Measuring freedom (was Cause versus mechanism...)

CSGnet Archive CSG2011
21

[From Rick Marken (2011.04.20.1250)]

AM:
The money is lost because no one profits from the bridge. Monetary profit to
the bridge owner would be money gained.

The money is lost to the bridge contractor but not to those paid by
the contractor to build the bridge. So if $1B was spent to build the
bridge, that $1B is now purchasing power in the hands of the people
who were paid to build it and the$1B will all be spent on products
needed and wanted by these people. Even if some of the money is saved
(and very little will be saved by the workers) it will eventually get
spent as well; savings just puts a bit of a delay into the circular
flow of money.

At the aggregate level, money is being paid by the aggregate producer
to itself (in the form of wages and profits) as the aggregate consumer
who is paying it back to itself (in order to purchase the products
produced) as the aggregate consumer: this is the circular flow of
money). It may be that money can be permanently lost from this
circular flow (T. C. Powers calls this "leakage") but I don't know
how.

Best

Rick

···

On Wed, Apr 20, 2011 at 11:51 AM, Adam Matić <adam.matic@gmail.com> wrote:
--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

22

AM:

Sure, the money doesn’t go out of circulation, that’s not what I meant by lost money.

If we compare money spent on two bridges - one is used and the owner profits, the other

one isn’t, and the owner doesn’t profit, to the workers it’s all the same. The amount

of money is the same, it goes on circulating in either case.

I’m talking about what happens after building the bridge.

If the bridge doesn’t get used, if people don’t pay for it, than the owner will loose the money

invested. That’s what I mean by lost money. It’s easy to see a good investment in a for-profit

investment - the money returns. The buyers see value for themselves and buy the service.

It’s equally easy to see a bad investment.

The problem with government building a bridge or anything else that’s not for profit is

that there is no apparent straight-forward way to measure the goodness of the investment.

If it the bridge does get used, that means people do see value in using it. Perhaps it saves

them time and they make more money. Perhaps the cost of transporting goods is less

when using the bridge then when using other means of transportation, and eventually goods

become cheaper. If people make more money, they will be taxed more, so the money returns

to the government budget.

If they don’t make more money from using the bridge, the money is lost to the government,

they have a deficit.

This looks closed-loop to me. I believe that a model would behave like that, and I plan to make

a simulation to prove it, so we’ll have more discussions about this. :slight_smile:

There is, of course, the problem of historical data. According to austrian scholars, the data from free

markets is fully consistent with the theory. Perhaps the best little book I found on economics

is H. Hazlitt’s Economics in One Lesson ( www.hacer.org/pdf/Hazlitt00.pdf ) and there are a lot

of predictions of how things like price-fixing, minimum-wage laws or tariffs will effect the economy.

It looks like closed loop reasoning to me and it could be simulated with PCT models.

···

On Wed, Apr 20, 2011 at 9:47 PM, Richard Marken rsmarken@gmail.com wrote:

[From Rick Marken (2011.04.20.1250)]
The money is lost to the bridge contractor but not to those paid by
the contractor to build the bridge. So if $1B was spent to build the

bridge, that $1B is now purchasing power in the hands of the people

who were paid to build it and the$1B will all be spent on products

needed and wanted by these people. Even if some of the money is saved

(and very little will be saved by the workers) it will eventually get

spent as well; savings just puts a bit of a delay into the circular

flow of money.

At the aggregate level, money is being paid by the aggregate producer

to itself (in the form of wages and profits) as the aggregate consumer

who is paying it back to itself (in order to purchase the products

produced) as the aggregate consumer: this is the circular flow of

money). It may be that money can be permanently lost from this

circular flow (T. C. Powers calls this “leakage”) but I don’t know

how.

To connect this with (economic) freedom, the greatest amount of individual freedom would be in a

tax-free system. If no-one is coerced to pay taxes, his individual economic freedom would not be

reduced.

There is a problem of what to do with the bad guys, of course. According to free market theorists,

voluntary payments to “dealers with the bad guys” would lead to better police and legal system

by allowing the good ones to profit and the bad ones to go out of business.

