Comments on Rocketpunk Manifesto: Cold Equations

IIRC, the Athenians used slave labor to mine th...

2011-08-17T12:31:40.843-07:00
IIRC, the Athenians used slave labor to mine the silver and probably a large number of slaves to build the ships. That labor -- both free and slave -- was diverted from other projects. It hadn't been previously idle. It took a lot of convincing on the part of the naval party to convince Athens to invest in a navy, not because there was a debate about what to do with unused labor, but a debate about what to do with the windfall silver discovery. Themistocles wanted to buy ships, while Aristides wanted to distribute it among the citizens (kind of a "stimulus package" if you will). It should be remembered that the pressure of Persian expansionism heavily influenced the decision as well. In any case, the navy did not arise out of unused manpower, but a windfall discovery of new commodity resources that could be exchanged for a navy.

Which pretty much sums up how resources are allocated; based on what is seen and desired as the most useful (highest ROI) means of using the resources. Had there been no Persian threat on the horizon, the idea of diverting manpower and resources towards shipbuilding would have had far less support, regardless of what sort of currency existed.

The United States faces a similar issue during the Civil War. Government spending had so far outstripped revenues and backing that "Greenbacks" were issued to fill the void. Since the concept of paper money did not exist in ancient Greece, it is hard to say what the Athenians could have done faced with a Persian threat but no silver mines, but they would have thought of something. After all, during the Peloponnesian wars, Athens did lose their fleet, the flower of their army and most of their trade partners/subjects after the disaster at Sicily and still managed to fight on against Sparta and her Allies (backed by Persian funds) for almost a decade more.

(SA Phil) Im going to take Rick's advice and ...

2011-08-16T15:05:01.695-07:00
(SA Phil)

Im going to take Rick's advice and quit while I am behind on this one.

I hope I made some points towards the idea we dont use resources as well as we potetnially could, and that could benefit space development.

The link I listed earlier does a much better job of explaining MMT than I do.

SA Phil: "Until someone actually does -- ...

2011-08-16T14:35:41.161-07:00
SA Phil:

"Until someone actually does -- it is getting something for nothing."

It's getting something for tokens which in turn can be exchanged for value on demand. Those tokens are only nothing if they aren't backed by an economy that can remunerate their value. And if they're not reliably backed, those tokens wouldn't be accepted in the first place.

"As for the silver - the vast majority/all of the non-coin uses were as Luxury items. Which is not a resource needed for building ships."

Vast majority? The Pheonecians and Egyptians regularly used silver for food and beverage storage because it has preservative effects. Hardly a luxury usage, even if limited to the relatively affluent.

In any case, silver had a real, not fiat value. Nobody said, let's make silver money because we say so. The market had to accept that silver was money, and just as valuable as anything else they might have exchanged goods and services for. If that value derived from luxury application rather than utility as a cow manure shovel is irrelevant.

Tony, As long as the US is perceived to be econom...

2011-08-16T14:00:26.736-07:00
Tony,

As long as the US is perceived to be economically strong, just the ability to go there for exchange is enough, whether one actually does so or not.

---
Until someone actually does -- it is getting something for nothing.

As for the silver - the vast majority/all of the non-coin uses were as Luxury items. Which is not a resource needed for building ships.

(SA Phil)

SA Phil: "You create a fiat currency from...

2011-08-16T13:49:52.831-07:00
SA Phil:

"You create a fiat currency from thin air..."

Actually, it turns out that no, you don't just create fiat money out of thin air. It's value is defined by the strength of the economy in which it is legal tender. You can issue however many units of your fiat money you want, but each unit is only worth what it can buy in the market. If you issue ten units of money per unit of resources available in the market, your money is worth less per unit than if you had issued only five.

