All of skilesare's Comments + Replies

Does anyone here have kids in school and if so how did you go about picking their school? Where is the best place to get a scientifically based 'rational' education.

I'm in Houston and the public schools are a non-starter. We could move to a better area with better schools but my mortgage would increase 4x. Instead we send our kids to private school and most in the area are Christian schools. In a recent visit with my schools principal we were told in glowing terms about how all their activities this year would be tied back to Egypt and the stories of E... (read more)

My approach was very simple: find the best public school system in my area and move there. "Best" is defined mostly by IQ of high-school seniors proxied by SAT scores. What colleges the school graduates go to mattered as well, but it is highly correlated with the SAT scores. What I find important is not the school curriculum which will suck regardless. The crucial thing, IMHO, is the attitude of the students. In the school that my kids went to, the attitude was that being stupid was very uncool. Getting good grades was regarded as entirely normal and necessary for high social status (not counting the separate clusters of athletes and kids with very rich parents). The basic idea was "What, are you that dumb you can't even get an A in physics??" and not having a few AP classes was a noticeable negative. This all is still speaking about social prestige among the students and has nothing to do with teachers or parents. I think that this attitude of "it's uncool to be stupid" is a very very important part of what makes good schools good.

Sorry for the delayed reply.

This system significantly reduces risk. It is one of its biggest benefits. Have you tried doing an NPV calculation with 0 risk?

Risk is reduced by folding the blockchain over delinquent entities so that you still procure some future benefit from investors/customers.

I agree though, the benefits must out weigh the negatives...and I think they do. The hard part is convincing businesses that they have more to gain by using the system...or rather that they will be out competed if they don't use the system.

Ahh...I see...The 'stock' that consumers get in hypercapitalism isn't a stock of ownership or voting stock. It is a kind of non-voting prefered stock. Really it is more like an airline mile. It doesn't affect what dividends are paid or the cap table.

Okay I think I identified more preciusly what is it. I will just call it arbitrarily "shard" to make special note that we are defining (or I am figuring out) and that analogs with other things might not apply. Shard is a right that has a holder and target (ie it can be spesified as a two place predicate s(a,b)). Having multiple shards of same holder and target can be expressed as having a single relation with a strenght in it (ie that s(a,b,100) a has 100 of shards on b). During regular intervals (which most simply is annually but can be tought to also happen smoothly constantly) there happens a lazy money redistribution event. First we mark everybodys money as "lazy". We take a portion of everybodys lazy money that they have and mark "waking percent" of it as unlazy. This money will no longer be touched by the event and where the money woke up will be availble to use after the event. For each person we take whatever lazy money they have left (the remaining "dozing percent") and distribute it equally among all shards that have that person as their target. If A has 10000 and we use 90% waking percent this result in 1000 lazy money and B has 10 shards on him, C has got 25 and D got 5 then B gets 250, C gets 625 and D 125. This happens "simultaneously" for everyone ie can be done in any order (you have to keep track of money before the round started and received this round). Then we start again by waking up percentage of the money of the lazy money and keep doing this until some cut off point (such as under 1$ moved total in round) where the amount of lazy money is low. This is the claim and the effect of the shard (once it exists). The interesting thing is that the more shards you hold the more you stand to benefit from the redistribution event. Eveyrthing else is derivative of this effect. Now the idea is that shards are created when you transfer money to someone. Thus a person can't have more lazy money than there are shards on him. A person can have way less la
Can you precisely define what this consumer 'stock' is? You seem to think of it as a legally binding claim to a long stream of future payments which make it look like a bond. An airline mile is basically a disguised discount and it's a one-time thing, you use it and it's gone. Preferred shares have no legally binding obligation to pay out anything.

..and I'm all for profit. I think it is a great thing....I just also think there is an advantage to it being a time bound great thing. You made a profit! Awesome! Good for you! Now use it for the greater good or give it back(slowly...but still...)

I love your counter-parable. It does an awesome job of showing what massively complicated thing we are discussing. Land, money, consumables, exponentionables(your seeds), all have very different characteristics and drivers. Interest, investment, production, savings all are slightly different ways of talking about some of the same concepts.

I'm trying to get to the bottom of this statement and am having some issues:

The role of money is to make such long chains implicit; a positive real interest rate reflects that such chains are possible for most goods,

