Archive for March 2015

Best description of the US economy ever

I normally don’t write about this stuff, but this quote was posted on a private forum on a Transformers board I frequent, and it was too good not to share.  Since I can’t link to the actual post to share it, I’ll share it here!

The entire concept of trade, of capitalism, is the efficient allocation of resources. That it’s only marginally more difficult for me to build two or three tables than it was to build one, and that it’s only marginally more difficult for you to find and cook food for two people than it is to find and cook food for one, so I’ll give you my second table in exchange for you giving me a few meals. That’s barter.

But barter is a pain in the ass because trying to track down who’s willing to trade something you need for something you have a surplus of is really hard. So instead of barter, we had this rare, shiny stuff that we used as tokens to represent the nebulous concept of “value.” Which worked a lot better than barter, most of the time, but it had its own problems—sometimes there weren’t enough tokens to go around, or new tokens were going into the system too quickly and made the tokens everyone had less valuable, or people made fake tokens, or people tried to remove some of the rare stuff from those tokens and sell it separately while still presenting the token at the value it was originally set to represent.

So instead of tokens made from rare shiny stuff, or even tokens representing rare stuff stored somewhere, we figured out that it works better to just make cheap (but very, VERY difficult to fake) tokens that we can just make more of whenever we need more, backed by the credibility of the people who make those tokens instead of relying on the perceived value of a scarce substance. And we still try to ask for some of those tokens back, because making too many of them to pay for everything without trying to take any back hurts our credibility as the people backing them, devaluing the tokens much like too much of the rare shiny stuff devalued the tokens. Which is fine, that’s an easy enough system to manage (aside from where it’s really complicated and difficult to predict consequences of things)… as long as you know what you’re trying to accomplish.

Unfortunately, there’s a bunch of people out there with a lot of tokens who aren’t very nice. They derive their self-worth from the tokens, and not just how many tokens they have, but how many more they have than other people. They view how many tokens people give them as indicative of how much those other people respect them. They view the fact that they have tokens as proof of their inherent moral superiority to the people who don’t have tokens. They view their possession of tokens as evidence of all the hard work they’ve done, even though their parents had a lot of tokens too and that helped put them in a position to get all those tokens. They view anyone trying to take their tokens with suspicion. But worst of all, they use the fact that they have a lot of tokens as part of their resumé when they demand they should have the job of managing that token-making system, even though they’ve spent their entire life operating as though tokens are still that representation of a concrete scarce object and have no idea how to deal with it as an abstract representation of value.

So when one of those people gets into a position where they have a say over how the token-making is done… they tend to do very bad things with it. They freak out over the fact that we’re creating more tokens than we collect, even though a small amount of devaluation of those tokens over time helps to forgive people’s debts and encourage people to use their tokens more often. They freak out over the fact that we’re taking people’s tokens because taking things from people without giving them something they specifically asked for or doing something for them that they specifically asked to have done is mean. And they object to all the things we’re doing that benefit everyone, like making sure the roads are in decent condition and that people can go to the doctor if they feel sick, because they could just spend their tokens if they needed that and if anyone else wants those things, those people should have to spend just as many tokens as they have to.

Essentially, they forget that the point of those tokens isn’t to exist as their scorecard, their representation of self-worth, but to *facilitate the exchange of goods and services.*

So let’s all remember what the point of all these tokens are for!