The reason that the Saudis, Kuwaitis, et al accept US dollars as real money payment is that the US economy is so strong that they don't have to trade directly with the US to recapture value. They can trade with anybody that accepts dollars -- which is essentially anybody at all. Now, it's all based on the theory that the US dollar can be returned to the US eventually for US goods, but no given dollar has to be. As long as the US is perceived to be economically strong, just the ability to go there for exchange is enough, whether one actually does so or not.

"In the silver example - the fact it took labor to mine the silver actually strengthens my point. They not only had enough labor to mine the silver but also to build all the boats."

IIRC, the Athenians used slave labor to mine the silver and probably a large number of slaves to build the ships. That labor -- both free and slave -- was diverted from other projects. It hadn't been previously idle. It took a lot of convincing on the part of the naval party to convince Athens to invest in a navy, not because there was a debate about what to do with unused labor, but a debate about what to do with the windfall silver discovery. Themistocles wanted to buy ships, while Aristides wanted to distribute it among the citizens (kind of a "stimulus package" if you will). It should be remembered that the pressure of Persian expansionism heavily influenced the decision as well. In any case, the navy did not arise out of unused manpower, but a windfall discovery of new commodity resources that could be exchanged for a navy.

"All for a 'commodity' that's only real value was as a currency (primarily at that time)"

Silver was used for utensils, storage containers, jewelry, decorative items, and even medicine. It's high value derived from its rarity compared to its perceived utility. It could be used as money because it was directly convertible into useful -- or at least highly desired -- items. (One of the big problems with deasing of coinage, along with the reduction in the precious metal contained in each coin was the, was that it changed the metalurgical properties of the money supply, making it harder to use as something other than money.)

Tony, Really? The Saudis, Kuwaitis, etc. aren'...

2011-08-16T12:44:21.951-07:00
Tony,

Really? The Saudis, Kuwaitis, etc. aren't getting paid for their oil?

-----------

You create a fiat currency from thin air -- so unless they use those dollars to buy things from us -- they are giving us their oil for nothing.

Its particularily relevant to the Chinese. Who send us billions and billions in goods, and then just sit on these "dollars" not buying anything with it.

------

In the silver example - the fact it took labor to mine the silver actually strengthens my point. They not only had enough labor to mine the silver but also to build all the boats.

All for a "commodity" that's only real value was as a currency (primarily at that time)

(SA Phil)

Rick: "Wrangling over economic ideology i...

2011-08-16T09:34:54.274-07:00
Rick:

"Wrangling over economic ideology is not, IMHO, a particularly efficient allocation of time and mental energy."

Probably not, but it is interesting to see how other people think.

Wrangling over economic ideology is not, IMHO, a p...

2011-08-16T09:26:15.748-07:00
Wrangling over economic ideology is not, IMHO, a particularly efficient allocation of time and mental energy.

SA Phil: "The cake story was about M. Ant...

2011-08-16T08:59:10.169-07:00
SA Phil:

"The cake story was about M. Antoinette supposedly being so clueless she didn't know the masses didn't have cake."

You're absolutely correct. The masses don't have cake, and nobody could wish it into existence. But it turned out that revolutionary reorganization didn't solve the fundamental problems that were causing a lack of bread in the cities. So the French wound up stealing it from somebody else -- and their cake too.

"As far as the utilization of resources goes -- we won't know that until they start utilizing them, will we?

Right now we steal resources from other countries for numbers on a ledger.

So not only aren't they using their resources for their own betterment - they are sending goods to us - for nothing."

Really? The Saudis, Kuwaitis, etc. aren't getting paid for their oil? I've been to the Middle East, Phil. I can guarantee you that they aren't giving it up for nothing. Or maybe you're talking about minerals from Africa and South America? They're getting paid too, even if they give kickbacks and don't evenly distribute the wealth. Even in the days of European colonialism, the "stolen" resources were paid for with armies, colonial administrations, and the loss of a lot of human capital to tropical diseases. TANSTAAFL.

I'm not sure what other resources you think aren't being utilized. Care to enumerate?

