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On March 21 2014 04:22 corumjhaelen wrote:Show nested quote +On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly.
Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation.
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On March 21 2014 04:27 JonnyBNoHo wrote:Show nested quote +On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation.
You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it.
Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital).
![[image loading]](http://delong.typepad.com/.a/6a00e551f080038834019b0327dc6d970c-pi)
![[image loading]](http://delong.typepad.com/.a/6a00e551f080038834019b0328b47f970d-pi)
![[image loading]](http://delong.typepad.com/.a/6a00e551f080038834019b0328ca0b970d-pi)
![[image loading]](http://delong.typepad.com/.a/6a00e551f08003883401a3faaf968b970b-pi)
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On March 21 2014 04:27 JonnyBNoHo wrote:Show nested quote +On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation.
God, what an awful idea to be arguing about something, they should really just stop as you say.
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On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI.
I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return.
Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening.
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On March 21 2014 04:38 corumjhaelen wrote:Show nested quote +On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. God, what an awful idea to be arguing about something, they should really just stop as you say.
"stop just stop" as in - you're making a fool of yourself. WhiteDog has said the same to me in the past.
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On March 21 2014 04:44 IgnE wrote:Show nested quote +On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening.
You talking macro, micro, both?
Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI.
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On March 21 2014 04:36 WhiteDog wrote:Show nested quote +On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it. Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital). + Show Spoiler +
There have been more than two crisis (great depression and today). Why are you linking these two? Moreover, why are you supposing that capital accumulation is the cause? Why not look to a bank run / credit crisis as the cause?
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On March 21 2014 05:18 JonnyBNoHo wrote:Show nested quote +On March 21 2014 04:36 WhiteDog wrote:On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:On March 21 2014 02:13 WhiteDog wrote:
The main problem with IgnE's point is that he is mixing up different problems that all have their own difficulties. I think there are no link between innovations (in the strict sense) and capital accumulation. The relationship between capital and wage does not follow economical law : it's a political matter. Trying to explain over accumulation through the evolution of innovations is a mistake : it is only when the "dead work" (the machine) is used to maximize profit (and only that), and that there are no contrary forces (like a high marginal taxation rate, or a high economic growth) that it leads to overaccumulation.
I don't believe there is anything in the inner nature of innovations that necessarily leads to overaccumulation and unemployment in the long run. This technicist point of view does not feel right when compared to history. On the other side, I think IgnE is absolutly right when he is saying that there is a crisis of overaccumulation. I'm even surprised to see jonny argue against it when I showed him empirical evidence of it some pages ago. Lol, what did you show? A data point that supported your argument? As if there are none that counter it? You're cute. Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it. Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital). + Show Spoiler + There have been more than two crisis (great depression and today). Why are you linking these two? Moreover, why are you supposing that capital accumulation is the cause? Why not look to a bank run / credit crisis as the cause?
Well the bubble in 2000 have ressemblance but not at the same scale. I am not the one that made clear that there are big ressemblance between 2007 and 1929 - there are a tremendous number of paper and work on the subject. I'm not saying that the crisis was created by the accumulation per say (we already had this discussion), I am merely showing a direct correlation between the two (through the various graph).
The analysis of the impact of inequalities and capital accumulation on crisis is very complex and quite new, and I already gave my point of view on various occasion on that previously, so I will not enter in that area (the IMF, the OECD, and various economists such as Krugman are discussing this since some times now).
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On March 21 2014 05:41 WhiteDog wrote:Show nested quote +On March 21 2014 05:18 JonnyBNoHo wrote:On March 21 2014 04:36 WhiteDog wrote:On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:On March 21 2014 02:27 JonnyBNoHo wrote:
[quote]
Lol, what did you show? A data point that supported your argument? As if there are none that counter it?
You're cute.
Edit: you talking about your graph showing capital to gdp rising? That's not empirical evidence of over accumulation... Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it. Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital). + Show Spoiler + There have been more than two crisis (great depression and today). Why are you linking these two? Moreover, why are you supposing that capital accumulation is the cause? Why not look to a bank run / credit crisis as the cause? Well the bubble in 2000 have ressemblance but not at the same scale. I am not the one that made clear that there are big ressemblance between 2007 and 1929 - there are a tremendous number of paper and work on the subject. I'm not saying that the crisis was created by the accumulation per say (we already had this discussion), I am merely showing a direct correlation between the two (through the various graph). The analysis of the impact of inequalities and capital accumulation on crisis is very complex and quite new, and I already gave my point of view on various occasion on that previously, so I will not enter in that area (the IMF, the OECD, and various economists such as Krugman are discussing this since some times now).