... (read more)
You can't plant a pie and grow two pies, and in fact it will go bad quickly, but you might be able to trade the pie for seeds, grow them, and reap enough to trade for two pies. If no one with seeds wants a pie, you might have to make a chain of trades, the pie to the cobbler for shoes and trade the shoes for seeds. Even if you don't want to grow seeds yourself, you might trade the pie for farm tools, then trade those to the farmer in exchange for seeds at harvest, then trade the seeds for more pies. Now it's not guaranteed that these sets of trades are possible. It could turn out that the best deals you can get will leave you with half a pie at the end. But usually, if some goods can be used to make more goods, and baking pies isn't going to get any harder in the future, exchanging pie today for pie tomorrow will get you more pie. Money and financial institutions abstract trade chains away, so you can sell your pie, put the money in the bank, they'll make loans to people who can pay back more in the future, pay you interest, and then you can buy more pie. The interest isn't a distortion caused by money; it reflects a possible set of trades that might not be obvious but would be possible. If such a set of trades doesn't exist, you won't have positive real interest (real interest is the published interest rate minus inflation). If you give all of the upside of the loan to RC there's nothing left for the stranger and no reason for him to bother. If they're able to negotiate an interest rate, they'll find a deal that works for both of them. An equity arrangement where RC gets a defined percentage of the stranger's harvest instead of a fixed amount of grain is also something they could negotiate in traditional capitalism, if such a deal were preferable to both parties.

You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to "get more" I would want to get more value and you're promising me just more money. The point is that an economy produces some amount of value and that's all you have to redistribute. You can make money spin faster, but that will not increase the value produced -- all you'll do is increase inflation.

Do you think that the current economy is ginning at an optimal output? How much slack would y... (read more)

I don't know what "optimal output" is. Can the economy produce more? Of course it can. What's stopping it? Ah, an interesting and complicated question. There are a lot of constraints, both local and global -- I would say the biggest is the level of technology -- and they are binding in different places. As I mentioned earlier, I do not think that the availability of capital is a major constraint at the moment. In fact, we have a glut of cheap money. That's possible, but why do you think these actors would generate value? It's entirely possible for them to just waste resources. The fact that they have not been able to secure financing indicates that they do not have a convincing plan of creating value. Just get yourself a plot of GDP and a plot of money velocity over time. See how correlated they are and whether you think there is a causal connection. In any case, velocity is a calculated number -- it's just GDP divided by money supply (and you can use different money supplies -- the monetary base, M2, M3, etc. to get a velocity for each of them). That's the financial equivalent of lending money to the seller. Why would a consumer be interested in becoming a creditor for all purchases? I think that's not quite true. Yes, Piketty has written a book. Not everyone agrees with its conclusions. Really, you don't think there is a good chance to royally screw things up if you make radical changes with uncertain consequences? So what's stopping the current central banks from easily controlling inflation now in this way? Japan, for example, have been trying to get out of deflation for many years. It printed a lot of yen. Inflation is still negligible. Sure. As long as your proposals are not mandatory :-) Depends on what. For some things I don't care and for some things I expect voluntary consumer choice to be not an effective method to achieve anything useful. Status quo as in what we have now? I would prefer things to get better, of course, but I'm not holding my b

Here is a video where I present a more 'real world' scenario. And I mean real world in the loosest sense. In it there are 3 actors that all have their role to play and the fallout is interesting.

Ultimately It would be cool to build a super detailed economic mode. I also think it would be cool to hook it up to something like World of Warcraft.

I do need to do a better job of 'thinking evil' because we all know there will be people that try to break the system and use its weakness for gain. The ret... (read more)

Increase the decay rate and people move money faster and more cash comes out of the economy which keeps deflation from happening.

Things are ok if the economy recovers. In the event of a near extinction event we'll have bigger problems.

This is a great comment and I've been thinking about it for most of the day. Just wanted to let you know I'm thinking on it and will respond in a bit.

Can you explain more? Currently I don't care where an apple came from as long as two apples are the same to my perception. If I have a known reason why apple A is made in a more responsible way than apple B, I have no real incentive other than guilt to guy A over B. Under hypercapitalism you would favor A. Now B could lower their that your concern?

I'm not sure where the assumption that rent rates are static comes from. Economic rent just is. It can vary all over the place. if someone comes up with a magic brain cancer pill that can only be... (read more)

Only to the extend that you define "responsible" as likely doing business in a way that makes a profit in the future. Not if you define it in ways about producing little negative externalizes. Animal products might be a better example. If "responsible" means that the animal suffers less than there no element in your hyercapitalism that encourages a buyer to buy from the more responsible person. If raising animals in a way where the suffer less is bad for business hyercapitalism encourages people to buy from farmers who's animals suffer more. I'm not sure that it's worthwhile to discourage people from buying from companies that are in financial trouble. Do you think extra pressure to kill weak companies is good? Only if the have the same price. Otherwise you calculate the value of money that you are likely to get back by comparing it to how much a similar investment costs and see whether the price difference warrants it.
Yes, I mean that B could charge a lower price, and 'capitalist reason' would dictate buying the apple from B. I'd urge you not to conflate externalities with future value; there are many reasons one producer could have a higher future value than another, and they aren't all socially beneficial. For instance, farmer B might be an excellent and responsible farmer who's about to retire. Or maybe farmer A uses slave labor and is smart enough to never get caught. Re: static rent, I meant in your code, not in the idea of hypercapitalism; each node is given pER at the beginning and it doesn't change. Having some kind of time-varying pER that buyers can predict, together with having higher pER nodes charge lower prices, would start to get at the difference between capitalist and hypercapitalist reason, but that starts to get complicated, and I'd have to think a while longer to conclude that it doesn't need even more complexity to make sense. (I've had other thoughts on how to improve your code, but they keep exploding into endless chains of 'but if you add this, then you have to add that') And when I questioned if future-value-based buying was 'desirable', I meant for society. Take the example of the retiring farmer; 'capitalist reason' would say to buy from them iff they sell the best-priced apple, whereas hypercapitalist reason would penalize them for their lack of future value. Also, random thought: it'd be cool to add utility measures. I'd suggest utility per node per month as log(spending/necessities).

