The General Economics Thread

Keep in mind, the inflation and deflation are impacted less by how much money exists, but by how much money is circulating. If someone is sitting on 30 million dollars that they never use, it might as well not exist. A similar effect occurs when money moves around in one specific sector, but rarely if ever leaves. You can see that with the current stock market, where a ton of money is spinning around there, but it doesn't seem to be doing anything but buying and selling stocks.

Not Three Laws compliant.

Part of me wonders whether the misunderstanding comes from the idea of money still remaining in the turn of the 20th Century (i.e, backed by precious metals rather than being fiat) for a lot of people.

Remember: inflation is related to the money supply, but only peripherally. Fundamentally, inflation and deflation occur when there is a general imbalance between supply and demand. In a "general glut" — that is, there's more stuff to buy in the consumer economy than there is money to buy it, prices (and thus wages) will attempt to fall. In the converse situation, with lots of consumer cash chasing scarce products, price and wages will try to rise.

A nominal amount of inflation (common wisdom holds this rate as between 2 and 4 percent) is desirable because it helps reduce the value of cash held (and erodes the value of debt), encouraging consumers to spend rather than save. Much more than that and people see their money lose value too quickly, disrupting savings (and hence investment). Too much less and you enter what is known as a deflationary spiral, wherein people hold onto their money in the expectation that it will be worth more in the future — when everyone does this at once, the economy grinds to a halt.

Also note that the money supply must increase as a simple function of population growth; as more consumers enter the economy, there must also be more money available or you have inherent deflationary pressure. This is, incidentally, the fundamental problem with bitcoin: it is a currency that is deflationary by design, which is so pants-on-head stupid that it's hard to adequately express.

edited 26th Oct '16 8:48:20 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

So the worlds first delivery by self driving truck has just been completed. How long until truck drivers go on strike demanding shipping companies remain in the 20gh century ?

edited 25th Oct '16 7:08:30 PM by Xopher001

Going by the article, the end makes it sound like truck drivers would take on a role more like what modern airline pilots already do: handle the contact with humans where it needs handling and taking over from the autopilot if something goes wrong.

I was just going to say that. I know a few truck drivers, and they are all on board with self-driving trucks. Especially since you can put a little apartment in the cabin of a truck, so they don't have to spend the entire time behind the wheel. Some of the hardcore lifers already have apartments in their trucks.

Eventually, self-driving vehicles will be so reliable that human drivers will be eliminated. But for now, it's safer (at least in the public's mind) to keep 'em on board.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

And eventually planes will be the same. But this isn't something that's gonna happen overnight. I'd say the current generation of truck drivers (and pilots) don't have to worry about losing their jobs to automation. Next generation... maybe, but I wouldn't bet on it.

edited 25th Oct '16 7:29:58 PM by Discar

We still have bank tellers in spite of ATM machines.

True but that's a service thing, you really can't properly automatize a lot of that.

Oh really when?

Yeah, when something weird happens with your account, you need a teller, not a machine that lets you deposit or withdraw and not much else.

Not Three Laws compliant.

Did you just??

edited 25th Oct '16 7:43:07 PM by Xopher001

IKR right?

Funnily enough, when it comes to reliability, self driving vehicles beat humans when it comes to safety for the sole reason that none of those vehicles were programed to be stupid. The first self driving car accident was the fault of the human driving his car, not the automated one.

I think the reason to keep a human in the loop for truck drivers isn't only as a matter assurance, but also safety and management, with a human on the wheel you can check for eventual problems, cover situations the machine wasn't programmed for and interact with other people between the departure and destination such as cops, other drivers and inspectors.

I'm sure the truck drivers would appreciate being able to at least get some rest during the highway and only take control when they are inside cities and urban areas, which certainly have a lot of things to keep an eye out for.

Inter arma enim silent leges

I think that is something of a valid concern though. Everyone else isn't in a self driving car. That's a shit ton and a half of variables for the truck to deal with.

Oh really when?

I would think one would start with long-haul routes where there would be long stretches of boring and thus more opportunity to fall asleep at the wheel.

All that requires is automated steering, my dad's car can be set to go at a certain speed and it will slow down and speed up (up to the set speed) as required to keep a safe distance from the car in front.

The hardest thing to program is idiot management, the car can drive perfectly on its own, but it lacks the ability to deal with the imperfect driving of others.

“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran

That may have been what happened in the US...

...but that was Britain. In fact, rationing got worse after World War II, and industry and infrastructure was devastated after World War II (and it could be said, has never quite recovered).