Adam

23

[From Rick Marken (2011.04.20.1845)]

AM:...
If the bridge doesn't get used, if people don't pay for it, than the owner
will loose the money invested. That's what I mean by lost money. It's easy
to see a good investment in a for-profit investment - the money returns. The
buyers see value for themselves and buy the service. It's equally easy to
see a bad investment. The problem with government building a bridge or
anything else that's not for profit is that there is no apparent straight-forward
way to measure the goodness of the investment.

You are simply defining the "goodness" of an investment as "profit".
Making a profit is certainly "good" for the investors and the owner of
a business; it's very important that revenue at least match expenses
and it's also nice if there is some profit , which is like "wages" for
the owner and capital gains for the investors. But the goodness of
government investment can't be evaluated like the goodness of a
business investment. Government investment doesn't produce profits for
the "owners" (the tax paying public). Government invests in what is
considered (by the voters, if we're talking about a democracy) to be
the common infrastructure of a society. These investments are "good"
if they increase the productivity and standard of living of everyone
in the society, producers (businesses) and consumers. They are "bad"
if they don't.

It is difficult to measure changes in the standard of living made by
government investment but I bet we could figure out ways to do it.
I'm bet that the US government investment in the interstate highway
system in the 1950s and 60s improved the productivity of all US
business that rely on transportation. Investment in public education
results in a very productive workforce, which increases the
productivity of private business also. Japan's investment in
universal healthcare made it possible for the Japanese car
manufactures to produce better cars for less and dominate the auto
industry.

The wisdom (or lack thereof) of government investment depends on the
wisdom if the policy makers (politicians). If the politicians make bad
policy -- like investing in a useless bridge -- it won't increase the
standard of living much (Nor is the money lost; it still becomes
demand; that's why Reagan's investment in the totally useless Star
Wars program in the 1980s help bring the US economy out of a
recession). Wise investments in common infrastructure can markedly
improve the productivity of private business and make life better for
the public in general. But it does take wise policy makers and you
don't get wise policy makers unless you have a wise polity (which we
no longer have in the US since our public airwaves are now used to
spew right wing propaganda rather than information).

If it the bridge does get used, that means people do see value in using it.
Perhaps it saves them time and they make more money. Perhaps the
cost of transporting goods is less when using the bridge then when using
other means of transportation, and eventually goods become cheaper. If
people make more money, they will be taxed more, so the money returns
to the government budget. If they don't make more money from using the
bridge, the money is lost to the government, they have a deficit. This looks
closed-loop to me. I believe that a model would behave like that, and I plan
to make a simulation to prove it, so we'll have more discussions about this. :slight_smile:

Now you're talking! I can't wait to see it.

There is, of course, the problem of historical data. According to austrian
scholars, the data from free markets is fully consistent with the theory.

Well, the data that's I've seen contradicts everything I've heard from
the Austrian school: increases in the marginal tax rate are
associated, with increased (not decreased) growth and decreased (not
increased) unemployment; increased investment follows rather than
precedes growth; government run healthcare is less expensive and
produces better outcomes than private, free market healthcare. I don't
think there is anything the Austrian school says that pans out, except
perhaps that communist dictatorships do not produce good economic
results.

Perhaps the best little book I found on economics
is H. Hazlitt's Economics in One Lesson ( www.hacer.org/pdf/Hazlitt00.pdf )
and there are a lot of predictions of how things like price-fixing, minimum-wage
laws or tariffs will effect the economy. It looks like closed loop reasoning to me
and it could be simulated with PCT models.

Thanks. I look forward to reading it.

________________
To connect this with (economic) freedom, the greatest amount of individual
freedom would be in a tax-free system. If no-one is coerced to pay taxes, his
individual economic freedom would not be reduced.

His freedom from paying taxes would certainly be increased but with no
government his freedom from contaminated food and water (no inspection
or testing), from public safety (no police or fire), from exploitation
by business (no labor laws), from ignorance (no pubic education), etc
might be reduced a tab if he wasn't one of the lucky rich ones.

There is a problem of what to do with the bad guys, of course. According to
free market theorists, voluntary payments to "dealers with the bad guys" would
lead to better police and legal system by allowing the good ones to profit and
the bad ones to go out of business.

I think you might want to take a closer look at Somalia if you really
want to see how things work without a government. Not pretty.