Thanks for the feedback. I'm not quite sure I understand your concerns. Are you concerned that people will offer different levels of stock to different people? That is not exactly how I imagined things working. $1 spent = 1 unit of stock(point/air line mile/smoods/call them what you will it is a unit of account).

In general I think we should be more forward looking. I don't see much of a negative in causing people to consider the future implication of their actions. We are limiting anyone's freedom. You can still buy from the less attractive vendor if you want.

Even if the amount of "stock" is the same constant for everybody there is still a decision how big a portion it should represent. In the extreme the only stocks are from the $1 in 1 stock out principle. But in a way the enterpreneur should also have stock in it. If the enterpreneur reserves 1000 stocks for himself that would be the equivalent of a 100 stock person giving out 10 stocks per $. If the starter doesn't have any stock he doesn't own it he just operates it for the customer-owners.

You are on to something here and I think you are tracking pretty well with what I'm putting forward. There is a tension between 'do I keep spending money with grocery store A that I have a long history with and get significant dividends from' or 'do I go with the new upstart where my money is getting in earlier in the game and who probably has more long term potential'.

Hypercapitalism put forward the idea of limited corporate lifespans where the law of diminishing returns eventually catches up with the growth potential of an existing corporation. I've ru... (read more)

I am not tied to the name. The public facing name I've proposed for this kind of money is 'Art', but I'm hoping to engage some actual PR and Marketing people to help come up with some thing better.

I love it. Can I steal it? :)

It is still a little obtuse for the man on the street, so I'm looking for even better ways to make it understandable.

Thanks for the feed back! I'm glad to be having real conversations about this stuff instead of just letting it rattle around in my head.

A converse argument is, if whatever project you are considering is not economically viable if capital costs ~ 8-12%/year, maybe it was not really such a great idea.

Let's look at the data. TTP(Time to profitability)

Tesla - 10 years FedEx - 4 years Amazon - 9 years Turner Broadcasting - 11 years ESPN - 5 years (

This... (read more)

Thanks for the lengthy reply! I don’t think I quite follow your first point. However, by listing several companies that took multiple years to become profitable, you illustrate that our current system is equipped to support endeavors that are not immediately profitable. While I read and enjoyed Gessell’s parable, there are some special conditions in the parable that make it not particularly applicable to many real-world scenarios, including my backhoe scenario. The stranger planned to borrow buckskin clothing, seeds, etc., from RC and pay them back in kind with zero or negative interest. These were things that RC had no immediate use for, and that would deteriorate if not used (like money under hypercaptalism). So (and this is the point, I think) the stranger was doing RC a service by borrowing these things, using them, and paying back later in kind with new products that had not suffered deterioration. However, in the case of my backhoe example, a plumber needing to borrow a backhoe would probably borrow it from one of two sources: 1. A tradesperson who owned a backhoe for his/her own use, and rented it out when idle as a secondary revenue stream, or 2. A business that buys equipment specifically to rent out at a profit In the case of #2, clearly the business would not purchase a backhoe unless it expected to be able to rent it out profitably. In the case of #1, the tradesperson who bought the backhoe uses it him/herself, so it is not in danger of getting rusty or falling into disrepair due to lack of use. So, even in case 1, there is no advantage to the tradesperson to lend out the backhoe unless rent is charged. And in both cases, there is effort and risk involved in loaning me the backhoe – risk that I might damage it or not return it, and effort in running a credit/background check on me prior to lending me the backhoe, taking and verifying a credit card or other collateral to (partially) mitigate the risk of my absconding with the backhoe, inspecting

If she were rewarded for buying from someone who'd get better tomorrow, she will also get punished for buying from someone who'd get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don't see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.