---

In theory, planes can do the same now, but pilots are still used to cover emergencies, meet regulations and reassure customers.

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Britain had the disadvantage of having its infrastructure crippled by the very war that it was fighting. The U.S., on the other hand, had no war within its borders. It's a huge difference in comparative advantage.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Was the battle of Britain really that damaging to British industrial capacity? Maybe i'm downplaying it's significance, but i thought it was mostly a terror thing due to how inaccurate German bombers were at the time (and that tech breakthroughs by the next couple of years meant that Allied counterattacks could target something as "small" as a factory instead of just bombing towns willy-nilly).

I thought it was more that the UK was simply pushed beyond the limits of productive capacity in both World Wars. They were pretty distressed after World War I too.

The bombing really was that bad. Sure, not every city was Coventry levels of bad, but most major production centres did get hit a few times. Accurately enough to cause disruption.

But, that wasn't the biggest problem: damage to civilian infrastructures also has a knock-on effect on productivity levels, even if you draught in the female population for a boost in your workforce.

And, most bombs hit near where somebody was living or working.

Well, if some idiot is going to ram your car, there are situations where you won't be able to avoid a crash no matter what you do. But generally speaking, a properly programmed self-driving vehicle is better able to react to that sort of thing because 1) it's always paying attention to every other car on the road, rather than assuming that other drivers are going to behave themselves, 2) it can watch every other car simultaneously, rather than having to shift focus to one direction at a time like human drivers after to do, and 3) it has much better reaction speed than a human driver, and never freezes up, panics and does the wrong thing, or otherwise succumbs to "human error".

That's not to say that they're perfect, of course — there are things that can "blind" a self-driving car's sensors that would affect a human driver, for instance, which can result in a crash if a human driver isn't present and paying enough attention to take over when appropriate. But generally speaking, in the vast majority of cases, a self-driving car is going to be a better driver than a human.

Really from Jupiter, but not an alien.

Britain had their coastal cities and a big chunk of London and their other major cities flattened. Only the countryside was moderately safe. Any above-ground infrastructure was pretty much going to have to be rebuilt from scratch, coal mining had become pretty much conscripted labor for a while due to manpower shortage and food rationing had to continue into the 50s.

edited 26th Oct '16 8:00:37 AM by Elle

Yes, as I said, there was a vast destruction of production capacity that had to be rebuilt, which required large loans (denominated in dollars, mind you, not pounds) and a substantial period of privation. Had Britain not gotten that support from the United States, it may well have collapsed into a semi-permanent depression. Incidentally (or not), U.S. support for the rebuilding of the European nations post-WWII, combined with our unchallenged industrial supremacy in the same period, is largely what cemented the dollar as the global reserve currency. (Our geographic isolation from the war was a fortuitous circumstance. The fact that we had such industrial capacity to begin with was, however, a direct outcome of Alexander Hamilton's economic ideology at the founding of the nation. Had we followed a Jeffersonian path, with its emphasis on a decentralized, agrarian economy, the World Wars would have been much, much different.)

Note that the real fear of self-driving vehicles is not their response to unpredictable events; they are, as noted, going to be much safer than human drivers in 99% of emergency situations. No, the biggest problem is the risk of emergent behavior: where a fleet of such cars is traveling on the roads and the response of one to an adverse event triggers responses in others that lead them to some kind of lemming-like mass crash. We've seen examples of this sort of thing in the stock market, where the expert systems driving the trades are all variations of the same basic program and all respond identically to an event, causing huge market swings in much the same way as a flock of birds might suddenly decide to fly out of a tree.

One thing that can mitigate this is having cars with a variety of driving software on the road, such that they aren't all running the exact same core program.

edited 26th Oct '16 8:29:47 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

I'd like to know more about similar policy choices-and-consequences by newly-freed colonies around the globe.

But, holy shit, "My name is Alexander Hamilton, and there's a million things I haven't done, but just you wait, just you wait!" We're still feeling the ripples of his actions over two centuries later. What a guy!

What are good works specifically about Hamilton's economic choices, how he got them through cabinets and congresses, their causes, goals, and consequences?

Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

@ Euo,

That's correct — one of the reasons behind the nationalisation of the "Big Four"^note  which were themselves created by Government to form British Railways was due to the damage and lack of maintenance the rail network during World War II.

Interestingly:

Like a lot of British industry and infrastructure, the railways were damaged, but not damaged enough to rebuild and modernise from scratch. Hence, we didn't update and got left behind, not helped by conservative management, workers and unions.

edited 26th Oct '16 8:50:32 AM by Greenmantle

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