How To Know When Not Being Deluded?

[geko]

I have a problem, or rather what i think may be a problem. The thing is you see is i have an opinion, a political one, that differs wildly from the established one. I'm utterly convinced i'm right. In fact, i'm so sure of it that it scares me. It scares me because i think i may be wrong since it is so easy and simple to see that i wonder why the majority of people don't see it if it's right. The more i think and the more i learn the more convinced i become. I've started to think i may even be conning myself with sophistry because i cannot work out why there is only a handful of people in the scheme of things that think the same way.

 

I'd imagine some will suggest that quantification is the answer. However, what do you do if it can't be quantified because you haven't got the opportunity to observe the principles being put into action, i.e. that it rests on logic only? Well, you check the logic innit; you standardise, check your premises, square the opposition, rethink the deductions…and what to do if you still resolve into non-contradiction? Is it arrogant to assume that the majority are wrong and that the minority are right? Are logical extensions correct insofar as they maintain logical consistency? What to do when you are so sure that you begin to doubt because of it? How can so many intelligent people be wrong at the same time i ask?

[Moontanman]

I honestly do feel for you, being or even thinking different can be a burden. Even if you are completely correct if your ideas conflict significantly from what larger group believes to be right, no matter how much better your ideas are and no matter how much the group might benefit it is unlikely your ideas will be welcomed with open arms, that is just human nature really. Remember that no good deed goes unpunished :rolleyes: (I do good deeds anyway but I am different) The best you can hope for is to find a few people who agree with you, some do not even have that... BTW I'd be interested in hearing your world view, I might not agree but I assure you I will not judge you just because we disagree, in fact I find new view points refreshing even those I do not agree with. I find that one small thing to be quite rare in our society... the ability to allow others to be who they are.... Discussing your idea with others who are not judgmental might help you work out your feelings and who knows, you might be the start of a movement that will change the world, much like a dirty diaper, the world certainly needs to be changed IMHO.

[geko]

That was a nice post Moot. I've kinda just resigned myself to just ploughing on anyway and attempting to implant a seed of doubt rather than the voracity of an alternative. My concern still remains though that what if we're wrong? Do i want to be a part of that 'radical' movement that promised the world but ended up causing more harm that the harm being committed now because it made a terrible oversight… if you convince the intellectuals you convince the masses and then the lives and health of billions rest on our shoulders. It asks for a leap of faith almost in a system that has so few practical examples that they're statistically insignificant and rests solely on a long train of thought.

 

 

I'd be interested in hearing your world view

 

You'll forgive me if i don't present a thesis but we can begin the argument by going back to basics and questioning the initial premises of our current system. Take political economy for the example. What do you see as the logical conclusion of a system that relies on growth to sustain itself? Is this not absurdity when followed in a world of scarcity? It also assumes infinite desire for new material satisfaction in humans, something which lately i've begun to question.

 

The whole system, it seems (to me at least), is fundamentally flawed. An inflationary policy perpetuates itself by requiring more and more of everything, including money. Without qualifying myself, all effects of inflation are negative unless you are laser-beam focused on growth. But focusing on one consequence to the exclusion of the others is nothing if not irresponsible. The answer is the opposite. A system that doesn't rely on growth. A system that allows more for less (over time). The opposite of inflationary is deflationary, a naturally occurring one. How do you allow a deflationary cycle to potentially commence? By preventing an inflationary one. How do you prevent inflation? Since inflation is an increase in the supply of money you prevent it by locking the money supply. One way to lock it is by law. Another way is by tying it to a standard.

 

This single premise has numerous consequences of course. Maybe the most troubling of which for people is what is the effect on a government that doesn't have access to free money?

[Moontanman]

I happen to think that things like a commodity market where the price of "stuff" is artificially inflated so someone who has little if anything to do with the creation or even use of that commodity can drive up the price to make money, the price of oil is high not so much because oil is scarce but because speculators can buy up oil futures so they can keep oil off the market to artificially drive up the price and make money even though they have nothing to do with the production of that oil in anyway. Personally i think this is something we need to stop or at least severely limit.