One of our great US jurists, Oliver Wendell Holmes, once said
something like "Taxes are the price we pay for civilization". I think
he couldn't have said it better.

Best

Rick

···

On Wed, Apr 20, 2011 at 1:46 PM, Adam Matić <adam.matic@gmail.com> wrote:
--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

24

[From Rick Marken (2011.04.21.0930)]

According to austrian scholars, the data from free markets is fully consistent
with the theory. Perhaps the best little book I found on economics is H. Hazlitt's
Economics in One Lesson ( www.hacer.org/pdf/Hazlitt00.pdf ) and there are a lot
of predictions of how things like price-fixing, minimum-wage laws or tariffs
will effect the economy. It looks like closed loop reasoning to me and it could
be simulated with PCT models.

Well, I downloaded the book and I my main reaction is this: How in the
world could someone who can appreciate the scientific merits for
Powers' "Behavior: The Control of Perception" not immediately see
Hazlitt's "Economics in One Lesson" as a pseudo-scientific fraud.
There is no model described in that book. The economic "fallicies" are
simply his opinions, stated authoritatively. And his opinions, such as
the idea the taxes inhibit productivity, are contradicted by the
facts.

But it is interesting that a book with opinions like this was written
at a time when policies that are the exact opposite of what Hazlitt
recommends were about to usher in the most prosperous economic period
in US history (1946 - 1980).

Best

Rick

···

On Wed, Apr 20, 2011 at 1:46 PM, Adam Matić <adam.matic@gmail.com> wrote:
--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

25

[Martin Taylor 2011.04.21.12.58]

        I don't see how this is

relevant to my repeated question about how the money is lost
if the built bridge is unused. It is highly relevant to my
argument about the effect of the environment on freedom. A
bridge that nobody wants to use ** does not increase the
freedom of anyone, and it might decrease the freedom of
someone** who, before the bridge, could control a
perception of watching the shore birds in that area and now
cannot, or rather, has a much smaller range of possible
reference values over which that perception could be
controlled.

AM:

The money is lost because no one profits from the bridge.

How does that lose the money? The designers, managers, and builders

have been paid, and they still have the money used to build the
bridge (unless they used it somewhere already).

      Monetary profit to the bridge owner would be money gained.

It would come from people who use the bridge

That's a different flow. It's not related to the money used to build

the bridge. It’s a flow from the many who use the bridge (assuming
it’s a toll bridge, which most are not) to the owner(s) of the
bridge.

      - they would profit from using the bridge and would be

willing to pay for use - non-monetary profit.

That's why richer people have more freedom. People who don't have

enough money to pay the toll can’t use the bridge as a component of
the feedback path in the control of any perception. What you call
“non-monetary profit” is what in PCT would be called “control of a
perception”.

      An unused bridge decreases the amount of money of the

investor - that is his freedom.

No. The money spent building the bridge decreases the amount of

money of the investor. That’s in the pockets of the designers,
managers, and builders. The investor controls in imagination a
perception of money, and if the bridge is unused, the real amount of
money coming in is less than the investor imagined would be coming
in, and probably less than his reference value for the perception of
money in hand. That may be unfortunate, but is not the fact that the
bridge is unused that decreases the investor’s amount of money. It’s
the building of the bridge that does that.

      If the money comes from taxes, it decreases the freedom of

people who are taxed.

And increases the freedom of those who were paid to build the

bridge. There’s no way you can say that the total population freedom
is either increased or decreased by the building of an unused
bridge. Which was the case would depend on a lot of unspecified
conditions, such as the progressivity of the tax structure, how much
was borrowed, how the building of the bridge detracted or enhanced
the pleasure of the people using the land around its termini, and
much else.

        MT: The question is

whether that difference is measurable in the sense that some
other perceptions can be measured at least to the degree of
being ordered from greater to lesser? Does it ever make
sense to ask someone “Did you have more freedom then than
you do now, the same, or less?” I think it does sometimes
make sense to ask such a question, and if it does, the
implication is that freedom is a quantitative property.

AM: Ok. I agree with that.

        MT: I suggested that it is the sum over the freedom of all

the individuals in the society. You may suggest something
else if you think it appropriate to do so.

