A gold standard means that when the economy gets overheated it pops, then contracts and you get deflation. This makes crashes last longer and harder. It requires greater fiscal discipline to overcome.
The problem with the USA "empire" is that for a trading empire to work you need a plan, and stick to it.
China has been quietly debt trapping a whole bunch of nations that have strategic things they need. They have been investing in infra and leasing it back to the host country. That takes planning, money vision and time. Something neither the president or congress have the ability to do.
The USA in the 40/50s played a blinder, neatly using war debt and the martial plan to usurp the exhausted british empire's trading power. The dollar became the global reserve and all of the new global institutions were setup and housed in the USA.
And a dictatorship. Democracy does not fit very well with long term plans, unless you either make huge efforts to ensure everyone gets their fair share (see Scandinavia) or you have a good plan for people being rich with not too much effort (see Switzerland and other tax havens).
Concerning the USA, the divide between the extra rich and the general poor is nowadays too large to have a functioning country.
Suffice it to say that the debacle presents circumstantial evidence that "rich with not too much effort" might encourage dangerously laissez faire behavior.
Just boring right wing poltics paid for by russian rubles.
This more or less guarantees winning on the very longer run.
You still have gradual decay, which can unfold over centuries, and that is ok, but that is cyclical and you rise back in a century or so.
The real issues with the US/West is wars, too many of them. Even if the dollar standard guarantees a money printer. Its not exactly free. Triffin dilemma de-industrializes your country. Your politics has too much ego to stop fighting. In the meanwhile you lose industry, stability, time and just don't have focus for things that matter. Somebody who is more sane wins in the meanwhile.
UK really needed to build more industries instead of fighting WW1/2. Its a shame that Churchill won above Chmaberlain/Halifax. You get the fake thrill of winning a war, you shouldn't have even gone into, destroyed yourself fighting, all for some fake sense of bravado which led to your disaster.
If things go South for US from here. George Bush will likely have the same standing in history.
tl;dr- If you are winning, keep it that way, and don't fight wars.
Except for 99.9% of those millennia, humanity had very different challenges than it does today. One of the biggest being effective communication between people. There's a reason the U.S. constitution talks about sending delegates to Washington D.C. Another being an abundance of basic necessities that simply did not exist when Voltaire was writing. Increased globalization, vast changes in technology, bitcoin, AI, automation, social media, etc. Why would you assume political theory from even 100 years ago holds up in the face of all those differences?
And political theory, like history, tends to be written by the victors. What percent of all laws ever written were about maintaining the status quo for the people currently in power? It's a lot; I wouldn't be surprised if it's over 90%.
There's no reason to believe that humanity has "figured government out" by now. There's still plenty of room for experimentation in what works best in today's world. For example, why can individuals not collectively draft legislation, in the same way they can draft Wikipedia articles or open-source software? What would it take to make that happen?
Galadriel. She would be a great and terrible queen. All would love her, and despair.
> People that don't know any history?
For some reason, I find that people who accuse others of not knowing history tend to be the most ignorant of it themselves. History buffs don't seem to be walking around telling other people they "don't know any history". Just an observation.
For an example of a benevolent dictator, look at King Leopold II of Belgium, the Builder King. Loved by his people. Created the Royal Trust, donating a most of his properties to the Belgian nation. Brought culture and prestige to Belgium.
For an example of the atrocities of a malevolent dictator, look at King Leopold II of Belgium. The butcher of the Congo. Unbelievable exploitation and atrocities committed under his rule.
Or look at Ashurbanipal, the last "Great King" of Assyria, who built one of the greatest libraries in history; a collection of human knowledge surpassed in the ancient world only by the Library of Alexandria. And a genocidal maniac who spent months not just pillaging and raping opposing cities long after they had been defeated, but destroying any trace of the people who lived there, salting the land, and seeding the ground with weeds so that it would be impossible to ever re-build.
A wise builder-king with the power and drive to make the nation and world a better place for all its people would absolutely be the best government humanity has been able to achieve so far. Checks and balances are a necessity for a functioning government, but they do bog things down.
My point, of course, is that this is completely counter to human nature, and has (almost?) never been achieved, even in those times that it appears that it has.
Preferring democracy is compatible with recognising its limits.
Say again? If we're talking strictly about the United States as per the article that inspired this post, the U.S. is a case study of a prosperous, remarkably stable democracy steadily increasing its prosperity, wealth, influence and power while also for the vast majority of its history investing for the long term and in vital infrastructure. This process hasn't been constant or evenly incremental but it has been there for (now) literally centuries.
The same could be said of Britain and many other developed countries on shorter but still reasonably long scales. On the other hand when you look at dictatorships in the wider scope of the modern era, the vast majority of them either invest explosively only to fail catastrophically at some point before reverting to some other variant of government, or countries that see their biggest failures happen during periods of dictatorship, and their major socioeconomic successes happen during periods of something at least approaching democracy and openness.
There are exceptions to the above tendencies in favor of democracy, but China can't yet be called such. It has had only 80 years under its present dictatorship (preceded by decades of warlord rule, weakness and chaos) and of those only the last 40 have been ones of relatively stable growth, investment in major projects AND concurrent increases in prosperity. Under Mao it invested in certain major projects, but at nearly cataclysmic social, economic and human cost. Hardly a model, in those days, of dictatorship being applied to patient, wise planning.
>Concerning the USA, the divide between the extra rich and the general poor is nowadays too large to have a functioning country.
Really? Feel like sharing the mechanism by which these claims of overly severe wealth inequality will make the US collapse any time soon?
Note also that as another comment above this mentions, the U.S has had more or less similar levels of said inequality for the last 100 years.... in which it functioned as a stable, relatively peaceful, democratic, increasingly prosperous society in which overall standards of living in absolute terms have gone up enormously.
This is not what it said. It said it was about the same 100 years ago. It improved for a long time before going back up.
Accepting "the purpose of a thing is what it does" is important for these times. So is avoiding the epistemic traps of disingenuous actors.
America's political class got complacent and lazy, and forgot that they have to sell what they were pushing to the American people. They never even FOUGHT the battle of ideas. As they age out/get pushed out new Ben Franklin with their own printing press types will rise.
50 years ago? Perhaps some of what you describe applied, in very limited form and only if you view a small segment of the media/political landscape with extremely rose-tinted glasses, but go read more of U.S media history to see how completely off base you really are.
Media in the United states has spent most of its history being absolutely saturated with extremely yellow, scandal-mongering political hack journalism of the absolute most dishonest kind you can imagine (yes even in the age of social media). This was the case throughout the 19th century, the whole early part of the 20th century and it certainly applied 50 years ago, which would be roughly the late 60's to the 70s.
Overall, i'd say you have no idea at all of what you're talking about and pulled this funny notion out of nowhere for the sake of forcing an alarmist point.
I get that the establishment also sometimes does good things like create the EPA but it seems like those good things only ever happen after there's a huge amount of public screeching and that the default behavior is for the establishment to wage war and enrich itself.
The establishment should not be in bed with the media IMO. While the current fragmented media landscape is causing turbulence in the short term it is a good thing in the long term IMO.
For decades the vast majority of those who even knew Trump existed were aware from the beginning he was a fake and it was just so curious to watch him take the pratfalls that he set himself up for. He only became widely known because he was such a complete failure compared to ordinary businessmen, and he would not shut up about how successful he was, it just emphasized how much he didn't have a clue and he was all PR. It was so cringeworthy people could not help but notice. Some things never change.
But under those media conditions he was merely a comic figure for the longest time. Bragging about how rich he is when he's actually bankrupt in more ways than one.
It just wouldn't have been very easy to build critical mass among people who would be willing to take him the least bit seriously. Especially about anything concerning money.
Now it's too late.
Today at least, if anything, people have access to a vast plurality of views that despite many of them being absurdly mistaken at least through the mechanism of their existence let massive cracs rapidly open in any official or propagandist narrative. On the whole, this is what major media truly hates, while couching its complaints in fear mongering about misinformation.... Much of that fear mongering surged especially strong during the recent pandemic, while media at the exact same time promoted several major official narratives that were obviously politically motivated rather than being based on any thing resembling solid editorial standards.
Maybe he tried?
https://en.wikipedia.org/wiki/Riverside_South,_Manhattan#Tel...
There was the same amount of inequality a century ago in the US, so what happened at that time.
people with enough skill and compatible mindsets need no management, they care, they will innovate, improve, repair
if the structure is at odds with that, they will ask to compensate the pain by large salary bumps because pleasure is turned into pain
They didn’t import millions of poor people to do all the dirty or unpleasant jobs in their countries.
Seemed almost like an elephant in the room for a minute there.
But looking back, was it a market "correction" or maybe just a rug-pull?
You probably had to be there.
But we knew there was nothing like it until the 1970's.
So many of the people who had lived through 1929 were still alive.
Unless you were quite fortunate in the early 1970's, you would realize that 2008 was a non-event by comparison.
I don't think that there is a fixed asset that could be suitable as a proper peg.
It seems like the actual value of gold is that it is useless, and thus not used up, and all the easy gold is extracted. We could just use numbers instead.
Pegging currency to gold or silver gives it the illusion of being of a fixed value, that can't be gamed or changed. However history says otherwise. Its continuously mined, and there are industrial uses so Gold and silver's actual value will still fluctuate.
plus whilst tradeable gold is normally stored in vaults, there is still a boat load of "free" gold that can move around and cause monetary problems. Its a side plot of one of the James Bond books.
You also have to remember that even if there is a physical backed standard, banks still need to lend, which means that in practice it'll still be a fiat currency, just not centrally controlled.
oil is fairly difficult / expensive to transport and store, certainly at volume.
More difficult for some technologies than others, which I tried to come to terms with long ago.
After over 40 years, I'm still here to help when it makes sense.
>Oil changes owners all the time without going anywhere.
Even more often when it is on open water already on the way somewhere else.
It just doesn't fulfill its destiny until its voyage is not only underway, but fully completed.
That's precisely the solution. The current state of the hollowed-out US economy is because of the zirp enabling a hollowed-out financialized economy riding on bloated stock prices and valuations. That is where that 'capital' came from. And like in every case of printing money, the bill eventually came due.
> A gold standard means that when the economy gets overheated it pops, then contracts and you get deflation
That can be fixed with other measures and regulations than enabling a scammy free cash economy that causes only hollowed-out bloat.
Banking systems being somewhat unstable and prone to credit crises is actually an entirely different problem, and unrelated to how the expansion is being regulated.
This is nice for the King because he benefits from the seigniorage. (But also potentially fatal, as he gives in to temptation to print too much and then some more, leading to hyper-inflation and the guillotine.)
Fiat money can be combined with fractional reserve banking. Now the monetary authorities can create extra money to overcome banking crises. Notice that society has a trade-off to make. Perhaps high reserves, so that the banks do not create much money, in which case the King/President will have to print extra fiat currency. Perhaps low reserves, and a small base of fiat currency. Now the banks create most of the money in circulation and get to charge interest on it, as an kind of on going seigniorage.
Which is best for the country? One off seigniorage accruing to the national treasury (due to printing), or the recurring seigniorage of interest paid to the banks on the money created by the fractional reserve system? There is something to be said for fractional reserve banking, as a kind of automatic stabilizer. If the economy contracts, there is a credit squeeze and the money supply contracts. Pick the reserve ratios and minimum lending rates correctly and it contracts the correct amount for price stability. And this works in reverse, expanding the money supply as the economy recovers, avoiding needless restrictions on growth due to deflation.
Experience shows that reserve ratios are too low, leading to economic instability. Why do we ignore this experience? Follow the money, low reserve ratios are profitable for bankers. We could have have a much more stable economic system with a two part strategy of 25% reserves and the monetary contraction implied by raising reserve rate being countered by printing the right amount of money.
I think there's some truth to this.
And if you're willing to accept it for what it is, ask yourself about your own supply of money, what it is and where it comes from.
What are the current limitations if not gold any more?
And it hasn't been gold in quite some time, not just theoretically for a while.
How has that "unlimited" money supply worked out ever since?
Is there any other bottleneck somewhere that maybe is holding back that limitless supply of money from ending up in your pocket worse than if it was gold, which we know has always been so hard to come by that most people have never had significant amounts whatsoever since the beginning of time?
It works very well when your currency is the world's reserve currency. You get way more latitude for printing money with much lower inflation vs some isolated economy win no deep reservoirs of unused currency in "reserves".
If the US loses the status of being the dominant reserve currency, the link between money supply and inflation will become much stronger. The USD is currently backed by the US hegemony , of which foreign policy is a big part of.
Inflation on one side, employment rates on the other. It's literally in most central banks' headline policy goals.
> How has that "unlimited" money supply worked out ever since?
Pretty well, seeing how it's largely coincided with unprecedented growth in living standards and helped us avoid what could have been a repeat of the 1930s due to Covid's impact on economies, among other things.
Judging that it's been 100 years since the last depression, pretty well.
But they're in the same boat as everyone else now, as far as guessing how many years til the next depression, whether or not it is overdue, by how much, and what happens this time.
People really think humanity operates on some kind of fixed physical properties, when everything we rely on in modern society is not real. Borders are not real, the value we place on a human life is not real, the stocks and bonds arn't real.
They're all relative relationships with historical and future promises, reliant upon the trust we place in the means of proof and veracity, all of which are entirely human figments.
Nerds trying to fix problems that nerds seem to have created a wind on will go nowhere.
This not a problem of fixed economies of precious metals. This is entirely about what form of governance can tackle climate change, and the zeit geist has determined fascism everywhere, zombie apocolypse where huamnity needs to be as brutal as possible will win.
Europe is now the "heros" of the zombie apcolypses interacting with the "evil" humans who want to brutalize everyone into either submission or death.
Kenyesian economics, through inflationism and fiscal policy, has been trying to solve this problem since the New Deal. When they actually make any progress on that front, why don't you let me know?
Inflation sucks but deflation is a death spiral. There is some more nuance, but most economists would agree that deflation is a lot scarier in general than inflation due to its feedback loop.
Moreover, the reason why we keep getting rampant inflation is more due to neoliberalism and neoconservative economic/fiscal policy rather than modern monetary theory and Keynesian monetary policy. If anything, these monetary policies have massively reduced the amount of inflation we have been feeling for the past several years.
Do you actually have any evidence for this? Considering that we haven't experienced deflation in nearly 100 years, and all. The USA certainly wasn't "death spiraling" before we went off the gold standard, quite the contrary. But now it seems we are.
Isn't this a good thing? Otherwise, what incentive is there for financial discipline?
> The problem with the USA "empire" is that for a trading empire to work you need a plan, and stick to it.
Have stuck with it for over 75 years. Not too shabby. Also why is empire in quotes?
> China has been quietly debt trapping a whole bunch of nations that have strategic things they need.
I know the US and Europe has for centuries. Which ones has china "debt trapped"? Or are we sticking to the propaganda that china helping develop other nations is "debt trapping".
> Something neither the president or congress have the ability to do.
Neither the president nor congress sets the "plan" for the US. Do you really think trump gets to decide geopolitics? Do you really think congress decides the direction of the nation? Or do you think they listen to the elites who fund and control them? One has to be extraordinarly naive to think that a superpower with nukes is run by the masses.
The president and congress sells the plan decided by the powerful to the masses. It's why they exist. They don't plan or decide anything. Most of their time is spent raising money for elections. When do you think trump or congress has the time to develop any expertise in anything.
Getting reelected because you managed to not tank the currency and economy.
That clearly that hasn't worked has it? Also, are you arguing against term limits?
Having to get elected is reason not to enforce financial discipline because people don't vote for those who promise financial discipline. People vote for those who promise more stuff.
What a naive comment.
there isn't one. Banks need to lend as much cash as possible to make as much money as possible. A gold standard doesn't stop that, it just means that bailing out customers of those banks much much harder. hence why the FTC was setup. Its a rich history and well worth looking into
> I know the US and Europe has for centuries.
Not really, the last "european" style colonial system died in 1989 with the collapse of the USSR. Sure France does the whole "we'll administer your currency for a huge fee", bu that only works because they are ex colonies. Invading another country and turning it into a puppet state is much more costly than people think (see Syria, Georgia, Iraq, Afghanistan)
What china is doing is far more clever, far more effective, much less bloody and extremely profitable. just build a road, port, rail line, factory, mine. charge the host country a fee, bish bash bosh, massive growth for the host and china.
> Do you really think trump gets to decide geopolitics?
I mean he's not far away from deposing a president, and he's allowing another country to ethnically cleanse another(Biden did that too). Biden crashed russia's economy, Trump will un-crash it and let it re-arm to invade another country.
That sounds like geopolitics to me.
-there is more to an economy than manufacturing. Using manufacturing metrics to rate an economy is like scoring a soccer game based on how far your players run: in some contexts correlated with “winning” but in others it’s not. -gold is not a good currency or basis for monetary policy. -these ideas only sound self consistent without economic context.
But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere.
For my money, you’re better off reading Krugman, Brad Delong, and (my personal favorite) Michael Pettis. I’ll read Geohot when it’s about engineering or self driving cars.
That’s a pretty good analogy for what GDP is counting, actually.
But I think the larger point is that manufacturing is grounded in something real. It’s a measure of how many tanks and fighter jets you can make, no matter how much they cost to make.
The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I know there's a 2 year wait-list to even have your energy production considered to be hooked up to the grid, but I assumed there was some at least some throughput, now we're taking about onsite mini nukes while China is building.
My opinion is the money is a means to an end and we’d be served better by focusing on those ends instead: healthcare, housing, education, life expectancy etc.
https://en.wikipedia.org/wiki/Big_Mac_Index https://worldpopulationreview.com/country-rankings/big-mac-i...
the utility of a toaster is different in different places.
It may also be the case that a toaster costing 5x in the US, because this is including an opportunity cost for that toaster being made (which means a different thing wasn't made).
Maybe toaster is not the best example to illustrate this by, so say we use microwave --and the time saving based off of it-- instead. A 100k/y worker's time savings are 5x the 20k/y workers savings when equal in time.
So the microwave is accepted to cost more. Sellers are great in caching in on this.
If I make 5x as much as someone in China and am willing to pay 5x as much for the same thing, at the end of the day we both just want toast. And if I buy a crappy toaster that only costs 2x as much and can only toast half as fast, “utility” (i.e. cost) says my toaster is still better despite it being an objectively worse toaster.
but the seller doesn't care about that. The seller will attempt to extract the maximum price of a toaster.