[Fluxus]

I don't think there is a viable way to truly quantify a question like this, let alone most political questions.

 

The closest thing you might be able to do, if you were sufficiently skilled, is set it up as an argument using classical logic to determine if the argument itself is consistent and/or gapless. However, logic is also not really designed to evaluate the veracity of the premises, it's only designed to check the validity and consistency of an inference.

 

 

In terms of "growth," this actually isn't exactly a new idea; Thomas Malthus suggested that overpopulation would lead to economic issues, notably scarcity of staple resources and an increase in the labor supply would reduce demand, thus cause poverty. That was around 1800 or so. ;)

 

More recently this type of pessimism is focused on sustainability and ideas like "peak oil." If this is your concern, I recommend you focus on contemporary environmentalism and sustainability factors. The world does have finite resources, after all, and at some point the population may get too large for the world to feed. (That said, technology has repeatedly risen to the occasion in this matter.)

 

In terms of "inflation is bad because it uses more finite resources," keep in mind that deflation is economically disastrous. In a deflation, prices fall due to various factors, ranging from increases in supply, reductions in demand, currency manipulations by central banks, and fluctuations due to currency traders. The problem is that the consumer sees little reason to buy a car for $20,000 today when next month it will cost $19,500, and $19,000 the month after that. As a result demand falls, which accelerates deflation, which results in less production, which results in manufacturers firing more people, which further reduces demand, and the next thing you know 1/3 of the population is out of work. This is what happened in the Great Depression, and was a major concern at various points during the recent fiscal crisis.

 

I.e. what seems obviously beneficial to you, defines an economic collapse to everyone else... and with good reason.

 

I'd stick to sustainability and population controls as better solutions to the problems you're trying to address.

[geko]

Peak oil and environmentalism is only a small part of the problem, and they're not that problematic when viewed without restriction. There are numerous nuances of growth that go beyond the verb, and it's the nuances that are the problem. The reason i used the logical conclusion of the verb is because it's easy to see and understand.

 

A $500/month drop in price is a chimera. Who benefits from low prices? Who suffers from high prices?

[Fluxus]

Peak oil and environmentalism is only a small part of the problem, and they're not that problematic when viewed without restriction...

I only mentioned peak oil as an example that you are not really alone in your opinion that the world has finite resources that we're using too fast, which is pretty obviously what you're headed towards.

 

Environmentalism and sustainability do seem to be the primary solution to that problem, as they focus on more efficient and renewable uses of existing resources.

 

Population control can also help, but is much more controversial. Global enforcement of a China-style One Child Per Family is practically impossible, especially in India, Africa, and Latin America.

 

Perhaps more to the point is that there are quite a few people with highly similar perspectives, who are in fact doing something about it -- e.g. environmentalists, sustainability advocates, anti-globalization activists and so forth. The trap, of course, is that you could end up surrounded by people who have no interest in challenging their assumptions and beliefs, and strive to confirm rather than challenge their biases.

 

 

A $500/month drop in price is a chimera.

Is it? If you can shave $3,000 off the price of a $20,000 vehicle just by waiting 6 months, do you really believe that would have no effect on buying decisions?

 

Haven't you noticed that people are often willing to wait for the price of a brand-new electronic good to fall before buying it?

 

Deflation has negatively impacted the economies of Hong Kong (after rejoining China), Japan in the late 90s, the US during the Great Depression. It doesn't always result in a massive deflationary spiral as it did in the 30s, but unless it's conjoined with a drop in population, a lack of growth will lead to more unemployment and poverty.

 

 

Who benefits from low prices?

There are numerous reasons why prices can fall, thus there is no simple answer.