So you want to link accumulation with crisis? Then why add in inequality? The Marxian view doesn't stand up well in the US. We save little and import a vast amount of capital from overseas. Or just look at the graphs you posted - more inequality in the US yet Europe has more accumulation.
And what about how the latest crisis played out. Too much capital wasn't the issue, it was how the capital was structured and used that was the main issue. Look at your graphs again - there was a lot of capital accumulated in the UK / France for quite a while before the depression and the accumulation fluctuations in the US aren't very big (relatively).
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On March 21 2014 05:55 JonnyBNoHo wrote:Show nested quote +On March 21 2014 05:41 WhiteDog wrote:On March 21 2014 05:18 JonnyBNoHo wrote:On March 21 2014 04:36 WhiteDog wrote:On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:On March 21 2014 03:41 WhiteDog wrote:[quote] Really ? The increase of capital to income from 400% to 600% is not a proof of overaccumulation ? You're a hero. That's a proof that the capital is taking a higher % of the wealth created than wage. It's, by the way, a proof that one of the deepest belief of economists (that the repartition of the wealth created between wage and capital is constant) is not true (and yes, even Keynes believed that, and it was considered as one of the few empirical law in most economic textbook). And the fact that the rate of return on capital is on average 5%, while the growth is (at best) 2%, is not a proof too ? Here : http://www.hup.harvard.edu/catalog.php?isbn=9780674430006 No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute! And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish! Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it. Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital). + Show Spoiler + There have been more than two crisis (great depression and today). Why are you linking these two? Moreover, why are you supposing that capital accumulation is the cause? Why not look to a bank run / credit crisis as the cause? Well the bubble in 2000 have ressemblance but not at the same scale. I am not the one that made clear that there are big ressemblance between 2007 and 1929 - there are a tremendous number of paper and work on the subject. I'm not saying that the crisis was created by the accumulation per say (we already had this discussion), I am merely showing a direct correlation between the two (through the various graph). The analysis of the impact of inequalities and capital accumulation on crisis is very complex and quite new, and I already gave my point of view on various occasion on that previously, so I will not enter in that area (the IMF, the OECD, and various economists such as Krugman are discussing this since some times now). So you want to link accumulation with crisis? Then why add in inequality? The Marxian view doesn't stand up well in the US. We save little and import a vast amount of capital from overseas. Or just look at the graphs you posted - more inequality in the US yet Europe has more accumulation. And what about how the latest crisis played out. Too much capital wasn't the issue, it was how the capital was structured and used that was the main issue. Look at your graphs again - there was a lot of capital accumulated in the UK / France for quite a while before the depression and the accumulation fluctuations in the US aren't very big (relatively).
How the capital was used and structured is linked to the accumulation. If inequalities and/or accumulation is too important (the two are obviously linked) then demand is lacking, and it is better to use capital income in sustaining demand - through credit (for the state or for individuals, just like during the "roaring twenties" or "la belle époque") - than to use it directly for production.
It is something I've stated countless time and you force me to restate it over and over. Everytime you refuse to acknowledge the deep macroeconomic background that participated in the 2007 crisis, and force us to talk everytime about financial innovations, risk management and whatever.
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On March 21 2014 06:39 WhiteDog wrote:Show nested quote +On March 21 2014 05:55 JonnyBNoHo wrote:On March 21 2014 05:41 WhiteDog wrote:On March 21 2014 05:18 JonnyBNoHo wrote:On March 21 2014 04:36 WhiteDog wrote:On March 21 2014 04:27 JonnyBNoHo wrote:On March 21 2014 04:22 corumjhaelen wrote:On March 21 2014 04:22 JonnyBNoHo wrote:On March 21 2014 04:16 WhiteDog wrote:On March 21 2014 04:12 JonnyBNoHo wrote:
[quote]
No, accumulation is not over accumulation. Really it's true, just stop and think (assuming you can!) for a minute!
And no 5% roc and 2% growth isn't proof either. Are you trying to hold that constant and extrapolate? If so, that would be really foolish!