"Interesting example -- didn't the Athenians discover some silver which they used to build up their Navy prior to the big invasion at Thermopylae?

Other than its value as currency what is silver used for when making War Galleys?

Basically they were able to "pay" people to build the galleys and for the raw materials.

If they had had a fiat currency it might have amounted to the same thing. They would have paid for the people and materials and the boats would have been built.

After all there was very little real need for the silver."

A couple of problems with your theory here:

1. Silver is commodity money, not fiat money. It cost effort to extract and refine, giving it real value to those it was offered to in exchange.

2. Inflating a fiat money supply is the functional equivalent of taxation -- on credit. The government buys at full value, but as the economy adjusts to the new balance of money vs resources, the money injected into the economy buys less than full time-of-issue value. What the government is actually doing is concentrating a resource allocation in time at the moment of issue. But the cost to the economy is lowered allocations later on, because the money buys less at that time.

(SA Phil) I don't disagree with the lack of a...

2011-08-15T21:29:32.209-07:00
(SA Phil)

I don't disagree with the lack of a Macguffin.

I more meant a better use of the resources we have -- some of which could be used for space development.

I also don't think space development takes huge resources. It takes huge specialization. Which in our system is huge money. But I think that would change with time. If only because the technologies would mature and the manufacturing challenges would be easier to solve.

================
As far as extra-terrestrial resources, I expect they would only be utilized by extra-terrestrial activities. And it would be a long way off.

If you have a Mars Base for scientific study .. it would be nice if they can begin to acquire some of their resources locally.

Phil, you're right that one can print money to...

2011-08-15T21:14:12.442-07:00
Phil, you're right that one can print money to mobilize unused labor. That's what Keynesianism is all about.

Problem (relevant to this site) is, having mobilized the labor and resources, what do you pay them to do? Yes, you could have them do space stuff, at little cost relative to the depressed economy... but the relevant measure is opportunity cost: you could have them building high speed rail or cleaning up pollution sites or rebuilding infrastructure instead.

Money isn't resources? Yeah, sure. Problem is, there aren't any space resources you can get for less investment of resources than you could get by terrestrial means, by current valuations. Money's a shorthand for all of that.

(SA Phil) Interesting example -- didn't the A...

2011-08-15T20:17:08.872-07:00
(SA Phil)

Interesting example -- didn't the Athenians discover some silver which they used to build up their Navy prior to the big invasion at Thermopylae?

Other than its value as currency what is silver used for when making War Galleys?

Basically they were able to "pay" people to build the galleys and for the raw materials.

If they had had a fiat currency it might have amounted to the same thing. They would have paid for the people and materials and the boats would have been built.

After all there was very little real need for the silver.

Going back to the historical examples for a moment...

2011-08-15T19:33:54.732-07:00
Going back to the historical examples for a moment, while it is true that Greek military science and cultural cohesion were important factors in winning the Persian wars, the Greeks had to cough up the resources to feed, arm and equip all these men from a relatively poor agrarian society.

If the Classical Greek economy worked anything like the Persian one (where most things happened by the fiat of the Great King or his lesser minions), then the advancing Persian Army would have been met with (at best) tiny fully equipped royal bodyguards and perhaps a larger number of "peasant levies" firing sling stones. Indeed, if the Persians had invaded Greece a few hundred years earlier, that is exactly what would have happened, the Mycenean "Palace" culture could only produce that sort of military force.

Similarly, the Elizabethan economy was far smaller than Spain's at the time, Phillip could call on the resources of Spain, many Habsburg allies and buy the services of many others across Europe. Elizabeth Gloriana was broke, and could only meet the challenge through offering incentives to pirates (er, Gentlemen of Fortune) to attack Spains source of wealth in return for a cut of the loot. The actual contributions on land (in the United Provinces) tended to be small and poorly equipped, as there was never enough loot to pay for an army, and piracy offered a far better rate of return in both monetary and military terms.

