[pdonis]

> The trick comes in when we switch without acknowledgement to describing the system for the distribution of wealth and status.

I think the trick comes even earlier: in making people think that there has to be a single "system for the distribution of wealth and status".

Wealth is not a zero sum game; there is not a fixed pool of wealth in the world that has to somehow get distributed. Wealth can be created. Indeed, wealth is created every time people make a positive sum trade, a trade in which both sides come out better off.

Status tends to be more of a zero sum game, but it doesn't have to be. For example, status here on HN does not have to be the same as, or even measured by the same criteria as, status somewhere else.

However, if we set up one centralized system that is supposed to "distribute" wealth and status, we are making zero sum games out of things that shouldn't be (wealth) or at least don't have to be (status). The solution is to stop doing that. Stop centralizing power.

[mrow84]

Here is yet another trick: situating the creation of wealth primarily in the exchange of goods, implicitly devaluing the act of producing the goods in the first place; treating allocation as the primary problem, with production a mere by-product.

The line of thought typically proceeds by claiming that it really is the exchange that makes the wealth, because it only after exchange that the person who wants to use a thing can actually get their hands on it. However this is misleading, because production is necessary before exchange can take place.

The idolisation of the problem of allocation structures the world in a particular, and not inevitable, way, with many unsavoury properties. Allocation favours fungibility, as a tool for reducing the time needed to exchange, creating immense difficulties in valuing the act of production itself, because one line of production can just be exchanged for another. This abstraction over production removes almost all incentive to consider the future, or to plan for catastrophe, something we see visibly in the response of allocation-focused countries to the current pandemic, and in their willingness to attempt to mitigate, or even to prepare, for the consequences of human-induced climate change.

[zrobotics]

While I want to agree with the general gist of your argument, there is value created in economic activities besides production. For example, operating a pick & pack line to ship goods to end-consumers is labor intensive.

Speaking as someone who supports such an operation, shipping to end-consumers is expensive. None of the manufacturers I order from want to be in that business, they want to operate assembly lines and ship out truckloads at a time.

While my job is the classic 'middleman' in the supply chain, there is value provided that we do generate. The manufacturers I work with understand this as well; if they wanted to sell to end consumers it would be easy for them to cut us out. All they need to do is to advertise, package, and ship out individual products and provide support for those purchases.

Producers (read: manufacturers) want predictable demand and have long lead times. If I am running out of a product, my lead time is 8-12 weeks coupled with a sizeable minimum order. No end consumer wants to deal with placing an order for 26 skids of product and waiting 2 months. Specialization means some firms produce things and are good at it, others distribute those goods. Distribution is its own challenge, and takes specialization.

There are very few manufacturers an end-consumer can order goods from, for very good reasons. Honestly, I can't think of a single manufacturer that ships direct to consumers; even most alibaba 'factories' are intermediaries (and alibaba itself also acts as a retail channel).

[mrow84]

Yes - I have a tendency to waffle, and it seems that editing came at the expense of my actual opinion, namely that a concern for both production and allocation is vital for a stable society.

Significant advantage has been found in organising redistribution of goods (and services, another important mechanism of wealth production, as pdonis mentioned in a sibling comment), and it clearly isn't something to be ignored, my point is only that a lot of the contemporary approach to thinking about economies focuses almost entirely on allocation/distribution - production is taken as a given, driven largely by demand through the allocation mechanism.

And to clarify - it is not even the first order effects (e.g. worse conditions the closer you are to "mere" production) that I find most concerning (though they are serious issues), but the higher-order effects of how society manages and maintains its productive capabilities, and prevents them from causing longer-term harms, simply because those harms aren't handled by the system of allocation.

The common response within the current mental framework is to try and manage those harms through the allocative system, by creating markets for them, but fundamentally the incentives simply aren't there in the way that they are for the allocation of things people want - they have to be coerced, and so people try to game the system.

No easy answers, unfortunately!

[pdonis]

> situating the creation of wealth primarily in the exchange of goods, implicitly devaluing the act of producing the goods in the first place

Producing goods and services also involves exchanges, but it's a fair point that there are other activities besides direct trades that can create wealth, yes. Transformation of raw materials into finished products also can. So can providing services.

[CuriousSkeptic]

There are two kinds of wealth that gets confused in the discussion.

The absolute wealth of having access to high quality services and goods with relatively low efforts. This is the wealth we create by progress.

Then there’s the relative wealth of which share of the economy you wield power over. How much of the current means of production is commanded for your personal priorities and how do they relate to others priorities? What is the opportunity cost?

[pdonis]

> There are two kinds of wealth that gets confused in the discussion.

No, there's just wealth. Which is basically what you are calling "absolute wealth".

What you are calling "relative wealth" is not wealth; it's either simple trade (when you buy a product, you are "commanding the means of production" that produced it, but that's just how a free market works) or brute force (using either overt violence or government power to "command" resources that in a free market would go to other uses).

[CuriousSkeptic]

Relative to your peers. If it clear things up.

[pdonis]

> Relative to your peers. If it clear things up.

I already understood that that's what you meant. It doesn't change anything I said.

[monadic2]

> Wealth can be created.

Corollary: wealth doesn’t exist and the need for disparity to drive the economy doesn’t exist either.

[pdonis]

> Corollary: wealth doesn’t exist

I have no idea how you are getting that from what I said.

[mushufasa]

yeah. i can create a sandwich. that does not imply there are no other sandwiches.

[monadic2]

It does imply that sandwiches are not necessary. I’m not sure what else you can draw from a comparison between an abstract concept and physical expression of one—you certainly didn’t materialize the expression out of thin air.

Incidentally, the benefit of wealth is unclear.

[pdonis]

> It does imply that sandwiches are not necessary.

You're still not making sense.

> the benefit of wealth is unclear.

How are you posting here without taking advantage of various benefits of wealth? Last I checked the Internet doesn't work with paper cups and string.

[rrrrrrrrrrrryan]

I can use raw ingredients to create a sandwich too, and if we prefer the each other's sandwiches more, we can agree to trade sandwiches.

Was anything actually created during the trade though? I think that's what he's getting at. An economist would argue yes, value was created, but it's an abstract concept at best, a bit made-up at worst, because at the end of the day it's the same two sandwiches.

"Wealth isn't real" is a pretty radical take though, and I'm not sure how productive it is to contemplate because you'd have to entirely throw away the concepts of personal property and money before you can get there.

[pdonis]

> at the end of the day it's the same two sandwiches

No, it isn't, because the sandwiches are in the possession of different people than when they started. That's where the wealth gets created: the value of each sandwich is different for different people. Many people fail to understand the concept of wealth creation because they think of "value" as something inherent to the object, instead of something that depends on who is using the object and for what purpose.

[monadic2]

Depends on which type of value people are talking about; not all forms of value are subjective.

[6510]

I suggest without underlying thoughts that we exchange the sandwich back after taking a closer look at it.

Is even more value created?