I'm very open to a serious discussion. But only if it's actually serious. I don't consider reducing economy to thermodynamics to be serious.
Any statement about any economy is meaningless if you're ignoring services. Especially when discussing the totality of an economic system, such as the question whether capitalism is zero-sum. I am happy to hear actual arguments how the value of services always, necessarily, by definition comes at the cost of some environment somewhere. I'm not happy to hear arguments that dismiss existence of services entirely.
I was sure you were a troll yourself after that hole digging line. My bad.
The only reason people work is that they can have food so that their thermodynamic process of biology maintains consistent - if you do not account for this then you have not even begun to think about an economy
I have a degree in econometrics
that has nothing to do with reality
economists are totally completely capitulated to capitalism as a religion
there is no other possible thing that institutional economics talks about
so if your entire point is that you wanna stay within the frame of institutional economics then like I said there’s nothing else to be said here
If you really wanna go fully into this then you can read my paper that pulls all of it together:
I, unfortunately, do not have a degree in economics. I don't have the knowledge necessary to digest your whitepaper. It would be useless of me to read it (I tried). I'm sorry.
My objection to the thermodynamic argument is that it means that no value can ever possibly be gained from any action whatsoever, both at micro and macro scale. Life is pointless, nothing matters, etcetera etcetera. While undisputably true, it doesn't make for an interesting discussion.
Capitalist model, even if fundamentally wrong, at least makes it possible to talk about value and its changes. And even if it doesn't describe real world, it still describes some kind of world. Taken purely as a mathematical construct, the world of the capitalist economic model can be analyzed in terms of game theory. And at least when I do the analysis, it comes as non-zero-sum. Not only because of services, but also because of processed goods - even if thermodynamic balance is the same, some arrangement of atoms have more value than others, usually because of their utility (copper lumps vs. copper wires, for example).
Taking away parts of the model in order to show that it's zero sum isn't very convincing - what if it's only zero sum because you took away parts that make it non-zero-sum? A much more convincing argument would be to add to the model - accept what the economists say as is, but expand on how externalities are being ignored and that if you account for them, the sum does indeed end up zero.
Note that I'm not claiming capitalism is good. I'm only claiming that in game theory terms, it is not an example of a zero sum game. The only way it could possibly be true is if there was some inherent law that any . It's much easier for me to believe the world will be destroyed in 30 years due to capitalism than that the world being eventually destroyed is a mathematical consequence of zero-sumness of capitalism.
Not GP author. I'd like to continue the conversation though. However, be warned that my view is actually closer to reducing the economy to thermodynamics. I don't intend to overturn every single point you've made, but I hope this doesn't preclude a productive discussion.
> Services are an extremely clear example of positive sum - no resources disappeared from the world, as much money was gained as was spent, but on top of it somebody got something of value.
I think it's very hard to fall back on services being positive-sum on a gross basis (i.e., 0 inputs, positive outputs) to justify that it is positive-sum on a net basis.
What kinds of services actually consume no resources? I could agree that, in isolation and on a marginal basis, a particular exchange of services for money might deplete a negligible amount of (physical) resources, but when you consider the operation of the entire industry (supposing a mature industry, i.e., that there is an industry to speak of), can it really be said that the entire industry consumes no resources? A prototypical counterexample is any service that relies on physical equipment: I would view that physical equipment always incurs wear and tear, and this is potentially substantial for sufficiently large industries. The wider umbrella here are all the other various externalities of the service.
(A good rebuttal to the physical equipment counterexample is actually where we've mastered the materials science well enough that, miraculously, the wear and tear outlasts the lifetime of anyone involved and hence where the equipment feels impervious to wear and tear... I resort to time horizons, which is another aspect of "scale". Something like GDP [growth] tries to normalise for time scales, but sadly I see this as falling prey to the same shortcomings as any kind of prediction activity.)
Personally, I consider it reductionist to try and measure every transaction with a currency value and then aggregate for a GDP. (The next key phrase in this train of thought is "Goodhart's law", which happily also gets addressed in the OP site [0].) However, I do also appreciate that this is a really fundamental paradigm in modern implementations of capitalism to attempt to uproot.
One way through which I can appreciate that capitalism is non-zero-sum is: across multiple different dimensions/axes/facets of measurement (currency value may be one of them), transactions incentivised by capitalism are not "zero" on all of them simultaneously. Under capitalism, it is that the transaction is positive by currency value which incentivises its own execution.