(SA Phil) That wasn't what the cake story was...

2011-08-15T16:30:01.427-07:00
(SA Phil)

That wasn't what the cake story was about.

The cake story was about M. Antoinette supposedly being so clueless she didn't know the masses didn't have cake.

It was an "out of touch" thing.

It would be like you complaining that you cant afford a bus pass and me saying to drive to work instead.

Oblivious to the fact that you ride the bus because you can't afford a car.

--------------

As far as the utilization of resources goes -- we won't know that until they start utilizing them, will we?

Right now we steal resources from other countries for numbers on a ledger.

So not only aren't they using their resources for their own betterment - they are sending goods to us - for nothing.

SA Phil: "Actually quite the opposite. ...

2011-08-15T15:34:27.493-07:00
SA Phil:

"Actually quite the opposite.

I am for lifting up the masses. IE finding bread for them to make.

You suggested that it might not be such a good idea.

Remember - in revolutionary France there was no Cake for them to eat."

So they went elsewhere to steal cake, because they coudn't make it by an act of will.

Likewise, you can't lift up the massess by an act of will. And if you invest the resources to lift up the masses, you then have to provide the resources for them to live uplifted lives. Except there probably isn't enough to go around for every one of billions of humans to live even the lifestyle of poor Westerners, no matter how well educated everyone is.

(SA Phil) Actually quite the opposite. I am for...

2011-08-15T15:16:20.464-07:00
(SA Phil)

Actually quite the opposite.

I am for lifting up the masses. IE finding bread for them to make.

You suggested that it might not be such a good idea.

Remember - in revolutionary France there was no Cake for them to eat.

SA Phil: "You probably have summed up rig...

2011-08-15T15:03:10.253-07:00
SA Phil:

"You probably have summed up right here why we don't fix any economy - including that of the current US - in this statement.

'Let them eat cake'"

Considering what happened to France after Louis and Marie got abbreviated, I think she probably had a point -- the country started out rebelling over bread, wound up starting wars to pay for cake, and eventually succumbed to foreign conquest and the reinstatement of the Bourbon monarchy. You're advocating the same kind of something for nothing logic.

Tony, And while it may be a harsh judgment, it is...

2011-08-15T14:51:26.338-07:00
Tony,

And while it may be a harsh judgment, it is also true -- given the demands on material resources that a more educated and affluent world would make, it is probably not in your or my best interest to make that happen.

=================

You probably have summed up right here why we don't fix any economy - including that of the current US - in this statement.

"Let them eat cake"

(SA Phil)

SA Phil: (taken a little bit out of order to avoi...

2011-08-15T14:38:47.580-07:00
SA Phil:

(taken a little bit out of order to avoid confusion)

"They were all unemployed due to a lack of demand in the first place."

If we're talking about the whole world, most people are pretty much overemployed (by Western standards) just trying to survive. The problem is that nobody thinks it worthwhile to allocate the resources to improving their economic efficiency. And while it may be a harsh judgment, it is also true -- given the demands on material resources that a more educated and affluent world would make, it is probably not in your or my best interest to make that happen.

And before you say that exploiting space resources would solve that, no, it wouldn't. It would never get to that point. It's easier and much, much cheaper just to kill your competitors on Earth and take their stuff on Earth.

"Ah - but you missed the point.

If you develop those resources they will increase the demand on other resources (a house a car, etc) -

A demand other aspects of the economy can fill.

Improving the overall economy.

If you then with your new economic engine want to use some of your resources for Space Development -- you are in a much better position."

A rising tide lifts all boats, huh? See above.

(SA Phil) Ah - but you missed the point. If you ...

2011-08-15T14:25:08.426-07:00
(SA Phil)

Ah - but you missed the point.

If you develop those resources they will increase the demand on other resources (a house a car, etc) -

A demand other aspects of the economy can fill.

Improving the overall economy.

