6 ms·

While we're bashing economics, something I truly miss is that no new high level economic systems are being discussed prominently. As important as fusion in phys

• amelius 2y ago
  Yes economic system is highly flawed. Elon Musk owns $400B. Earth will become uninhabitable after 1 billion years from now (when the heat of the Sun becomes too large for us). This means that Musk, if he lived that long, would be able to spend $400 every day until the death of all life on Earth. This is 15 times the current average daily income worldwide. If this is not insane, then what is?
  • d3ckard 2y ago
    Except he does not. His assets are valued at 400B, provided that he pinky swears not to try to actually sell them, in which case they will be worth much, much less.
    • pyrale 2y ago
      Why is that? Just because an orderly liquidation would take some time does not mean it would be impossible for him to sell. As a case in point, when he decided to invest in twitter, he was able to use his wealth pretty easily.
      • Cpoll 2y ago
        He can only share his shares and assets at 400B if the market thinks they're worth 400B, and if there are enough buyers for all 400B. And once he starts selling, the market might re-evaluate the worth of the shares. Isn't Twitter a good counterpoint? I vaguely recall Musk had a hard time liquidating shares to buy it?
        • pyrale 2y ago
          That is the meaning of what I call orderly liquidation. Sales are usually structured in order not to crash the market. That being said, just because you need to structure a big sale does not mean it can not be done, or that you can not leverage your asset to have cash available at short notice. For instance, a loan with your actions as collateral will let you structure your divestment over years for a very moderate price. Again, what I’m describing is not science fiction, it’s litterally what happened with twitter. Imo it would be a harder challenge to find valuable stuff to buy than to divest orderly. > Isn't Twitter a good counterpoint? I vaguely recall Musk had a hard time liquidating shares to buy it? From what I remember, the issue was more along the lines of him making an offer without thinking it would be accepted, and then be under the gun because he was not prepared. Even then, he eventually found a reasonable financing scheme.
          • Ntrails 2y ago
            Selling a billion dollars of amazon via blocks etc with limited market impact? Probably doable if not super cheap. 3-400b? No way. There isn't capacity, you would cause a massive dip in prices. The timelines you would have to exit over would be very long, so disclosure also causes market reaction. Loans work to an extent, but you get risk adjusted and eg 1bn of amazon stock is pretty low risk whilst 100bn is high risk. Concentration/size vs market cap and adv matter. You can do it all, at a price, but it would be a lot lower than the current stock price for obvious reasons
            • pyrale 2y ago
              > The timelines you would have to exit over would be very long, so disclosure also causes market reaction. Your claim seems to revolve around the idea that a fire-sale would crash the market, but no one is arguing for a fire-sale. Again, structuring a sale over a long time span isn’t a big issue, since you can get cash now by selling the future revenue. The real hard question would be to find $400bn worth of stuff to buy.
    • croes 2y ago
      That’s why he uses these assets to borrow money
  • narrator 2y ago
    You're looking at the world as a poor person. If you had Elon's brilliance you'd probably quit after you made $5 million dollars or so and definitely after you sold Zip2 back in the 1990s and spent the rest of your life on the beach. The only reason he's still working as hard as he does is not because he wants to spend that on himself. He wants the glory of going to Mars and having a positive impact on humanity and that requires control of the activities of large companies like SpaceX, etc. which requires ownership stakes in those companies that are valued in the billions. One of the reasons that he campaigned so hard for Trump is that Kamala's proposed wealth taxes on unrealized capital gains were going to take his companies from him and he'd have to sell to Vanguard or Blackrock, who would give control of the companies to Boeing-tier mediocrity which would mean that we'd never get to Mars. There have been so many companies where the founders sold out and retired because they had enough money and they got bought by big conglomerates who destroyed those companies with mediocre management and neglect. This is the great thing about Elon, he just keeps building and leveraging all that money to create bigger and bigger companies using his creativity and management ability to achieve his goal of launching an era of space exploration.
