[FRIAM] ill-conceived question

Sun May 3 08:23:27 EDT 2020

I can’t weave a grand diorama that has the meaning of everything in it, and anything I try will come out a mess.  So let me try for Less is More.

I think part of this is habit and commitments.  Somehow the society has to sort out a predictable way to arrive at who has a right to consume how much of what.  A surprising amount of structure goes into that, and it has enormous inertia.  Part of what we are trying to “restart” is a set of systems that happen to be doing an allocation that we don’t have other systems in place to do as an alternative.

Take food production.  Fine, what people need to eat is relatively inelastic, and not wildly different from one human to another, compared to dollar-wealth.  But over the past 80 years, nearly all food calories are produced by very few decision makers and enormous capital outlays, levered to the hilt with credit, on really bad (regular, fast, and inflexible) turnaround times.  (This means Corn, Beans, lesser Wheat, to some extent commodity meats.). The story is a little more diversified for the nutritive value of food (fruits, vegetables, et al.), but different in structure where near-slave labor takes the place of capital and a different analysis is needed.  For now I will just look at the simple one.

We can’t all suddenly move back to the farm and grow calorie crops.  We don’t own land, we don’t have skills, and besides there is no easy angle to do that in a system that over-produces already.  So the production is there.  But if we don’t have a way to pay the “farmer” (really a grant/loan/lobby businessman more than an expert in soil health etc.), why should he give us anything to eat?  You could say “Ah, he only needs enough to live, and he is only one man, so he could give the rest away because people need it.”  But he isn’t only one man.  He is a vastly debt-leveraged operation, with enormous capital replacement and maintenance costs, huge loans for fertilizer/seed/pesticide, and no way to pay that unless he turns over the crop within certain price ranges (or lobbies hard to get Dept of Ag to make up the difference; what happens is a lot of both).  So he has no choices if we don’t have money, and we have no choices if we have no money.  But then what should anyone pay any of us for if the US operates on 1000 farmers, but there are 378M mouths that want to be fed?  Some system has to work that out.  

During the near-century of technological increases in output optimization, the rhetoric was that with less labor used to produce consumables, people’s efforts would be liberated to do other good things.  But to the extent that those things aren’t “necessary” in the Maslov sense like food is (following Steve S.), really all those other people are useless.  

One could try UBI, or have some utopian fantasy about centrally managed communist economies, but apart from small-scale experiments on UBI within much larger conventionally-run countries, and Kibbutz-level communes, I don’t see evidence of mechanisms to put behind those visions.  So we are left with an unsolved problem of distribution.  Not least, just How do we coordinate it?  But also how do we do so stably enough that the system is perceived as having some kind of legitimacy (close enough to “fair”, to being individually negotiated and thus allowing people to want different things, all the marginalist Econ stuff).

Take any other area.  Gas-powered transportation.  Well, maybe you don’t “need” it in the sense that you can conjure a world where you live and work close together and have support for walk/bike/pubtrans etc.  But where you are now, you and almost everybody else in the US, has demographically committed to being unable to do much of anything without plugging into that whole “unnecessary” system.  So some part of the economic inertia comes just from the thick web of these commitments that people have made, which leave them unable to withdraw from dependencies on lots of complicated services.

Easiest way to get 100,000V if you started with 100V?  Coil some wire to make an inductor, plug it into the wall, and then cut the wire.  Sudden shifts of anything have a dimension of problem just from the timescale, in addition to whatever may have been problems or virtues of the normal state of operation.

If one thinks that these kinds of “commitments” or “inertia” as one principle, and the mechanics problem of negotiating a widely-applicable and adequately stable set of permissions for access to a wage as the second, are two broad “primary” drivers of the restarting, then there is still a vast depth of smaller-grained design choices that have accumulated since the Industrial Age, in supply chains, transportation, management, law, etc.  It’s a hard web to change fast without a lot of chaos that drowns a lot of people.  

However bad it was during the last depression, city people still could go back to the farms, because there there was food, and they could somehow chip in in exchange for eating, to get around the coordination failure.  Now, with all the permission massively centralized, no people in the interior, and everything going through bank credit, even that demographic shift no longer exists as an option.

There is a whole separate story about the fact that the predator and parasite class are still there, and they aren’t going to leave of their own accord, but I think that is more a story of motive and how the mechanics gets steered and evolves, whereas what I put above is just about what mechanics exists.  I think the mechanics will dominate in the immediate-short term.

Very inadequate.  

Eric

> On May 3, 2020, at 1:33 AM, <thompnickson2 at gmail.com> <thompnickson2 at gmail.com> wrote:
> 
> Colleagues, 
>  
> I have asked this question before and nobody has responded (for clear and good reasons, no doubt) but I thought I would ask it again.  What exactly is this economy we are bent on reviving?  What exactly is the difference in human activity between our present state and a revived economy.  We can go to bars and concerts and football games?  Is that the economy we are reviving?  It seems to me that the difference between a “healty” economy and our present status consists possibly in nothing more than a lot of people frantically rushing about doing things they don’t really need to do?  
>  
> You recall that I invoked as a model that experiment in which 24 rats were put in a quarter acre enclosure in Baltimore and fed and watered and protected to see how the population would develop.  They never got above two hundred.  Infant mortality, etc., was appalling.  Carnage.  In the same space, a competent lab breeding organization could have kept a population of tens of thousands.  
>  
> Don’t yell at me.  What fundamental proposition about economics do I not understand? 
>  
> Nick 
>  
> Nicholas Thompson
> Emeritus Professor of Ethology and Psychology
> Clark University
> ThompNickSon2 at gmail.com <mailto:ThompNickSon2 at gmail.com>
> https://wordpress.clarku.edu/nthompson/ <https://wordpress.clarku.edu/nthompson/>
>  
>  
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