Some risk, yes. But in the models I've run, the risk is fairly small and is mitigated by the fact that shitty wine maker spends some of your cash with awesome barrel maker and awesome se... (read more)

As an aside: the local prefix for quoting is ">" at the start of the line, not the pipe character. I think you're mistaken about my preferences. You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to "get more" I would want to get more value and you're promising me just more money. The point is that an economy produces some amount of value and that's all you have to redistribute. You can make money spin faster, but that will not increase the value produced -- all you'll do is increase inflation. Essentially, if I buy a loaf of bread from a baker and the baker knows he'll have to pay me "dividends" in the future, the baker will raise the price of bread to compensate for these future dividends. Your hopes remind me of "free energy" mechanisms in physics -- if only we could set up sufficiently clever loops we can get more energy that we put in! Um... My current understanding of your idea is that you basically want a tax on wealth (or, specifically, on money wealth) with a very complicated scheme to distribute its proceeds directly to the population bypassing the government. Is that a reasonable approach? I would also like to point out that I think your fears of wealth accumulation are overblown. Look at empirical data. Is there, in reality, old old money dominating everything? Does the Medici family rule Europe? What happened to the Vanderbilts? The oldest rich family I can recall offhand is the Rothschilds and while they are not poor by any means, how do they do compared to Gates or Brin or Musk? What about the traditionally most valuable kind of capital -- land, also known as real estate? What about technology? or non-agricultural commodities like oil, coal, copper, etc? The current inflation is controlled to best of central banks' abilities. You are not controlling it any better, you're just setting a floor as to how low can it go. I'll take the standard capit

Question to skilesare: what is the hypercapitalist take on rising interest rates? My impression is that hypercapitalism encourages negative interest rates. Am I understanding that correctly? Or, is hypercapitalism a reaction to negative interest rates?

I think rising interest rates should be a natural phenomenon arising for money getting more expensive. I also think that there are not many good reasons for money to get expensive. Money is a tool and a score keeper. It isn't anything real. There should always be enough money in circulation to buy all the ... (read more)

Thanks for the response and clarification. These are interesting ideas and a radical departure from the current economic situation. If I have time, I would like to read more of Silvio Gesell's theories. And, I'm glad to hear that you've considered the potential for (hyper)inflation resulting from the increased velocity of money that will result from its increased availability and the fact that consumers will be eager to spend it quickly before it decays. I am still unclear on what (if anything) is wrong with a modest positive interest rate along the lines of pre-2008 downturn levels. You said: A converse argument is, if whatever project you are considering is not economically viable if capital costs ~ 8-12%/year, maybe it was not really such a great idea. And, you said: Well, yes and no. My understanding of capital is that it is just wealth used to generate more wealth. For example, if I am a plumber by trade and I need a backhoe to repair a sewer line, the backhoe is capital that I need to complete my project and create wealth. If I don't own a backhoe, I'll probably opt to rent one, and this would arguably be preferable to owning one as it is not every day that I need to dig up a sewer line. Obviously, if someone owns a backhoe, they will expect payment (rent) in exchange for my using the backhoe. By the same token, if I am a real estate developer and I need $100M to develop a project, I would expect to have to pay interest (rent) to use that money. I don't see the difference between paying to use someone else's backhoe and paying to use someone else's money. In both cases, I am paying for capital that I need to complete my project, and I don't really see a problem with that arrangement. And, as Lumifer said upthread:

The map is not the territory. Money that doesn't decay isn't representing something real. And when this happens someone ends up holding the bag.

Positive interest is beneficial to bankers.

Give this parable a read:

But you can also write the opposite parable: Crusoe has finished planting his most fertile fields and is preparing to plant his remaining seed in the less fertile adjoining land when the stranger arrives. S: I have found some excellent fields, too far from your home here to be of any use to you, but which will serve me well; and I need only some seed. I see you have some excess, which will be much more productive in my fields than in yours; might I borrow it, and easily repay after harvest? RC: How much seed will you repay me, for each I lend you now? S: One seed for each; my religion would forbid any other arrangement. RC: The land I intend to plant them in is not so lush, but even so I expect to reap many times the seed I plant. Where is my self-interest in placing it where it will yield less? Moral: some goods decay, but others can compound themselves--or, more often, create other goods that can create other goods in a long chain that ends with more of the first good. The role of money is to make such long chains implicit; a positive real interest rate reflects that such chains are possible for most goods, and any exceptions will increase in price faster than interest accumulates.
Interesting. Thanks for the link.

I'm new here, tell me more about this thread?

The latest diary thread is this: [] This is also described in the Wiki (but the linking is outdated): [] You can find it in the right side bar (at least most of the time).

Potential absurdity bias maybe? Tim Cook has a ton of apple stock and I don't see many kidnaping attempts. Someone tried to blackmail David Letterman a few years ago and that guy is in jail. This is certainly in the realm of possibility, by I think highly unlikely. Now if you want to talk about your deadbeat brother in law hitting you up for a loan....again...maybe that is an issue worth addressing, but I bet your 3000 sq ft house says more about that than your blockchain activity.

You certainly wouldn't want to try this without some significant rule of law.

...and besides, I do think privacy is important and you have to have a mechanism for it. Hypercapitalism has a mechanism.