    • 7thaccount 2y ago
      We've already sent probes to Mars. There's no reason to send people other than to show we can. It's extremely uninhabitable...like Antarctica is a paradise in comparison with water, air, and a lack of radiation. We have nowhere near the technology to terraform Mars either. I guess you could dig someone a cave and send them some nuclear batteries and a bunch of prepackaged food, but what's the point? Elon is an oligarch plain and simple. SpaceX is impressive, and I'm a big fan of NASA's research, but let's look past the marketing of him trying to save the human species or whatever. I do think humanity may have to settle another world (or move to a post-biological existence where we can just park our satellite brains around a star for energy), but this is going to take a lot of scientific advancement over many centuries. Elon's plan would make a lot more sense if Mars was an Earth 2.0 and we just needed to move a bunch of people there, but it's not and even if we do find something really close to Earth with JWST, it would take centuries to get there. In short, our best approach is to save the planet we already have and continue funding scientific research.
  • superluserdo 2y ago
    You're mixing up years and days there. It would be about $1 a day, not 400.
    • lupusreal 2y ago
      Somehow people making these sort of hypotheticals about billionaires spending or dispersing their money always make a mistake like this. "Jeff Bezos has 300 billion dollars. There are 300 million people in America, so he could give everybody a million dollars." For fun, calculate how long the billionaires of America could fund America's social programs if they were taxed at 100%. If you ask people this, the off-the-cusp estimates are usually something like a thousand years, a century, some huge number like that...
      • JohnCClarke 2y ago
        that's a thousand dollars each Even in this populist age, math still counts.
        • lupusreal 2y ago
          It was an illustrative example of the way people botch this sort of math problem. Steve Mould has a video about it IIRC.
      • hnbad 2y ago
        Sure but those hypotheticals are just poorly thought out ways to visualize the imbalance. Another way to do it would be saying "Jeff Bezos has 300 billion dollars, that is 300 thousand millions. There are 300 million people in America, so $1000 has been taken out of every American's share of the national wealth and reserved exclusively for Jeff Bezos". Repeat that for every billionaire in the US and you should be able to demonstrate quite the imbalance. Of course that assumes you think Earth's and society's (or at least the US's and Americans') resources should exist for all humans (or Americans) and the ideal balance would be based on as little as one needs and as much as one can contribute, i.e. literally how early human communities operated and how human communities still often operate outside economical contexts (e.g. after a natural disaster). You can say that model doesn't scale but I don't see a good argument for why that should be a reason to use a completely different model unless you're literally among the few people it disproportionately benefits (if you ignore how ruinous it usually is to them too at a human and interpersonal level because of how much it alienates them from almost anyone else around them).
  • fdschoeneman 2y ago
    In answer to your question, it is irrelevant. It doesn't matter how much money musk has, or you have, or bezos has, or the government has. What matters is where that money is invested. If musk was using his money to bang hookers on solid gold yachts, fine, complain about it. But he isn't. He doesn't even own a house. Stop worrying about another man's dollar and start worrying about being a better and less covetous person.
    • deleted 2y ago
      [deleted]
    • harimau777 2y ago
      Wasting his money on luxuries would be preferable to destroying Twitter and funding Trump's reelection.
    • thomassmith65 2y ago
      Cut to Musk tweeting "no fear, buy the dip!" as he unloads some memecoin.
    • SoftTalker 2y ago
      Yacht makers and hookers need customers too.
      • fdschoeneman 2y ago
        I agree with this but not everyone does. My argument here is crafted to those who do not understand why taxation is theft.
        • johnnyanmac 2y ago
          well you're making a horrible argument of it. All you seem to be doing is saying "he's doing good things" and you dismiss any disagreement with "well what do you think he's doing?" with no further discussion. Musk is a great argument that while the government is inefficient, they are still beholden to laws and people. Musk isn't. Tax him to high hell.
  • shikon7 2y ago
    That's why he works so hard to colonize other planets.
  • deleted 2y ago
    [deleted]
  • kiba 2y ago
    I think access to that much capital as assess to strategic resource, not as wealth for individuals. At that level of wealth, it doesn't make sense to think about fancy cars and mansions and living an extravagant and luxurious lifestyle. At that point, you got it made. However, if you're talking about building something meaningful, that's a different matter entirely. That requires far more capitals than what is required to sustain a person indefinitely. There are shows that I would love to revive and reboot, such as Stargate. There are researches I want to do or fund, such as research into 3D printing, or do long term research grants so that people can do meaningful work. The money's not for living. It's for projects. If your personal projects don't require that much money, you can always give it away to fund other people's projects.
