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From: mmt@dciem.UUCP (Martin Taylor)
Newsgroups: net.politics
Subject: Money not "wasted" on silos and space
Message-ID: <536@dciem.UUCP>
Date: Fri, 2-Dec-83 18:56:26 EST
Article-I.D.: dciem.536
Posted: Fri Dec  2 18:56:26 1983
Date-Received: Fri, 2-Dec-83 22:53:42 EST
References: <135@csd1.UUCP>
Organization: D.C.I.E.M., Toronto, Canada
Lines: 63

==========
From Michael Condict:
It always befuddles me how people who know a little (or even a lot)
of economics can let it lead them into gross violations of common sense.
It seems that talking about M1 vs. M2 money, reinvestment of deferred income an
d
all sorts of abstract financial concepts makes one forget a very basic fact:
money is not wealth, it is just a rather bizarre and complicated
symbolic representation of wealth which people manipulate and abuse in order
to attempt to acquire real wealth, which is of course measured by standard
of living and the ownership of luxurious possessions.
==========
The intent of this comment is painfully true. Money is NOT a resource.
You can't eat it, build with it, or efficiently clothe yourself with it.
But neither is it a representation. It is a transmission medium, or
perhaps better, a channel through which information about value is
passed. Value is what you would swap for what you want, and money
can pass that information. Uncertainty about value is noise in the
channel, and is a major cause of inflation (maintaining information
rates in the face of added noise).
==========
From Michael Condict:
(1) it takes materials and labor to build things, (2) both of
these are available at limited rates, whether or not they are inexhaustible
in the long run, (3) things like homes, cars, tvs, and movies that you
enjoy did not grow on a tree, their production consumed some part of the
available labor and materials.  There is an obvious sort of conservation
law in operation here: output=input.  From this, without knowing whether
the economy functions by money or by barter or by theft and coersion we can
all the same quite easily conclude that (4) the higher the percentage of our
available materials and labor we spend on sending somebody to the moon or on
putting missiles in a silo, the less is available for building cars, tvs and
all the things we the common people actually use.

This logic is irrefutable, yet apparently impenetrable to many economists.
==========
The logic is refutable. Value is contained not only in materials
and labour, but also in structure. This structure is not only in the
objects constructed but also in the social patterns that arise because
of economic activity. The Huntsville infrastructure was a value
sustained by the channel whose end-point was NASA "wastage(?)".
There IS benefit in building worthless things that are left in
holes in the ground or are shot into space.

To change the metaphor (only slightly: thermodynamics and information
theory are tightly linked), consider the economy as a heat engine
with money as the working fluid. There must be a source (raw materials)
and a sink (final wastage of derelict objects). Between, there can
be many loops, but the work that is done can be sustained only by
the basic heat flow. An engine of 100% efficiency can reduce that flow
to zero, but such efficiency cannot be attained in practice. In
economic terms, money used for wasted objects is useful, but not
as useful as that spent on objects that themselves are useful.
These objects participate in further energy (money) loops, contributing
more.

We don't have economic perpetual motion machines any more than we
have physical ones. Both are powered by physical energy, the economic
machine by materials handling as well.
-- 

Martin Taylor
{allegra,linus,ihnp4,uw-beaver,floyd,ubc-vision}!utzoo!dciem!mmt