(Untitled)

[solange]

I've always had trouble understanding money. I'm not really ashamed of this. I feel like I'm confused in a good way about something worthy of my confusion. I suspect that the wiring in my brain which causes the confusion will eventually hit the jackpot and start pouring out economic insights. Oh, y'know, that was a financial metaphor. Good for

Comments

[rootlesscosmo]

I'm not an economist (see the thread under my David Raksin obit, and why it's located there is as mysterious to me as to anyone) but recall what Thoreau said after he was taken on a tour of the latest mechanized shoe manufacturing plant in New England: "Very impressive. Of course, it's not for making shoes, it's for making money." Once economies get past simple exchange of the kind you outline--and especially once they develop to a point that they require investment against future return, which can mean something as comparatively low-tech as advancing the cost of building a sailing ship--the notion of profit (and the related notion of interest on loans) enter the picture. Economic depressions then occur, not because of a bad fit between needs and the means of satisfying them, but because--for any of a large number of reasons--investors' expectation of profit falls, so they stop investing, so growth slows or turns negative, and workers are laid off, and consumer spending falls... etc

[rootlesscosmo]

You may want to check my Friends page for angel80's latest post--she really is an economist.

[dogoncouch]

I dunno, to me it doesn't seem like everyone in town would grow extra food for the tailor to 'return the favor'. It seems more to me like, at that point, they're doing it cause they have to. Money has a bad side affect, I think, of dehumanizing people. Even though that might not have been an origional intention, that's what it does.

[solange]

Why do they have to? Suppose that, at the beginning, everyone spends nine hours a day growing food and one hour a day making clothes. When the tailor starts making clothes and selling them, people aren't obligated to buy them. They have two options: they can ignore the tailor and continue what they're doing, or they can give up the hour making clothes and spend that time growing additional food which they exchange for clothes. In the second option they're not doing more work, in fact they're probably doing less because they're more specialized, and they're getting better clothes for their effort because the tailor is more specialized. But no one is forcing them to take up that option. If they're really happier doing everything for themselves and not participating in the burgeoning economy then they're free to do that, aren't they?

Oh, and I think I misspelled "tailor" before because I was thinking of Taylor series. I think I'll be proud of that error.