Yes, exactly. Most economic theory assumes 'in the moment' and a bit of God like reach. In the real world we have to deal with time and space.

For most of us working stiffs, when we go to the store to buy milk we are charged an large amount of economic rent to buy it cold, in a container, near our home. Despite the fact that you really need to drive an hour or more to find a cow. Given infinite time and teleportation, we'd hit the farm and get it for much, much less. You only have to look to digital assets to see how this plays out. This isn't a bad thing. ... (read more)

The wine buyer is not rewarded for buying from a wine maker that will make a better wine bottle tomorrow though. Think for a bit on if she was.

I'm not sure if the velocity of money is a result or a cause of economic activity, but my reason tells me that if it is flowing faster, 'I' have a better chance at having some flow to me. P(making 100k at mv 6) < P(making 100k at mv 12)

Can you name a form of non artificial capital that is a cash equivalent? Maybe gold? Any non elements that aren't subject to entropy? Ultimately, yes, I think all artificial forms... (read more)

If she were rewarded for buying from someone who'd get better tomorrow, she will also get punished for buying from someone who'd get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don't see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited. As a buyer I don't want to have a little bit of risky investment forced into every purchase I make. Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket. What's "non-artificial capital"? Money itself is "artificial" to start with, the current fiat currencies for certain. "Cash" is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid. You can think of inflation as "entropy" for cash. Not in your sense, I don't. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example. Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.

This is a tough one because most of the readily available literature on competition and market take a specific approach. Specific in the sense of time. Of course at the instant we don't want people favoring more expensive things...unless there is a damn good reason to. If you add in time though things get very interesting. This system alters the proposition to current market decision + future potential. You wouldn't pay more just to pay more, but you might buy a Tesla instead of a Honda accord because you think that Tesla had better long term earning pote... (read more)

You could offer the Tesla at a high price or a lower price. If the price is higher individual sells will move the company quicker to ground floor. That is Tesla + 1 stock will probably cost less than Tesla + 10 stock. But what is that prevents from offering the option of Tesla + 0 stock or the minimum amount of stock allowed? There is also the issue that if you think you can afford Tesla + 5 stock but could not afford Tesla + 0 stock you might end up with Tesla that bombs harder than just taking a unpaybackable loan for Tesla + 0 stock. That is when the future component factors in to everyday products future speculation will impact the price of milk. People might have a bigger resistance to buy into things because it doesn't need to only work in the moment but it needs to work for the future as well. You can't look at your accout balance and know how well of you are as you are expecting uncertain returns, returns you might need to stay on the positives.

See my answer below:

I mean that some of us are better at generating some kinds value than others. (Division of Labor)

A wine maker who has been in the business for 25 years can make a better bottle of wine than I can. If he wanted to make the same bottle of wine that I can, he could do it more easily.

A competent wine maker is already rewarded for being able to produce a good bottle of wine under normal capitalism -- he can sell this bottle for, say, $50 and you can't do this with your homebrew. As to you goals, I don't see why low velocity of money is a problem (yes, I'm familiar with Keynes). It's a symptom of the sluggishness of the underlying economic activity, not its cause. Having bank deposits or bonds pay negative interest is also a solved problem (see contemporary Europe), and if you want all store-of-value to be subject to negative interest rates you have to outlaw cash and equivalents to start with. I don't know what is "good" value. I also don't know what is "dignity of labour". And I don't think you're serious about robots :-P

This is a great question. Privacy is important. How important is it? I'm not sure.

For example, I have some Apple stock. I don't hold it anonymously because I want to them to know where to send the dividends. People tend to quickly lose interest in privacy when they have something to gain from not being private.

On the other hand there are certainly some times where you want privacy. The system allows for this by having privacy pools that you can pay through that preserve privacy. It isn't as optimal as knowing exactly where the money came from, but if... (read more)

How much Apple stock do you own? Enough to motivate someone to kidnap your relatives and blackmail you? Then you would get interested in privacy again.

Hmm...I'll have to look into this more. There certainly is a difference between 'rent' and 'economic rent'. I'm really don't think I'm misusing economic rent.

You can call it profit if you want. In the model, some nodes have a better ability to extract profit than others. Or we can call it 'make moneyness'.

"Moneyness" is a term in finance :-) Do you mean "better extract profit" or do you mean "generate value with higher productivity"? And my initial question still stands: what is your aim and what problems do you want to solve?

The economic rent is in the fact that there wasn't an apple tree on your the walk to the store.

Economic rent isn't always bad. Otherwise we'd have an apple tree infestation problem.

And we come full circle to me pointing out again that this is NOT the meaning in which mainstream economics uses the word "rent". You do want to popularize your theory, right? That means explaining things using terminology that your target audience knows and understands. Unless you have a very good reason, changing the meaning of pretty standard terms leads to much confusion.

