[underlipton]

No, that quote is correct. Let me restate it in a way that may appeal more to pessimists:

Money is a form of mind control. You use money to get people, groups, institutions, to do what they normally wouldn't. Economics is the study of manipulating that power.

Cryptocurrencies would then be, or was supposed to be, about radically resetting economic priorities, in part by washing away the old incentives (by cutting the institutions that perpetuated them out of the money->behavior loop). It actually did manage this, to a limited and chagrin-inducing extent: 2-3 years ago, you could have convinced someone to pony up 2 year's worth of the average American's income for a picture of a cartoon monkey. Even today, people are paying "money" for digital art that they never would have a decade ago. The potential to have people value things differently because the means underlying that valuation had changed was there.

The issue, to my eye, is that the traditional financial "megaliths" (as he put it) sunk their claws in, with people on the inside ready to sell out the space to become filthy rich (only to be betrayed, both by their own hubris and the incumbent power structures). This is where your "game of greater fools" comes into play, as well as the oft-noted notion that Capitalism subsumes and commodifies everything it can.

[tomrod]

> Economics is the study of manipulating that power.

Hello! Your friendly neighborhood economist here. Economics is the study of resource allocation under scarcity.

In your comment, I think you actually mean Game Theory and Mechanism Design, which are about assessing strategic behavior (Game Theory) and about creating mechanisms that align with strategic behavior to result in preferred outcomes (Mechanism Design, sort of the opposite approach to Game Theory).

Alternatively, based on your comment here:

> The potential to have people value things differently because the means underlying that valuation had changed was there.

you might find your thoughts more appropriately align to sociology and social psychology than economics, as economics doesn't care where your valuation or preferences come from--just that you have them.

Up, up, and away!

[underlipton]

If I'm wrong on this subject (and I would be interested in knowing how "resource allocation under scarcity" and "manipulation of the behavior of the people obtaining and using resources" are mutually exclusive), I might say that it's a product of the layman's (my) relationship to "economics" and "economists". The contact the most people have with economists is usually, "Talking heads or disembodied voices telling listeners how they should feel about developments in various markets that are connected to whether or not they'll be able to find their lifestyle affordable." The emphasis is decidedly on application, which I imagine runs into game theory and mechanism design, to the point where a reasonable observer might consider the latter two components of (applied?) economics. ...Which raises the question: DOES anyone subscribe to this model? What would an expert make of it?

>you might find your thoughts more appropriately align to sociology and social psychology than economics

Since economics is an emergent property of agents interacting with other agents and their environment, I'm failing to see how I'm misaligned with any of the three. I've heard economics described as "sociology with a veneer of statistics", which is something I can't say I'm unconvinced by. I respect your status as a relative expert, and also as someone close enough to the subject to have a conflict of interest in characterizing it fairly.

[MrVandemar]

> Hello! Your friendly neighborhood economist here. Economics is the study of resource allocation under scarcity.

As an economist, would you be able to explain (because I truely do not understand) why "the study of resource allocation under scarcity" is more important than (and/or prevents) meaningful action on climate change?

[jncfhnb]

Because meaningful action on climate change requires the allocation of scarce resources?

[tomrod]

> As an economist, would you be able to explain (because I truely do not understand) why "the study of resource allocation under scarcity" is more important than (and/or prevents) meaningful action on climate change?

For my case, it is quite simple -- people have different preferences and switching costs! I chose economics as a field of profession because I felt it explained human behavior much better than anything I'd come across in my life at the ripe old age of 21. Had I started my studies less than two decades ago, I would have invested more in physical sciences (especially hydrological saline exchange and improving soil quality through mycology, both fascinating problems some of my close friends study). This said, my data science company was founded two years ago to focus on impact problems in health, technology, and geopolitics, all of which are becoming more and more impacted by the effects of anthropogenic climate change in addition to just out and out pollution and bad policy effects.

But I think your first question is less why I personally studied computational economics and industrial organization, and more why economics exists when humanity may be facing a global extinction at worst and a loss of living standard at best. And the answer is: economics can be used to help with mitigation (and economists have been calling for effectual policy to address climate change for _decades_ through known effective policies like carbon markets, see subfields that research environmental economics and public economics).

Now, economics can also help understand why we see little meaningful action. Rational people (defined as being able to make comparisons between options presented to them, which simplifies analysis without much loss of generality to cases like bounded rationality) do not choose what is best for a collective (personal happiness/utility) nor what is best for them tomorrow (time inconsistency of preferences) when neither of those have meaningful impact to them today or in the near term. You see this all the time in the startup world and in the corporate world among VCs and executives who are only in things to accomplish short term goals. Self-organizing collective action is _hard_ to generate or maintain without enforcement of some kind.

To explain with a workhorse model regarding collective versus individual action, you can reference the stag hunt game: https://en.wikipedia.org/wiki/Stag_hunt. In short, while two individuals engaging for collective action will benefit more in total, there may be incentives to deviate from a collective strategy. People want more _now_, not 75 years from now (beyond the lifetime of the current living).

So TL;DR:

1. Preferences! Or, rather, subjective valuations of research topics by people can vary without applying presentism to near history

2. Because economics can explain failures in collective action, but it doesn't control or recommend against collective action goals. In fact, qualitative economic approaches to policy are often highly successful. So the gap on meaningful action is more related to political will and the incentive to deviate or adopt a policy that isn't Pareto improving.

[MrVandemar]

Thank you. Very digestible. And depressing.

[tomrod]

Only to an optimists first challenge. In truth, there are a huge array of tools that work pretty well. Definitely a space to explore, especially for folks that want to make the world a better place.

[Dalewyn]

Put another way, money is a method for purchasing time.

We pay money to use other people's time, and we sell our time to get paychecks.

Remember the old saying: Time is money.

[tomrod]

Close. We pay money to use other people's times _and_ resources (capital) and outputs (widgets). Take Netflix. You watching a whole lot of Netflix for $400 a month (or whatever they are charging these days) doesn't make people work any differently than paying for it and not watching it, or, truth be told, not paying for it (as an individual), or, in the rare case, watching it without paying for it. Thanks to the magic of capital! You're paying Netflix for Video Content and Delivery systems, but their system exists and would probably work for a long time if they reduced staff significantly. (I'm not advocating Netflix fire people).

In short, we pay people both for their time, purchasing of objects, and for use of their assets (without commenting how how fair or unfair their capital acquisition practice was to this point).

[000ooo000]

>Close. We pay money to use other people's times _and_ resources (capital) and outputs (widgets)

If these other things still require time as an input to create them, isn't it still just time at the end of the day?

[tomrod]

With a really indirect definition, yes! But then, the cost per unit sold for the latest Taylor Swift album through Apple Music is basically free, so much so that the marginal amount of time to produce and sell it is extremely negligible.

[trompetenaccoun]

Money is a means of exchange or unit of account that in its essence represents real value, such as your labor. It can be used much more like physical shackles than mind control. Because people need to eat, people need housing, that's not an illusion. And money isn't inherently bad, the mind control is in the part where they convinced a majority that it's ok for them to keep the key to everyone's shackles.

In the end all the ways Bitcoiners thought the system would come after them never happened. Ironically they got exactly what they wished for and what critics thought could never happen. Because the establishment has a much easier way to suffocate emerging uprisings: Buying off the leaders and incorporating the movement into the mainstream. Crypto has gotten assimilated.