It is because americans are more productive, that their maximum price for a toaster is 5x that of china; they can afford to pay 5x. So this is a measure of their utility - not the ability to toast. An american finds that the ability to toast to be worth 5x that a chinese would be willing to pay for toast.
If america was poorer, the seller would not be able to sell the toaster for 5x (and instead would have to lower their price to match the price their customers can afford, up to the minimum margin the seller could afford to cut to).
and this is called intrinsic theory of value[0], which mostly has been superceded by other theories (such as the one in my post, which is the subjective theory of value[1]).
While the intrinsic theory of value isn't wrong per se, it is too naive, and "simple", such that this theory does not explain much when applied to real world scenarios.
[0] https://en.wikipedia.org/wiki/Intrinsic_theory_of_value
[1] https://en.wikipedia.org/wiki/Subjective_theory_of_value
Second, “GDP/watt” is absolutely an economic metric, and it captures something about energy efficiency but also the mix of an economy. Software and services scores highly; aluminum smelting does not.
Say the monetary base is $100 and the GDP is $1,000 initially, then the monetary base doubles to $200 and the GDP doubles to $2,000. It looks suspiciously like no real economic activity was generated and that suggests that velocity is the growth measure.
Sure mind over matter, but I'd prefer using a more objective definition for wealth, rather than an arbitrary one. It makes measuring and comparing things much more sensible, otherwise you are free to reason whatever you want and have no culpability, which is very unscientific.
The reason economics is hard, in part, is that there isn't some core firmament you can rest on; there is no fundamental, provable truth. And yet, with fancy statistics and clever experimental design, you can still make intelligent statements and understand the world better.
To me, economics is the field with the purest expression of "all models are wrong, some are useful." Which is actually sort of cool, if you let it be.
I can only think it began with the philosophy for making better decisions, solving problems, and improving society - particularly in the allocation of its resources.
As so, I think a huge part of the problem with economics, including most economists, is that people equate value for wealth. Value certainly is subjective, I mean, do you value having $80k, or a nice car? How about a pool, or a boat? Do you value your time less than the cost of a flight? All very subjective. But I think it's flawed to conflate value for wealth. Wealth is something real, the things you are evaluating in trade. Time is wealth. Money is wealth. Oil is wealth. Land is wealth. Why don't we simply measure these things, and how they're allocated? IMO, it seems more practical and more noble of pursuit to figuring out if someone actually needs food in society, rather than what people with plenty of resources ascribe their values to.
Anyway, idk if that's useful. I'd say though, economists don't really need to care about what people value, except to the extent that they can e.g,. learn about what people value by observing their behavior, or use how they ascribe value to something to predict their behavior. That is to say, "real" economists _do_ study allocations of physical resources etc., don't think they just try to model some theoretical value function :)
You’ll find that money is noise, this, us, together, is wealth
The body’s just cosines and vectors, love is the real health
Is it actually that hard?
The material worth of something is what someone will pay you for it, i.e. the value it would sell for at auction. Your material wealth is the sum of the worth of what you have.
That means if you own something and the market price of it changes, i.e. someone changes their mind, then your wealth changes. But is that even wrong?
The real trouble here isn't measuring wealth, it's measuring surplus. If you sell your widget for $5, that implies it was worth less than $5 to you and at least $5 to someone else, but the gain isn't $5, it's whatever the difference is between how much you valued it and how much they did. If that was $4.50 and $5.50 then it's $1. If it was $3 and $1500 then it's $1497, even though they only paid $5. Imagine, for example, a $5 generic drug to someone who has what it treats.
The problem is that this i.e. isn't right, because the vast majority of market transactions are not auctions. The value a pallet of rice would auction for is very different than the value a rice farmer would accept to load it onto a truck, which is very different than the value a supermarket would pay to get one a month deposited in its loading dock, which is very different than the sum of values individual consumers would pay for the bags on that pallet.
"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings." [1]
1: https://en.wikipedia.org/wiki/TrumpNation#:~:text=During%20d...
In that case, you could argue that "true GDP" didn't change at all, merely our measurement of it had error. But pretty soon you ask 'well, what is the real signal?' And it's turtles all the way down.
Again, economics is weird, but perhaps interesting because it's weird. (I'll confess I didn't care about the field at all until it suddenly got very interesting in ~2008.)
Manufacturing plastic one use sponge bob toys are also real. Real and not particularly useful and perhaps not what most people imagine when they vastly overstate the importance of manufacturing to an economy.
Now jets and planes and military supplies is a real issue. But Manufacturing in general isn't how many tanks and fighter jets you can make at best it correlated.
Hmm
> you’re better off reading Krugman
It used to be kind of a meme to make fun on how wrong Krugman was but now it's kind of like beating a dead horse.
https://foreignpolicy.com/2019/10/22/economists-globalizatio...
https://www.theguardian.com/commentisfree/2018/jan/10/paul-k...
In particular, Krugman was the flag bearer of "countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt". (paraphrasing) This was incredibly wrong. It ended up in sky high debt and now interests on it are non-zero. And most of the added money ended up in the top 10% making inequality much, much worse.
Krugman actually generally felt it went too far, and was not a proponent of it.
There is some similarity to his making fun of people worried about “bond vigilantes,” iirc. But I don’t think your characterization of his positions is accurate.
Or are you referring to the fact that he said it didn’t show up as having caused growth in the underlying economic data? I think he was pointing out something quantitative at the time, and in recent years he speculated that the strong growth in US GDP was finally reflecting efficiency and productivity gains from IT and the Internet. (The US’s strong growth until very very recently was an outgrowth of strong and rare increases in worker productivity.)
Conflating that with Keynesian principles is false. He didn’t propose that the trillion dollar coin would ever affect actual spending.
As soon as you get inflation, keeping interest rates low would make it worse, but raising them explodes the interest rate on the debt. And your other alternative to paying the high interest is to print the money to pay the debt, which also worsens inflation. So taking on that much debt is just a bomb that goes off as soon as inflation becomes non-trivial, and on top of that, is a thing that generally causes inflation.
To understand how people like that succeed, realize that there is always a market for someone who will tell you what you want to hear.
I trust a Nobel Prize winner has thought through it more deeply and integrated the causes and effects more than most random internet commentators. I am happy to report that “low interest rates” do not cause inflation by themselves on any scale less than a decade. Source: 1995-2021.
What actually causes inflation is more a function of overall demand and supply in an economy. Interest rates have an indirect effect on that balance that can also have higher or lower leverage depending on a lot of other factors.
The reason why raising interest rates breaks inflation is usually because it chokes off economic activity to a point where labor ceases to have bargaining ability to ask for higher wages, which then chokes demand, which then helps bring supply and demand back into equilibrium and breaks the inflationary spiral.
It's a mechanism that is quite clear, but also rarely discussed in polite company, because "breaking the bargaining power of labor by intentionally choking economic activity to create enough unemployment" is, when spelled out, prone to creating pretty emotional reactions.
At some point “Actually he is good and strong and smart and he is my friend” posts start sounding more like a fandom argument than anything actually salient to a discussion about any particular economic subject.
Interest rates in 1995 were about average, not particularly low. The zero interest rate period really started at the end of 2008 in response to the housing crash, with a very specific goal: To counteract the deflationary effect of the housing crash.
A major deleterious effect of that policy was to effectively re-inflate the housing bubble, which is now Causing Problems. But it was quite effective at doing the thing it does, which is increasing the rate of inflation relative to the alternative. When the rate of inflation would otherwise have had a minus sign in front of it, that can be what you intended to do, but that doesn't mean that's not what it does.
How do you define "actually study" here, and what makes you think the author didn't study the topic at all?
Its totally fine if you disagree with the author's view or have additional information that they missed or didn't consider.
Writing it off as coming from someone who didn't "actually study" the topic is unnecessarily dismissive.
Because this is George Hotz who is arrogant and enamoured by his own intelligence.
He famously derided Twitter's engineering team as being incompetent and that he could easily rewrite it. He lasted at Twitter for a month, delivered nothing and then resigned.
Part of their argument, and arguably also quite apparent fact, is that this is not efficiency improvement - it's just outsourcing the energy-intensive parts of the process abroad. This makes treating energy intensity as a measurement of efficiency just an accounting trick.
It's the same kind of trick as e.g. Germany shutting down its clean power plants, covering the energy deficit by buying electricity produced in coal plants abroad, and then claiming, "look ma, no emissions, no nuclear, so green".
Supply and demand goes both ways. You don't get to outsource the important parts and then claim they don't count because you're just buying - it's not like manufacturing or electricity production are natural phenomena you're just tapping into. The buying is what makes them exist, whether or not it's within or outside your borders.
They are among the most rational people you shall ever meet. And they are very aware of how incomplete their tools are. But they do a lot with such tools that is worth knowing.
This ignores so called Austrian economists however, who are just flat out lying to either themselves or everyone else depending on the person.
All I know about them is that they don't like funny money, which to me as a systems thinker is perfectly reasonable. At worst you would expect it to be harmful, at best to obscure what is really going on.
Individual Austrian-school economists sometimes make falsifiable predictions, and they are often (either knowably at the time or determined later) false, but that's a different issue, because, again, those predictions are not grounded (in the predictive sense; while they are in an emotive sense) in the fundamentals of the school in a way which would make falsifying them a “repudiation” for anyone at risk of adhering to the school in the first place.
'Austrian' economics is more akin to a religion, with associated dogma and moral tenets.
i think focusing on M0 is also incorrect. the debt money multiplier is a real phenomenon, and at least the psyche of a user of the banking system must be accounted for.
But I have read NBER papers, and can confirm that there is real research. It's not a hard science, but among the social sciences it's pretty rigorous, and often very quantitative. I know how this crowd likes it quantitative.
Multiple experiments are conducted using historic data, for example the 2024 Nobel.
If you want a center-right take on economics, go to someone like Tyler Cowen. There are also plenty of economists who argue in favor of onshoring some manufacturing under a security/defense as public good argument.
Now we’re told it’s too complicated to understand, leave it to the experts in Washington. If we put restraints on their ability to create money bad things will happen.
Separate money and state!
That said, this isn't all "gold" either in my opinion. Money is still tied to productivity. At least it works as long as people believe debts can be repaid. If they wouldn't, there would be runaway inflation.
It is more sensible to back that debt with productivity or "economic potential" instead of gold, but the idea isn't that far off as people generally say it is. In general it still is more loosely tied to real productivity though and that is a problem. The solution isn't to return to gold backing though.
And there is a development of poor economic ideas, like that creating debt is always good on a national economic level. You should never neglect to mention that this new debt would require something like a hegemonic military position to underline the "securities" of said debt.
And when market changes drastically(extra gold, or lot of removed supply). The value also swings a lot. Possibly even more than with other currencies.
Some level of floating currency is clearly most reasonable solution. But just how is still very open question.
I think the answer is to tie it to lifespan.
How many years does it take for a family to purchase a home on the gold standard? 200? 350?
In our time, we have turned the dial so far that some families can purchase a home in five years.
So it becomes a question of expansion over time for real people - and nobody wants to live in a world where it takes 400 years to save for a house.
Perhaps, however, it should take more than five…
Not a crypto shill but proof of work isn't so terrible, particularly something ASIC resistant. Energy isn't such a bad thing to peg your currency to (lot more flexible than gold). But nonetheless you still end up with a lot of weird distortions.
The legacy of ZIRP, and the effects of decoupling the financial and real world, are going to be felt for years to come.
Not really. Most developed economies are basically 70% Baumol's cost disease[1]. The 20% of the American GDP that goes to healthcare, half of the military budget that goes into salaries, public services, the police isn't billed on productivity. Those are non-tradeable services whose compensation inflates with growth in the productivity gaining sectors of the economy.
That's why you can go not to a wealthy Tier 1 city in China, but to a Tier 2 or 3 city and it has better public services despite having like 10% of the per capita budget of a US city. Most compensation is.. fake. If you want to know what an economy does look at the stuff they make.
A lot of folks say China is decades in the future, this is not my belief. They are ahead in some major areas for sure but in other areas they are still a developing nation. China just does it's own thing and doesn't concern itself too much with the whims and concerns of the west.
One thing was abundantly clear however, China does not suffer from financially engineered Baumols disease. It was incredibly refreshing to spend time in a "functioning" society. Housing abundance, cheap EVs / public transport, great services, lively small businesses etc (no abandoned high streets).
If I were to guess this is probably because productivity growth so far has been able to keep up with the expansion of money supply. Where as the west tried to print itself out of structural deflation with a decade of ZIRP/QE. How do you avoid deflation in an aging society? Is it even avoidable? I guess we'll find out [2].
1. https://www.scmp.com/economy/china-economy/article/3133397/c...
2. https://www.wsj.com/world/china/china-xi-debt-economic-plan-...
Let's say that some new use for copper is discovered, that drastically increases the demand for copper. The cost of existing items that use copper is going to go up, even if those items are no more productive than they used to be, because the new items are now in high demand.
You can see this effect in real life with GPUs; it's much more expensive to buy a gaming graphics card today than it was a decade ago, because GPUs are in high demand for other applications.
So, increasing the productivity of labor in some sector is going to do the same thing supply and demand does to anything else -- the cost of labor goes up, but not as much as the productivity in that sector, and the producers of labor will enjoy higher demand.
It isn't, but nominal growth as a consequence of demand without increase in real output makes you no better off, that's the "fake" part. More practical example than graphics cards is houses. Large chunk of the US market, constantly goes up in price, but not because housing is becoming more productive. It's because money from other sectors spills over. Good for landlords, bad way to measure real economic activity. You'd be better off if you could roll houses from the conveyor belt and collapse prices.
Rising education prices don't reflect greater quality in education, faster teachers, or more graduates, i.e. output, which is what we ought to care about, but just higher spending funded by real gains in other sectors.
The way I see it, if the markets led by PhD and Noble laureates fails, people start looking for alternatives. Since the "establishment" has been proven useless, the door is open for "anyone" to chime in. The reality is that the economist at the top do not want to see the deficiencies because they have their salaries on the line.
Ironically, that has created a populist backlash that has vaulted even worse economic ideas into power.
Anyone read "Capitalism in the 21st Century"? It's long and dense, but it does make some excellent, well-supported points about the structure of an economy that explains the current situation very well with historical antecedents.
This won't do it justice, but: inequality always increases, by definition, if the returns on capital outstrip the overall growth in the economy. (Think through that if it's not obvious; it's literally a mathematical truth.) The book argues that history is a series of long, slow accretions of wealth, with increasing inequality, until some shock (usually a violent revolution) overthrows the old system, resets inequality, and the cycle starts again. The latter half of the 20th century, for the US, was one notable exception: growth outstripped returns to capital, so the benefits of that growth were widely shared: inequality decreased. That trend ended in the ~1980s, and the widening inequality gap has fueled unrest.
And the book points out that we've seen this show before. I think we're in the "history repeating itself as farce" phase, though.
The US financial system is structurally orientated towards distributing wealth poorly. It's an unavoidable economic fact that when someone spends newly created money there's a wealth transfer from currency holders to them (that's why counterfeiting is illegal), and in the US means there's a persistent, systematic transfer of wealth from currency holders to the banking/financial system. Which is extremely regressive, as poorer people hold the largest fraction of their wealth in cash, while the middle and upper classes have more of it in assets like housing and stock.
Economists funded by the banking system will try to distract you by arguing about inflation vs deflation, but it's a smoke screen. It's perfectly possible to have a non-regressive inflationary economic system, e.g. one where the government directly prints money and gives it to the poor, and such a system would avoid the systematic transfer of wealth from the lower classes to the financial industry.
You don’t need a conspiracy, you just need a philosophy of small government and low regulation to let grifts expand through the financial parts of the economy. The history of financial regulation in the US is the banking industry finding new ways to evade regulation, which lead to moral hazards and privatized gains / socialized losses.
But it’s not that the “system” is explicitly designed that way; instead, it’s an adversarial system and the US in particular (for cultural reasons) has long favored the vigilante over the regulator.
The story works even without simple Hollywood villains. The system isn’t malicious, it’s just stupid.
Which is a long way of mostly agreeing with you.
(Oh, except on printing money. That’s a surprisingly deep subject that’s often misunderstood. You’re spot on about government-sponsored wealth redistribution, though. Fully on board with that.)
Stories like what happened to Jack Ma have to be interpreted in that context, I think. In my reading that wasn't about politics at all, but about an unregulated peer to peer lending product (i.e. a tech based loan shark system for exploiting people in need) he was about to release.
I still remember my wife casually mentioning, back in 2019 or something (well before Evergrande), that China was restricting property speculation. Prohibiting folks from taking out loans on third properties etc. As an Australian this was mind blowing to me, property speculation is a sacred religion there.
I far from agree with their politics on social matters, but their financial regulators aren't asleep at the wheel and haven't been regulatory captured.
1. https://en.wikipedia.org/wiki/Three_red_lines
2. https://www.forbes.com/sites/georgecalhoun/2020/11/16/why-ch...
Before 3RL, RE bubble was being addressed since 2010s, TLDR is policies led to domestic construction slump in 2012-2017 - where indicators like floor space completion and construction employment peaked. ~2017 crack down on shadow banking which drove developers + local gov to increase presales, turning it into a financial instrument to keep the taps going. Then hard 3RL in 2020.
Could have probably smashed skulls harder, sooner, but they've been regulating for 10+ years, developers kept finding loopholes thinking central gov would be soft, until central gov wasn't.
See:
https://www.ceicdata.com/datapage/charts/o_china_cn-floor-sp...
At minimum getting floor space completion to peak in 2014 = mitigated bubble.
E: IMO also important to note 3RL happened AFTER 12TH & 13th 5YR PLAN that build out PRC renewable manufacturing. Reason why 3RL is feasible was it became possible to shift construction to renewable rollout to keep jobs and gdp, minus RE speculation, i.e. why PRC can grow at ~5% instead of 5% + 3% RE speculation. RE was never 30% economy, about 15% + 15% in construction and downstream industries. The 15% RE growth got cut down, but other 15% shifted to growing renewable infra.
I think a lot of folks who were dismayed by the 2008 bailouts during the GFC would have a lot of sympathy and respect for whats going on. China didn't bail out, they let them burn.