AM:

That seems like a good measure.

Which links to my last comment above.

      I just have a vague idea at the moment: increasing one's

freedom giving him freedom to coerce, decreses other’s freedom
from coercion.

I don't know what you mean by coercion, but whatever you do mean, I

doubt it is the first thing someone would use increased freedom for.
People do interact, though, and in every interaction there is the
likelihood that the influence on one person on another’s perception
acts as a disturbance that requires action to correct. That’s a
restriction of the freedom of each. Is that what you mean by
coercion?

      Attaining maximum feedom for everyone would require that

everyone at the same time has freedom to do whatever he wants
except decreasing other’s freedom.

In other words, not interacting with anyone else by influencing any

variable that might enter into any perception controlled by any
other person. Good luck with that!

      An increase of one's freedom to coerce would

disproportionaly decrease other’s freedom to do what he wants.

Surely that would be true only if the one with increased freedom to

coerce actually used that freedom. Typically, in most ways “coerce”
is used, the coercer has more power than the coercee. In economics,
money is power. So what I understand you to be advocating is strict
equalization of wealth. I don’t think even theoretical communists go
quite that far.

Martin
···

On 2011/04/20 2:51 PM, Adam Matić wrote:

    On Tue, Apr 19, 2011 at 5:28 AM, Martin > Taylor <mmt-csg@mmtaylor.net> >         wrote:
26

[From Rick Marken (2011.04.20.1845)]

You are simply defining the “goodness” of an investment as “profit”.

Making a profit is certainly “good” for the investors and the owner of

a business;

AM:

Yes, that is the most straight-forward way. If the purpose of an investment

is to return the money invested and perhaps make more money, then profit is a

good measure of goodnes. The important thing I wish to convey is that owner’s

profit is also a measure of “public goodnes” of an investment. In order to make

money, the service (such as crossing the bridge) has to be considered valuable

to the users. They will pay money for it only if the service enables them to

do something they want. Otherwise, they will use a different service.

RM:
But the goodness of
government investment can’t be evaluated like the goodness of a

business investment. Government investment doesn’t produce profits for

the “owners” (the tax paying public). Government invests in what is

considered (by the voters, if we’re talking about a democracy) to be

the common infrastructure of a society. These investments are “good”

if they increase the productivity and standard of living of everyone

in the society, producers (businesses) and consumers. They are “bad”

if they don’t.

AM:

That’s how it appears - that government investments don’t produce profits, but

I would argue that if a government investment is good, then the money

invested will return in taxes. If people make more money because of a

pubic investment, then they will also pay a greater amount of money in taxes.

It’s a percentage of income.

RM:

It is difficult to measure changes in the standard of living made by

government investment but I bet we could figure out ways to do it.

I’m bet that the US government investment in the interstate highway

system in the 1950s and 60s improved the productivity of all US

business that rely on transportation. Investment in public education

results in a very productive workforce, which increases the

productivity of private business also. Japan’s investment in

universal healthcare made it possible for the Japanese car

manufactures to produce better cars for less and dominate the auto

industry.

AM: There are certainly great investments made by the government.

Those same investment’s could have been made by private entrepreneurs.

That eliminates the problem of calculating the goodnes of government

investment by counting votes which, (would you agree?) is not a

very accurate measure.

RM: The wisdom (or lack thereof) of government investment depends on the

wisdom if the policy makers (politicians). If the politicians make bad

policy – like investing in a useless bridge – it won’t increase the

standard of living much (Nor is the money lost; it still becomes

demand; that’s why Reagan’s investment in the totally useless Star

Wars program in the 1980s help bring the US economy out of a

recession). Wise investments in common infrastructure can markedly

improve the productivity of private business and make life better for

the public in general. But it does take wise policy makers and you

don’t get wise policy makers unless you have a wise polity (which we

no longer have in the US since our public airwaves are now used to

spew right wing propaganda rather than information).

AM:

There is no proof that government spending by itself helps recessions. There can

be a number of other causes. The simple fact that spending happened before

exiting a recession does not mean it is the cause of success. It’s possible, for

example, that spending prolonged it. It might have lasted shorter.

Also, if private businesses wish to increase their profits, they can invest

themselves, not rely on the wise government.

