[throwawaymaths]

> broken perception of risk based on “optimism, underestimation and invincibility"

How about artificially low interest rates? An interest rate is exactly the coordination between risk and time, with a low interest rate you're subsidizing stupidity and wastefulness, and with its concommittant inflation you're forcing people into making those investments to stay afloat.

Maybe if we weren't goosing the interest rate lower for "growth" we wouldn't be destroying the environment.

But I guess it is hard to get someone who works for an organization like the UN, who is predisposed to meddle, to see that the problem is meddling, and not that the solution is more meddling.

[mort96]

Your last sentence seems to suggest that if we just let the free market do what it does, everything would be fixed and we wouldn't have any environmental problems.

Are you not aware of the concept of externalities? How do you, for example, explain the fact that leaded gasoline was only replaced with non-leaded gasoline when "meddling" made it illegal?

[roenxi]

Are you of the opinion that letting the free market set interest rates is going to cause measurable levels of brain damage?

The official policy position is that the free market won't gamble enough if left alone and that it needs to be forced away from conservative plays. We must admit that this is, potentially, a contributing factor to the lack of responsible long term thinking in markets that are influenced by money (hedging in case there are aspects of life that aren't influenced by low interest rates, if someone spots any let me know).

Plus printing money and handing it out to rich people is outrageous. I'm confused at how anyone is can pretend that is a good idea. You didn't say that, I'm just throwing it out there Carthago delenda est style)

[mort96]

I was specifically talking about the last paragraph, that the solution is to not "meddle" in general. It's quite possible that the way interest rates are set is problematic, I'm not qualified to have an opinion on that. But clearly there are problems where meddling is necessary.

[infogulch]

Humans have a strong universal bias towards additive solutions, even when subtractive solutions are clearly better. I doubt regulatory policymakers are immune.

[mort96]

That's a non-statement. Nothing about what I have said assumes that policymakers are immune to any form of bias.

[throwawaymaths]

> Humans have a strong universal bias towards additive solutions, even when subtractive solutions are clearly better.

That's a very profound statement, are you kidding me?

[throwawaymaths]

Bad response. Nowhere do I claim that no meddling is good. I simply claim that this one form of meddling is really fucking bad and it's hard to see that meddling can be the root cause when you are predisposed to meddle.

The irony is that you're falling victim to exactly this phenomenon: I claim that meddling in one form is bad and you pull out a knee-jerk argument with a buzzword (externalities) that injects a misinterpretation of the logic in the argument. When you are predisposed to meddle, you put up barriers to understanding my argument.

Anyways, my point is exactly that central banking makes blindness to externalities worse.

[throwaway894345]

I don't know that I agree with the idea that the government should take no direct role in managing the economy, but that's a different argument than "the government shouldn't regulate externalities". I think there's a reasonable distinction between "protecting public health" and "manipulating the economy". Certainly regulating public health will have downstream economic impacts, but those impacts aren't the purpose.

[luciusdomitius]

Yes, externalities must indeed be settled. However, leaded petrol (same chap also invented freon (!) btw - talk about being unlucky :D) cannot really be handled by a market as it is in its nature a bodily harm and there is the criminal code for that.

Freon would be a much more interesting example as it hurts societies in the long-term and not individuals in the short.

[KptMarchewa]

Unfortunately governments can also fail in settling externalities. For example, making it hard to extract oil domestically only shifts production to other countries, which are often bad authoritarian states.

Better way is to tax consumption, but that has never been popular in US.

[galangalalgol]

The US is a "low trust" society. We don't trust our government. Our entire system was in fact designed assuming the axiom that people in power cannot be trusted. People are not confident those tax dollars would be used to offset the externality, as opposed to a pet project. Sadly, our history would seem to make that lack of confidence rational. But, denying our government the power to govern isn't the solution, demanding (and getting) transparency and personal accountability that is meaningfully severe is.

[SkyMarshal]

Technically the US is a “high trust” society. Meaning we have institutions like rule of law, independent courts, and elections that are trusted by society to facilitate commercial and legal relations between people, rather than personal relationships and kinships.

Yes we complain a lot and criticize the government and don’t fully trust our polarized politicians, but a real “low trust” society is a far cry from what we have.

https://en.wikipedia.org/wiki/High_trust_and_low_trust_socie...

[luciusdomitius]

This might have been true 10 years ago, but now (just from the wiki examples):

1. More than 40% in US do not believe Biden legitimately won election – poll - https://www.theguardian.com/us-news/2022/jan/05/america-bide...

2. US tax system is not voluntary, but extremely coercive - the IRS is legendary in its blood-houndness and the US is probably the only country in the world that taxes non-resident citizens.

3. Abortion-Rights Protest Targets Homes of Kavanaugh, Roberts https://www.bloomberg.com/news/articles/2022-05-08/abortion-...