But there are lots of service industries where an undue focus on the currency value pushes us towards undesirable outcomes (necessarily on some axis besides currency value or GDP). For instance, some services are just innately incompatible with commercialisation. (Arts and culture comes to mind as one. Basic research is another.) When you attempt to offer/conduct these services under capitalism, you invariably need to moderate/regulate/limit the offering due to capital constraints. As in everything, moderation is sensible, so the next question is: are there enough people with enough influence thinking about whether we've gone too far? In a system where garnering influence is highly positively associated with accumulating capital, the answer seems self-fulfilling...
EDIT: I just realised that the "G" in "GDP" is "gross", for being gross of depreciation ("wear and tear"). This is a pretty big revelation for me, since it probably sheds some light on why I think GDP gets undue focus. Nevertheless, I think the principle of what I said above still stands.
There is a big difference between being zero-sum and the sum being zero. A zero-sum game cannot end with any other outcome but the sum of zero. Non-zero-sum games can end with the sum of zero but can also end with other sums. This last part is what makes capitalism not zero-sum, even if in practice the sum is zero (which it isn't but that's a separate point).
I focused on zero-resources-needed services because they're the easiest example. They don't make much of the overall economy, but they do exist - tutoring, standup comedy, basic massage to name a few. Because no resources are used, you don't have to quantify the value to prove the sum is positive, you just need to prove the service isn't completely pointless. A proof for services that do use resources is also possible, but far more complicated and requires quantification of value, which is always a very contentious topic in and of itself. Like, you already contended it before I even invoked this concept, that's how contentious it is.
Externalities exist, sure. And are often omitted in pro-capitalism arguments, sure. But to argue that externalities make capitalism zero-sum is to argue externalities always exactly match whatever value was gained by capitalist transactions. Which is even harder to prove than the already dubious argument that externalities are larger than the value of capitalism.
I only brought up GDP to highlight that services are a big part of modern economy, so any model of economy that assigns no value to services is a wrong model, because it will not match the actual flow of money within a real world economy. I strongly believe models ought to be useful.
May I ask what your impression of "the sum" is? Namely, what is "the sum of a game" to you? The question may sound slightly opaque (and, sure, maybe even pedantic), but here are examples of some aspects I am trying to garner:
• Do you see it as a single number (e.g., representable by a single floating-point value)? If not, how alike to a number is it? To what degrees does it lend itself to ordering (higher/lower/equal) and aggregation?
• Do you think the concept of "the sum" has a consensus interpretation (consensus across people, say)? For a particular game, do you think its sum has a consensus determination?
I'm less settled on precisely those aspects, and I think they tend to mask aspects that are worth clarifying/examining. Please do not see this as my claim that my stance is absolutely the only valid one. However, without a unified stance on these aspects, it feels hard to contribute further to the discussion.
My contention is that "a game" cannot be condensed down to a single number. (More specifically, I think that it should only be done so in a way that is unequivocally universal and objective. If this doesn't exist, any discussion should begin on more general premises, rather than the premise that a game can be condensed down to a single number.) From the perspective of evaluating whether capitalism installs incentives that result in a better world, I view it as overly simplistic to think about "a sum" and then consider whether that sum is zero/nonzero/positive/negative.
Of course, these are models, and I judge the merits of a model based on its ability to be useful. But here I really consider that such a simplistic model is a hindrance. I don't mean hindrance in the sense that it necessarily results in poor decisions being made (partially because the model seems to come with an intrinsic notion of "poor"). It's a hindrance in that it seems too ubiquitously adopted, to the extent that discussions on the alternative are hard to initiate/sustain/come by.
As a result, I think there is a lot more elaboration needed before landing on this dichotomy:
> But to argue that externalities make capitalism zero-sum is to argue externalities always exactly match whatever value was gained by capitalist transactions. Which is even harder to prove than the already dubious argument that externalities are larger than the value of capitalism.
Namely, I don't readily see that there is a dichotomy in the form of either (1) "externalities always exactly match whatever value was gained by capitalist transactions" or (2) "externalities are larger than the value of capitalism". The dichotomy doesn't easily stand to me because it seems attached to an oversimplified way to compare outcomes/merits of a game ("exactly match whatever value", "larger than the value of").
Thats on me