The deflationary conditions are the next challenge and I'm very interested to see how they are combatted. It's interesting that Xi has come out strongly against Abenomics, and direct cash transfers, arguing that they'd distort things and "breed laziness".
Obviously this is a very unconventional view point, but looking at the financial shenanigans that have happened in the West and Japan over the last couple decades it's hard to argue in favor of the conventional methods.
Big issue is neither approach really increases the velocity of money, and just leads to it ending up in savings and bloating balance sheets. You've got to get the cash moving.
E: I do ponder how much of the deflation actually is an "efficiency dividend" due to the mass adoption of renewables and electrification. Saul Griffith (one of the folks behind the inflation reduction act) is working on a macroeconomic analysis that suggests renewable energy is inherently deflationary. Solar panels cost less as time goes forward but oil always costs more (due to getting harder and harder to extract).
My intuition is also that PRC deflation = PRC producer simply better at cheaper inputs and value engineering products. A 10K USD domestic EV today is significantly better than a 10k USD domestic IC from 5 years ago. PRC manufacturing very good at Model T-ing everything. And it's the "correct" model since PRC is large income disparity society. Common prosperity means driving quality/costs down so the 5000k USD per capita in tier 3_ cities have something reasonable to buy. And also makes migrating/sustaining to those cities viable because T1s/T2s are full. It's why we see stats like aggregate sales during major events (11/11) or travel going up, but per capita spend down. Market is creating products forbottom quantiles who are price sensitive to consume. Common prosperity is giving T3+ cities a taste of T1/T2. Get's obfuscated by western reporting because their source in T1 cities are buying less Prada handbags because they have to shut down one of their 3 hotpot restaurants. Also just general PRC branding improving in popularity and domestic blends tend to be cost-concious, this gets labelled as consumption downgrading (and some of it is), but a lot of it is also PRC value-driven products are increasingly competitive with imports. Enough to drive patriotic purchasing. Bonus this means very cost-competitive goods for exports and displacing (western) incumbants on increasingly higher value sectors.
Then add government driven consumption, i.e. vouchers for cars, appliances, tourism, industrial upgrades. Underdeveloped safety net = people will have propensity to save. So more prudent for gov to pull targetted consumption lever, IIRC accounting for gov social transfers on top of household consumption, PRC consumption around OECD average. They can consume more, but not as prolific as Americans unless CCP gets more sectors to extract service rent. Which I don't think they want to, at least not as much as US - crippling education debt not good if you want to maximize broad talent development. The other generic suggestion is improve investment market / financialization, and there's some efforts to. But to be blunt, too much of PRC poor are undereducated and vunerable to... not sound investment. IMO recipe for social disaster when grandma gambles away nest egg on stocks because mass speculation / herd mentality / scams / superstition . AKA shenanigans. So really just leaves household saving what they need, buying what they can afford, and gov boosting consumption via levers, and indy policy stretching more consumption per rmb by making goods better/cheaper.
If anything, I think the finance industry is more built on stock markets, real estate, etc., and manipulating or trading on them to extract value from people participating in them, which are generally wealthier people and businesses.
They were always run by politicians, oligarchs, capitalists and interest groups.
[1] https://en.wikipedia.org/wiki/Long-Term_Capital_Management
hows that going? economists have been giving advice to policymakers for decades, and we have a widening gap between the haves and the have nots, society increasingly in debt, etc.
Maybe economists have it wrong.
To be clear, I am talking about the ones who get the limelight, no all of them, in general.
If all the banks failed we would certainly have a more equal society in 2025.
It is really hard to say though if spending my 30s and 40s largely in a depression would have been worth it just from a personal standpoint.
Imagine instead of the boom of 2010s we had a depression.
Rather intellectually dishonest for a technologist to complain about this really.
so yes, it is about economists. interest rate policy is crafted around this principle and designed to screw the have nots (it is not only krugman, it is encoded in the fed's dual mandate). since every country has a central bank with a similar mandate its hard to know if gettimg screwed is inherent in captalism or if it's only a feature of central bank capitalism.
It's maybe telling that the nordic central banks have the lowest interest rates in general
> The gap between haves and have nots is more related to politics than economics IMO
in human history there have been few societies that haven't had a widening gap; gaps typically have contracted during times of revolution. no social democracy in the current epoch doesn't feature a widening gap, so i would doubt that active redistribution helps all that much (inflation is a compounding effect that overtakes all redistribution)
> rather than firing them
Absolutely nuts outcome. why dont we enable capital to be lazy terrible dishonest management instead of having them actually respond to market forces with hard truths and look their employee in the eye and fire their employee. what could go wrong with this sort of social policy?
imagine a society where not everyone had to be employed. some could afford to stay at home and take care of the kids, or take care of someone else's kids, the elderly, or just do random social improvement activities.
well in a society incentivized to maximize the employment statistic, the society will craft policies to incentivize people to be employed, and a lot of unemployable social good will be imobilized and the capacity to do it will be undeployed. by far the worst mechanism to do this is inflation, whose mechanism of incentivizing individuals to be and stay employed is a compounding treadmill which if you fall off, youll be homeless or foodless or both.
Exactly advice.
Which is then promptly ignored because the rich are a uber-powerful voting bloc.
Not everyone with a brain just wants more money. Some want to do interesting research that doesn't have a short term commercialisation strategy.
This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close. Put on top the rising costs of living, and 45% top tax brackets (France, UK, Germany, Spain), the US is incomparable.
> This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close.
But what does that buy you really, in a high cost of living area? What if you ever want to do something else? What if demands for your profession change? How expensive is it to raise children?
I have first hand experience of both the US and Europe, and while nominal salaries are (much) lower in the latter, subjective feelings of safety and quality of life seem much more comparable than the numbers might make you believe.
That said, the US system of highly rewarding relatively few people at the top certainly motivates the masses like few others: Most people are bad at statistics and like playing the lottery.
This discussion is about whether or not the US is a top brain drain destination. That means we're talking about exceptionally skilled or promising scientists/engineers/doctors at the top of their field. I'm not claiming life is great for everyone in America. I agree it isn't.
> But what does that buy you really, in a high cost of living area?
Look at the PPP in CA. It buys you a lot. People in HCOL cities that manage their finances well can become multi-millionaires in their early 30s. They will already be able to retire in 99% of the world, with enough savings to lead incredibly comfortable and luxurious lives. Meanwhile, people in Europe have on average lower assets and savings, low levels of home ownership, and lower likelihood to retire early at a comparable standard of living. Not to mention the pension crisis many of them are or will be facing in the near future.
And my point is that this is increasingly the case due to a combination of inertia and people’s bad EV calculations:
> They will already be able to retire in 99% of the world, with enough savings to lead incredibly comfortable and luxurious lives.
Just demographically, this will never be viable for a large fraction of the population, regardless of any economic concerns.
This leaves truly exceptional talents, and those that incorrectly assume that that’s them.
And this isn’t even considering how AI is potentially going to shake up knowledge work.
There is a very big reason why there’s no more large swaths of immigrants from European and some Asian countries flocking into the US. Yes there is some, but the times when it was objectively much better to live and grow in the states is in the past. Money is really not the only thing people care about, but it’s hard to understand for people for whom money is the only thing they care about.
Yeas, and this reason - US visa is one of the hardest to get.
You've no idea of the blatant ongoing racism in Europe that's so normalised it's basically a non issue. Like Zwarte Piet in Netherlands.
The xenophobia in EU is head and shoulders above the US. I've lived in both places for years. In Germany for example you will never be considered German even if you were born in the country.
Also how can a person that hasn't experienced the economic freedom the US provides to top talent accurately judge if their country of choice is better? I would like to see the statistics on SWEs that got wealthy in America, that regret moving to the states and would prefer to revert all those years.
(I've lived in Europe for most of my life by the way. Lots of good places to retire, but mostly poor choices for spending my productive years there.)
You guys think everyone wants the same as you do, but it really isn’t like that.
I've already addressed this in another thread. We're talking about brain drain. That means we are talking about highly skilled professionals for in-demand fields that can easily get this level of pay.
A skilled senior SWE can very realistically demand $300k+ comp in US tech companies. In the startup space $150k + equity has become table stakes, and their hiring bar is often significantly lower. These are not anomalies, tech companies employ hundreds of thousands of engineers.
> You guys think everyone wants the same as you do, but it really isn’t like that.
Ok, so tell me, what are things people want? Because people in the aforementioned circles can retire in their 30s, and spend the rest of their lives traveling the world, taking care of their family, and pursing their passions without worries. Is that somehow controversial?
If you're single and flexible to move away if any part of that calculation changes it's definitely a great deal, but the more attachments you have in life, the worse the deal becomes arguably.
> Because people in the aforementioned circles can retire in their 30s, and spend the rest of their lives traveling the world, taking care of their family, and pursing their passions without worries. Is that somehow controversial?
I think you have an unrealistically rosy view of the average outcome here. I work in this field, and people "retiring in their 30s and traveling the world while providing for their family and pursuing their passions" is still an extreme outlier.
> Ok, so tell me, what are things people want?
Maybe I'm an outlier here too, but personally, I value long-term societal stability and safety quite highly, as I don't have many illusions about being able to buy my way out of certain kinds of problems caused by a large and increasing rift between people of various income levels.
> The majority of American households in the poorest US states are doing better than the majority of Europeans.
The average life in these countries is undeniably better, even if poorer on paper.
My entire family was killed in my previous country for daring to speak up against the leader at the time. It has something that has shook me to my core. Now, even to this day, I cannot find another country besides the US who not only respects freedom of speech, but encourages it among its residents. I will not move to another country no matter how drastic it gets.
Aren't colleges and universities liable for any "illegal" protest on their grounds, since yesterday? Whether a protest is illegal or not will be decided by the local politburo office.
Unless you speak ill of america's greatest ally.
I also lived better in Sweden when I was a PhD student, than I would have if I went to Washington and took an H1B job for 100k. I think the cutoff would be at somewhere soon above 120k. Maybe at 130k-140k, I would be able to live in Washington approximately as well as I could live in Sweden as a PhD student, but it would substantially more stressful. Maybe 130-140k isn't much to long-term Googlers, but I think this is closer to salaries that people actually pay for H1Bs than these 500k+ salaries.
The built environment in the US doesn't really correspond to the nominal prices, so in a way, America is only interesting economically if you're planning to go back home.
Even better, let them keep their visa and if they revoke their citizenship, we'll relocate their entire family if they come from a repressive regime.
Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Additionally, we should be funding basic research at historic levels and incentivizing, via the tax code, corporations to productize and apply this basic research. We should be expanding the frontier of knowledge without regard to its immediate application.
One of the keys. Others are the USD as the defacto world reserve currency, the ability to project military might anywhere, and the US's ability to keep other countries from growing their militaries too much (making the other items in this list easier to manage). The US is quickly throwing all this away though.
While the USD is still the de facto reserve currency for some, many larger countries and blocks have made sure they are not reliant on it. Up to the point where weakening or strengthening the value of the dollar is far less than a power it used to be.
What happens when you "sanction" a significant portion of the world because they don't share your "values" or want to play ball elsewhere ? Well guess what ? These countries will inevitably look at each other and form their own trade routes and alliances.
Unfortunately, no hegemony is eternal.
Why should we want that instead of an orderly, well-governed democracy? Do you think people in Sweden or Denmark are upset their countries aren't hegemons?
And what would that do to the country? Do you really think that, say, the top 5% of India and China (100 million people) would do better maintaining a democracy than median Iowans? That's a real bet that your assumptions about how society works actually reflect reality.
But since there's no real practical experience of how that would actually feel (or rather, how a very high quality of life and subjective happiness are possible without an US salary in many other countries), they instead project from something that does exist in the US: Downward social mobility. (And given how US society treats its less fortunate in many instances, that seems scary to me too.)
So, I looked at other historic examples. The British, Dutch, and Spanish. (You can add German/Austrian and the French, close contenders).
They're all still very well-off!
Yes, my country was significantly larger and more influential a century ago. It even was an empire, with an emperor and all! But no, I don't feel like the average person born back then had a better life than me.
This is true for (almost) anywhere in the world. Everybody has a better life _on average_ than 100 years ago.
> It even was an empire, with an emperor and all!
But the fact that your country was the capital of an empire a century ago is a large reason for why it is richer now, and generational wealth was indeed passed on.
This perhaps is visible if you look at countries that used to be subservient to yours, in empire times. Are they not - relatively - still poorer than the former empire capital?
But all I'm saying is that there's a path to preserving wealth beyond outright remaining an empire. (Whether it's still possible after making hypothetical full reparations is a difficult question I don't know the answer to.)
If America was suddenly no longer a hegemon, it would be qualitatively different. There are other hegemons in the world that would step into the void left by the U.S., and it would be their influence that would be felt most the world over, including by the countries you named.
Another problem (which Trump is idiotically pushing) is for everyone else to grow their military. Do we really think the world is safer with more countries having larger militaries that are an election or coup away from no longer being allies?
Ie China is not doing sudden backstabbing of its allies, strongarming weak at their weakest point. In contrary ie it helped develop parts of Africa that were severely neglected by western powers, not for free but that was never the case. They did some not so nice stuff, but so did US in the past, in much higher numbers. Tens of millions of civilians are dead because of failed US policies and invasions which ended in withdrawals and defeats in past 80 years.
With all negative stuff on China (uighur treatment, other cases of human rights violations) its still shines compared to US now. Now for any outsider (>95% of mankind), why should they still ally with US now?
China seems a lot more reliable than the US, and has seem more reliable for quite a while.
You speak as if the US does not exploit others dry. The US is a lot more malignant than you make it sound.
Not sure I’d call the place well off. Granted, a lot of the reason they’re in this situation is because they put everything into stopping the Nazis and thus saving the world. The US kinda lucked into inheriting the UK’s wealth.
Japan is even lower on the list, but personally I’d rather live in Osaka than Mobile.
I do agree with your larger point, it is however counterbalanced in part. Gross per capita income doesn't reveal the full picture.
All whites, all allies of the Hegemon, and most importantly, all colonizers, what a coincidence
if this is a satire, I have to say it's a brilliant one
Funny that you chose those two countries. Denmark is a founding member of NATO. Sweden is one of the two most recent admitted, almost a year ago.
My point is that it's U.S. hegemony that has protected its own democracy and that of liberal democratic Europe to a large extent.
Sweden and Denmark haven't been hegemons because they haven't needed to be.
That's exactly right, and I used nearly exactly those words in a recent comment.
Important to note: The free world - economically advanced democracies excluding the US - is the largest economy in the world, larger than the US by about 30%, with an even larger population.
These countries have a historically unprecedented incentive to work much more closely together now, and there is a massive void to fill.
The incentive is there now, when it wasn't before. Cooperation emerges under external pressures, almost as a rule.
And, I'd say protecting democracy for "white countries only" is a simplification. If you're talking about Europe, then we have to consider that the U.S. has also pretty famously fought against European nations and that our subsequent "protection" there was to serve as a bulwark to maintain a world order that benefited the U.S. and democracy.
And, you have to consider that we later "protected" the non-white Japan, Korea, and Vietnam at great cost.
In some of the countries wherein the U.S. could be said to have propped up dictators, there tended to be other geopolitical realities. For instance, many of these were in the Middle East and the U.S. elected to align with the most pliable of the available alternatives. And, in spite of this, the U.S. has also promoted democracy in the region.
You have to also consider the sentiment in many of the countries or regions is/was decidedly anti-American and the choice to support regimes less hostile to U.S. interests is a practical one. Many do not want democracy and the alternative for the U.S. is frequently to topple regimes and attempt to stand up completely new governments (i.e. nation-building). This is an extraordinarily costly endeavor with a high failure rate.
And, all of this in the context of adversarial nations doing the same to promote their own interests.
Again, we're not perfect but the world is a messy place.
Yes, and this is one of the stupidest things about American foreign policy. Every european democracy spent hundreds of years as an authoritarian regime first, while it developed the underlying infrastructure of state and civil society. America repeatedly trying to short-circuit that process by toppling authoritarian regimes is in the long run bad for the people in those countries. Those countries are not ready for democracy and the fledgling democracies that the U.S. has tried to install, like in Iraq, have led to horrors.
Pushing fake candidates in Venezuela - supporting Democracy!
Ousting left-leaning governments in Australia - supporting Democracy!
Overthrowing the democratically elected government of Iran, returning it to authoritarian monarchy - supporting Democracy!
Overthrowing the democratically elected government of Chile, installing a dictatorship - supporting Democracy!
Supporting the overthrow of democracy and establishment of a military dictatorship in Brazil - supporting Democracy!
And so on and so forth, with plenty of logistical and moral support for mass killings, disappearances, assassinations, and political imprisonment mixed in to boot.
We have never promoted democracy, we've only ever promoted the interests of American corporations and opposed socialism.
Yes, it gets messy. And, yes, United Fruit Company et. al. happened. We've absolutely had government capture and promotion of special interests. But, even these aren't always so neatly separable from U.S. interests, which are not always so neatly inseparable from promotion of democracy. For instance, a weak economy would make it nearly impossible to have influence in the world.
There's a simplified world view that ignores the good, measures each discrete misstep on its own (or interprets every difficult choice as a misstep), then tallies a final score. But this is not realistic in a world where lesser evils are frequently the viable option. America does not operate in vacuum and you have to look at the entire arc.
You'll not see me defending every egregious thing this country has done or endorsing the instances when it has truly veered from its creed. But, to measure us by only that metric and declare the country evil or completely non-democratic is to exonerate other bad actors on the planet.
Worse, adopting such a simplistic point of view makes it impossible to recognize when we've entered a truly treacherous phase, wherein an authoritarian regime comes to power and eschews democracy entirely. Everyone would just throw their hands up and declare "we were never democratic anyway, so it doesn't matter". And, by the time they're shown the difference between our imperfect democracy and frank authoritarianism, it's too late.
I'm not judging the US in comparison to anyone else. I'm judging it in comparison to your statement that it has promoted and protected democracy around the world.
US interests justify all kinds of nastiness, sure. But we claim to be civilized, claim to be champions of justice and democracy, and say we act for the good of the world. There is no evidence at all to give any credence to those claims. Claiming that other countries would be even worse is just a strawman. We should be better, and we know we should be better, because we feel the need to hide and deny the things we do. I don't care what other countries do - I don't live in them, have no vote in them, and am not represented by them. I want MY country to be good and just, rather than pragmatically evil because we can't let anyone else "win".
