Fwd: The "Investment" quandary...
---------- Forwarded message ---------- From: Tom Crowl <[email protected]> Date: Thu, Feb 6, 2014 at 7:59 AM Subject: The "Investment" quandary... How Can Adam Smith's Ideas deal with an investment and political climate (along with constituencies dominating both parties) virtually demanding that returns exceed the natural rate of return in a maturing economy? (I believe it can be answered... but it won't be very popular.... especially among those most needed to get it fixed) *From the NY Times, Jan 28, 2014:* *Capitalism vs. Democracy <http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html>* "If the rate of return on capital remains permanently above the rate of growth of the economy - this is Piketty's key inequality relationship," Milanovic writes in his review<http://mpra.ub.uni-muenchen.de/52384/1/MPRA_paper_52384.pdf>, it "generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal -- which indeed is what we have witnessed in the past 30 years." *This reflects a fundamental problem with the artificial inflation of various investment vehicles... which are NOT matched... or even remotely connected to any real change in overall economic conditions.* *"Trickle Down Economics" supported by money creation directly injected into investment markets to artificially inflate returns ultimately hinders both any potential for real growth... as well as the social contract upon which it ultimately depends.* *Could there be any 'social structure' able to act at least as somewhat of a counter-balance for the drive towards an 'inequality relationship'?* *I've got one worth thinking about.* Regards, *Tom Crowl* http://CulturalEngineer.blogspot.com -- P2P Foundation: http://p2pfoundation.net - http://blog.p2pfoundation.net <http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation>Updates: http://twitter.com/mbauwens; http://www.facebook.com/mbauwens #82 on the (En)Rich list: http://enrichlist.org/the-complete-list/
Where do 'returns' come from? We must slow down and answer this question fully. There are many stabs in the dark at this long-standing conundrum, but until we know at least this much, we cannot proceed toward a solution.
On Thu, Feb 6, 2014 at 9:02 PM, Patrick Anderson <[email protected]> wrote:
Where do 'returns' come from?
We must slow down and answer this question fully.
There is no need much confusion about it, I think -- it comes from an appreciation of value. I mean the word "appreciation" in both senses of the word: to like something (with an increasing vector or "thumbs up" from others) and to increase in asset value. mark
There are many stabs in the dark at this long-standing conundrum, but until we know at least this much, we cannot proceed toward a solution.
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There is no need much confusion about it, I think -- it comes from an appreciation of value. I mean the word "appreciation" in both senses of the word: to like something (with an increasing vector or "thumbs up" from others) and to increase in asset value.
If so, then I wonder why some people worry about corporations maximizing profits... Does that mean non-profits suppress appreciation, "thumbs up" and asset value?
On Fri, Feb 7, 2014 at 4:13 PM, Patrick Anderson <[email protected]> wrote:
There is no need much confusion about it, I think -- it comes from an appreciation of value. I mean the word "appreciation" in both senses of the word: to like something (with an increasing vector or "thumbs up" from others) and to increase in asset value.
If so, then I wonder why some people worry about corporations maximizing profits...
Because that's a second stream of value. Historically, they've tried to get both at once: growth via asset appreciation (a.k.a. "capital gains"), and profit maximization (via selling as high as the market will bear).
Does that mean non-profits suppress appreciation, "thumbs up" and asset value?
No, non-profits have a different asset measure. There, it's typically social value or earth value. And they also desire to "appreciate" things there. The trick I'm trying to create is a parallel, creative economy, where appreciation is just as valued, it's just that the asset measurement is completely different than the industrial model. For more detail on that, there is material on the wiki, where the non-physical, intellectual capital wealth is quantified and called "quantz" (see http://pangaia.sourceforge.net, article: hackerspace microcosm). mark
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Patrick Anderson