Philip 6/11 18:30
I probably did not completely understand Richard Marken’s paper, H. Economicus, because it was heavy reading, but I did get the impression that leakage is not a good thing. And so a simple feedback loop naturally occurred to me which I have illustrated below. It’s a mechanism which sustains producers through taxation (tax dollars go to producers).
Perhaps intuition is failing me in this regard, but I cannot imagine a feedback loop where income tax will lead to negative feedback, as income tax will decrease consumption - hurting producers. Only a tax on leakage makes sense, as it minimizes the amount of latent money.
[Rick Marken 2018-06-16_18:28:08]
···
On Sat, Jun 16, 2018 at 3:53 PM, PHILIP JERAIR YERANOSIAN csgnet@lists.illinois.edu wrote:
PY: any thoughts?
RM: I liked the closed loop model of the economy that I described in that paper. The basic idea was that an economy is a population of controllers who are simultaneously producers and consumers of the goods and services they produce. This model ignores the details of how production is organized and how the fruits of this production are distributed. So the model presumably applies to any kind of economy, whether it’s called capitalist, communist, socialist, mercantilist or whatever.Â
RM: The main problem with the model, from my perspective, is that it is way too high level. But I don’t know the best way to make it more detailed without making it way too complex. So I kind of gave up on it after writing it. But I think the basic idea of the model is right: that an economy is a collection of controllers who control their input (consume goods and service) by producing what they want (their reference for that input).Â
RM: This general view of the macro economy made a lot of sense to me and it helped me see why specialization of production would create problems – the main problem being highly unequal distribution of the fruits of production (in the form of income). When there is high inequality there is leakage (unspent claim on goods and services, better known as money stowed away in accounts on the Cayman Islands;-) so that the aggregate consumer cannot consume (buy) all the goods and services that the economy is able to produce. This is bad for the economy and, of course, for a large segment of the people in it who are unable to consume all that they want (or need) to consume. That is, gross income inequality leads to loss of control in large segments of the population, which I believe is largely responsible for the increase out of control behavior (hatred, racism, anger, etc) we see here in the US.Â
Best
Rick
–
On Mon, Jun 11, 2018 at 6:47 PM, PHILIP JERAIR YERANOSIAN pyeranos@ucla.edu wrote:
Philip 6/11 18:30
I probably did not completely understand Richard Marken’s paper, H. Economicus, because it was heavy reading, but I did get the impression that leakage is not a good thing. And so a simple feedback loop naturally occurred to me which I have illustrated below. It’s a mechanism which sustains producers through taxation (tax dollars go to producers).
Perhaps intuition is failing me in this regard, but I cannot imagine a feedback loop wher
e income tax will lead to negative feedback, as income tax will decrease consumption - hurting producers. Only a tax on leakage makes sense, as it minimizes the amount of latent money.
Richard S. MarkenÂ
"Perfection is achieved not when you have nothing more to add, but when you
have nothing left to take away.â?
                --Antoine de Saint-Exupery
What do you think about taxing leakage instead of income?
···
On 6/16/18, Richard Marken <csgnet@lists.illinois.edu> wrote:
[Rick Marken 2018-06-16_18:28:08]
On Sat, Jun 16, 2018 at 3:53 PM, PHILIP JERAIR YERANOSIAN < > csgnet@lists.illinois.edu> wrote:
PY: any thoughts?
RM: I liked the closed loop model of the economy that I described in that
paper. The basic idea was that an economy is a population of controllers
who are simultaneously producers and consumers of the goods and services
they produce. This model ignores the details of how production is organized
and how the fruits of this production are distributed. So the model
presumably applies to any kind of economy, whether it's called capitalist,
communist, socialist, mercantilist or whatever.
RM: The main problem with the model, from my perspective, is that it is way
too high level. But I don't know the best way to make it more detailed
without making it way too complex. So I kind of gave up on it after writing
it. But I think the basic idea of the model is right: that an economy is a
collection of controllers who control their input (consume goods and
service) by producing what they want (their reference for that input).
RM: This general view of the macro economy made a lot of sense to me and it
helped me see why specialization of production would create problems -- the
main problem being highly unequal distribution of the fruits of production
(in the form of income). When there is high inequality there is leakage
(unspent claim on goods and services, better known as money stowed away in
accounts on the Cayman Islands;-) so that the aggregate consumer cannot
consume (buy) all the goods and services that the economy is able to
produce. This is bad for the economy and, of course, for a large segment of
the people in it who are unable to consume all that they want (or need) to
consume. That is, gross income inequality leads to loss of control in large
segments of the population, which I believe is largely responsible for the
increase out of control behavior (hatred, racism, anger, etc) we see here
in the US.
