Hmm, I do not quite see how you would "fuel" money into the economy, other than by printing more money and increasing inflation, which does not generate wealth at all.
Also, I do think that an ideal economy does not operate at losses but gains.
The proof of this is the generally higher living standards of the average people today versus the average people 50 years ago.
IMHO these gains come mostly from the invention of new technology and from the increase in world population.
If I stuck with your analogy (which I think does not work) we are in a sense creating fuel from burning fuel.
The Thermodynamics of Economics
Could you please define not greedy?In principle, if an honest trustworthy CEO who wasn't greedy,
Already has 13 cars and no more room in his garage?
Has 6 wives and feels a 7th would be an imposition?
Has a 737 private aircraft and sees no need to move up to a 747-400?
Will work for $1 a year? Will work for $100 million a year and not a penny more?
What is this mythical not greedy I keep hearing about?
Engineering is the art of making what you want from what you can get at a profit.
Maybe I am not explaining myself well enough and it is simplistic thermodynamic box model. But, money (fuel) is the asset used that buys the equipment/labor/marketing etcetera (the engine) that is needed to produce wealth by selling something (output). The more money (fuel) invested (bigger engine) the more of the product you can produce to sell (output). The problem is that the money (fuel) that was once a fixed asset based on gold is being pumped into the engine is now massively being diluted. This does not produce wealth. It only fools the operator into thinking he has more fuel than he really does. Less BTUs in, less work out.Skipjack wrote:Hmm, I do not quite see how you would "fuel" money into the economy, other than by printing more money and increasing inflation, which does not generate wealth at all.
Also, I do think that an ideal economy does not operate at losses but gains.
The proof of this is the generally higher living standards of the average people today versus the average people 50 years ago.
IMHO these gains come mostly from the invention of new technology and from the increase in world population.
If I stuck with your analogy (which I think does not work) we are in a sense creating fuel from burning fuel.
I agree that an “ideal economy” would only produce gains. Example of an “ideal economy” engine would be a perpetual motion engine. In other words, you don’t pay for equipment/labor/marketing (losses).
The model I envisioned is simplistic. But, yes you burn money (fuel) to make money (fuel). In other words you must spend money to make money. My other point is you produce wealth by making the engine more efficient. That is the closer you get to that “ideal economy engine” or perpetual motion engine the more wealth you can produce. You produce more wealth if your engine can produce and sells more for less cost. If I could reduce the cost of producing you would hope that you do this by innovation to increase production, opposed to the current situation, of flooding the engine with cheap labor to reduce cost. It isn’t perfect model but it somewhat works.
Sorry, I just can not agree with the idea of having to spend money in order to make money.
That just does not make sense. That way you will never have economic growth. However you do have that for the factors of technology(invention) and I think also population growth. I do also think that mining and/or discovering new resources causes growth as you effectively feed something into the system from the outside, that is not money.
That just does not make sense. That way you will never have economic growth. However you do have that for the factors of technology(invention) and I think also population growth. I do also think that mining and/or discovering new resources causes growth as you effectively feed something into the system from the outside, that is not money.
Thermodynamics is really a limiting analogy for economics; its provides only reductive explanation, and really says nothing about new growth.
Personally, I'd go with a self-organizing system to describe it; then one can better explain the positive and negative feedbacks that happen within, as well as identify the attractors that set off changes. Thermodynamics would still be a part of the analogy, but limited to dissipation, and not function.
I believe the new term for self-organizing systems is Evolutionary Dynamics. Call it Dynamic Evolutionary Economics or something.
Personally, I'd go with a self-organizing system to describe it; then one can better explain the positive and negative feedbacks that happen within, as well as identify the attractors that set off changes. Thermodynamics would still be a part of the analogy, but limited to dissipation, and not function.
I believe the new term for self-organizing systems is Evolutionary Dynamics. Call it Dynamic Evolutionary Economics or something.
Perrin Ehlinger