They were all unemployed due to a lack of demand in the first place.

If you then with your new economic engine want to use some of your resources for Space Development -- you are in a much better position.

SA Phil: "But you can! Manpower is also...

2011-08-15T14:12:54.877-07:00
SA Phil:

"But you can!

Manpower is also a resource. If you lack manpower, you lack resources. Hard to utilize resources you lack.

However manpower is a resource you can develop. (IE Educate)

And with the horrendous global unemployment (much much worse tha US levels, let alone historical US levels) ---

I suggest manpower is probably the biggest unutilized resoource we have."

Improving the capability -- and thus the economic efficiency -- of manpower involves the allocation of human and material resources that could be doing something else. As previously mentioned, just because a resource exists doesn't mean it is practically exploitable.

Also, improved capability includes expanded outlook. You may have more people doing more valuable work, but they expect more from it -- more food, more clothes, a bigger car (or a car at all), etc.

And you've got to give them something to do. What will they do? Provide themselves more food, more clothes, a bigger car (or a car at all), etc.

Educate and equip all the underutilized people on the planet, then proclaim: "Now, all you minions whose life I have improved...off to Space!!!" They'll reply, "Not at the expense of my food, clothes, car, etc., you wont!"

Tony, One can't just utilize unutilized resou...

2011-08-15T13:46:21.106-07:00
Tony,
One can't just utilize unutilized resources because they exist.

One has to have the manpower to make use of them. When one doesn't have the manpower -- or when one has improperly skilled manpower, which is also a function of resource allocation -- then trying to get to unused resources causes other sectors to go wanting.

=================

But you can!

Manpower is also a resource. If you lack manpower, you lack resources. Hard to utilize resources you lack.

However manpower is a resource you can develop. (IE Educate)

And with the horrendous global unemployment (much much worse tha US levels, let alone historical US levels) ---

I suggest manpower is probably the biggest unutilized resoource we have.

(SA Phil)

SA Phil: "There is no Greap Space Leap Fo...

2011-08-15T13:01:09.240-07:00
SA Phil:

"There is no Greap Space Leap Forward- There is utilization of resources.

If you have unutilized resources you could use on Space and you want to use them on Space then you can.

Just like we utilize resources on Defense, or Education, or The War on Drugs, or Baseball, or Reality Television or whatever."

I chose my terminology very carefully, Phil. One can't just utilize unutilized resources because they exist. One has to have the manpower to make use of them. When one doesn't have the manpower -- or when one has improperly skilled manpower, which is also a function of resource allocation -- then trying to get to unused resources causes other sectors to go wanting.

"The market never optimizes anything. And it is never seperate of the political system. The "free" market is a myth."

I really don't GAS about the "'free' market". To me the market is just the market, and politics is just a constraint.

WRT what the market optimizes, what exactly do we think the market actually trades in? Allocation of resources, right? Yes. But market efficiency is a function of how those resources are matched up to people who can use them. When the market is down, it's not resources that are being underutilized. It's people. When the market is heated up and bubble is about to burst, it's not resources that are being overutilized. It's people. When you look at the market over a long enough duration to smooth out these fluctuations, you find that the market optimizes the use of human time and skill towards some goal or goals accepted as worthwhile by the market participants as a community.

"As I mentioned before, Money is just an extention of political will. If you are keeping score yourself and you lose, it is your own fault."

Money is shorthand for human effort. It's just portable and convertible tokens that make transaction easier.

Tony, IOW, your Great Space Leap Forward would be...

2011-08-15T11:22:36.186-07:00
Tony,

IOW, your Great Space Leap Forward would be just like any other government fiat program doomed to failure by misallignment with economic reality.
=============

There is no Greap Space Leap Forward- There is utilization of resources.

If you have unutilized resources you could use on Space and you want to use them on Space then you can.

Just like we utilize resources on Defense, or Education, or The War on Drugs, or Baseball, or Reality Television or whatever.