Maybe a better question is what do I know and how do I know it? :)

Money was different than it is now 40 years ago. It was different 30 years before that. I know this because wikipedia tells me that Nixon took us off the gold standard in the early 70s and that standard was established at Bretton Woods in the 40s. Because of this I apply a very high probability to the likelihood that our money will operate differently in the future then it does now.

I guess the problem I'm trying to solve is, if we are likely going to be using a new kind of money in the f... (read more)

I think it is semantics that depend on your assumptions:

Profits are economic rent are the same in a lot of instances. If all markets were perfect their would be neither profit nor economic rent. Can you think of a situation where profit is not economic rent?

When you talk about perfectly competitive markets having no profit, you're probably thinking of the term "economic profit". The sort of profit everyone usually thinks of is revenue minus cost, which is called accounting profit by economists so as to distinguish it from economic profit. Also economists are really bad at naming things. Economic profit is revenue-costs-opportunity costs. In perfect competition, firms do make accounting profit, but they don't make economic profit. Thanks for posting your model here and getting involved in the discussion. It's always good to be able to discuss these things publicly because I'm sure many people are learning a lot from it.
I think what the linked article was trying to say was something like this: In an imperfect market, even goods that are generally not limited, can sometimes (locally, temporarily) behave like limited goods, thus increasing their price. We will call these unexpected extra payments "economic rent" because of their similarity with rent, which is defined as an income generated by owning a (truly) limited resource.
Profit is not the same thing as economic rent. You can think of economic rent as the portion of revenues deriving purely from the scarcity of some resource you hold, e.g. land in Manhattan (but not the stuff involved in administering or maintaining it), or the rights to a patent, or skills or credentials that are underrepresented in a market thanks to cultural factors. That has almost nothing to do with profit; although you can profit from economic rents, you can profit from other things too, and almost all transactions involve factors other than rents. A perfect market would eliminate rents, but it would not eliminate profits -- though it would drive down profits to the minimum necessary to motivate transactions. There are rents involved in the production of most material goods, because natural resources are almost always scarce in this sense. However, as a counterexample we could imagine e.g. a frontier situation where land was essentially free and the prices of agricultural goods directly reflected the costs and effort involved in cultivating them.
That is not correct. If there are no profits, there are no incentives for sellers to stay in business. Sure. I walk into a grocery store and buy an apple. I paid more than the cost of the apple to the store -- where is my "disadvantage" that the seller exploited to get rent? To forestall the location rent argument, let me point out that there is another grocery store selling the same apples down the block.
  1. A slow down in the velocity of money.
  2. How to make money with negative interest.
  3. How to optimize for creating 'good' value.
  4. How to restore the dignity of labor(reconciling leftist 'full value of labor' with the reality of market dynamics)
  5. How to make the robots not kill us.

Oh...and I think economic rent is a fairly standard term. This is the amount that people pay for a thing above its cost because of a disadvantage they are under. Some economic rent is good, some is bad. You can argue that it is 'value' though if someone is willing to pay it. If they weren't getting that value out of it they wouldn't pay it.

Not quite. The difference between the price the buyer pays and the cost of the good to the seller is the seller's profit which is not the same thing as rent. To call something "rent" implies that the seller controls some limited resource that cannot be easily reproduced or acquired by his competition.

I guess I need a better way to intro the concept. Would you be willing to help me work through that?

Does this video help at all? Maybe I need to have this as text? Maybe simplify it first?

I don't like videos for explaining concepts, but that may be just me. First question: what is your aim? What is the problem you're trying to fix?

If you do any driving the HPMOR podcast is a pretty good use of drive time.

Any suggestions on how to think about it a deeper level? I'm new around here just trying to get my head around some of these ideas.

A couple points, if your one year decay rate is 12% and you have $1 billion in the system you will decay $120 million that will flow back to the system. Yes it will matter how close you are to the nodes of activity. That is the point. This updates our decision function when engaging in commerce. The question isn't is this the most affordable apple, it is is this the best apple made by the best process in a way that will lead to... (read more)

I think writing down a monto carlo model helps to make decisions explicit. At best you do it in a form where the model is easy to modify for other people. You could run a tournament where people can submit bots that act in the economy to maximize their returns. Bitcoin invests a lot of resources into not needing to trust any single entity. That's why it's transactions are much more expensive than Ripple transactions. If you want to trust central authority to uphold law anyway, then it's likely beneficial to not go via bitcoin trust model and have cheaper transactions.

If a citizen creates a legal entity, doesn't he get his second account?

The wine seller creates a legal entity "wine shop" and transfers the money from it into his citizens account whenever the shop get's any money.