Best
Rick
On Mon, Jun 11, 2018 at 6:47 PM, PHILIP JERAIR YERANOSIAN < >> pyeranos@ucla.edu> wrote:
Philip 6/11 18:30
I probably did not completely understand Richard Marken's paper, H.
Economicus, because it was heavy reading, but I did get the impression
that
leakage is not a good thing. And so a simple feedback loop naturally
occurred to me which I have illustrated below. It's a mechanism which
sustains producers through taxation (tax dollars go to producers).
Perhaps intuition is failing me in this regard, but I cannot imagine a
feedback loop wher e income tax will lead to negative feedback, as
income
tax will decrease consumption - hurting producers. Only a tax on leakage
makes sense, as it minimizes the amount of latent money.
--
Richard S. Marken
"Perfection is achieved not when you have nothing more to add, but when you
have nothing left to take away.�?
--Antoine de Saint-Exupery
[Rick Marken 2018-06-18_08:32:29]
PY: What do you think about taxing leakage instead of income?
RM: Leakage is an aggregate concept. We tax individuals and businesses. So taxing leakage makes no sense. Just return to a highly progressive taxation system, like we until 1980, and that should take care of most of the problem.Â
Best
Rick
 >
···
On Sun, Jun 17, 2018 at 11:58 PM, PHILIP JERAIR YERANOSIAN <<mailto:pyeranos@ucla.edu>pyeranos@ucla.edu> wrote:
On 6/16/18, Richard Marken <<mailto:csgnet@lists.illinois.edu>csgnet@lists.illinois.edu> wrote:
> [Rick Marken 2018-06-16_18:28:08]
>
> On Sat, Jun 16, 2018 at 3:53 PM, PHILIP JERAIR YERANOSIAN < > > <mailto:csgnet@lists.illinois.edu>csgnet@lists.illinois.edu> wrote:
>
>> PY: any thoughts?
>>
>
> RM: I liked the closed loop model of the economy that I described in that
> paper. The basic idea was that an economy is a population of controllers
> who are simultaneously producers and consumers of the goods and services
> they produce. This model ignores the details of how production is organized
> and how the fruits of this production are distributed. So the model
> presumably applies to any kind of economy, whether it's called capitalist,
> communist, socialist, mercantilist or whatever.
>
> RM: The main problem with the model, from my perspective, is that it is way
> too high level. But I don't know the best way to make it more detailed
> without making it way too complex. So I kind of gave up on it after writing
> it. But I think the basic idea of the model is right: that an economy is a
> collection of controllers who control their input (consume goods and
> service) by producing what they want (their reference for that input).
>
> RM: This general view of the macro economy made a lot of sense to me and it
> helped me see why specialization of production would create problems -- the
> main problem being highly unequal distribution of the fruits of production
> (in the form of income). When there is high inequality there is leakage
> (unspent claim on goods and services, better known as money stowed away in
> accounts on the Cayman Islands;-) so that the aggregate consumer cannot
> consume (buy) all the goods and services that the economy is able to
> produce. This is bad for the economy and, of course, for a large segment of
> the people in it who are unable to consume all that they want (or need) to
> consume. That is, gross income inequality leads to loss of control in large
> segments of the population, which I believe is largely responsible for the
> increase out of control behavior (hatred, racism, anger, etc) we see here
> in the US.
>
> Best
>
> Rick
>
>>
>> On Mon, Jun 11, 2018 at 6:47 PM, PHILIP JERAIR YERANOSIAN < > >> <mailto:pyeranos@ucla.edu>pyeranos@ucla.edu> wrote:
>>
>>> Philip 6/11 18:30
>>>
>>> I probably did not completely understand Richard Marken's paper, H.
>>> Economicus, because it was heavy reading, but I did get the impression
>>> that
>>> leakage is not a good thing. And so a simple feedback loop naturally
>>> occurred to me which I have illustrated below. It's a mechanism which
>>> sustains producers through taxation (tax dollars go to producers).
>>>
>>>
>>>
>>> Perhaps intuition is failing me in this regard, but I cannot imagine a
>>> feedback loop wher e income tax will lead to negative feedback, as
>>> income
>>> tax will decrease consumption - hurting producers. Only a tax on leakage
>>> makes sense, as it minimizes the amount of latent money.
>>>
>>
>>
>
>
> --
> Richard S. Marken
>
> "Perfection is achieved not when you have nothing more to add, but when you
> have nothing left to take away.â?
>Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â --Antoine de Saint-Exupery
>
--
Richard S. MarkenÂ
"Perfection is achieved not when you have nothing more to add, but when you
have nothing left to take away.â?
                --Antoine de Saint-Exupery