RM: Well, the data that’s I’ve seen contradicts everything I’ve heard from

the Austrian school: increases in the marginal tax rate are

associated, with increased (not decreased) growth and decreased (not

increased) unemployment; increased investment follows rather than

precedes growth; government run healthcare is less expensive and

produces better outcomes than private, free market healthcare. I don’t

think there is anything the Austrian school says that pans out, except

perhaps that communist dictatorships do not produce good economic

results.

AM:

Yes, that might also mean that the data is not reliable and accurate.

For example, I don’t think there is a completely free makret healthcare anywhere

in the world at the moment to compare it to public ones.

Growth measured by GDP is a silly thing. It focuses on how much

money is spent in an economy. It depends more on the increase of

the money supply then anything else. For example, Japan held a

constant amount of money for two decades. It’s GDP didn’t grow.

But the price of goods went down, wages could buy more goods.

http://www.guardian.co.uk/commentisfree/2011/jan/17/japan-myth-lost-decade

RM:

His freedom from paying taxes would certainly be increased but with no

government his freedom from contaminated food and water (no inspection

or testing), from public safety (no police or fire), from exploitation

by business (no labor laws), from ignorance (no pubic education), etc

might be reduced a tab if he wasn’t one of the lucky rich ones.

AM:

Exactly. I don’t think that simply removing the government would bring anything

good if it is done abruptly before private business start providing their services.

But gradualy.

RM: I think you might want to take a closer look at Somalia if you really

want to see how things work without a government. Not pretty.

One of our great US jurists, Oliver Wendell Holmes, once said

something like “Taxes are the price we pay for civilization”. I think

he couldn’t have said it better.

AM: Right. Somalia seems to be doing better without government than it

did when they had it. It’s still a very poor country, but it’s getting better.

http://www.peterleeson.com/Better_Off_Stateless.pdf

http://www.independent.org/pdf/working_papers/64_somalia.pdf

Best

Adam

···

On Wed, Apr 20, 2011 at 1:46 PM, Adam Matić adam.matic@gmail.com wrote:

27

[From Rick Marken (2011.04.21.0930)]

Well, I downloaded the book and I my main reaction is this: How in the

world could someone who can appreciate the scientific merits for

Powers’ “Behavior: The Control of Perception” not immediately see

Hazlitt’s “Economics in One Lesson” as a pseudo-scientific fraud.

AM:

I’ll take that as a question.

It is precisely because I’ve read B:CP that I find his work valuable.

Logic and deductive reasoning based on a the fact that people

act with purposes in not pseudoscience. Economic science based

on the SR model that uses statistics to prove it’s theories is pseudoscience.

RM: There is no model described in that book. The economic “fallicies” are
simply his opinions, stated authoritatively. And his opinions, such as

the idea the taxes inhibit productivity, are contradicted by the
facts.

AM:

If you find a right triangle that contradicts the Pythagorean theorem, than

your facts not facts but errors in measurement. The implicit model in EOL

is that human behavior is purposeful. Sellers act to provide value and increase their profit,

buyers act to decrease value lost and increase value gained. It’s a simple

model, it’s not quantitative, but it’s a correct one. Everything else is logically deduced

from that model.

But it is interesting that a book with opinions like this was written

at a time when policies that are the exact opposite of what Hazlitt

recommends were about to usher in the most prosperous economic period

in US history (1946 - 1980).

RM:

Yes, it’s very interesting. Either Hazlitt is wrong or the facts are not facts, but

opinions and faulty statistics.

How exactly is prosperity measured?

Best

Adam

···

On Thu, Apr 21, 2011 at 6:30 PM, Richard Marken rsmarken@gmail.com wrote:

28

[Martin Taylor 2011.04.21.12.58]

How does that lose the money? The designers, managers, and builders

have been paid, and they still have the money used to build the
bridge (unless they used it somewhere already).

AM: The owner looses the money. It doesn’t return to him.

Also, he will not be able to pay for more designers, managers and builders for a new bridge.

Their future jobs from that owner are also lost. Benefits for the users of the bridge are lost

(if compared to a well build bridge).

“Lost money” in no way resembles burnt money or money lost to “the economy” as you seem to

understand what I’m saying.