The market never optimizes anything. And it is never seperate of the political system. The "free" market is a myth.

As I mentioned before, Money is just an extention of political will. If you are keeping score yourself and you lose, it is your own fault.

(SA Phil)

SA Phil: "As I said *if you have resource...

2011-08-15T10:19:16.920-07:00
SA Phil:

"As I said *if you have resources that you aren't utilizing* because you lack money...

Then create more money.

You are assuming the market guarantees some maximum utilization of resources. It doesn't.

You wont get any inflation until demand goes up. Which is what you want anyway if you are trying to increase resource utilization.

You dont get uncontrolled inflation until the money grows beyond supply. (Availible resources)"

Actually, what I'm assuming is that the market optimizes utilization of human effort over a statistically significant period of time. Underutilization is a temporary condition, just like overutilization is. To bring things back to the topic, manned spaceflight, as a project, is a very long term endeavor. Throwing money at it over the short term isn't going to get you anywhere, and you can't just throw money at it over the long term because the market is not going to tolerate it without commensurate profits. IOW, your Great Space Leap Forward would be just like any other government fiat program doomed to failure by misallignment with economic reality.

Comments on Rocketpunk Manifesto: Cold Equations

IIRC, the Athenians used slave labor to mine th...

(SA Phil) Im going to take Rick's advice and ...

SA Phil: "Until someone actually does -- ...

Tony, As long as the US is perceived to be econom...

SA Phil: "You create a fiat currency from...

Tony, Really? The Saudis, Kuwaitis, etc. aren'...

Rick: "Wrangling over economic ideology i...

Wrangling over economic ideology is not, IMHO, a p...

SA Phil: "The cake story was about M. Ant...

(SA Phil) I don't disagree with the lack of a...

Phil, you're right that one can print money to...

(SA Phil) Interesting example -- didn't the A...

Going back to the historical examples for a moment...

(SA Phil) That wasn't what the cake story was...

SA Phil: "Actually quite the opposite. ...

(SA Phil) Actually quite the opposite. I am for...

SA Phil: "You probably have summed up rig...

Tony, And while it may be a harsh judgment, it is...

SA Phil: (taken a little bit out of order to avoi...

(SA Phil) Ah - but you missed the point. If you ...

SA Phil: "But you can! Manpower is also...

Tony, One can't just utilize unutilized resou...

SA Phil: "There is no Greap Space Leap Fo...

Tony, IOW, your Great Space Leap Forward would be...

SA Phil: "As I said if you have resource...*

Comments on Rocketpunk Manifesto: Cold Equations

IIRC, the Athenians used slave labor to mine th...

(SA Phil) Im going to take Rick's advice and ...

SA Phil: "Until someone actually does -- ...

Tony, As long as the US is perceived to be econom...

SA Phil: "You create a fiat currency from...

Tony, Really? The Saudis, Kuwaitis, etc. aren'...

Rick: "Wrangling over economic ideology i...

Wrangling over economic ideology is not, IMHO, a p...

SA Phil: "The cake story was about M. Ant...

(SA Phil) I don't disagree with the lack of a...

Phil, you're right that one can print money to...

(SA Phil) Interesting example -- didn't the A...

Going back to the historical examples for a moment...

(SA Phil) That wasn't what the cake story was...

SA Phil: "Actually quite the opposite. ...

(SA Phil) Actually quite the opposite. I am for...

SA Phil: "You probably have summed up rig...

Tony, And while it may be a harsh judgment, it is...

SA Phil: (taken a little bit out of order to avoi...

(SA Phil) Ah - but you missed the point. If you ...

SA Phil: "But you can! Manpower is also...

Tony, One can't just utilize unutilized resou...

SA Phil: "There is no Greap Space Leap Fo...

Tony, IOW, your Great Space Leap Forward would be...

SA Phil: "As I said *if you have resource...

SA Phil: "As I said if you have resource...*