the profit motive to the emotion of 'greed'. Economic systems are, I think, more impersonal than that. In a Capitalist economy it's *essential* that an enterprise maximises its profits, otherwise it fails to compete and ceases to be - to the detriment of both employer and employee.

Plus...I'm not sure how 'greed' can be taken out of the system. How do you legislate unselfishness? What you *can* do is something more impersonal. You can limit and/or redistribute profits. Focus on the end you're trying to achieve - equitable distribution of wealth. How? Welfare systems, etc. etc. These you support by taxation. But I don't think that the taxpayers whose profits are sequestered necessarily become any less greedy.

Sorry if that's more bullshit.

>You have to read and think about what I say.<

Does that not rather imply that posters who don't agree with you are somehow inferior or not as clever as you since they haven't 'read' nor 'thought about it' in the correct manner?

Maybe you should try more clarity.