The point I'm making here is that this doesn't always look like we think it should (though it also frequently has). The world doesn't just cooperate. It's a nasty place filled with competing, often hostile ideologies. And sometimes nastiness is required.
>There is no evidence at all...
Of course there is. If I give you examples, you might wave them off as the U.S. merely promoting its interests versus democracy, but these are frequently directly linked. The U.S. does have an interest in promoting democracy in the world, even if there are counterintuitive scenarios wherein we must take a short term approach that reads anti-democratic. For instance, if a candidate were democratically elected, then ruled as a dictator, removing that democratically elected president would conceivably be a democratic action.
Beyond this, the U.S. must protect its interests (and power) if it is to continue wielding influence in the world.
But, it's true that there have also been grave missteps along the way. I want my country to be perfect too. But, alas. Still, I don't believe it's so binary (though I once did).
In any case, we seem to disagree and I'm not sure that this goes much further without us simply repeating ourselves. Thanks for the chat.
And just because someone was born in China or India it doesn't make them any less American then someone born in Iowa. Their children might be born in Iowa
Immigrants may become legally American overnight, but they don't become culturally American overnight. Cultural attitudes are extrmely durable (https://www.sup.org/books/economics-and-finance/culture-tran...). My mom has lived here for 36 years, and she's still a low-social-trust south asian who has distinctly south asian views on credentialism, education, social hierarchy, etc. Are those attitudes compatible with the kind of egalitarian, self-governed democracy Alexis de Tocqueville wrote about? I am skeptical that's true at scale.
Even having grown up here, my cultural attitudes are very different--and again, distinctly south asian--compared to my wife's (whose family has been here since the early 1700s). If you took 1,000 people like my wife and put them on an island, you'd recreate America--including the parts of America I find perplexing and frustrating. I'm not persuaded that if you took 1,000 people like me and put them on an island you'd recreate America.
I'm not persuaded we could recreate America even if we took any 1000 people, even people who can trace their apple pie eating back to the Mayflower, because you know, America is a country and more generally complex arrangement of stuff that involves and entangles hundreds of millions of people (if not the entire planet).
So what? Immigration is optional. The people supporting large-scale migration from countries without functional democracies should have the burden of proving that cultural attitudes salient to democracy are not durable.
Even in the U.S., I'm not persuaded that the Anglo-American republic as originally conceived survived the mass immigration of continental Europeans in the late 19th and early 20th centuries.
> 'm not persuaded we could recreate America even if we took any 1000 people,
We have a real-world experiment of this! America, Canada, and Australia are all oddly similar countries, demonstrating strong alignments along many dimensions.
This argument really does not make sense, and lest we forget those "enlightened democratic western cultures" created some pretty gruesome dictatorships in the intermittent years.
Turning to Western europe more generally, there are cultural traits arising from Christianity and the historical development of the Catholic Church: https://news.harvard.edu/gazette/story/2020/09/joseph-henric....
Protestantism also played a significant role. Puritanism in New England heavily influenced what became American political culture: https://democracyjournal.org/magazine/37/our-puritan-heritag...
Actually if you study British history you'll find that what is most striking is that the United States is a departure from rather than a continuation of British legal or governance norms.
Obviously there’s differences in application of those concepts after hundreds of years. But the point is that when Bangladesh drafted a modern constitution, it reached for concepts dating back to 13th century England. Democracy as we understand it was a long time in the making. They didn’t reach back to the Mughals or the Nawabs of Bengal. This was no indigenous foundation for law-based democratic society. And experience has proven that you can’t transmit such a system from one society to another with ideas or words on paper. It’s the organic result of mother teaching child over generations.
Remember, the american revolutionaries were fighting to vindicate what they saw as the ancient rights of Englishmen, unlike say the french revolutionaries who sought to institute a new regime.
It's one of our core defining values
The American that was originally convinced was imperfect and much worse then the America we have today. We literally had slavery and most adults couldn't vote.
What you’re talking about is a 20th century creation. We never tried to be an “immigrant nation”—we were a big open country with no welfare state, and it was favorable for us to allow extensive immigration to populate the continent and displace the native americans.
In the 20th century we accidentally found ourselves with British Americans being a minority then created this idea of an “immigrant nation” to assimilate all the Germans, Italians, etc. But it’s a retcon.
You're being informed as to actually, as messy as it might be, what the US is and was. This isn't going to be neatly described in any papers or appeal to core enduring features, however much that might suit your ends
The point is you have a view and the after that fact have found an argument (not a particularly compelling one).
Unfortunately (for you) the burden of proof at the very minimum (or maybe more properly on everyone in this domain) is on you as immigration from non-democracies is as older than the United States itself, you are the one advocating for a departure from this historical fact.
The countries you list are actually not as similar as you might like to believe, in so far as they are similar not for the reasons you believe, but it might be your own inability to see the differences here, nor do they prove your proposition that somehow there is some determinism by deep roots (or lack thereof) of people.
I have a similar family experience with drastically different outcome. Including ties to your idealize Iowan people (born to Iowan w/ Iowan grandparents, great grand parents and so on back to Jamestown for a couple), who are simply that, just people. Most Iowans come from late 1800 immigrants, many from East Europe. Some of my Iowan family lines are outliers in terms of origin (first families), but there is at least one from 1800 East Europe that I know of. If you moved on from British history to American History, you would better understand the real mixing of immigrants/cultures, and that is distinctly American. They did not all stick to their kind, as it were.
Some recent family has integrated with Asian immigrants and they are more "American" than some of my Iowan families in-laws that have been radicalized into anti-American values, much to my Iowan families horror. That has nothing to do with "cultural attitudes" etc, and everything to do with living in internet bubbles.
Iowan's I know and come from are blue through and through--Union loving gun toting Democrats. Most of them have kept their values, some have let Fox "news" take that thinking over for them.
I guess I'm just arguing for a more expansive view of what constitutes an American. If it was some precious fragile thing that gets diluted by immigration and threatened by cultural mixing and new ideas, well...
Oh... darnit.
In my view, the best expression of America is somewhere like Iowa--a flat society with intense, local self-governance. In every multicultural society, the democratic rapport that people have with each other ends up being replaced with relationships mediated by an increasingly large and bureaucratic government that can reconcile the conflicting cultures and interests. Democracy is reduced to mere voting.
You sound very Jeffersonian, but methinks you're idealizing Iowa — have you ever spent time there?
Anecdata: My dad's family is from Iowa — his people were small-holding farmers and village shopkeepers whose immigrant ancestors had come to Iowa from Germany. My dad and his siblings each left the state as soon as they reached adulthood and never once returned to live. Neither I, nor any of my siblings, nor any of our first cousins have ever lived there, nor have many of our second cousins (although we used to go back regularly to visit relatives). Feel free to conjecture why that might be.
That depends on the constituents of your sample. I doubt a city girl from New York and a farm boy from East Tennessee would have the same approach to life in this hypothetical thousand-person colony. They'll likely work and trade together as needed, but they would otherwise form and primarily associate with their own sociopolitical milieu, thus forming cultural enclaves.
In short, I don't think you could really create another USA without the historical happenstances, upheavals, and transformations that changed country from a collection of colonies primarily divided on religious grounds to a unified secular republic.
A rare moment of strong agreement.
accepting loss is a core tenet of democracy
The peaceful transfer of power is not common in human history. It’s a miracle it’s gone on as long as it has in the US.
Yes, water it cheap. But you die if you can't access it for just a couple of weeks - this is a risk based approach. And this is something traditional economists do not look at too much.
In the 1980's and 1990's computer industry, your dollars could buy a lot more megahertz or megabytes every year.
If the "deflation = bad" people were correct, everyone should have held onto their dollars waiting for next year's tech, knowing it would be a lot better than this year's tech. No one should have wanted to buy computers, and the tech industry should have been in a gigantic depression.
Broad-based deflation due to a lack of money to buy goods and services is bad.
A little inflation means that your currency buys stuff _today_ that's worth more than hoarding it for _tomorrow_, so you spend, vitalizing the economy.
The reality is, it needs to be balanced. There needs to be enough money in circulation such that economic activity is not stymied, but not so much that it starts price wars.
Kinda like blood sugar!
Currency inflation leads to unfair distribution because the value of financial assets grows faster than the real economy (it inflates).
Currency deflation benefits the poorer. As technology and productivity grow, it costs less to produce goods, so their prices should decrease.
The currency hoarding behavior that you describe is no different than today’s financial investment.
It is trivially easy to avoid the effects of inflation by investing - if you have assets to invest, that is. But if you live month to month, you get screwed by inflation, because your salary is sticky as prices rise.
The United States has attempted several times to use a gold standard. However, it results in unacceptable outcomes every time. In the 1970s, President Nixon led the US to leave the Bretton Woods system of fixed exchange due to trading partners converting excessive amounts of gold (specie). It has been found time after time that central banks need to adjust the value of their currency to account for financial shocks with countercyclical monetary policy.
How does the rate we pull gold out of the ground relate to the rate of production and value growth?
No working is required, when you can print any amount of currency and can buy anything from any part of the world with it. Yes, printing speed up inflation a bit, but unlike in any other country of the world, when US is printing dollars, they spread the effects of inflation on all of the world: US becomes richer and all other countries a bit poorer.
This is why linking dollar to the gold would kill US prosperity. Also, one reason is why US is so heavily militarized and is fighting wars all over the world: you need to constantly threaten all the world so that they can't even think of choosing any other mean for world trade other than dollar.
Bingo ! Many people conveniently overlook this reality. Most countries don't simply choose to trade and hold USD because it's the most stable currency pegged to a stable, rationally driven economy. No, it's because if they choose not to, they suddenly become a "nuclear threat to world peace" and we magically find non existent WMDs. It's a bullying tactic.
At what quantile of an R1 does graduate education become something other than a visa scam? What domestic student is going to toil for years for poverty-level wages? The further pursuance of policies that are turning research institutions into immigration scams is a bad idea.
Do you want entire swathes of the country to have no exposure to higher education personnel?
And what would that be? "Services"? The author tried to explain how that is basically a scam.
And, getting back to our present, hobbes-ian world, services won't help you put tanks on the ground and airplanes in the air in the event of a grand war, you need a pretty solid manufacturing base to back it up, you need to be the "arsenal of democracy".
Neoclassical economists have been selling themselves as “scientists” (think physicists) for decades and their theories are cited as reasons for economic policies in the USA.
One of these days I’ll write a post on it. But one of the areas they get wrong repeatedly is on the minimum wage.
Neoclassical economists would argue that increasing minimum wage ultimately hurts the people it’s trying to help. For example, by increasing minimum wage you would see a decrease in businesses and/or number of jobs available. In neoclassical theory and “Econ 101”, they would chalk it up to supply and demand.
However, this has been disproven in regions or states where the minimum wage has well exceeded the federal minimum wage. Take Seattle, WA for example where min wage is ~$20/hr. Local restaurant industry didn’t collapse. Region itself didn’t collapse. Sure jobs or businesses closed (Subway franchises, lol), but were eventually replaced by ones that could compete. Likely local businesses. And since all businesses pay the same wage to remain competitive, workers get more money in their pockets. This leads to increased spending by those same people.
There’s a ton of other factors as well but it’s well beyond commenting here.
I don't agree with all of his premises or conclusions either, but I believe he's exactly right about the financial engineering and outsized rewards that frequently accrue to non-productive activity in general.
I see the manufacturing fall-off he notes as a proxy for that. It's not the only evidence, but it's one piece.
If they did, we'd have had a land value tax for a century by now...
Not really, no. If China cut off the US, for any reason, who gets hurt more? Who has a bigger house of cards to collapse? Who will have a harder time rebuilding?
If the next leader is bolder than Xi, and is of the same kind that once killed tens of millions of people, losing an arm and a leg to behead an enemy might be a viable strategy.
There’s a logical fallacy in your rebuttal.
I think the original reply was itself a strawman of the point the article was trying to make. Manufacturing isn’t the only important thing about an economy but it’s an important one.
That's crackpottery. I was succinct in my criticism, but there is plenty of room for elaboration.
If the essay instead took those economic indicators and delved into why manufacturing output should matter more than other output in determining the Real Economy, then hey, we've got an essay to discuss. But just eliding that and saying "manufacturing is real because atoms are real, everything else is b.s." -- that's not really an argument, that's just laying your biases extremely bare. Which I pointed out.
That said, geohot is close to some real points, I just don't think he has the background to articulate it rigorously. And for the record, I do think the US economy is entirely too financialized.
But again, that's a different -- likely better -- essay.
Apple isn’t going to be worth $3 trillion when they can’t sell an iPhone for the next decade. Heck, General Mills won’t be selling much breakfast cereal, when the parts to the equipment can’t be imported. How much do you think a bare shelves Walmart is worth? Heck, how will American manufacturing rebuild when the CNC motors are made in China? When even a Prusa uses motors from China (LDO)? Will software sales save us with no hardware to run it on?
The value of everything on the stock market collapses in such a scenario, and the power of the US Dollar goes with it.
But the output was mismatched to demand; it was a classic example of "when the measurement becomes the target, it ceases to become a good measurement" -- the centrally-planned industrial targets were inefficient, so a lot of that industrial production went to waste.
And to be fair, this is what's hard about economics: you can't just count tractors, or tons of steel, or whatever, as the output of an economy. Because every marginal ton of steel matters a different amount based on demand. The genius of capitalism (yes, I said it!) is it is an extremely elegant system for optimizing an incredibly high-dimensional system with a slippery, dynamic cost function, by incentivizing a bunch of independent agents to collaborate in price setting (and therefore sending signals about production via pricing, vis a vis supply and demand).
This is also why China's economy has done better than the USSR; let's not forget that Deng Xiaoping's "limited market reforms" helped unleash the modern Chinese economy. The structural issues in the Chinese economy now stem from the lack of development of consumer demand, which does echo some of what the USSR struggled from. But China has come very far; the criticisms of its current economy that I like best are well-articulated by Michael Pettis, fwiw. But I'd encourage you to do your own reading and form your own opinions.
China gets hurt more. They are an export economy. US will face some temporary pain, sure, but other countries build stuff as well. Meanwhile what does China do with all the materials piling up, millions out of jobs and a half a trillion dollar hole in their economy?
I mean, we've sort of long assumed that increasing trade ties led to peace, and the detente between the US and China was long taken as proof of that axiom. But morons with half-formed ideas about trade policy can blow up detente in less than 100 days, as it turns out.
Have two nuclear powers ever gone to war directly?
I'm pretty sure it isn't going to happen because ultimately the leadership on both sides would be assured of being vaporized, and no leader on either side has the guts to actually die in a conflict (especially where there could very likely be no real winner, and no glory, at all).
As long as that holds, we're actually pretty fortunate in that we avoid these stupid types of wars, and we're forced into these frustrating (for chest-beating tough guys) economic rivalries instead.
China is not motivated by what makes economic sense. The party openly says this - the very fact corporations exist is a concession to not having achieved pure communism yet. The party openly hates the fact they need an economy, after having failed for the first few decades to operate without one.
All it takes, quite literally, is one hardcore communist after Xi who isn’t afraid of a second cultural revolution. Maybe a chance to fix all their consumption, housing, and youth issues once and for all in one painful societal restructuring? The very economic and social issues we point to as why they would never do it, I fear, might actually become reasons they will do it.
It's sad, but as long as people continue to believe in this mythology of "absolute freedom", it will continue to work.
Regarding Pettis, I still haven't decided whether I agree with (and understand) his worldview.
https://www.bitsaboutmoney.com
And subscribe to Bloomberg's Matt Levine's "Money Stuff" newsletter and podcast:
I think the ideas are interesting and worthy of discussion. If you want an actual credentialed economist talking about similar issues — here’s one: https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-econ...
But you need to recognise that there is an “orthodoxy” and challenges to that. You aren’t going to hear the questioning of the status quo without looking outside the “establishment”. Here’s a taste (note that Yanis is old school left as far as politics goes)
“Faced with President Trump’s economic moves, his centrist critics oscillate between desperation and a touching faith that his tariff frenzy will fizzle out. They assume that Trump will huff and puff until reality exposes the emptiness of his economic rationale. They have not been paying attention: Trump’s tariff fixation is part of a global economic plan that is solid — albeit inherently risky.”
Questioning establishment dogma is largely forbidden, no matter what your establishment is, so it's absolutely worth considering outsider assessments.
Wars test base assumptions. It seems obvious that in a war, ability to take things out of the ground, turn them into bullets/drones/etc, and then get them to the front line is what matters, not what the stock market says, and not claims made with the backing of a military (such as how much the US dollar is worth, or who owns what IP).
I don't necessarily agree with his conclusions, although I understand where they come from.
And I'm not even an economics expert. I've just read more about it, or read more critically, than geohot. And I can tell you he's wrong, not because he's an outsider but because his analysis does not make sense.
Copernicus had well-reasoned, self-consistent arguments that incorporated previous models, and produced better results. This doesn't. There is a rubric for how one should score outsider contributions, even if you want to allow for revolutions in a particular field. This essay doesn't rise to that level.
In fact, it matches the first pattern -- smart person outside their field, makes ass of self -- much better.
The electricity graph is a very good example of that. A machine plugs into a wall and uses electricity. An aggregate graph of electricity consumption contains the information of how many machines are running in aggregate. You can argue that data is wrong, and I'm open to believing it is since I believe you can have a privately owned power source, but if you don't dispute the data, then a graph of electricity is very much a graph of aggregate manufacturing, also aggregate computing. Aggregate electricity should have a deeply entwined relationship with aggregate economic output. I'm not an economist, so apologies for any misused terms.
Electricity is basically a raw material component for almost any good, even services likely have a relationship with electricity.
I find that analysis cogent and satisfying. I've traveled a fair amount, and the amount of "third world"ism I see in the US is shocking. Before traveling it never occurred to me that San Francisco literally literally has slums. Meanwhile many places in "poorer" foreign countries are nicer than things I can find in the US even if I were to go looking for them.
Just looking at the map in this article, and whatever source this comes from (some people don't seem to bother sharing sources) - it seems not accurate. (e.g. why is Greenland a different color than Denmark...)
It's not like anyone designed it, or has any control over it. Some people are in position to make adjustments, nudge some aspect of it towards a desired goal or away from undesirable one, but there's only so much they can do - it's all strongly path-dependent.