Why would the ratio of capital to wage income be constant? Seems like one of those "we think it's a law until it isn't" kind of things (same crap you're pushing). You know, you don't need to act like a dick everytime you are arguing on something that you don't entirely understand. They believed it was a "law" because it makes the entire economic system sustainable in the long run (by itself). If the accumulation of capital is higher than growth, it means that capital in the long run will accumulate wealth at a higher rate than the production, and thus that a crisis of overproduction is possible. If there is no law, it means that the remuneration of the factor of production does not follow a law by itself, and thus that wealth distribution is political and thus needs political intervention. Entirely speculative, unless you're making the 'hold constant and extrapolate' mistake. You know what possible means ? Edit : Yeah let's stop thinking, it could end badly. Possible? If WhiteDog and IgnE are just speculating about what could be I have no problem with that. But they seem to be arguing that we're really in a crisis of over accumulation. You know I'm not speculating entirely. It's just that it is a complex matter. As I said, there are no law in this matter : so we can only use historical evolution and "speculate" from it. Now, we are arguing that we are in a crisis, because the situation is comparable to the situation prior to the first world war (in terms of capital to income ratio for exemple) : and yes, it was a deep crisis of the economical system back there (1929 remember ? and the new deal fixed it, through a high marginal taxation, in the US, while the two world war fixed it in Europe, through the destruction of capital). + Show Spoiler + There have been more than two crisis (great depression and today). Why are you linking these two? Moreover, why are you supposing that capital accumulation is the cause? Why not look to a bank run / credit crisis as the cause? Well the bubble in 2000 have ressemblance but not at the same scale. I am not the one that made clear that there are big ressemblance between 2007 and 1929 - there are a tremendous number of paper and work on the subject. I'm not saying that the crisis was created by the accumulation per say (we already had this discussion), I am merely showing a direct correlation between the two (through the various graph). The analysis of the impact of inequalities and capital accumulation on crisis is very complex and quite new, and I already gave my point of view on various occasion on that previously, so I will not enter in that area (the IMF, the OECD, and various economists such as Krugman are discussing this since some times now). So you want to link accumulation with crisis? Then why add in inequality? The Marxian view doesn't stand up well in the US. We save little and import a vast amount of capital from overseas. Or just look at the graphs you posted - more inequality in the US yet Europe has more accumulation. And what about how the latest crisis played out. Too much capital wasn't the issue, it was how the capital was structured and used that was the main issue. Look at your graphs again - there was a lot of capital accumulated in the UK / France for quite a while before the depression and the accumulation fluctuations in the US aren't very big (relatively). How the capital was used and structured is linked to the accumulation. If inequalities and/or accumulation is too important (the two are obviously linked) then demand is lacking, and it is better to use capital income in sustaining demand - through credit (for the state or for individuals, just like during the "roaring twenties" or "la belle époque") - than to use it directly for production. It is something I've stated countless time and you force me to restate it over and over. Everytime you refuse to acknowledge the deep macroeconomic background that participated in the 2007 crisis, and force us to talk everytime about financial innovations, risk management and whatever.
The US had a huge trade deficit nearing 6% of GDP at its worst. We weren't able to produce enough to meet our own demand by a long shot. Capital had no where to go? How about satisfying existing demand? Capital was ~450% of GDP in US but ~650% of GDP in France but we were over accumulating?
We were absorbing a huge amount of capital from other countries:
![[image loading]](http://4.bp.blogspot.com/-XpJg_dCzB8Y/UOi5d9rtl8I/AAAAAAAACkI/Sp_C7wqRaBM/s640/import+capital+2005.jpg) source
we were over accumulating yet excess capital from all over the world flooded to the US?
And what happened during the crisis? Capital flowed out of the US!
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Cayman Islands24199 Posts
well in countries like china or saudi arabia their internal demand (can be represented by wage share of economy) is even less than that of the u.s. the concentration of either ill gotten or rent generated wealth in those countries is even higher, and so it's natural that capital is going to flow out of them.
also u.s. has good appreciating assets to park your monies
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On March 21 2014 05:14 JonnyBNoHo wrote:Show nested quote +On March 21 2014 04:44 IgnE wrote:On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening. You talking macro, micro, both? Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI.
What are these arbitrary walls you are erecting? I am talking about the global economy. It seems like you are playing games by changing the boundary conditions. It's not like European capital is restricted to investment opportunities in Europe is it? Global growth is a requirement for the perpetuation of capitalism.
You continue to talk about overaccumulation as it if were an American-only phenomenon. Stop putting up arbitrary walls and maybe your conclusions would be more valid. Why wouldn't American capital satisfy American demand? Maybe because it was investing in China to satisfy the demand through imports?