Yes...this is possible. I would expect a legal entity to pay it's employees. The Legal Entity also benefits for what is paid out to employees. The string of accounts and how many lengths away an account is will be a short term concern but not a long term concern. In addition wine buyers can hold the wine maker responsible for mak... (read more)

Why? The one day decay of 10%/365 doesn't do much. Transaction itself aren't strongly taxed. What's taxed is letting money sit and those taxes go one level back in the chain. Transactions costs fees based on the amount of data they contain. If you batch up 10 transactions into 1 transactions the cost doesn't become the costs of 1 transaction. The banking system can internally move money for nearly zero fees. Stocks get traded in a way where a 0.1% transaction tax would have major repercussions. Our banking system costs money because it does things like fraud protection. Anybody can charge back any credit card payments made with their card. -------------------------------------------------------------------------------- This whole discussion reminds me of how Eliezer interacts with people who put forward AGI designs. When the AGI designer is vague, it's impossible to specifically show how the AGI will take over it's own utility function. When it comes down to the math, and Eliezer shows them how the AGI will overtake it's utility function the person just says: "Well that's not exactly what I meant..." and they are never really convinced. I'm not certain that what you propose can't work but it seems you are making a lot of assumptions that things will just work out without having thought it through on a deeper level.

You don't say anything about how is supposed to have the power to enforce that statute.

I say a lot about it in my book. The system relies on Rule of law:

And yes, we limit citizens to one account and legal entities, and governments have different kinds of accounts with different restrictions. (read more)

If a citizen creates a legal entity, doesn't he get his second account? The wine seller creates a legal entity "wine shop" and transfers the money from it into his citizens account whenever the shop get's any money. Of course you can transfer a few satoshi. On the other hand that doesn't stop you from paying bitcoin fees. The bitcoin blockchain is incapable of doing cheap micropayment transactions. That sounds like a corporation could issue a citizen account to someone who already has an account. In general if you do have to trust a government to enforce rule of law, why use the expensive bitcoin system where trust relies on the blockchain? The assumption that the business man doesn't do anything with his money is unrealistic. It also doesn't make sense to assume a 3 person economy. It would make more sense to run a model economy with 10,000 participants and assumptions about how the market participants interacts with each other via an open python script. Including a miner who gets his $0.04 for every transaction.

Great point. I need to flesh out the exact process. The high level solution is that we can 'fold the blockchain.' Since we have a record of where money flowed, when an entity fails, we can fold the inputs and connect them to the outputs.

N1 sends cash to N2. N2 wastes it on a bad idea spending money at N3,N4, and N5. The great thing about 'money' is that N3,N4, or N5 have a new chance to do something 'valuable' with it. If N2 fails, we can 'fold the blockchain' and pass through the benefits from 3,4,5 back to 1.

Money doesn't generally f... (read more)

I've been working through the sequences and have been trying to apply things to my current project that has to do with remaking money. I'd appreciate any feedback. Did I miss anything major? Am I on the right track to fix my thinking?

I found the article fairly irritating because it's just a claim that you might have a good idea, but it doesn't describe the idea. I followed links to find out what your idea is, and I'm quite dubious about it-- I think the problem you're trying to solve is probably the wrong problem. I think your issue is capitalists getting too much money from employees and customers, and then doing something profitable with the money and not sharing the profits. You don't (I may have missed something) cover the case of capitalists doing something unprofitable with the money, which may be an honest experiment or a stupid mistake, but in any case, there are no profits to share. Excuse me if I've missed things you've covered, but what will enforcement look like?

I've tried to set up a system where tax avoidance is reduced or eliminated. Because the transaction system will reject transactions that don't pay the fee when they use their cash, they are stuck with the decision to participate in the system or not. Once the cash is in the system, they must pay the tax or the tax will be taken from them(using btc multi-sig where the decay charging authority is held accountable to only charge the fee on delinquent accounts.

N2 can certainly set up Nx and move all cash over there. Lets use a real example.

N1 spends $100 wi... (read more)

You don't say anything about how is supposed to have the power to enforce that statute. It's also not quite clear in what way having a shell corporation is illegal in your system. Even if you have a fixed rule that a single individual can only own a node, people can move money to their family. Have you done any math to show that they add up? Also in a system like Bitcoin where it costs $0.04 to do a transaction, are you sure you can transfer $0.0000032 effectively? Economic systems work by their agents trying to maximize returns. That means if there a way in your system to maximize returns in a way you didn't anticipate the calculation based on the ways you anticipate is worthless. If you want to have a mathematical answer you have to be clear about your assumptions.

I did ask it in the stupid questions thread. :)

I think that both can be true and yet still have real results. Take humans, reproduction, and marriage. Typically a man is fertile for more years than a woman. We see in marriage a tension between men staying loyal to the wife of their youth and moving on to a more fertile partner. I don't have statistics in front of me, but over history the tendency is to stay loyal. Patrimonialism has a profound evolutionary basis and my theory is that you can use that built in bias to form a sustainable system where leg... (read more)

If you look at how companies try to evade paying taxes, that's a bad assumptions. Companies usually try to whatever they can do to legally avoid paying taxes instead of paying more taxes then necessary out of loyalty to the government. As far as your current setup seems to work, all the "pref" seems to go back to from N1 to N2 in cases of decay payed. The person who owns N2 can create a N3 and transfer all the money from N2 to N3. That way N2 never pays any decay fees and N2 get's part of the decay fees that N3 pays and can refunnel them to N3. There are people who argue that bitcoin fees should be $0.41 per transaction ( []). Even the 4 cents that currently exist can still matter. While fees might be less than the average CC transactions they are not zero. Claiming that they are zero suggests that you are not clear about how bitcoin works on that level. Yes, Ripple manages to work with much less fees but you seem to want to use a blockchain based model.

