Economics thread. Have you had enough of wizard of oz monetary scientists?

[HeadingNorth]

Where exactly did I say he was wrong?

 

You claimed that povery and inequality are the same thing, and then explained why they are not remotely the same thing.

[andyofborg]

Here is a workable solution to the "banking crisis."

 

http://www.energybackedmoney.com

 

This idea was proposed by Thomas Edison all those years ago and I think it has merit as a solution to the worlds financial problems.

 

 

no it's not.

 

any sort of commodity backed currency needs a fixed amount of the commodity else you are no better off, there is nothing stopping you doubling or trippling the amount of energy you produce.

 

if the population were to adopt significant energy saving measures then you could decommission some of your energy generating capability which would mean deflating your economy, perhaps fatally.

 

it was the attempts to return to the gold standard in the 1920's which forced the uk into recession and then depression.

 

rightly or wrongly we are stuck with fiat currencies forever. the sort of deflation required to return to any sort of commodity backed currency would make the consequences relating to the possible collapse of the euro look like a party.

 

if you could find a commodity to avoid that, then all you are doing is locking in the current level of money supply.

[Cavegirl]

You claimed that povery and inequality are the same thing, and then explained why they are not remotely the same thing.

 

Then I've not explained myself properly (I'm tired, just in from work). What I meant was that you don't have poverty without inequality.

[MrSmith]

Poverty and inequality are essentially the same thing. You don't feel poor unless you're constantly reminded that there is somebody who has more than you. People have lived with very little with great contentment, but introduce someone who has much more and their contentment levels will naturally drop. You're only made to feel poor if there are others around you who have more than you.

 

But I’m constantly reminded that there are people with much more than me, I even on occasion feel envy when I’m watching some rich pop star strolling along a tropical beach or see someone driving a car or living in a big house that I would like. There are many things in life that I wish I could afford but I don’t feel poor and I don’t despise the people with more than me, and I have no desire to see them loose it. When I want something, I first think about whether I need it, if I don’t need it but still want it then I work out how many hours I need to work to get it, then my next question is whats more important to me the thing I want or the hours I have to waste working to get it.

[HeadingNorth]

Then I've not explained myself properly (I'm tired, just in from work). What I meant was that you don't have poverty without inequality.

 

But you were, and are, wrong. You even gave us a detailed explanation of why you are wrong.

[Cavegirl]

But I’m constantly reminded that there are people with much more than me, I even on occasion feel envy when I’m watching some rich pop star strolling along a tropical beach or see someone driving a car or living in a big house that I would like. There are many things in life that I wish I could afford but I don’t feel poor and I don’t despise the people with more than me, and I have no desire to see them loose it. When I want something, I first think about whether I need it, if I don’t need it but still want it then I work out how many hours I need to work to get it, then my next question is whats more important to me the thing I want or the hours I have to waste working to get it.

 

It doesn't really matter whether you, as an individual, feel poor, the point is (and this is purely hypothetical) that if you earn ten thousand pounds a year and I earn one million pounds a year (assuming we have no other assets) then you are poorer than I am, whether you feel it or not.

 

As a higher earner I have more social, economic and political power than you do- I can achieve more. I have more possibilities open to me- I can visit a range a shops that are out of your price range, I can go on holidays that you can't participate in, I can get into social circles that you can't have access to, I can pay to have certain problems alleviated privately whereas you have to rely on the state etc etc.

 

Now none of this is any real problem for you if everyone in your social circle earns ten thousand pounds or there abouts a year because you can all participate in things on an even keel. However, if 50% of your friends and family earned twice as much as you then you'd start to feel poverty acutely- there'd be family holidays that you can't afford to go on, social events that you can't afford to attend, gifts that you can't reciprocate etc etc.

 

So what I'm essentially saying is that if you're living in equality with those around you, you probably won't notice a problem like poverty, but if you're in contact with those that have significantly more then you definately will.

 

You appear from what you say not to face the problem within your social circle, but you do face it intensely as a member of UK society and a large wealth gap has proven time and time again to undermine wider societies and leads to dysfunction, just as it's did to ours during the summer riots.