Put another way, the shape of the economy is just an exercise of descending down the gradient. Any individual or group has very little control over this, and major changes to the economy basically only happen when war or technological inventions reshape the entire gradient.
--
[0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
Entire economies were indeed planned and designed, and their shape was controlled and changed at will. Individuals and groups had control, and did do major changes, including but not limited to forced resettlement and labor camps.
You can of course argue that this ended almost universally in failures, but people did try, and the amount of control over economies is very much a spectrum.
Specifically, to have this level of control, you basically have to go full-totalitarian and rule with iron fist, and sustain this rule even as The Economy pushes back, in form of unrest, civil war, revolutions, military coups, as well as sabotage or direct attack by foreign forces. Yes, all this is part of the economy too. And, if you somehow manage to keep control in spite of all that, you'll quickly see the rest of the world, with its uncontrolled economy, zip past you in terms of wealth and power, and find yourself at its mercy.
Fundamentally, people want to trade; they both need this to survive and want it to improve their lot. If you make trade hard for them, they'll invent workarounds - alternate currencies (see e.g. use of dollar in the soviet block to work around rationing), barter, smuggling of goods; if you crack down on it, they'll conspire to depose you - and yes, even your military and security personnel, at every level, would like to make the lives of themselves and their families better too. There's only so much blood you can spill before you run out of people to kill, or out of goodwill of people doing the killing. And, as history shows, The Economy will win anyway.
As for sane, free, democratic countries - there's shit all you can do there, as the economy will push back through support of the voters and other politicians, strongly limiting the kind of decisions that are possible to implement. Try to make too big a changes, you'll get sidelined and removed from position of power.
You can argue dollars can also buy 'IP', but IP is virtual and only as good as the police and military enforcement of its regulation.
You can argue dollars buy oil, but once again only because of military enforcement of the imposed rules of not to trade in other currency.
In the end an empire based on massive consumption of the world's resources in return for not much else besides the threat of 'take this paper or we bomb you' will not hold.
As for the brain-drain. This was/is still a huge thing. But it hinges on the desirability of attracting the right brains. If you abandon meritocracy as the US has been speed-running, why would a capable person want to go/stay there? Seems like the attraction incentives are there more for the subpar performer in the 'modern' US.
From my experiences over the decades, the Venn diagram that includes both and have worthwhile understanding is a small minority of either group, and even smaller when you consider the total of those outside the set as the mainstream.
When this showed up on HN, there were no comments for quite a while.
I had casually heard of Hotz as a recognized hacker, interestingly one who was respected for figuring things out that other people could not. But with no real familiarity, I couldn't recall what he had hacked or where he had worked. Maybe I had retained the impression that he started out quite young.
And then he comes out with this.
Last time I heard of him, I knew he was smart, I just didn't remember why any more.
This time it's different.
Something must have escalated.
All I could think of now was "How did he get to be so smart?"
That would have been my entire comment, which I didn't post because I thought it was not very substantial, and I was wondering if there would be any comments anyway. No interest was being shown at all.
Study takes many forms and some people can figure things out better than others.
No one person can solve all the problems, or even recognize them, and when you start looking from fundamental principles you can end up so far off the mainstream that there is overwhelming misunderstanding that can not be overcome. Any mainstream can look so sensible across-the-board because the experts are standing on the shoulders of those who came before, and some of these are lifetimes of intense study. It can add up to more than one person can usually do in a single lifetime themself.
But if the foundation is wrong to begin with, or turns out that way later, it can be like a pro-cheerleader pyramid where the top rallying cry comes from someone who can still not see out of the pit of their own making, not actually elevated above the crowd like it appears. What could be incorrect about all the shoulders they are balancing on and the adoring crowd of high-dollar ticketholders to boot?
One thing's for sure and I don't think it's the title by accident.
"The Demoralization is just Beginning"
I've seen this movie before.
He doesn't even try to discuss this main point at all. People are nowhere near ready for that, look at the comments, many from quite educated positions pooh-poohing him from different directions.
All anyone can do in a short blogpost like this is throw out a little evidence and people can decide for themselves how demoralizing it already is, or how it might turn out.
Which is what people are doing, as righteously as they can, bless their hearts.
So my advice to Hotz at this point is keep doing what you are doing, and illegitimi non carborundum.
No different than the comment that popped into mind at first, now just a little more substantial than a quick drive-by.
He gives away the game at the end when he decries socialism (because of course he does, it's practically a Free Space on the "Highly Intelligent Engineer has Opinions on Things" BINGO card) and fingerpoints at Europe, despite China having Communism on some scale yet is also somehow what we should be emulating for growth? It reveals the naivety of his position, assuming he's making the argument in good faith.
But getting back to his action plans (which are, generally, not bad), I totally agree that a good step forward is reforming immigration to promote movement of people provided they're willing to contribute to society. He couches his standards in nebulous vagaries like "production" and "productivity", but the core concept is sound, even if his rationalizations leave a lot to be desired. We should be courting smarter and harder workers with pathways to Citizenship, not highly exploitable visas like H1Bs or the various farmworker visas, and we should be holding companies' feet to the fire in ensuring imported talent stays here, on American wages, in American living standards. I've been screaming the same to my EU friends of late, stating that now is the best time since Operation Paperclip for a foreign power to import brilliant talent from a failing state.
On the topic of the EU, something I'd like to challenge is this popular (with laissez-faire Capitalists and Libertarians) narrative that the EU is somehow failing because it hasn't exploded with growth like the USA or China. From what I've seen, Europe has been remarkably stable on the whole (with pockets of success and failure, a la the United States) precisely because it built up modern infrastructure when it could, maintained a diversified economy, and didn't give in to scams or grifts - like the ones he cites in the American economy as artificially inflating the economic numbers to create the appearance of growth where none has really occurred. If we had real growth, like China, we'd have the same amenities - high speed rail, modern freeways, high levels of infrastructure replacement and improvements, and a burgeoning middle class. China built these things as part of its rapid industrialization over the past century, whereas we squandered our post-war advantage on corporate subsidies and hawkish conflicts abroad for decades. If anything, I'd argue that the EU may very well be a model of a sustainable economy of sorts, provided there's not some crisis boiling beneath the surface that could cause a collapse; the people there generally have everything they need, and healthy regulations minimize the risk of exploitative or anti-consumer practices.
But I digress. The TL;DR is that he has valid points, but man does he undermine his argument with the same tired tripe at the end exposing his ignorance on the subject.
Keynesian economists and now mmt advocates are the reason that most of the productivity gains of the last hundred years have ended up in the hands of a few hundred people while most struggle.
I'd say it's high time to stop listening to these people who are nothing more than useful idiots of the elites.
As I understand it, pretty much every developed country employed mmt practice in response to covid.
Now we have (even more) rampant inflation and wealth inequality with no sign of slowing down.
Obama thought the idea was intriguing and mentioned it multiple times to his advisors. It never went anywhere though.
Brain draining the rest of the world is one of the main reasons for America’s success. It is due to America being a nation of immigrants that we can do this.
Some EU countries offer scholarships to attract good foreign undergrads and grad students to their universities. The whole point is that they stay afterwards, and they try really hard to keep them. It's been proven to be quite economically profitable, see e.g. [1]. I've never understood what's the point of attracting good students if you don't want to keep them later on, unless you have overcapacity and sell education services. But that would not make sense for top universities where there is a fierce competition for spots.
[1] https://www.dtu.dk/english/newsarchive/2022/11/udenlandske-s...
Seems like you understand the point after all :)
US tertiary education is the perfect export good: Like other intellectual property, it's almost infinitely fungible, and parents from all over the world will part with staggering amounts of money for it.
The quality is definitely high, but the markup compared to other countries' universities is something else.
No random nation based limits like the US somehow has.
US schools attract international students because most will pay full tuition, subsidizing costs for local students.
Another reason would be to generate goodwill and potential future business relations for your country. Can be pretty valuable for your export-oriented businesses.
Exporting knowledge, culture and contacts
Anyhow consider me demoralized, i cant picture anything the US could do in the next decade to turn the ship around from the fuck-it-all perestroika we've adopted as federal policy. (Speaking of turning the ship around, I'm looking forward to my 8 day east bound crossing from NYC to Southampton at the end of the month. The ship is capable of doing it in 5 days but the demand isn't there to pay the extra cost to run the turbines at full steam.)
If you’re lucky enough to be able to fuck off for 42 days you might also be interested in ocean crossings by sail, here’s the offering ive considered, the Europa: https://www.barkeuropa.com/en/our-voyages
Thanks for the information!
And I might have time to fuck off, I'm burnt out of my job and thinking of quitting in summer time.
> Obama thought the idea was intriguing and mentioned it multiple times to his advisors. It never went anywhere though.
This sounds like OPT on an F-1 visa. If the OPT employer likes you, then they sponsor your H-1B application, and with your masters+ degree from an American institution, you get two shots in the lottery. (And if there's a recession, the caps might not get hit anyway). Kind of a drag because you'll probably need to get a masters degree, but it'll help your immigration file later if you want to try for permanent residency, or if you give up and pick a new host country.
Not true. America was successful regardless of immigration. For example, for much of the 20th century, the US banned immigration from most of the world. Look up the history of US immigration bans. It's quite enlightening
> It is due to America being a nation of immigrants that we can do this.
America is not and never has been a nation of immigrants. At no time in US history has immigrants represented anywhere close to the majority of the US population. America was always a nation of native born americans. Not immigrants.
These two hot takes at the top of the essay really undermines everything else the author might say in the article and brings into question how serious and critical their thinking is.
Several comments here against the article talk about the Chinese economy problems and this article in this morning’s BBC is a pretty good summary of the dynamics and the problems, notwithstanding manufacturing prowess, China is facing: https://www.bbc.com/news/articles/c8x4vj8rj9wo
Does it though... If anything, the numbers prove him right:
> Several comments here against the article talk about the Chinese economy problems and this article in this morning’s BBC is a pretty good summary of the dynamics and the problems
They have been predicting 'a hard landing' for the Chinese economy every year for 15 years now. What the economic press publishes in Angloamerican countries about China is just external lobbying to scare China into opening up its market to financial speculation. Without any success. Naturally so, as everyone saw what it led to in the West in 2008.
If you think DOGE is a legitimate source of determining fake jobs you are mislead and not worth listening to.
It’s wrong in so many ways, that it actively reverses reality.
I believe the core payload is the idea that America was already fading, and that it was in decline agains China / Asia.
My suspicion is the goal is to kill the idea of dynamism, feed off of the malaise people are feeling.
The intellectual payload is simply a barb for the emotional payload to be distributed.
But does anyone think through to the end-game of that? That when you drain the most smart/productive people away from every other country, all those countries become less wealthy and more dysfunctional, leading to societal decline, poverty, resentment, radicalisation, war, etc?
Aside from anything else, the other countries become less able to trade on good terms, and thus less able to buy US products/services. And so it becomes a self-defeating policy long-term.
Good economists (and to be honest I don't know of many these days) know that there are no free lunches. We need to put as much effort into helping every other country develop and thrive - and by doing that we'll create many more customers for the products/services produced in our own countries, and everyone can end up richer.
After writing this I wonder even if the economic and political dysfunction we're seeing in so much of the world as actually the inevitable consequence of decades of brain-draining, rather than an indication of the need for more of it.
I know of more than one example where someone has been “brain-drained” to the states, who has subsequently moved back to start a successful business. Sometimes leveraging gained contacts directly, sometimes leveraging the newfound experience and knowledge.
Whether this works out this way depends on how open the world (or at least the respective countries between each other) is when it comes to movement of people, money, and trade.
The reality is far less zero sum. These Chinese scientists learned about and contributed to solar research overseas, and some of them went back to China and made China wealthier.
The truth of the matter is that most cutting edge research is spearheaded by the west. The problem is that the west can't build or prioritise anything useful with it.
A decade ago the west was clearly ahead of China in fundamental research. Not anymore.
And that would be a good thing in a world where super-powers aren’t imperialist, and don’t try to one up each other.
Alas.
EDIT: Thinking about it, it’s kind of hilarious that it’s called “Truth Social”, given that it’s mostly antisocial lies.
How many Europeans who emigrated to the USA in the late 19th and early 20th centuries returned to their countries after making it big in America? Is any of Europe's economic development since then attributable to them?
Our 20th century immigrant experience was that the old country evaporated and there was no longer a connection.
Also, most of that emigration was more like “famine-drain”.
this was the logic in letting eg China into the WTO and allowing them to become such a big trading partner. turns out, this doesn't necessarily result in liberalization (see Germany's experience with Russia for another example).
we should only be seeking to shift trade from repressive regimes to democracies, not working with everyone equally.
The will of the people in China is unknown. There is only the will of the CCP, and increasingly, one person.
I think genie is out of the bottle, and it’s too late to prevent it. But the logical step would have been what Obama wanted. Now, we have dark times ahead of us. These forced shifts in trade just make the process to these bad times quicker. Nobody really benefits them, just make the war a possibility sooner. If not a full out war, but a new Cold War at least.
Meanwhile, China is playing the long game and is building infrastructure projects all over the world, including the EU [0]
You have a source for this? I haven't heard of any threat of military intervention for Canada and/or Denmark.
"Trudeau more recently suggested behind closed doors that Trump’s sustained annexation calls may not be just light talk and appear to be “a real thing.”" [1]
"Trump refuses to rule out use of military force to take control of Greenland and the Panama Canal" [2]
"US will take Greenland ‘one way or the other,’ Trump says" [3]
[0] https://www.bbc.com/news/articles/cddy2q2z8dzo
[1] https://apnews.com/article/how-canada-could-become-us-state-...
[2] https://apnews.com/article/trump-biden-offshore-drilling-gul...
[3] https://www.politico.eu/article/us-will-take-greenland-one-w...
"What he wants is to see a total collapse of the Canadian economy," he explains. "Because that will make it easier to annex us."
Source: https://www.bbc.co.uk/news/live/cvgpdk4257zt?post=asset%3A3b...
"Trump has previously spoken of using "economic force" to make Canada the 51st state of America. But he said he was not considering using military force - an assurance he has not given while stating his ambitions of taking the Panama Canal and Greenland."
Personal freedoms can't be manufactured. They are a product of the underlying system governing a country. The US has very strong institutions and legal framework in the form of the constitution (again, at this point in time; I expect the current admin to weaken those, either directly or by eroding public trust in them).
Culture is something that's very hard to replicate. The language of the world in English, Hollywood is American, Hip hop is American and I can't really think of any other country in a position to globally influence and create an ethos in the same way US can. You can call it branding. US fully controls the societal narrative around the world.
Financial opportunities is the easiest one to manufacture (see Dubai). You can give incentives left and right and in few years attract investors and high earners. But without #1 and #2, you'll just attract transients, not people who want to become influential citizens.
In the academic world, I am definitely seeing brain-drain from the EU towards China now. 10-20 years ago, it was almost exclusively the US. I expect this shift to rapidly continue now. From a European perspective, China appears to be more stable than the US at the moment.
> The language of the world in English, Hollywood is American, Hip hop is American and I can't really think of any other country in a position to globally influence and create an ethos in the same way US can. You can call it branding. US fully controls the societal narrative around the world.
You are describing the world 20 years ago. A large and respected German newspaper (FAZ) had an article today, titled: "Is the US our enemy now?" [0]. The Financial Times had an article last week titled: "The US is now the enemy of the west" [1]. This would have been completely unthinkable just a few weeks ago. 27% of Canadians already see the US as an enemy state [2].
Would you get your daily entertainment from the enemy? China is already the major trading partner for most of the world. Why shouldn't it became the major entertainment provider?
[0] https://www.faz.net/podcasts/f-a-z-podcast-fuer-deutschland/...
[1] https://www.ft.com/content/b46e2e24-ca71-4269-a7ca-3344e6215...
[2] https://www.ctvnews.ca/windsor/article/27-per-cent-of-canadi...
> Culture is something that's very hard to replicate.
You are highlighting the global influence of the US. By definition, you'll get access to that global shine almost wherever you live. Nobody will immigrate to the US to watch Disney movies or eat McDonalds. On the other hand, you might need to be in Korea to get most of the Korean culture. You'd need to assert that the US local and exclusive culture is more attractive than other countries own culture, and that sounds like a hard debate.
To your point, it's easier to move to the US if you already know the culture a bit, but that still presumes wanting to move there.
Or not. Unsurprisingly US immigration dropped a lot during the first Trump presidency, which coincided with COVID making things worse. In numbers Germany was also getting more influx than the US, but they sure weren't happy with it either.
https://www.oecd.org/en/publications/international-migration...
> China [...] would draw immigrants in.
Assuming that China wishes for more population to come in sounds pretty weird to me. They fought an incredibly unpopular fight on their own citizens for decades to reduce population growth, a foreign influx of people is probably the last thing they want IMHO.
The big pros of the USA are 1) the unified market, where everyone shares the language, most laws and regulations, a lot of culture and political vision. Also 2) the ability to take risks. Starting a company is easy, and failing it is not carreer-terminating. You don't need a piece of paper for absolutely everything.
Also, I've learned first French and later English, by osmosis, as that's the language of whatever came into the country. I noticed recently I am starting to osmosis-learn Chinese now, and I am not the only one. Also, I've seen brain drain to the USA in my student years, but today, people also choose to go to China
This needs to be past-tensed. In fact, currently, the US is the global leader in regressing with regards to these and other commendable qualities.
What metric is this being measured by?
* https://en.wikipedia.org/wiki/Freedom_in_the_World
* https://en.wikipedia.org/wiki/World_Press_Freedom_Index
Thought experiment: swap Americans with a country that is dysfunctional, the result would be that there would be only a marginal improvement in the quality of living for the swapped population. On the other hand the originally dysfunctional country with the new Americans occupants will soon strengthen the institutions and legal framework.
The point I'm trying to make is that institutions and legal framework are far less relevant compared to the personal ethics of the population at large.
Anecdotally I don't consider the US a particularly free country, nor do most people I know. Americans might have all these nice sounding rights on paper but they're all blatantly undermined in practice.
Nothing! And that is sort of the point. If the US can provide freedom, rule of law, education, good salary, etc... and the other countries do the same to keep the best at home that's a win for everyone.
The first reply asserted that my comment was based on a “ridiculous premise” without addressing the principle.