Great Question. The 'bits' in the system I'm proposing are based on a system wide demurrage or 'decay rate' of currency. Simply switching to a different node doesn't change the decay on cash you hold. There isn't an incentive to create a new node. On the positive side, existing customers have a loyalty factor. N1 will be more likely to buy the same commodity from N2 than from a random Nx. This behavior has a limited life though because diminishing returns eventually catch up and suddenly the benefit from being one of the first contributor to Nx is gr... (read more)

I don't think the question you asked above is answerable at the level of detail you use to speak about. But I don't think what you saying is true. It quite hard to believe that "There isn't an incentive to create a new node." and "younger companies offering equal goods and services will become more attractive for the general public than old established corporation." can be both true. You also say "If someone pays from a Hypercapital account to your hypercapital account, there is no fee. " and you say your system is build on Bitcoing with does include fees.

Numenta's stuff made a lot of sense. They kept things simple by removing the recursion of HTMs...and I think that is probably the key to the whole thing working.

All that being said, their latest product Grok seems to have some success in the network monitoring space.

On Intelligence was my first intro to the idea of Bayesian thinking.

This was really helpful and gives me some great stuff to look at.

Thank you.

My theory is that actors in an economy spend cash on things and some of those things produce lasting value in the economy and some don't. Each actors probability of making a valuable choice that leads to overall growth is unknown. If we reward those that make a valuable voice with fresh cash, they then have the opportunity to succeed or fail again. If we do this over and over the 'right' probabilities will emerge and we will see who the 'best spenders' are by who has the biggest rewards flowing back.

We optimize for value creation and in the long run have a system with better and better information.

I guess the stupid question is does it follow from Bayes that if you keep measuring the same probability over and over that you will converge on the 'actual' probability.

That's more like the Bernstein-von Mises theorem [], I think. But that only applies if what you're doing is actually Bayesian updating, and it's not obvious to me that that's necessarily happening in the system you describe. (The actors might happen to be doing that, but you haven't said anything about how they make their decisions. Or there might be some more "automatic" bit of the system that's equivalent to Bayesian updating -- e.g., maybe some of the money flows might adjust themselves in ways that correspond to Bayesian updating -- but I don't see any reason to expect that from what you've said.)

Have you considered that one of your base assumptions that you can 'store value' is false?

All value us future value. You can't store it. You can make a bet on a piece of capital. Gold has been a decent bet, but far from stable. Bitcoin is just another bet.

Also, btc has a significant long term risk as well. The system is terrible for an interstellar economy. You can't have a blockchain when you have to wait light years for payment confirmations. Maybe this isn't a big deal in the short run, but if you're looking really long term, it is an issue.

A coup... (read more)

That person is me. Check out I'd like to think it is more than just randomness this system you knowledge and group wisdom leads to who wins the lotteries.

Question updated. Any more clear?

Still doesn't seem like the thing that Bayes alone could possibly answer. It seems more like a question about differential equations or dynamical systems or something of the kind. All Bayes' theorem tells you is the relationship between certain conditional probabilities.

Lets think about it as information theory. If there are 5 different types of 'information' that different people are listening for, then we need to reduce the entropy in 5 different channels to get the right information signals. This is much more complicated than trying to just reduce the entropy around 1 thing.

Maybe language isn't the best term, but all 5 of the information sets are important in different amounts to different human beings. So your utility function is going to get messy.

That is interesting....what do you mean 'on its own'. Are there some other things that affect the application of Bayes to a system?

Let me think about reforming the question now that I'm not on an iphone.

We have an economic system with N actors. Each actor has its own utility function that it uses to attempt to spend/invest money in areas that will grow. The system as a whole doesn't know these functions and the nodes can't see them internally. They just make a judgment and spend/invest. If they spend in an area that grows, more money comes to them via an agent in the system that redistributes cash as it flows to the originators of cash in a node.

For example, If N1 pays a dollar to N2 for a bottle of wine, N1 gets a share in N2. As cash flows through ... (read more)

If N2 basically has to pay a tax towards money being challenged through N2 after the node is in use for a while, why doesn't it instead create a N3 node to use as a conductor for payments?
I'm not sure I've correctly understood your question, but it's hard to see how anything much like that could follow from Bayes' theorem on its own.
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