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On March 21 2014 09:53 IgnE wrote:Show nested quote +On March 21 2014 05:14 JonnyBNoHo wrote:On March 21 2014 04:44 IgnE wrote:On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening. You talking macro, micro, both? Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI. What are these arbitrary walls you are erecting? I am talking about the global economy. It seems like you are playing games by changing the boundary conditions. It's not like European capital is restricted to investment opportunities in Europe is it? Global growth is a requirement for the perpetuation of capitalism.
I wasn't trying to change the boundaries. I was looking for clarification on what you meant and offering some examples of where growth isn't required.
So where in the math is growth required?
You continue to talk about overaccumulation as it if were an American-only phenomenon. Stop putting up arbitrary walls and maybe your conclusions would be more valid. Why wouldn't American capital satisfy American demand? Maybe because it was investing in China to satisfy the demand through imports?
China was investing more in us than we in them. You know what outsourcing is?
Edit: What's with "American-only phenomenon'? My last post compared accumulation in US to France and cited international capital flows.
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On March 21 2014 10:02 JonnyBNoHo wrote:Show nested quote +On March 21 2014 09:53 IgnE wrote:On March 21 2014 05:14 JonnyBNoHo wrote:On March 21 2014 04:44 IgnE wrote:On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening. You talking macro, micro, both? Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI. What are these arbitrary walls you are erecting? I am talking about the global economy. It seems like you are playing games by changing the boundary conditions. It's not like European capital is restricted to investment opportunities in Europe is it? Global growth is a requirement for the perpetuation of capitalism. I wasn't trying to change the boundaries. I was looking for clarification on what you meant and offering some examples of where growth isn't required. So where in the math is growth required? Show nested quote +You continue to talk about overaccumulation as it if were an American-only phenomenon. Stop putting up arbitrary walls and maybe your conclusions would be more valid. Why wouldn't American capital satisfy American demand? Maybe because it was investing in China to satisfy the demand through imports? China was investing more in us than we in them. You know what outsourcing is? Edit: What's with "American-only phenomenon'? My last post compared accumulation in US to France and cited international capital flows.
The math is: MCM'. M' must be greater than M. What is your math? You keep hiding behind these stupid one-liners and pointing to totally irrelevant data. So Europe is not growing. And this somehow proves that capitalism can continue without growth? That Europe has reached a stable zero-growth form of capitalism? That's absurd. You yourself have said before that the European economy is in serious trouble, and here you are pulling it out as a defense that growth is not required for the perpetuation of capitalism. Can you be a little more forthright in your responses? I am trying to give you the benefit of the doubt here because it seems like you at least think you know what you are talking about.
So correct me if I'm wrong but your argument is: America was running a huge trade deficit, therefore there must have been a place for capital to go, because it could use that capital to meet its own internal demand. I don't see how that makes any sense at all. All that matters for global capital is that the demand is met. If it's cheaper to import than to set up production internally to meet demand then that is what will happen. Capital can go anywhere. Looking at trade balances doesn't speak to capital overaccumulation on a global scale.
Your last posts on this page with WhiteDog have been comparing international capital flows and then making a comparison between French and American capital accumulation. Have I misunderstood you here? Neither WhiteDog (afaik) nor myself have been arguing that capital overaccumulation is a particularly American phenomenon.
I believe that the excess capital flooding to the US before the crisis was tied to the housing boom. It would make sense that capital was flowing in to a housing bubble and flowing out when the bubble burst. The American housing market has supplied a lot of the extra demand required by developing countries that run on a trade surplus.