There is a Kurzgezat video a couple of years back [1] that does understand this. They did the same argument that you are making here. Heck, the prisoners dilemma is about how cooperating is the most viable strategy for global benefits. The world isn't really a zero sum game. We get a tons of energy thanks to our star that is usually the thing that most closed systems desperately look for.
Reality is that remittances and the skills that emigrants eventually bring back to their home country far exceeds any negative effects. Policymakers know this which is why they don't deter this from happening. In many countries they actively encourage it, such as is Philippines.
When economists talk about "no free lunch" they are specifically talking about abnormal profits. They are not talking about the fact that voluntary decisions of private actors can lead to positive sum outcomes in utility.
How exactly?
I’m no pro-China advocate (I’m Australian and live with the mixed outcomes of our ties with China, and I have no strong feelings about what Australia or the US should do with respect to China or anyone else).
But (leaving aside arguments about their “true” motives and assuming good faith), China invests in the economic development of many weaker countries and doesn’t try to brain-drain them. The U.S. and western allies invested heavily in the redevelopment of Germany and Japan after WWII, and all countries involved ended up much stronger.
It’s that spirit that I’m talking about.
I’m saying that for a country like the US, the idea that brain-draining the best from the rest of the world will have unmitigated positive outcomes is false.
Societal decline, poverty, resentment etc.: why should functional people bear the burden of it? Brain drain happens for reasons beyond the simple need to earn more money, it also happens because dealing with those dysfunctional people is extremely draining at several levels. On a larger scale when putting smart people together - be it at a country level or even at a company level, one achieves things that are not normally not possible, which is a net benefit for the world at large even if it creates some populations that are dysfunctional.
My average IQ (or below) take is that this “brain drain” narrative where absolutely everything collapses—societal decline, war, resentment, aah basically the Apocalypse—because the smart people leave is just the belief here because people put 50% or more of their professional identity into believing they have a high IQ.
Before you can even invest the immense time and effort needed to build that kind of environment, you need the will of the people, and in most of the world you don't have that.
Many impressive economists believe there are policies that could massively improve the worlds economy, but that implementating these policies is a coordination problem / hard to overcome lobbying / politically intractable, etc...
Radical Markets is great book on exactly this topic.
So much for free lunch?
This is a ridiculous premise.
See https://geohot.github.io/blog/jekyll/update/2024/11/03/high-...
>Oh and in the IRL mean time, it’s very nice to be physically in a high trust society. Still working on opening an office in Hong Kong for those who want, salaries higher in person.
Personally, I hope he'd flesh out more of that Bretton-Woods vs inflation argument (instead of fixating on gold, build an argument on that energy graph in the middle of it all (blackgold? stargold? hydrogold? datagold? Transmuted silicon ingots?))
It would have to be a low number like 10%, with perfect sorting of them into the US, to even start to have the impact you are postulating.
Specifically: there is not much of a home grown consumer economy; they have driven growth too heavily on exports and infrastructure build, leading to a massive overhang in building, a housing bubble that is teetering dangerously close to unwinding, and a major shortage of domestic consumer demand.
The Chinese people should be richer; the fact that they export a lot is a symptom of the failure to build up the household sector so domestic demand partly balances investment.
Again, read Michael Pettis’s “China Financial Markets” blog at the Carnegie Endowment:
Something must be very wrong in your assessment, right?
I like Michael Pettis's analysis, though I'll grant you that the distortions he cites in the Chinese economy have gone on longer than he predicted possible. But the health of the Chinese economy is not just the visible things you cite, but also the distribution of assets and balance sheets in the economy.
Per Pettis (and other sources), the banking system is dealing with a large debt overhang in society. Pettis's proposed policy fix is to assign that debt to the state, to state-owned-enterprises, or to the corporate sector. Because the long-term growth of China's economy depends on being less reliant on exports, and having a more "normal" mix of domestic demand. There are nuances there, but Pettis does a better job than I do in explaining it.
The trouble is that it's not politically expedient to assign the losses due to (unrealized) bad debt to those entities. And the result is a slow, grinding failure in the housing sector. The government does have a tight lid on dissent, but I understand that the Chinese people are in a more precarious position than they should be due to many households having overinvested in nonproductive real estate projects. How that unwinds will be fascinating to watch, and extremely relevant to world economics and geopolitics.
To be clear, I really am hoping for the best for China and its people. The right policy is sometimes well-known but hard to execute, and that's the tragedy. (It's playing out now, in spectacular style, in the US.)
China exports, per capita, around as much as Tunisia where I am from. It does, however, have a way higher gdp per capita. Per capita, China ranks at 104 far from most developed and developing countries. For some Chinese, exports are their bread and butter but for most Chinese, they are only dealing locally.
This does, in some opinions, explain the surge in their exports. As their internal market (which is their primary market) slowed down, they turned to exports. This might suggest that something is wrong with their economy, however: 1. it's not clear if it is as bad as the 2008 crisis in the US. and 2. the 2008 crisis was bad but not the end of the world. The US had a rather good decade afterward.
China has a serious debt problem in its economy. Not government debt like in the US, but shadow banking debt. My fear, based on reading Pettis primarily, is that the Chinese people will end up paying for that debt. Households that have expensive second homes as investment vehicles will suffer those losses (since there isn't sufficient population to fill those homes), unless those losses are socialized or redistributed.
This pre-dates the pandemic by 20 years. There are articles as far back as 2000 that detail the impending collapse Chinese civilisation. To the point where it's now become a meme (the economist are notoriously known for their bad predictions on this subject)
On the one hand you have a bunch of virtual numbers, on the other one you have a large number of top factories, scientists and engineers (they days of copying are long past). You would go with the virtual numbers if you could choose?
Even if finance completely collapses and all money vanishes, they will still have all those real things. Restarting finance from there is far, far easier than the other way around. Too much magical thinking around "money".
PS: I don't like the article though. Lots of... "statements", let's put it that way.
Everyone else?
An interesting thing is that they likely cannot, outside of some exceptional circumstances--which might include the current clownish situation. Lots of countries would like to be among leading economies. But they don't have enough capital, cannot get it on really favorable terms, don't have the know-how, cannot have effective protectionism to start up (blocked by international rules and retaliations).
You can attract foreign capital and corporations, but it's much harder to tie their people and wealth to you permanently. There is a term 'middle income trap' for example. The impressive thing about PRC is how they've had enough power leverage and ability to play into turn-of-Millennium Western establishment's mentality to really push ahead. But there are many countries that couldn't.
Is industrial capacity important? Sure. Is it the top of the value chain? No.
Then a few weeks in he went "Anyone want a job? Fix this, make your code MIT and we'll see!"
...despite the fact that he just wanted to steal code and had 0 authority to give anyone a job.
According to you. The solutions to your complaints come pretty easily from solving AfD's, at least in my view.
"Brain drain" is what we had been doing for the past 80 years or so. It worked great. We're specifically driving people away now.
"Gold standard" is an idea every sane economist rejected decades ago.
Geopolitics from a less civilized time making their comeback, this time without mincing any words.
A simple manifestation of this is how we start up coal fire. The idea is similar, bring the hot blocks together so they produce a lot more heat which in turn heats up the entire coal load. Move away the red hot blocks to isolation and the fire would die away in no time.
Silicon Valley is actually pretty good at that, compared to e.g. academia in the US.
I don't think any sane economists have ever "rejected" the gold standard, it is known to work. Pretty much any empire ever founded was built on a gold standard. The US jumped away from it because they were going to go bankrupt and picked a system that put the pain off until a later date. Now, 50 years later, they appear to have lost the title of the world's major superpower.
It is relatively unusual for effective economic ideas to gain any traction in politics. It seems to be partially random whether a specific policy gets a tick or a cross when an economist is asked about it.
Disabling the feedback mechanisms isn't a win. When it had the feedback from continuous minor panics the US built an economy capable of taking on the entire word and winning by a massive margin in the 1940s. And I bet there were alternative mechanisms to deal with the "deflationary debt spiral".
Now the US keeps telling itself it is OK while it is increasingly marginalised. There isn't much evidence is it can win a major war or compete economically against more serious Asian efforts. The election of Trump suggests that US citizens don't even feel particularly fat and comfortable in their own economy. At least all the economic indicators say the US is OK though! The money printing is sure to lead to prosperity.
Do people ever? I know plenty of people who cry poverty, and being “crushed by taxes and inflation”, and about “being a “wage slave” from a boat.
And I find it a bit of an eye roll that the minute the gold standard comes up all the "inequality is out of control now!" people fade into the background and the "back then, everyone was poor except the wealthy" arguments come to the fore. There is an inconsistency in the hive mind. This is a system where we print money and give it to the asset owners. It is visibly stupid.
Can't they just not print so much?
But the idea that you should manage your economy according to how much of some metal you can dig out of the ground is ridiculous.
Good lord, why are these malformed talking points being engaged with here. I see these things being shared amongst my hoaxer and antivax groups.
And how is that causally related to the abandonment of the gold standard? Is the CNY somehow backed by gold, or the RUR?
The conceptual flaw with gold is that it is a desperate attempt to grasp at an absolute, because absolutes feel warm and fuzzy. Nothing is absolute in an economy. The relative value of everything changes constantly and trying to create an artificial peg to gold doesn't achieve anything useful.
In historical terms, by any measure you choose (monthly salary, purchasing power, etc.) gold is worth roughly 1/10th what it used to be worth a millennia ago and prior.
Adjusted for inflation, over the last 100 years or so, the value of gold has remained roughly constant in terms of salary and purchasing power.
Being able to issue fiat money is a feature of high trust governments and societies, not a bug, and people yearning back to needing a gold standard scare me, because that inevitably implies dismantling that trust to get there.
There is nothing to dismantle because it's already gone.
The society that elected Donald Trump on his current program is an exceedingly low trust society. The whole point backed by DOGE is that you can't trust government and must reduce it to the most basic, barebones function. A lot of the current silicon valley elite fell prey to the nonsense preached by people like Curtis Yarvin who preach forms of anarcho-capitalism and despise democracy.
The United States of America are no more.
Anyone else who isn’t prepped will take far too long to get their heads around all the major errors, and by discussing it, propagate its ideas further.
Since people recall even incorrect things, repetition of it ends up creating the idea that it is true - the truth effect.
The "issue" with gold standard is that you cannot compete with countries that can print money at will, which gives them the advantage NOW, even though they'll suffer massive inflation later down the line. How will you ever win a war when your enemy has infinite money? I guess people forgot what happened to Germany's economy after WWI. Your only hope is to be the one that wins the war, and gets all the booty and reparations.
Fiat economics is basically an infinite money glitch, indirectly paid by your very own tax-payers 30 years down the line. Of course no government wants to get rid of it. All I hear is the same Keynesian party line that keeps being parroted by modern economists and taxpayers alike.
* for WW1, $12.5 BILLION
* for WW2, $413 million
Even Allies figured out that the ridiculous demands of WW1, with the double whammy of 1929, were a direct cause of hyperinflation in Germany trying to pay for it (which already had borrowed incredible amounts of money as they were the first country to abandon the gold standard to finance the Great War) and the second time around they allowed the country to have a chance to actually rebuild itself.
The US and *every other country jumped from it because it didn't work well and caused frequent instability*. The countries who dumped it quickest recovered from the great depression the fastest
...because they didn't have the social and technological methods, as well as centralization of force, needed to make a fiat currency work.
The gold standard was never a great idea. It was just more functional and efficient than what came before it because the gold supply was usually inherently limited by how fast the mines could produce the stuff.
Ahistorical bullshit.
Gold coinage was never really a big thing, because gold was too rare to make gold coins for everyday usage feasible. Pretty much all historical empires used primarily silver coins. The UK pound used to be a literal pound of silver.
Really? For at least 20 years, if not quite a bit longer, the US has made it obnoxiously difficult for foreign students studying US universities to travel or to remain in the US after graduation.
Oh boy... Bitcoin in many ways is idealized gold (unlike the real one, its supply is actually limited), yet there is no shortage of scams around it.
On the contrary, a gold standard would remove one of the most essential tools modern governments have: That of monetary policy. That sounds like a good idea if and only if there's an extreme shortage of trust in the government and institutions, and even then it's only the lesser of two evils (the other being inflation) and comes at a high price.
But it's our scam. The Fed isn't only diluting Americans' money; USD is a world currency, and the US tries to keep it that way by whatever means. So we kinda benefit from that.
Why folks are so eager to return to that era is beyond me.
[0]https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...
The macro world is extremely nuanced. I’m someone who likes experiments. If we could give every American instant access to convert savings to gold (or bitcoin), directly in their savings accounts, it would certainly be an interesting experiment.
If you have significant assets, inflation isn’t a big deal. If you are like most peasants, instant access to an asset easily protected from inflation would remove the tendency to fuck the peasants in the ass the moment the macro world gets shaky
It's enough to say that fiat currency, fiscal and monetary policy have papered over the worst of the excesses and explosions, you don't need to pretend like we live in unique times. Every time is unique, but history rhymes.
We don't even have the same kinds of boom and bust cycles. There is no dustbowl, and we've recovered from incredible calamites well compared to the disasters in the past. Spain hasn't ended up destroying its entire wealth by finding too much wealth for example.
I'm making the mistake of getting into detail with a point that is so out of bounds, its in "not even wrong" territory.
The only other alternative that doesn't create incredibly bleak incentives for anyone that doesn't inherit wealth would be wealth and estate taxes, but good luck getting either passed or reformed.
Real estate itself gets traded via proxy on the markets.
The ZIRP was there for a reason.
Central planning suffers from several issues, primarily due to insufficient ability to model the economy in a way that can reliably make valid predictions, but also due to being a single point of failure due to either incompetence or capture.
Speculation bubbles seem to be the main cause of economic collapses prior to centralized currency. Could we perhaps address that in a more targeted way, rather than jumping straight to handing government control of money?
Side note: Government controlling money not being necessary and furthermore not even being the American historical norm may be surprising to many readers. I would encourage you to look that up, it’s quite interesting.
I’m referring to private banks issuing receipts for metal deposits, which can be freely sold or traded. This is the origin of currency, no? The exchange rate between everything and everything else naturally floats in such a system, so there is no central planning.
> a working knowledge of economic history is crucial to be a part of this discussion
Here, let me get you a towel for that egg on your face, rude sir.
The only difference here being that you’ve described it before things like watering gold down, fraud, volatility, bank failures and the rest resulted in it coming under a single aegis.
Issuing currency against gold is what the gold standard is all about. What do you think it was?
And eggs are expensive, you should save them for later.
This seems pretty reductionist in a way that ends up being quite lossy.
With the gold standard, I believe the conversion rate between the dollar and gold was set by the government, right?
With private bank currency, it is literally a voucher for a specific weight of gold. There is no exchange rate like there was with the gold standard.
They were all receipts against the payment of a physical good.
Thats what the gold standard is. The difference is simply centralization.
Are you aware of what happened to The Spanish monarchy regarding silver and inflation?
The discovery of more physical silver results in more inflation.
Note that Bitcoin might have a monetary cap built in, but source code is not actually capable of preventing people from denominating IOUs in it.
Transfer speed - X would need to be fast.
Difficulty to counterfeit - X would need to be fraud proof.
How easy it is to custody - X would need to be easy to store with minimal cost.
Inflation - X would need a predictable inflation rate and immune to politics.
If you judge dollars, gold, and bitcoin by such a measure, I would argue Bitcoin holds up well
In almost all other ways, crypto is not great.
Umm, yes. Doesn’t that make this a perfect moment to do such? I can’t recall any other point during my life my trust in the US government was this low.
I say this as a person who is very bearish about America.
> The sun never set on the British empire. Now they put you in jail for memes.
I’m pretty sure they put people in jail for the equivalent of memes during the imperial days, no? The king couldn’t put you away for speaking against him?
Some people really need to go out, sit at random bars, and talk to people. They would get a better pulse check on society than 24/7 Twitter shitposting.
(See also: his attempt at self-driving, and his "internship" at x/twitter under Elon)
The man does and tries things. Man in the arena.
Because it was an unserious hack, like him.
https://venturebeat.com/ai/comma-ai-cancels-self-driving-car...
There are no principles in British politics, there is only pragmatism. Every policy must solve a real-world problem. The current Labour government will remove the hereditary peers from the House of Lords, because they only show up to vote in their own personal interest, and that reform has widespread support and will pass. Harriet Harman has put forward a bill that will also remove the Lords Spiritual, and that will pass, because no one has a problem with what the bishops say and do in Parliament.
Parliament gained control over taxation and the treasury in the seventeenth century - this was the major cause of the Second English Civil War. Later in that century, freedom of the press was established, but there were still consequences for libel and defamation. With the accession of King George I, Parliament gained control over the king, by appointing one who couldn't speak English. Everything that is not illegal is permitted, and the only speech that is restricted is that that is widely considered objectionable. Getting along with one's neighbours is an integral part of living in a society, regardless of one's beliefs on 'personal autonomy' and 'self-reliance'.
No one has been gaoled for posting memes, but people have been gaoled for threatening and abusing behaviour, and for inciting violence during rioting across the country. It just so happens that this has been done by posting memes, but if it had been done by using a megaphone to whip up a protest into a riot, the consequences would have been the same.
America's obsession with free speech is a problem, because it's used to justify retrograde opinions. The two political parties in the US are still debating broadly the same economic and political philosophies that held sway in Britain at the time of the War of Independence. Both political parties treat it as a religion, holding to these dusty old ideas rather than solving real-world problems experienced by real-world people. But every time someone proposes this, someone else yells 'Tyranny!', and the ghost of King Charles I laughs.
With one foot planted firmly in the past, and the other striding determinedly forward, the United States of America is truly a nation going in circles.
This is an interesting thought. I don’t like mining too much, as it has a lot of negative externalities. But the comparison of the two industries and how money is created is something to think about
So we can set some conversion rate to get things started with the correct kind of corresponding amounts. Great. But - over time, both the amount of commodity available and held, and the amount of money the economy needs will shift. Can we expect the conversion rate to stay the same then? Again, the answer is no.
That's why pegs to commodities (i.e. gold backed currency) or other currencies always fail eventually - they can start off fine but will always drift away and you either have increasingly large inflation or deflation when things don't match up (which ironically is exactly what the proponents of commodity-backing claim it prevents, but the history is pretty clear).