I am not sure if the US could already be classified as a low-trust society (probably not yet), but a strong negative trend is definitely present.

[danaris]

Taxing consumption is inherently regressive. By its nature, it places a disproportionate amount of the burden on those least able to pay for it.

[jcadam]

There are ways to address that. For example - exempting certain things like staple food items.

[danaris]

No, there really aren't. You can mitigate the regressive nature of consumption taxes, but you can't eliminate them.

Fundamentally, poor and middle-class people spend a higher percentage of their annual income on goods and services than rich people do. There just isn't enough stuff that one could ever want to buy (or services to partake in) for rich people to spend the same proportion annually.

The best you'd be able to manage is limiting your consumption taxes to things that only very wealthy people can afford in the first place, like superyachts. But at that point, a) you're not managing to bring in a huge amount of revenue with it, and b) you might as well just raise the higher income tax brackets, or add taxes on wealth over $X amount.

[jcadam]

If you could replace income tax with a national sales tax, I'd be all for it. The problem is, everyone knows any consumption based taxes will be in addition to the current taxes on productivity (e.g., income tax).

In any case, what the govt doesn't take in taxes, it can just take via inflation.

Wealth confiscation via inflation is great! it doesn't require politicians to justify higher taxes to their constituents (and thus face the wrath of their voters), and it can be implemented by unaccountable and unelected officials at the Fed.

[luciusdomitius]

Yes, but it is as socially unfair as government services being charged on for-profit basis. Or even a bit more.

I am the most anti-socialist person I know and even to me, inflation is too cruel of a tax.

[Mountain_Skies]

I my state, local sales taxes (which are a consumption tax) are hugely popular, especially in conservative areas. The reason is simple: voters know upfront what the taxes going to be used for (usually education related capital expenses and road improvements), when the tax will expire, and that it will only be used in the county instead of being shipped off somewhere else to be administered and a portion skimmed off. Each time they come up for renewal, they usually get passed by a large margin. So maybe the problem isn't that people don't like consumption taxes but that they don't like taxes disappearing into a black hole with dubious or non-existent benefits or even used to create negative value to the community.

[dpark]

> leaded petrol cannot really be handled by a market as it is in its nature a bodily harm and there is the criminal code for that.

This is the same fallacious thinking “libertarians” fall into when they think civil court will solve for most regulations/codes. The burden of proving harm is too high. Probably hundreds of millions were spent proving that leaded gasoline was unsafe. No criminal prosecution could have accomplished that. They simply don’t have the resources.

And who would they have prosecuted anyway? The gasoline companies weren’t actually the ones causing the harm. It was the billions of people driving around burning the stuff.

There’s a reason we end up with laws regulating specific things like this. It’s untenable for the courts to handle otherwise.

[luciusdomitius]

In case you are actually asking a question - most environmental guidelines in today's EU cities are the result of court cases. Both my hometown and the city I currently live in have been found guilty of neglecting air quality multiple times and ordered to take action. And yeah - in a libertarian (actually an-cap) world it wouldn't be a city, but a municipal services corporation with participatory ownership (a la UK Premier League).

But then again I am not really an anarcho-capitalist, but an extremely mild minarchist (imagine Raegan without his naiveness or Thatcher without her inferiority complex). So even this doesn't represent my opinion.

[scrubs]

You're right externalities are an issue. However, consider rating agencies in the 2008 housing crisis. By not downgrading junk they made the problem worse. If the market worked like a rational market, we'd be better off. Alas, human organizations are not rational sometimes.

[rapind]

That’s not how I read his post. Regardless you can mark me down as someone who doesn’t want the government trying to “goose” our economy through increasingly complex methods, like artificially low interest rates, corporate welfare, etc.

I do however fully support reasonable regulations (consequences for externalities), building infrastructure, universal aid and healthcare programs, etc.

Basically bad decisions like over borrowing, and bad lending, should be punished (not bailed out or you encourage bad decisions). Financial decisions that shift cost to others (externalities like dumping chemicals into a river) should also be punished. At the same time a safety net can be developed (cheap housing, food, or even UBI) to prevent the most devastating individual consequences (especially those you may not even be responsible for). That’s my ideal at least.

[jonkho]

“everything would be fixed and we wouldn't have any environmental problems.”

Ah…age-old gaslight tactic. Using words like “everything” “all” “any” to encapsulate your opponents argument then using a non-sequitor counter-point (leaded gasoline) to argue a tangent point (a point not relating to interest rates).

[mort96]

"How would you deal with externalities such as cars polluting the air with lead?" is a perfectly valid question in response to the claim that "meddling" by governments into the free market is inherently bad. It's neither a non sequitur nor gaslighting.