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On March 21 2014 10:41 IgnE wrote:Show nested quote +On March 21 2014 10:02 JonnyBNoHo wrote:On March 21 2014 09:53 IgnE wrote:On March 21 2014 05:14 JonnyBNoHo wrote:On March 21 2014 04:44 IgnE wrote:On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening. You talking macro, micro, both? Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI. What are these arbitrary walls you are erecting? I am talking about the global economy. It seems like you are playing games by changing the boundary conditions. It's not like European capital is restricted to investment opportunities in Europe is it? Global growth is a requirement for the perpetuation of capitalism. I wasn't trying to change the boundaries. I was looking for clarification on what you meant and offering some examples of where growth isn't required. So where in the math is growth required? You continue to talk about overaccumulation as it if were an American-only phenomenon. Stop putting up arbitrary walls and maybe your conclusions would be more valid. Why wouldn't American capital satisfy American demand? Maybe because it was investing in China to satisfy the demand through imports? China was investing more in us than we in them. You know what outsourcing is? Edit: What's with "American-only phenomenon'? My last post compared accumulation in US to France and cited international capital flows. The math is: MCM'. M' must be greater than M. What is your math? You keep hiding behind these stupid one-liners and pointing to totally irrelevant data. So Europe is not growing. And this somehow proves that capitalism can continue without growth? That Europe has reached a stable zero-growth form of capitalism? That's absurd. You yourself have said before that the European economy is in serious trouble, and here you are pulling it out as a defense that growth is not required for the perpetuation of capitalism. Can you be a little more forthright in your responses? I am trying to give you the benefit of the doubt here because it seems like you at least think you know what you are talking about. So correct me if I'm wrong but your argument is: America was running a huge trade deficit, therefore there must have been a place for capital to go, because it could use that capital to meet its own internal demand. I don't see how that makes any sense at all. All that matters for global capital is that the demand is met. If it's cheaper to import than to set up production internally to meet demand then that is what will happen. Capital can go anywhere. Looking at trade balances doesn't speak to capital overaccumulation on a global scale. Your last posts on this page with WhiteDog have been comparing international capital flows and then making a comparison between French and American capital accumulation. Have I misunderstood you here? Neither WhiteDog (afaik) nor myself have been arguing that capital overaccumulation is a particularly American phenomenon. I believe that the excess capital flooding to the US before the crisis was tied to the housing boom. It would make sense that capital was flowing in to a housing bubble and flowing out when the bubble burst. The American housing market has supplied a lot of the extra demand required by developing countries that run on a trade surplus.
MCM'? How does that fit into growth? M' > M doesn't seem to imply growth, though I don't know Marxist math well. Is it meaningful beyond a piece of paper?
My math? Open up a finance or accounting book and build a financial model. You don't need growth to have a positive ROI.
Europe's economy isn't good, true. But there's a difference between "capitalism requires growth" and "currently capitalist economies are geared to grow, and if they don't, they suffer, though that doesn't always have to be the case". I'm not sure which you are trying to say and I've been taking you literally - that growth is required now and forever or shit falls apart.
My argument about the trade deficit was focused on America. We aren't accumulating much capital on our own - a lot comes in from overseas. If your argument is that there's over accumulation globally - that seems absurd. Globally we need waaaaay more capital accumulation in order for developing countries to have decent incomes.
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my interp:
MCM' ~> dx/dt = f(x,t) st f(x,t) > 0 ~> dx/dt = Ax st. A is positive definite matrix
level of simplicity of model decreasing from left to right:
abstract description ~> non-linear, possibly distribuited system ~> linear, lumped, time invariant system
the simplest case, where x is just a varaible, not vector:
dx/dt = a*x, a being positive scalar. the solution of this equ is f(x)=c*e^(a*(t-t_0))*x_0, which diverges ofc...
it's as complex you want, since the description is very abstract, but in all cases it means divergent system.
lightyears ahead of any free-market bs modelwise, but can have a fairly basic interpretation if you want.
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On March 21 2014 12:06 nunez wrote:
my interp:
MCM' ~> dx/dt = f(x,t) st f(x,t) > 0 ~> dx/dt = Ax st. A is positive definite matrix
level of simplicity of model decreasing from left to right:
abstract description ~> non-linear, possibly distribuited system ~> linear, lumped, time invariant system
the simplest case, where x is just a varaible, not vector:
dx/dt = a*x, a being positive scalar. the solution of this equ is f(x)=c*e^(a*(t-t_0))*x_0, which diverges ofc...
it's as complex you want, since the description is very abstract, but in all cases it means divergent system.
lightyears ahead of any free-market bs modelwise, but can have a fairly basic interpretation if you want.
Thanks nunez
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np. :3
should be f(t) in solution of dx/dt=ax.