    • rickydroll 2y ago
      I agree with you that great wealth can be used to fund meaningful research and development. Unfortunately, as we have seen, great wealth is used to distort society to reinforce their ability to hold onto wealth.
    • amelius 2y ago
      But the article is about basic research. Do you think that we can cut basic research just so that one rich guy can have projects?
      • kiba 2y ago
        I was commenting on people bemoaning about billionaires being too rich, with the implication that billionaires shouldn't ever need that much money. I don't necessarily agree with the idea of cutting basic research programs and how it's actually structured(short termism, prioritizing novel results over building solid foundation, etc).
  • goatlover 2y ago
    The (US) economic system isn't economics, anymore than the (US) political system is political science. You're conflating the instance of one particular system with the study of those systems. You're also confusing economists with actual representatives who pass laws. Might as well blame climatologists for climate change.
  • efitz 2y ago
    This is not true and is a very common misunderstanding of modern wealth. Elon Musk owns hundreds of billions worth of stock. First, the value of those stocks varies from day to day. He can gain or lose billions of dollars in "net worth" on any given business day. Second, he is not free to sell that stock however and whenever he wants; he has to get approval from the boards of his various companies and is limited in the timing and amounts he can sell. Additionally, selling large amounts of stock causes the price to drop, AND dilutes his ownership in, and therefore control of, those companies. I think a lot of people have this stupid idea of Scrooge McDuck swimming in pool of cash, when they think about billionaires. That's not how it works, for most billionaires (I'm not sure about middle eastern oil royalty). In reality, businessman billionaires have most of their wealth in stock, and it is not liquid, and they borrow against the stock (i.e. use the stock as collateral for personal loans) and sell small percentages of it to finance their lifestyles. If you created a company, and it became wildly successful, and it was publicly traded, who should "own" the company? Should you be forced to divest, and therefore cede control to people who had no involvement in the company's initial success? Is that good for founders or for companies? How does it benefit society? Also note that profitability influences stock price, so taking away control from the people who made a company profitable, has a high likelihood of making the company less profitable, which in turn will almost certainly result in each stockholder becoming poorer. Remember that most stockholders aren't Elon Musks, they're John Q. Publics with a 401(k).
    • 1832 2y ago
      > Also note that profitability influences stock price, so taking away control from the people who made a company profitable, has a high likelihood of making the company less profitable, which in turn will almost certainly result in each stockholder becoming poorer. Absolute clown
  • deleted 2y ago
    [deleted]
• abeppu 2y ago
  People love to talk about ideology, but is what what economics should be about? Every major economy on the planet is a mixed economy. In China, government expenditure and revenue are 33.1% and 25.5% of GDP respectively. In the US, the corresponding percentages are 38.5% and 32.9%. Neither totally free markets nor planned economies seem to work, and empirical research obliges economists to look at the economies we actually have. https://en.wikipedia.org/wiki/List_of_countries_by_government_spending_as_percentage_of_GDP https://en.wikipedia.org/wiki/List_of_countries_by_governmen... I think Piketty does kind of do what you're talking about -- and though he makes a good case, I think when he argues for concepts like universal inheritance, that's more an act of political advocacy than economic scholarship. It's for the economist qua economist to study/analyze the conditions under which the rich get richer, or where class mobility decreases, etc -- but it's up to people and governments to choose what they want society to look like.
• johnnyanmac 2y ago
  My impression is that economics is like voting. We have a dozen different alternative structures that aim to fix many of the most obvious issues from centuries of use. but no government system has an incentive to shake things up to such a degree. We have a gigantic broken window, but the house still works. And ofc my government system has generally had a reactionary response rather than a preventative one; nothing gets done until it's too late and many people die.
• marxisttemp 2y ago
  I was hoping that link would be to Georgism! The list of notable Georgists is a testament to how convincing an idea it is.
• shadowerm 2y ago
  This post is complete nonsense and you obviously haven't looked very hard. You could start with the work of W Brian Arthur. Unless by "discussed prominently" you mean youtubers who don't know what they are talking about. Then you would be correct.