[jolux]

The problem is that economic growth is extremely important to developing economies as well. It’s one thing to say we should limit growth, or deprioritize it, or whatever, but in practice this means forcing poor countries to accept lower standards of living. That’s the real trade-off here.

[phkahler]

Growth can't continue indefinitely. In fact a lot of growth today is actually fudging the numbers to make them look good.

[chii]

> Growth can't continue indefinitely.

no it can't continue indefinitely, but there's still a tonne of room left for humans to grow. I dont believe we are near the limit yet. And that's only this planet. There's at least a few more in the solar system, and hopefully, propulsion tech will improve at some point to allow other star systems to be taken over by humans.

[0xffff2]

>I dont believe we are near the limit yet.

On what basis? We are already objectively destroying this planet with absolutely no meaningful action being taken to change, much less reverse course. At this point we will be incredibly lucky if we even manage to sustain a technological civilization long enough to settle other planets.

[dustingetz]

innovation can?

[phkahler]

Nope. One of the fudges is saying that a computer based on today's technology is more valuable than on from a couple years ago. I forget what this is called. But it's stupid and could be really abused to say a cellphone is a trillion dollar device, since that's what the processing power would have cost in 1980.

Maybe we should measure GDP via wages. Since all spending has to come from that anyway... not sure how to classify B2B transactions though, just thinking out loud.

[bryanlarsen]

An iPhone 12 uses less material than an iPhone 11 yet is more valuable than an iPhone 11.

A Tesla uses about 25 tons less fossil fuels than a gasoline car, even if its electricity is powered by a natgas generating station. The Tesla uses about the same amount of fossil fuels as the trucks transporting the fuel to the filling station.

Software of course, is special. New software is better than old software otherwise nobody would buy it. Yet the material usage is roughly equivalent at roughly $0.

These three types of progress can continue indefinitely.

[nradov]

You are referring to the hedonic quality adjustment factor that the BLS applies to CPI calculations. It's not at all stupid and it doesn't result in trillion dollar cellphones. You should really read up on the basics instead of making ignorant comments about things you don't understand.

https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...

[inawarminister]

There were proposals for labor-backed currency, where the basic unit is one hourly work of the worker. So B2B transactions will be valued from the man-hours that went to it.

Of course this approach breaks when the gigantic corpocracies are able to bloat into larger and larger sizes. But it might be an interesting research topic.

[collegeburner]

There are a lot of reasons why this wouldn't work but fundamentally the LTV is an interesting toy but crap economics. Bottom line is utility to people does not depend on person hours involved in production.

Think about it this way: I can have somebody skilled or unskilled do a job. Assume that they make the same output but it takes unskilled 2x the time, let us say maybe producing some leathercraft. Their output is not worth 2x the skilled, it's the same thing. Now assume that they take the same time but the skilled produces an output of 2x quality, maybe they are cooking something and the skilled makes a dish 2x as good. Neither are they worth the same. It may actually be worth less because they produce it slower so consumer has to wait 2x as long.

[bluGill]

Labor hours fails because some jobs need more incentive to get into. Why would I study in school when I could make just as much doing basic unskilled labor, with careful savings the unskilled laborer can retire earlier since he starts sooner (also likely doesn't have to pay off student debt)

[Infernal]

I think a lot of the sibling comments here misunderstand the concept of labor-backed money (rather than debt-backed money, which we have in the United States today).

First - currency is the physical note, coin, IOU, etc. Money is the concept.

With debt-backed money like the US dollar, the money is created by a private bank (the Federal Reserve) in exchange for US Treasury bonds - debt.

The currency supply is controlled by the US Treasury, but the money supply is controlled by the Federal Reserve.

Labor-backed money as I understand it, would be created by the Treasury in exchange for labor. The Treasury would control the supply of both money and currency. Crucially, to create money, labor must be performed. Similar to debt-based money, where debt is created by the government as the basis of money - in this case, labor would be "created" by the price (in new money) offered for it.

There is no need to have some centrally-planned, mandated valuation of a certain tradesman's time vs another trade or profession - the government puts out lots of contracts for bid today with no such mechanism in place, and it wouldn't need to change.

[inter_netuser]

why, because we ran out of habitable planets in the galaxy?

[Ambolia]

Depends what "poverty" means. A lot of poor people were subsistance farmers, able to hold property and carve a space for themselves and their families in the world. That's something that will be out of reach for many "rich" people in the upcoming decades.

[jolux]

Subsistence farming is a nightmare, I can all but guarantee that no living subsistence farmer would choose that life over renting an apartment and having disposable income.

[Ambolia]

It's not that bad, and a lot of people like to own their own land rather than never get to own anything.

[rayiner]

Dude. Go move to my dad’s village in Bangladesh for a year, so what they do, then come back and post on HN.

[SkyMarshal]

Let’s assume all of us are curious about what we would learn doing that, but none of us are probably willing or able to actually do that. What would we learn if we did?