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On March 21 2014 11:26 JonnyBNoHo wrote:Show nested quote +On March 21 2014 10:41 IgnE wrote:On March 21 2014 10:02 JonnyBNoHo wrote:On March 21 2014 09:53 IgnE wrote:On March 21 2014 05:14 JonnyBNoHo wrote:On March 21 2014 04:44 IgnE wrote:On March 21 2014 00:40 JonnyBNoHo wrote:
You don't need growth to have a positive ROI because growth isn't the only variable in the math. If a particular asset won't experience growth (or negative growth), just pay less for it (for example) and you'll still have a positive ROI. I don't understand how you can just "pay less for something." I understand that there are other variables in the growth scheme. But you seem to be saying you can get an ROI on something if the inputs drop in price, even if there is no growth. That implies that there is contraction somewhere else in the economy, does it not? I am not disputing that it's possible to get a return on a particular investment in a negative growth economy, but as a whole, most investors would not be getting a return. Give me an example of a variable that can change so that you can still have ROI without growth, wherein the changing variable is totally independent from the health of the macroeconomy. The only thing I can think of right now that makes your example from above appear plausible is a discovery like finding massive oil wells spurting out of the ground. In that case you have new value that's been discovered sitting in the ground and can be easily extracted, making ROI on the minor capital required to pull up that value high. But if you have negative growth everywhere else, the vast majority of the investment would be in this new oil discovery. And if you want to argue that the oil discovery will prompt new growth elsewhere, then we are back in a situation where growth is happening. You talking macro, micro, both? Europe hasn't been growing, is ROI zero throughout the economy? If I buy a house to rent out I can pay less for it if rent will not increase and still receive a nice ROI. What are these arbitrary walls you are erecting? I am talking about the global economy. It seems like you are playing games by changing the boundary conditions. It's not like European capital is restricted to investment opportunities in Europe is it? Global growth is a requirement for the perpetuation of capitalism. I wasn't trying to change the boundaries. I was looking for clarification on what you meant and offering some examples of where growth isn't required. So where in the math is growth required? You continue to talk about overaccumulation as it if were an American-only phenomenon. Stop putting up arbitrary walls and maybe your conclusions would be more valid. Why wouldn't American capital satisfy American demand? Maybe because it was investing in China to satisfy the demand through imports? China was investing more in us than we in them. You know what outsourcing is? Edit: What's with "American-only phenomenon'? My last post compared accumulation in US to France and cited international capital flows. The math is: MCM'. M' must be greater than M. What is your math? You keep hiding behind these stupid one-liners and pointing to totally irrelevant data. So Europe is not growing. And this somehow proves that capitalism can continue without growth? That Europe has reached a stable zero-growth form of capitalism? That's absurd. You yourself have said before that the European economy is in serious trouble, and here you are pulling it out as a defense that growth is not required for the perpetuation of capitalism. Can you be a little more forthright in your responses? I am trying to give you the benefit of the doubt here because it seems like you at least think you know what you are talking about. So correct me if I'm wrong but your argument is: America was running a huge trade deficit, therefore there must have been a place for capital to go, because it could use that capital to meet its own internal demand. I don't see how that makes any sense at all. All that matters for global capital is that the demand is met. If it's cheaper to import than to set up production internally to meet demand then that is what will happen. Capital can go anywhere. Looking at trade balances doesn't speak to capital overaccumulation on a global scale. Your last posts on this page with WhiteDog have been comparing international capital flows and then making a comparison between French and American capital accumulation. Have I misunderstood you here? Neither WhiteDog (afaik) nor myself have been arguing that capital overaccumulation is a particularly American phenomenon. I believe that the excess capital flooding to the US before the crisis was tied to the housing boom. It would make sense that capital was flowing in to a housing bubble and flowing out when the bubble burst. The American housing market has supplied a lot of the extra demand required by developing countries that run on a trade surplus. MCM'? How does that fit into growth? M' > M doesn't seem to imply growth, though I don't know Marxist math well. Is it meaningful beyond a piece of paper? My math? Open up a finance or accounting book and build a financial model. You don't need growth to have a positive ROI. Europe's economy isn't good, true. But there's a difference between "capitalism requires growth" and "currently capitalist economies are geared to grow, and if they don't, they suffer, though that doesn't always have to be the case". I'm not sure which you are trying to say and I've been taking you literally - that growth is required now and forever or shit falls apart. My argument about the trade deficit was focused on America. We aren't accumulating much capital on our own - a lot comes in from overseas. If your argument is that there's over accumulation globally - that seems absurd. Globally we need waaaaay more capital accumulation in order for developing countries to have decent incomes.
I am trying to say that any capitalist economy that doesn't experience growth for more than a short period of time will require significant structural changes. The end result would be a system with only a passing resemblance to our current capitalist economic system.
Capital accumulation does not help provide "decent incomes." Capitalism's modus operandi is to gut the middle class.
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EPT