[Cavegirl]

But you were, and are, wrong. You even gave us a detailed explanation of why you are wrong.

 

Please enlighten me as to why I'm wrong then. How can a person be poor if everybody has equal wealth?

[MrSmith]

It doesn't really matter whether you, as an individual, feel poor, the point is (and this is purely hypothetical) that if you earn ten thousand pounds a year and I earn one million pounds a year (assuming we have no other assets) then you are poorer than I am, whether you feel it or not.

 

As a higher earner I have more social, economic and political power than you do- I can achieve more. I have more possibilities open to me- I can visit a range a shops that are out of your price range, I can go on holidays that you can't participate in, I can get into social circles that you can't have access to, I can pay to have certain problems alleviated privately whereas you have to rely on the state etc etc.

 

Now none of this is any real problem for you if everyone in your social circle earns ten thousand pounds or there abouts a year because you can all participate in things on an even keel. However, if 50% of your friends and family earned twice as much as you then you'd start to feel poverty acutely- there'd be family holidays that you can't afford to go on, social events that you can't afford to attend, gifts that you can't reciprocate etc etc.

 

So what I'm essentially saying is that if you're living in equality with those around you, you probably won't notice a problem like poverty, but if you're in contact with those that have significantly more then you definately will.

 

You appear from what you say not to face the problem within your social circle, but you do face it intensely as a member of UK society and a large wealth gap has proven time and time again to undermine wider societies and leads to dysfunction, just as it's did to ours during the summer riots.

 

Then it comes down would you prefer a small unequal share of plenty or an equal share of nothing, I prefer the society we live in where many people have more than me as opposed to one where we all have nothing. I can even imagine a society in which we all have an equal share of plenty and can all afford what we want.

[Cavegirl]

Then it comes down would you prefer a small unequal share of plenty or an equal share of nothing, I prefer the society we live in where many people have more than me as opposed to one where we all have nothing. I can even imagine a society in which we all have an equal share of plenty and can all afford what we want.

 

I guess the point is, that if you lived in an equal wealth society, you wouldn't know whether you had little or plenty and you wouldn't care about it as long as your needs and to some degree wants were met.

[ultimatesens]

There does seem to be a big flaw in this idea, but perhaps you can provide a solution.

 

Nuclear power plants currently generate a lot of electricity around the world. Some country (the US?) has issued massive cyber attacks against Iran's nuclear power plants, effectively shutting them down for a period, as well as assassinating several of their leading nuclear power experts in recent years.

 

If money (particularly US dollars as the global reserve currency) was backed by electricity wouldn't it be possible for another country to effectively crash the entire world economy simply by inventing a virus that made it through the firewalls put in place at electricity generators?

 

Money backed by energy is certainly better than money backed by debt because it's based upon something real rather than a belief that economic growth for future generations will carry the weight of the debt, but it doesn't really solve the problem of corruption, manipulation, warmongering, greed and power grabbing that really lies at the heart of our current crisis. After all, debt based money wouldn't be a problem if it was properly distributed across and between societies, if a more serious effort was put into research and design into sustainable living and if profits didn't buy politicians.

 

Yes I do have a potential solution to the specific question you raised.

 

While it will always be possible to invent a virus that can overcome the security of any system, if we distribute the electricity generation as much as possible over a veriety of different systems with different security arrangements at each, we can help mitigate the risk of a catestrophic system wide failure. We can at least buy time while antivirus experts devise a solution.

 

Additionally the system doesn't have to be U.S. centric. If it were a global currency the damage inflicted by a country would have ramifications for its own economy.

 

I think some people are getting too caught up in whether we have a worse standard of living now than we did 100 years ago. It's a very complicated issue and depends whether your talking globally and what your definitions of poverty and such are.

 

I am more interested in discussing the practical aspects of actually implementing the system I have linked to above. Ideally the system would need to, at least for a time, run paralell to the current system.

 

Does anybody here know how smart grids work or have any experience with solar panels and other renewable energy source?