[rayiner]

Being a subsistence farmer is really hard. When my dad was growing up, 1 out of 4 kids died before age 5. Getting in boats to go to school was a thing during monsoon season. Moreover, most people don’t own their land—they’re what Americans would call share croppers or what Europeans would call peasants.

There’s certain benefits, of course. The communities are tightly knit and there is a predictable social hierarchy. But it’s a rigid one, and the rigidity is driven by the realities of subsistence farming. It’s pretty great if you’re a landowner, but if you’re not born into one of those families then you can’t “work your way up.” Indeed, a lot of the things we think of as “more enlightened” attitudes in the modern west are really the product of us being free from the constraints of subsistence farming. You don’t get to be “child free” (or openly gay) in an economy where having lots of kids and hoping enough survive to take care of you in your old age is the only retirement plan.

Men’s dominance over women, likewise, arises naturally in an economy where people are at the edge of survival and doing extremely physically demanding work keeps the community alive. My mom grew up reading Russian literature and got a master’s degree in chemistry and edited a history of the Bangladeshi independence movement. Not because her father was enlightened, though he was, but because he was a wealthy landowner and didn’t need his daughters to be in the fields harvesting rice, or to get married off quickly so some other man could support them.

[mardifoufs]

Yeah wow, I always cringe whenever I hear people unashamedly talking about "degrowth" in poor countries because hey they like it anyways! I mean they are alive so it can't be too bad? As if there's no reason why those subsistence farmers do everything they can to either get themselves out of that situation if they get the chance or at least sacrifice everything to make sure their kids don't have to live the same life. They should've just read about the virtues of minimalist living online and like, reconnect with nature bro.

This is one of the reason why i just can't get into most modern western environmentalist movements , it actually gets uncomfortable how they fetishise misery and stagnation knowing damn well that they themselves won't ever have to experience any major deprivation. Because let's be honest, even if western countries make concessions of course they will never sacrifice more than comforts/superfluous things. abject poverty farming for thee, and at the very very worse "degrowing" a few percentage of GDP for me.

[prasadjoglekar]

Not really. China and India grew even during the 1990s when $ interest rates were not 0 and quite high. Single largest removal of poverty in the world.

Growth in both those countries was due to them opening up economies to internal and external entrepreneurialism and capital.

[ivan_gammel]

Let's say you have two possible projects: X is investment in growth, which will result in increase of your revenue in the short term, and Y is investment in reduction of risks which will increase the value of your assets in the long term. If interest rates are low, borrowing money for Y or for both projects becomes more tangible option. If interest rates are high and you are an optimist, you will choose to borrow money for X. Based on this logic, higher interest rates would expose the optimism of the investors better. Whether there is a causal link between them or not, that is an open question.

[cryptica]

This hits the nail on the head. Also, all the money-printing creates extreme market distortions, inequality and injustice. It greatly increases the role of luck and social connections in financial success (due to Cantillon effects) and therefore those who end up at the top, blinded by their extreme survivor bias, tend to be overly optimistic about reality and so they are among the worse qualified to be making complex decisions on a global scale which affect the majority (who are non-outliers by definition)... I doubt anyone is qualified to be making those decisions, let alone extreme outliers who don't fully understand the magnitude of the problems.

[necroblogger]

I read it: 'UN wants to curtail their 5-years-plan 'agenda 2030' to be finished in 2025 , cos they are planning to impose you with their might (davos 05-22-2022 who want to overrule health, stripping sovereignty and if thats succsessful, forbidding nationalism world wide) to use the same _scare_tactics_ - as other western nations (media-driven experiment) before (-migration -covid-19 -war in ukraine for example), saying now - 'The UN welcomes you to 1,5 disaster per day beginnig in 2030!' (-; No... and while that wasn't about money, have you ever thought 'rising markets are an equivalent of increased productivity' ? ^^ Some days ago there was a headline: 'productivity is on an 75-year low.' But in terms of asking 'Is that a participation-thing?', i might enjoy what you wrote, sry, won't sound offending... (-:

[RC_ITR]

One of the interesting parts of humanity is that we make artificial frameworks that become so familiar to us it feels “natural”

The entire concept of interest is a human-designed concept (one that some cultures actively reject). To say that interest rates are being “meddled” with is just basically saying “one group of humans is doing one thing that disagrees with how another group of humans do it”

I’d argue that humans in general are awful at understanding time values and interest is a very incomplete solution to that problem. Making that incomplete solution marginally better isn’t going to get us anywhere.

Shame is, I don’t have any better ideas.

[luciusdomitius]

This is one of the best comments on HN ever. Another problem of the current (non-commodity based) system is that monetary base doesn't map to the resources of the planet which have not increased almost 5-fold as did M2[0].

0. https://fred.stlouisfed.org/series/WM2NS