 

For example, electronics prices fall because manufacturers recoup their R&D and marketing investments. In addition, if the product is a success then it can benefit from economies of scale, which make it more efficient to produce larger batches. In this case, the patient consumer -- you know, the ones chasing the chimera of falling prices ;) -- benefits, as do the producers. However, there is only so much that consumers can spend on such items even in the best of times, so this doesn't benefit everyone.

 

In other cases, a manufacturer achieves lower prices by moving production to an area with lower costs -- e.g. lower taxes, lower wages, relaxed environmental controls, lower distribution costs. Sometimes they will lower the price, other times they will increase their margins. The new employees may benefit, the old ones who lost their jobs won't, anyone negatively affected by inadequate environmental regulations also suffer.

 

A glut in supply can also result in lower prices, e.g. too much rice grown in one season can result in lower prices. In the short term the consumer benefits, but if suppliers go out of business as a result, then obviously this is not beneficial for anyone.

 

Currency valuation can also result in low prices. E.g. if the dollar rises in value compared to the yen, then it will be cheaper for Americans to buy Japanese goods. Sounds good, right? However American goods are now more expensive than before, so export manufacturers (and their employees) will suffer.

 

"Cheap calories" may sound like a good thing: The less it costs to grow and distribute food, the more people can eat, yes? However if the cheap and tasty calories aren't the healthy food sources, that's a contributing factor to the obesity problem in the US, which in turn results in a lower quality of life, more medical care costs, and so forth.

 

By the way, mild inflation is generally regarded as beneficial without needing a "laser focus on growth." After all, in theory wages are supposed to grow in tandem with inflation. Inflation is a much more serious problem at higher rates, but most central banks nowadays will act to prevent that from happening.

[geko]

...lack of growth will lead to more unemployment and poverty.

 

This is very true, and is one of the reasons for continued growth. The trouble we have is that the system is kept afloat with the growth. How does an inflationary policy that stimulates growth by injecting new money into the economy as interest bearing debt fix the problem? It just shifts it to the next cycle, taking the necessarily increasing defaults and, therefore, the poverty along with it. The practical absurdity of this system is as plain as day in the last growth cycle. We have 10's of millions of new houses across the world left vacant. Yes, we had growth, which people think is wonderful, but are the resources used up in this creation of capital, and the millions of labour hours invested in it, purposeful? or inherently pointless? Let's remember that labour isn't wealth.

 

 

Haven't you noticed that people are often willing to wait for the price of a brand-new electronic good to fall before buying it?

 

I don't deny this obviously, but your review of the effects of deflation implicitly assumes that consumers will continue to hold out on spending because they will continue to see increased effects from saving. Yes, prices go down, and people put off buying now on some items because they foresee a drop in price at a future date, but you cannot put off all purchases. People must consume. People will not refrain from spending today because there may be a slight decrease in nominal prices tomorrow.

 

Arguing against deflation from a hyper deflation standpoint is the same as arguing against inflation from a hyper inflation stand point. They're both invalid.

[Qfwfq]

Money is nothing but FS paper. Even less nowadays, actually, with electronic signals.

 

Unfortunately, barter is complicated. Money simplified things quite a bit. For a while, at least.

 

Is money still less complicated than barter? One thing is sure, it is hardly any safer. We're unaccustomed to reckoning how many bowls of rice are a good trade for a chicken, but at least a bowl of rice is a bowl of rice.

[Chewbalka]

We have done all this too ourselves its not the inflation that has hurt us inflation is a must with an ever higher demand in supply equals evermore employees which means you have to increase your price in order to cover the costs. The problem is growth there are too many people living today. We have made life to easy to live and we have made it to easy to live comfortably. Medicare, grocery stores, welfare, pensions, all of it has extended our life expectancy by decades (http://en.wikipedia.org/wiki/Life_expectancy#Human_life_expectancy_patterns) you can google it a million different ways but the basis is if you want to live a long healthy life you will have to pay for it somehow...