It doesn't matter then about whether the mining industry is 'real' and if the financial industry is 'artificial', as interesting as the argument is. Practically gold-backing always tends to fail, so it's a moot point.
There's not a single tower or factory or mine or business I would imagine that has been financed via dome form of debt coming from elsewhere, because if we're waiting for raw cash to build things we'd be missing out of most business opportunities and the entire economy would slow.
Maybe games are truly software that isn't tied to anything physical. I can't think of much else, though. Can you?
I help run a youth group, which uses lots of software to manage, communicate, learn and empower the next generation.
Nothing physical, but there is no question in my mind that all this software is intrinsically valuable.
You can't eat software. You can't eat gold either, but if society collapsed I bet you'd still be able to trade a gold ingot for a carrot, because it maintains a modicum of value. I doubt you'd have many takers for a JPEG codec you just wrote, though, and that's far more generally useful software than business software which is what most software is.
He has strong opinions on economics, but doesn't understand it. His points about economics are partially true but either subtly incorrect or interpreted incorrectly.
When the public gives (or random bloggers give) give a damn about economics, it's a sign the economy isn't working. Of course they don't have useful solutions - they're not economists - but that feels a little beside the point: you don't have to be a plumber to recognize that your house is full of sewage. And since no one can be an expert in everything, life demands the ability to identify and call attention to problems you cannot personally solve.
An article like this is the equivalent of your roommate going "oh, damn, the living room is full of sewage, we better do something about that!" Of course you'll vigorously agree at first, because you're talking about the problem (which is clear to everyone). But then your roommate suggests fixing it by dropping dynamite down the drain - i.e., talking about the solution - and you're a lot more likely to disagree.
No one who understands modern economics wants to bring back the gold standard.
Seems like geohot should stick to jail breaking iPhones and mocking programmers and CTF challenges… and maybe read a few more books and attend some lectures if he wants to continue deepening his understanding of economics and political science.
It immediately frames questions as "us vs them", if there's a talking point you hear come up frequently and it's easily dissolved: learn how to dissolve it.
The fewer people walking around with incorrect ideas about things the better we all are.
If people rebuff you, maybe they had a point the whole time? If they change the subject or resort to ad hominems, then it's clear to everyone listening that the talking point was bogus. You might not change the persons mind, but it can help others.
One of the heuristics is that if someone says something very left-field, does not qualify why it falls out of consensus, and it appears the same as arguments made by politically motivated actors, we trust it a lot less.
Especially when that person has no expertise in the area and is mostly famous for a completely different thing.
Ignorance just leads to further polarisation, and honestly, we've got to be close to a breaking point soon.
I might have time for reading an interesting take on economics. I can learn from that, even if I don't agree with the overall position. (That was one of the beauties of HN 10 years ago - you learned from people you disagreed with. You could even wind up upvoting posts you disagreed with, because they had an interesting point that made you think.)
If something is a collection of far-right or far-left talking points, I don't have time for it. Either way, it's too little reality and too much zealotry, propaganda, and shilling. I don't have time or patience to wade through it and dissect all the problems and issues and just general falseness of it all.
Now, that framing can be used as a general pejorative ("I don't like that"), or even as an attack from the other side (far-left labels normalcy as far-right, far right definitely labels normalcy as far-left). But, honestly given, it's useful to know something is far-right or far-left, just to avoid wasting my time and sanity.
You might hate the idea, but it's actually an excellent characterisation of how ideas spread in a polarised environment.
If you ever try engaging with both extremes over a long period of time eventually you'll notice that both of them repeat the same narrow set of ideas and sound bites over and over again. It's like these people train themselves in having arguments by repeating the arguments they read about. If you spend enough time with these people you can play a game with yourself, which is to try and map out the set of existing arguments and try and predict if you say X what will the person respond.
Except, of course, Miseans.
[0] https://www.splcenter.org/resources/reports/neo-confederates...
Mises did it to his own ideology. He was often employed by the Hapsburgs. Otto von Hapsburg was a sponsor of the Mises institute. His writings and ideas remain fringe because it comes with the baggage of racial politics and the monarchy stuff. Modern libertarian anarchists that still follow the Austrian school may reject some of those parts but the radical organizations that have co-opted it certainly haven't... and guess who's in power right now in the US?
Besides, the Praxeological arguments and system haven't held up. The field moved on to empiricism. Mises isn't often remembered for those arguments. It's generally the other stuff people seem to dig up.
It's still a fringe theory and will probably remain that way.
Update: gold standard/gold-hoarding is strongly associated with radical right-wing extremists, hence red-flag. OP says, "diversity is our strength," which is encouraging... but gold standard stuff, even if simplistic ("gold real, debt imaginary"), is still a red-flag.
A theory that rejects empiricism and is based on private ownership, an idealized vision of markets, and limited state intervention is refuted by so many wars.
Success in one domain should not imply competence in another.
https://reason.com/2024/10/17/british-man-convicted-of-crimi...
(An example of something that might be perceived by some as a judicial over-reaction based on perceived offensiveness to others.)
Seems similar to the German law that makes it illegal to wear politcal symbols or talk politics outside of polling places. There is an undefined "buffer zone" outside of the voting location where, if you display political symbols, you will be arrested. This is a limitation of freedom of expression, but IMHO it makes total sense.
The US has much stronger free speech protections than Europe. (At least for now.)
"On the day, he was asked to leave the area by a community officer who spoke to him for an hour and 40 minutes - but he refused."
- The Crown Prosecution Service
https://www.cps.gov.uk/north-west/news/man-jailed-offensive-...
As a liberal, your attitude is exactly what got US democrats steamrolled in the latest election.
- Benjamin Franklin
This is why we fought a war to be separate from your "wretched" country. You're justifying jail time for racist speech!
For inciting further civil unrest during civil unrest.
Kinda weird to just cherry pick some things from my post.
Ironic coming from a future slave owner. He did become an abolitionist, after travelling to France and England and being exposed to some, for Americans, pretty radical ideas.
The issue is the harassment. Most of these cases are baseless and get dropped once presented to the public prosecutor. But it puts unwarranted stress on people who just opened their mouth, regardless if I disagree with what they had said.
If these cases were moved forward, they could end up in front of the European Court of Human Rights, where Germany and Austria are among the worst offenders[1] when it comes to the article 10 of the European Convention on Human Rights[2], which grantees free speech in the EU.
Usually these individual cases are used by neo-conservatives to criticize Europe and describe it as (their words) "a socialist hellhole."
While this argument (= "there is no free speech in Europe") might be based on some truth, and while I agree that the free speech situation in most of Europe could be improved, I think it is grossly exaggerated.
[1] https://hudoc.echr.coe.int/#{%22languageisocode%22:[%22ENG%2...
[2] https://en.wikipedia.org/wiki/European_Convention_on_Human_R...
https://www.lawgazette.co.uk/law/judge-right-to-award-lying-...
"Meechan was sentenced to a fine of £800, with no prison sentence." i mean his video probably made more money than that...
https://www.independent.co.uk/news/uk/crime/count-dankula-na...
https://www.bbc.com/news/uk-scotland-glasgow-west-43478925
https://www.cheshire.police.uk/news/cheshire/news/articles/2...
These things seem abhorrent to Americans who have nearly unlimited free speech protection.
https://web.archive.org/web/20070315091415/http://news.com.c...
"Whoever...utilizes any device or software that can be used to originate telecommunications or other types of communications that are transmitted, in whole or in part, by the Internet... without disclosing his identity and with intent to annoy, abuse, threaten, or harass any person...who receives the communications...shall be fined under title 18 or imprisoned not more than two years, or both."
Drawn up in 2005, passed by Bush in 2006.
- Nazi pug man got a fine of £800; no jail.
- Cheshire people; in the context of rioting and the consequences of rioting.
For the record I think (personal view only) that the Nazi pug man should never have been prosecuted, I personally find it grossly offensive but I think that the harm of stopping people saying these things is greater than the harm of the idiot saying them.
The Cheshire thing I find much more serious, it seemed to me that this was about people calling for other people to get hurt and killed. Is it really the case that it's ok to threaten people or to call for violence against a community in the USA?
Also, what about folks like Snowdon and Assange? I mean if freedom of speech is absolute in the USA why can't they just tell the CCP about USA nuclear control?
In cases like that, courts in the US make the determination as to whether the speech is protected based on whether it may cause “imminent lawless action”—hard to say in the Cheshire case without seeing what they were actually posting, but encouraging people to start violent riots would not be protected in the US either. There are plenty of cases of people getting arrested in the US for Facebook posts inciting violence.
US woman arrested for allegedly threatening health firm: ‘Delay, deny, depose’
is this equivalent of EU meme jailing?
Why do people constantly and intentionally misconstrue arguments? It's so obnoxious and intellectually dishonest. I didn't say it was absolute. It's like people can't even have a conversation anymore without dealing with this.
>I think that the harm of stopping people saying these things is greater than the harm of the idiot saying them.
Oh, so you're a Nazi sympathizer? See how annoying that is when people intentionally misconstrue arguments?
I know it's a habit these days with the news and I don't mean to jump on your shit, it's quite common; but it's bleeding into person to person conversation and you just can't have any meaningful conversation this way.
> Also, what about folks like Snowdon and Assange? I mean if freedom of speech is absolute in the USA why can't they just tell the CCP about USA nuclear control?
I said it was near unlimited protection and he claimed I said it was absolute so he could make a counter argument. He intentionally misconstrued my argument to make a counter argument. What am I supposed to do, defend and argument I didn't make? It kills any conversation or sharing of ideas. It's annoying.
The news does this all the time.
https://www.justice.gov/usao-edny/pr/social-media-influencer...
This “arrested for a meme” meme is so dumb. What’s important is the content of the meme, not the fact that it’s a meme.
About those second 2 guys, what's that phrase that americans like so much? Fuck around and find out. I think the US, even in their nearly unlimited free speech, has similar laws in regards to inciting violence. Defamation, slander, fighting words, are also not protected by free speech. So really, the only difference between the US and UK is that the UK does not allow hate speech.
Germany has some more regulations, but the real significant difference seems to be about not being allowed to display nazi symbols or denying the holocaust.
From what I hear from acquaintances and social media, the UK is even worse.
No, she was not fined for posting crime statistics [0].
> Kaiser published a tile on her social media accounts with the text "Afghanistan refugees; Hamburg SPD mayor for 'unbureaucratic' admission; Welcome culture for gang rapes?"
[0] https://en.wikipedia.org/wiki/Marie-Th%C3%A9r%C3%A8se_Kaiser...
She was found guilty of reinforcing negative stereotypes and by doing so she "violated the human dignity of a distinct group of Afghan refugees".
Where is the line between having anti-immigration politics and harming refugees? If free speech means anything it should at least protect political opinions, and that includes politics many of us find distasteful or racist.
Dragging somebody through the courts and fining them heavily for a simple social media post is pretty extreme. If her post was deserving of a €6000 fine what kind of commentary will get you fined €1000? Which opinions will get you a visit from the cops and a stern talking to? Who decides where the line is between acceptable political opinion and unacceptable hate speech? How are regular people supposed to tell the difference? Or are regular people just expected not talk about controversial subjects at all if they can't afford to pay a €6000 fine?
Simple cute social media post where she equates afghan refugees to gang rapists.
> Which opinions will get you a visit from the cops and a stern talking to?
Racist ones that leads to violence. Argument started from "going to jail in europe for posting memes" to "posting statistics" to blatant racist xenophobic stereotyping punished via financial penalty. Free speech crusade came all the way to this goal post.
It's no coincidence that the laws used to punish people for speech are exceptionally vague. There is no clearly defined benchmark of harm. In fact harm does not need to be demonstrated at all. Simply asserting without evidence that a blog "leads to violence" is sufficient for those who don't believe in free speech.
- Wikipedia
You're ok with that?!
Context and content is important. There are limits to allowable speech (yes, even in the USA) and if you transgress that you can be breaking the law.
(Trump also just tweeted that activists will be imprisoned)
Yours is the only reply (yet) that talks about Palestine, that I find much more interesting in this context. It should be noted that pro palestinian protesters have been arrested in the US too, so I don't know if it's really a good point when comparing "freedom of speech" between the US and Germany.
Unless what you meant was "freedom of speech" is an illusions and Americans are deluded into thinking they have more of it.
https://www.yahoo.com/news/police-berlin-raid-flats-pro-1333...
https://www.dw.com/en/german-police-raid-homes-of-pro-palest...
Seems like this was not just about posting memes.
Notice also that the poster was only accused, not found liable or convicted. That means almost nothing - you can accuse anyone of anything.
Notice also the guilt by association, where the possibility of the poster committing violence (which isn't impossible) is used to try to invalidate their right to speech.
https://www.youtube.com/watch?v=-bMzFDpfDwc
Still, the author of the original article has some pretty polarising and crude views, and I think it's valuable to keep that context in mind. The key is not to be lazy and just dismiss everything that doesn't come from the smoothest PR media personality.
For me, it felt like reading a frustrated author arguing against over-reliance on the service sector as an economy, given the dependencies it creates. There is certainly nationalism, realism/geopolitical views and a somewhat raw criticism of the current monetary system in the mix. The author sprinkles a lot of cultural references all over it and concludes with a tongue-in-cheek hint at an accelerationist strategy.
.. based on that random blogpost I probably still wouldn't buy any gold just yet.
People have been jailed for racist rioting and planning racist riots, but not many people in the UK see that as a bad thing.
The climate change prisoners are getting a lot more support.
The US imprisons countless black people every year for the flimsiest reasons with questionable due process, in for-profit prisons, some of which have been caught operating with kickbacks for judges.
Also, Aaron Swartz.
And multiple arrests of journalists.
https://pressfreedomtracker.us/blog/journalists-arrested-in-...
The idea that the US is some kind of utopian beacon of free speech while the rest of the world is authoritarian and repressive is utter nonsense.
This is a factually false. The recent UK riots were largely about protesting violence (stabbings, killings, rape (which increased by a factor of 4.3 over 13 years, closely correlated to migration) and unchecked immigration (which is unpopular and opposed by a large fraction of the population, from someone who lived there).
These are, factually, not issues of racism - they are humans rights (in the case of the violence) and extremely reasonable political positions (in the case of cutting down immigration), and it's intentionally and maliciously deceptive to claim that they're "racism".
Yes, it's likely that some number of people at the riots were there because they were racist. No, the majority of the protestors were not there for that reason, and claiming that that small fraction makes the riots "racist" (not that that's even a coherent statement to make in the first place) is a lie.
Additionally, it's also a lie to claim that only people participating in or planning the riots were jailed - "A judge has warned that anybody present at a riot will be remanded in custody, even if they were only a “curious observer”"[1], which was actually implemented, with documented video evidence of people getting arrested for merely filming the protests and police, with no participation[2].
It's deeply evil to defend the UK government's behavior here.
> The idea that the US
This is the tu quoque fallacy, in addition to being irrelevant - the topic is the UK and EU on free speech, not the UK.
This whole comment is just a tangle of lies, fallacies, and emotional manipulation.
[1] https://www.telegraph.co.uk/news/2024/08/09/judge-refuses-ba...
Leading with a Curtis Yarvin citation as supporting material
Lampshading is when someone acknowledges a flaw or controversial aspect upfront, often humorously or ironically, to deflect criticism or give the appearance of humility or openness.
Saying something like "A home for poorly researched ideas" while actually propagating extremist, controversial, or misleading content is a tactic intended to: disarm critics, avoid accountability, and create plausible deniability.
some of his "watch me program" vids are also pretty popular. I learned a lot from watching his workflow.
but I'd never trust him when talking about economics or politics, or even where to go for dinner.
No individual, other than setting up lofty but ambiguous goals like reducing hunger/malnutrition, understand how or why certain goals should or not be set for certain sectors and why the processes are what they are to accomplish them.
> Protectionist America is a boring place and not somewhere I want to be. It kicks the can further down the road of poverty, basically embraces socialism, is stagnant, is stale, is a museum…
But the killer is the gold standard. The author seems to be confusing this with fractional reserve banking. Interestingly, they're anti-crypto, which is kinda odd because most gold bugs became crypto bros.
China's foreign policy is very different. China invests in creating infrastructure in countries to help make them future customers for Chinese products. US foreign policy is simply to loot the Global South and to use foreign aid as a form of economic imperialism.
I interpreted it as - the US "exports" debt in exchange for the import of goods and services. It's a deficit country, it consumes more than it produces.
China (not only China) is a surplus country, they produce more than they consume. They store that surplus into US financial assets but also increasingly into other places, like developing countries. I've read that their investments into developing countries are often unprofitable. Previously they've been using the excess production to invest into real estate and infrastructure but those were often money-losing investments too (empty houses, under-utilized high speed rail with high maintenance costs).
> Back the dollar by gold (not socially constructed crypto)
Gold is worth so much in dollars because everyone thinks everyone else also wants it. Sure you can process it for some industrial use, but most of the worth is because "Someone else will also find this worthy").
I have a 100 trillion dollar note (Zimbabwean) in my wallet, is it worth anything? Just the novelty value. Is the $100 (US) note worth anything? Well I can buy $100 worth of groceries, which at the moment is probably 20 cartons of eggs, but the way Musk is doge-ing the nation, it could be only 4 cartons in the near future...
What many gold bugs and crypto bros don't seem to understand is that:
1. The US dollar was never 100% backed by silver (originally) or gold;
2. What really backs the US dollar is the US military. This was true with the gold standard and it's true now;
3. The ability to manufacture more dollars and thus control the money supply is a feature not a bug;
4. Fractional reserve banking is so stunningly successful, it's impossible to ignore; and
5. A lot of the problems detractors point to are really symptomatic of unfettered neoliberalism, not abandoning the gold standard.
That's my whole argument for gold. The finite supply isn't socially constructed, and getting more requires building real infrastructure.
2. What do you mean by "real" infrastructure? Crypto-mining rigs are no less real than actual mines.
My argument would be that gold's value is as much a social construct as that of crypto; value is just a function of supply and demand.
I'm guessing you might post that there is a third input: utility. "Currency" is one use for gold, but can certainly serve many purposes, whereas crypto coins are strictly used as currency. That fact is presumably taken into account by a coin's price; nonetheless, it still has whatever value the market says it has at any time.
Meanwhile a TSA scanner's beep get treated as "this person is bringing a problem.".
Really? Because the vast majority of "Belt and Road" destinations connect China to raw resources. I'm sure that's just a coincidence. China is making it pretty damn clear that they do not intend to pay for those resources, or at least not in money, especially now that the "Belt and Road" initiative has turned into yet another Chinese money pit so deep it makes Trump look like a great businessman, and on top of that it made China so unpopular it makes it look like Europe loves Trump. And everyone reports another problem: CCP officials, even low level ones, make Trump look like a humble man.
Locals seem to hate the Chinese, and Chinese investments, everywhere the Belt and Road goes, whether it's Pakistani in Balochistan, Greeks in Piraeus, in Madagascar the people pretty much kicked out the government, largely over Chinese presence, China is now negotiating in Australia by openly threatening with warships in Sydney harbor firing live ammunition in the direction of the city and even their military base in Djibouti is not popular, despite being right next to a US, a French and a Japanese military base that ARE popular (despite middle eastern tensions. You know, you'd think the US base would be in the locals' bad graces given the last 2 years. It's not).
If this is supposed to build to a long lasting mutually beneficial trading relationship between China and these countries, they're not off to a great start. Not on the economic aspects, not on the political aspects, not on ...
But frankly, the answer to this weird state of affairs is brutally simple: China has no intention to turn this into a long lasting mutually beneficial trading relationship, and neither do those countries or those peoples.
The IMF (and World Bank) is economic imperialism doing things like preventing African countries from growing crops to feed themselves. Instead they need to produce export crops and then they can buy excess food created by Europe and the US. This has resulted in famines and utterly destroyed, for example, the economy of places like Somalia [1].
Yes, China is seeking preferential access to natural resources and considering the strategic importance of the borrower. But the general consensus seems to be China's terms are better than the West's.
[1]: https://twn.my/title2/resurgence/2011/251-252/cover06.htm
1) Chossudovsky criticizes subsidized grain imports for undermining local markets, but in contexts of hyper-inflation or economic collapse (e.g., Somalia’s public sector wages dropping to $3/month), external food aid was the only means for households to survive. Criticism that it destroyed the market is dishonest. Markets ALSO don't survive if the customers die off. Obviously.
2) While imposed austerity measures that worsened inequality and local economies, the alternative—total state insolvency—would have been far worse. A teacher wage of $3 is still far superior to a collapsed state offering a wage of $0, and probably forcing locals to wage war on each other. PLUS the state needs to get back to surviving on it's own, without external help, or it would just delay total collapse instead of fixing it.
I was curious about this article. So well written, but it's a totally unfair attack piece, it's lunacy ... and here is the wikipedia page on the author:
https://en.wikipedia.org/wiki/Michel_Chossudovsky
"Michel Chossudovsky (born 1946) is a Canadian economist and author. He is professor emeritus of economics at the University of Ottawa[1][2] and the president and director of the Centre for Research on Globalization (CRG), which runs the website globalresearch.ca, founded in 2001, which publishes falsehoods and conspiracy theories.[3][4][5] Chossudovsky has promoted conspiracy theories about 9/11."
"In 2017, the Centre for Research on Globalization was accused by information warfare specialists at NATO’s Strategic Communications Centre of Excellence (STRATCOM) of playing a key role in the spread of pro-Russian propaganda.[12] A report by the U.S. State Department in August 2020 accused the website of being a proxy for a Russian disinformation campaign."
It looks to me like the countries in the pie charts are ones with protectionism (e.g., China), while you are seem to be implicitly advocating for the opposite...
1) Brain drain the world. Work visas for every person who can produce more than they consume. I’m talking doubling the US population, bringing in all the factory workers, farmers, miners, engineers, literally anyone who produces value. Can we raise the average IQ of America to be higher than China?
2) Back the dollar by gold (not socially constructed crypto), and bring major crackdowns to finance to tie it to real world value. Trading is not a job. Passive income is not a thing. Instead, go produce something real and exchange it for gold.”
The first step has been in existence for decades in the US. Also, it is not sustainable potentially destabilizes other countries. The second step may have some merit, but I seriously doubt it will turn things around by itself.
China has largely built domination over the US and manufacturing by a combination of the hollowing out of US manufacturing and other capabilities due to short term profit goals of US companies and unfair trading practices, primarily due to imbalanced environmental policies, labor policy, and currency manipulation by China.
Many free traders lambast protectionist policies, but protectionist policies are largely what made China what it is today.
The United States is shifting toward a zero-trust model. All deals and agreements must be based on tangible incentives and benefits. It will be an interesting era.
Very good point and one that not a lot of people understand.
There is also a tipping point at which governments will look elsewhere for a reserve and trading currency. Yes, today the USD is king, but that's in part because China's efforts to make the RMB a reserve and trade currency are half-hearted as they conflict with its efforts to retain an iron control over its currency exchange rate.
If the USD loses its preeminant status as _the_ global currency, the US is in very deep trouble.
This plays into the Middle East in ways that many people don't realize. The Gulf countries only sell their oil for USD (in exchange for protection from the US). The US has a very big stake in that continuing to be the case. Now granted, they are less important than they used to be because of fracking, but still a major player. (Some people say the invasion of Iraq was because Sadaam threatened to start selling oil for EUR instead of USD. I don't know if that's true or not, but it's definitely a plausible reason.)
Then the government did an exit scam, passing a law that the gold trade in statements on the certificates are void. You can still spend one of these bills today though. For $20.
Why should anyone expect any government to indefinitely honor gold certificates?
The only currency that can avoid being devalued by a single government, is a currency no single government can control.
Why? You could also invest in better schools and education in the US. A smarter population would also be good for democracy, because they would vote smarter. But I guess it is too late now. Dictators don‘t need a smart population, they need a dump one, so they can do whatever they want.
Based??
> Back the dollar by gold
Oh haha lol
No bud, gold isn't money.
It would require US to start building a metric shitton of housing though, and fast. Otherwise you just get what Canada got, or worse.
Gold standard? That's batshit insane. Like Karl Marx tier of bad fucking ideas on how to change the way economics work.
BTW, merit VISAs already exist, and if you are rich there are investment VISAs. H1B is a cluster fuck, but it can be trivially fixed by allowing employees to switch employers.
I don’t have time for these random words that blogs invent which makes sense if you followed the author for the past thirty entries but not if you just found this one random article.
Demoralize who? Because I can’t imagine the average citizen wanting to get on board with your nakedly imperialist plan.
The thing about cheering for “your country” doing well in terms of geopolitics is that you are either a completely misguided tool since the geopolitical interests have nothing to do with the interests of the average citizen. Or you are so wealthy and powerful that they do. In which case the average citizen has no common interests with you.
Everything with respect to real estate is a scheme to get government subsidy. If you go to a modern Courtyard or Hampton Inn, you’re sleeping in a tax shelter that rents beds
You can absolutely forget competing with China under these circumstances, their system is starting to look better than the US will after another 1416 days of this.
He is not far off from the truth that a lot of the American economy is phony with wrong incentives. I submitted an article recently that makes the same argument, about e.g. the 2008 crisis "we used to sell mortgages to so we can build houses, not build houses so we can sell mortgages".
But his solutions fall on their face. The contradiction you mention is not the only one - his wrong way involves "protectionist economy" which is actually exactly what is happening right now.
It's also a bit funny the current backlash against globalization I'm the US government is led by the people that profited the most from it. That right there tells you their intentions are not noble.
[1] https://www.amazon.com/Audible-Kaput-End-German-Miracle/dp/B...
Germanys role in the fight against covid should not be forgotten. Germany is not just cars.
https://www.ft.com/content/4c0f90ac-1068-46ec-bb6a-b27f21af6...
Never a truer word spoken. Making money by moving money around. It shouldn't exist. It shouldn't be possible or at least should come with severe limitations that make it not possible to live off as a vocation. When person A 'wins', person B 'loses'.
It is a specific skill set that some humans have, but it's not one that should be valued because it gives nothing back to society. In fact, it's a net negative.
Only if one assumes that capital markets are zero-sum. They clearly are not.
What you presumably are referring to when you talk about "moving money around" is purchase of an asset such as a stock or a bond. Rather than moving it around, you are making capital available to some entity in exchange for the expected (but not guaranteed) return on investment. Such transactions are mutually beneficial.
Companies need capital to operate so they sell equity to willing investors in exchange for it. This is what makes growth rates seen over last century possible.
That said, they are not fair in that only those with capital can participate. If one is living hand-to-mouth, one cannot afford to participate. Would be ideal if we could find a way to level the playing field and equalize access
It even infected the tech sector and turned it from something that actually produces value to a casino that bets on 'potential' balloons to profit from bloated, overvalued stocks and valuations. Why produce anything when you can just make gobs of cash by shoveling the infinite amount of free cash that is entering the economy anyway...
All of this was at the cost of the physical goods and services. Now that the dollar has tangible competition, the entire scam is coming crashing down.
Fort Knox is the funniest example. For the financial theather it doesn't matter if there is any physical gold.
To meet global demand, the issuer must supply enough currency, potentially weakening its own economy, but restricting supply would harm international trade and finance
I'm going to nitpick on this line a bit, but bring it back to his core argument at the end. And I'm going to nitpick because in part, lines like this raise my hackles, but also because I think lines like this undercut his own argument:
This type of modern conservatism (which is what this take from George is, and is very tied to a new type of non-religious social conservatism) has lost the plot when it comes to basic justice. Threats in person to people are just plain old crimes. But package them in a funny picture online and it's free reign. Free speech absolutists (not sure that's what George is, but just using this as a broad label) have pretty convenient takes when it comes to the basic rule of law. Often those takes are pretty circumstantial, in some cases they're more than happy to deem speech threatening, but in the vast majority of threatening speech people actually experience, not so much. And remember, if the law is arbitrarily applied, it makes people less interested in a democracy, but they don't seem bothered by that.
Nor do they seem too bothered about the tens of thousands of people who suffer legitimate threats online daily. The social media companies know who those people are, down to what they had for breakfast that day. If we actually dared to, you know, enforce laws around threatening people our jails would be overflowing.
I agree to a very minor degree: you can google "jailed for memes" and find some questionable choices, but to use your voice for those handfuls of situations when literally thousands upon thousands of people are legitimately threatened each day online? I think I can guess what your true intents are: its to further a brutal status quo so you continue feeling good. It doesn't help his argument that the sentence before this line bemoans the end of empire.
And the frustrating thing is that one of his recommendations is kind of good: end the funny money system of business (not sure I agree with the how of the gold standard, but I'd have to defer to others there). But George just undercuts his argument with lines like this about memes, because if you pick it apart it just means he's advocating for the funny money version of enforcing the law. Ah, so George you're not against funny money in principle, it's more like "Funny money for me, but not for thee."
https://geohot.github.io/blog/jekyll/update/2024/12/07/elon-...
My VERY TLDR of his political world view is that he thinks the current world politics are f'ed to an extremely serious degree, so much so that we are in "lets get rid of democracy" land, and I think he wants a technocratic authoritarian strongman/"hero" to enforce some sort of libertarian paradise.
Its those controversial, obfuscated, and wacky ideas mixed with a healthy tech focus that leads to an entertaining read.
I think this is the central hole in the argument that the US is stagnant. The money that investors give you has to come from somewhere! Particularly in venture capital, you only get returns if you produce value.
Nevertheless, I do agree with a lot of the points here.
Money is detached from real output. Especially true in a zero interest rate environment like we had until recently.
There is no reinvestment when rent-seeking activities and financialization take place. Wealth is accumulated but not reinvested for greater growth.
> in venture capital you only get returns if you produce value
Is that so?
> America really is at a fork in the road. In one world, they abandon all hopes of being an empire, becoming a regional power with highly protectionist economics. This happened before, and it’s called Europe. I know it’s hard to believe now, but Europe used to be the seat of power for the whole world. The sun never set on the British empire. Now they put you in jail for memes
It's simply a disgusting take. Full of ego and lacking any empathy for people inside and outside the USA because he is too busy thinking in zero sum caveman terms.
This type of mindset is the one that justifies all military interventions because "there must be a world superpower and it must be us".
1. Hyperfinancialization was a huge mistake (e.g. a house should not be an investment)
2. ZIRP was a huge mistake: revenue matters, the current SP500 P/E ratio is insane. [1]
3. Manufacturing matters if you want to keep the blue collar people engaged economically. It's bewildering how US Democrats turned their back on their political base, the proletariat.
[1] https://www.currentmarketvaluation.com/models/price-earnings...
Now, what he gets wrong. China is also doing hyperfinancialization, just slightly different. Their housing market is crazy with tofu constructions and mostly empty cities. And they got already the Evergrande collapse. China also over-invests to take over markets, for example BYD is kind of a gigantic ponzi scheme [2].
[2] BYD’s Financial Time Bomb: A Replica of Evergrande's Collapse in the Making https://www.youtube.com/watch?v=QHpTWsBRIQs
As many other people said, Trump is making a huge mistake on tariffs. He should be putting tariffs on the completed products but not on the supply chain. Block subsidized EVs but not the small parts for industry and make Europe do the same. This would prick the Chinese manufacturing bubble.
And about importing talent, the system needs an overhaul. The H1B system is completely rigged and most of it brings cheap consultants for jobs easily sourced locally. Improve local competition. But bring the high earners. Make H1B for say 300k and up salaries for a minimum 5 year contract. And they should have a very strict English test, I'm fed up with people who don't bother to learn basic English because they live in bubbles of their country (and I'm foreign).
Also, and this is probably controversial, make some Singapore-style limits on who immigrants can live with and marry, forcing very different cultures assimilate. No more ghettos of very different cultures fighting each other. See how that's turning up in Europe. Before you call me a n*zi, Soviets did something like that, too.
The progressive option would be to deeply question "what lies beyond trade?" and to search for answers beyond the conventional regulated/unregulated spectrum, answers that are compatible in some degree with our starting place but allow broad movement. We know what trade is and does, but the economies it produces are no match for the hivemind efficacy of an ants or beavers. The frameworks of trade are negotiated around maintenance of fiefdoms, and economic activity is regularly blocked because the power structure will push against it and normalize "we can't have that here".
At the same time, we know that power needs checks and balances, and the capitalist mode of power creates some checks on power through its use of trade. That is what has kept it ahead of command economies.
What I find appealing about continuing down a crypto-oriented route is that it's a data structure with a balance sheet as a frontend. The frontend can change - it is a thing that can be experimented with. Valorizing the numbers on the balance sheet as gold-equivalent has always been an adaptive, "this is the only way we know how to do things" kind of social construction. If we can construct a different kind of game to play, the motives can shift.
Seems like the current choice is to be highly protectionist, not sure if it means becoming a regional power.
So, to put it in terms of the Hitchhiker's Guide to the Galaxy, they want to drain the rest of the world of everybody but hairdressers and marketing experts?
Of course the serious core here is this: It's assumed here that it would be a trivial matter to be able to see who is adding value and who isn't. I would question that assumption.
[1] https://hitchhikers.fandom.com/wiki/Golgafrinchan_Ark_Fleet_...
Hm.
You can critic America for failing to transition away from the manufacturing economy or how awfully bad they are at utilizing government to drive innovation or extra market value (look at the dogshit railway infrastructure) but pointing to manufacturer graph and doing soy face ain't it.
social being determines social consciousness, but social consciousness often lags behind social being.
when the empire was falling, its citizens still indulged in the eternal victories of the past. by the time they realized the empire's glory was irretrievable, it was usually already fallen.
this lagging may cause some consequences.
for instance, overconfident imperial citizens may try to contain rivals and prevent the empire's fall through various ways, tariffs, sanctions, or wars, the worst case
imperial citizens think a lot when they see this:
> In addition, we had and have military bases in Japan. This is not the same situation.
imperial policymakers may be rational, or may not be
But I could not fancy this imaginary community to scale up to even millions
It’s like a publicly funded version of YC’s call for startups. The difference is in the public sector the answer to “how do you make money” doesn’t have to be sell to a business/sell to consumers/run ads.
The gold one - seems infeasible at this stage.
Then I realized this was a post from geohot and felt very foolish the 15 minutes I spent thinking through his argument. Why is this so upvoted!
Even with the democrats it was the same thing. People who jump the border were the only sucesfull immigrants. Those trying the legal pathways are waiting for decades to get into the country. Now the message is again clear, be ultra rich and invest 5M to gain entry.
When this VC pyramid scheme collapses, we'll look back at this as a time where the economy and startups were once devoid from reality.
I want to know more details about that US vs China trade map. I've seen it before, and first off, it's not "primary trading partners" as the author said, it's the larger of the two. Like a country that trades 95% with its neighbors, 3% with China, 2% with US is red on that map. And idk if this is $ value traded in either direction or what.
let's do it!
starve these commies to death, 'a few months' later they'll enter a brighter future without communism!
I think this guy may need to travel the world a bit more. A lot of companies here are shiite, but you really need to understand what the competition actually looks like under the hood. And I'm not just talking about Chinese government efforts to crank out more commodities, which has been a Communist metric of success since Mao Zedong's time.
I should hope so! Imperialist ambitions are what Russia is still doing, but most other nations have realized that war isn’t profitable. Fighting a war to conquer factories will likely result in owning rubble.
This article has a more convincing description of how it works in modern times: https://acoup.blog/2023/07/07/collections-the-status-quo-coa...
We need a paradigm shift from what we call neoclassical economics and neoliberal economic theory. The author sort of hints at it but goes off the rails with his conclusions, but this country was built on a _strong_ middle class. Purchasing power of the middle class has been decimated/stagnated.
Public companies no longer invest in the wellbeing of their employees (ie, increasing wages) or invest back into the company to improve efficiency and remain competitive. Instead we see massive amounts of that profit generated by labor invested into short term _stock manipulation_ via stock buybacks.
The endless thirst for paper growth and infinite profitability is ultimately not sustainable. The end result of this rapacious capitalism is what we see today:
- 40 year wage stagnation of middle class and minimal chance of upward mobility for poor
- loss of collective bargaining and via non-existent unions or decrease in participation
- loss of safety nets such as pensions
- increased cost of living due to corporations endless need for paper growth
(list can go on, but I’m typing on a phone)
Ah yes, the US, famously under a socialist regime currently.
(I'm not trying to say Trump's current plans have any merit - which seem to be without any strategic foresight or planning).
And Europe used that power to do some incredibly inhumane and shitty things, while enriching a tiny number of sociopaths. I had hoped we had improved as a species since then, but I don't think we have.