      AM: Monetary profit to the bridge owner would be money gained.

It would come from people who use the bridge

MT:

That's a different flow. It's not related to the money used to build

the bridge. It’s a flow from the many who use the bridge (assuming
it’s a toll bridge, which most are not) to the owner(s) of the
bridge.

AM: It’s a closed loop look at the flow of money. Money is invested for the purpose

of returning or making more money. Money payed by the users is a part of that flow.

      - they would profit from using the bridge and would be

willing to pay for use - non-monetary profit.

MT:

That's why richer people have more freedom. People who don't have

enough money to pay the toll can’t use the bridge as a component of
the feedback path in the control of any perception. What you call
“non-monetary profit” is what in PCT would be called “control of a
perception”.

AM:

Yes, everything is control of a perception, so specificaly “non-monetary profit” is the amount

of value gained by spending money. Crossing a bridge is controling one’s position for what ever

higher purpose one has. Change in position is the non-monetary profit.

MT:

No. The money spent building the bridge decreases the amount of

money of the investor. That’s in the pockets of the designers,
managers, and builders. The investor controls in imagination a
perception of money, and if the bridge is unused, the real amount of
money coming in is less than the investor imagined would be coming
in, and probably less than his reference value for the perception of
money in hand. That may be unfortunate, but is not the fact that the
bridge is unused that decreases the investor’s amount of money. It’s
the building of the bridge that does that.

AM:

Of course the amount money the owner has is reduced by paying the workers. People who pay for using it

increase that amount. The amount of money stays decreased in reference to starting amount if the bridge

doesn’t get used. That would be higher level control of the amount of money. The “make profit” one.

      AM: If the money comes from taxes, it decreases the freedom of

people who are taxed.

MT: And increases the freedom of those who were paid to build the

bridge. There’s no way you can say that the total population freedom
is either increased or decreased by the building of an unused
bridge. Which was the case would depend on a lot of unspecified
conditions, such as the progressivity of the tax structure, how much
was borrowed, how the building of the bridge detracted or enhanced
the pleasure of the people using the land around its termini, and
much else.

AM:

Those who are paid to build the bridge get the same amount of money regardless of how the

bridge is used. We can leave them completely out of the equation (if we don’t look at new jobs

provided from an owner who made profit). In comparing two bridges, one used, the other unused

  • the used one increases the amount of freedom for the owner (in terms of money) and the amount

of freedom for the users (in terms of being able to control their position better - faster, cheaper).

An unused bridge decreases the amount of freedom of the owner. The gain in freedom of the users

does not happen. It’s neither increased nor decreased.

      AM: I just have a vague idea at the moment: increasing one's

freedom giving him freedom to coerce, decreses other’s freedom
from coercion.

MT: I don't know what you mean by coercion, but whatever you do mean, I

doubt it is the first thing someone would use increased freedom for.
People do interact, though, and in every interaction there is the
likelihood that the influence on one person on another’s perception
acts as a disturbance that requires action to correct. That’s a
restriction of the freedom of each. Is that what you mean by
coercion?

AM:

Coertion would be using means that allow winning a conflict by disturbing a system that keeps pain and fear low?

That’s not necesarily a bad thing on the level of society.

Best, Adam

···

On Thu, Apr 21, 2011 at 7:18 PM, Martin Taylor mmt-csg@mmtaylor.net wrote:

29

[Martin Taylor 2011.04.22.15.17]

        [Martin Taylor

2011.04.21.12.58]

          How does that lose the money? The designers, managers, and

builders have been paid, and they still have the money
used to build the bridge (unless they used it somewhere
already).

AM: The owner looses the money. It doesn’t return to him.

Ahhh! The Owner loses money. That's very different from what you had

said – that the money was lost.

      Also, he will not be able to pay for more designers,

managers and builders for a new bridge.

      Their future jobs from that owner are also lost. Benefits

for the users of the bridge are lost

(if compared to a well build bridge).

You forget that the money not paid to the bridge owner in tolls is

available to be paid to other people for other things. To assign all
the value to the owner is a very biased view.

      "Lost money" in no way resembles burnt money or money lost

to “the economy” as you seem to

understand what I’m saying.

Money lost by one person or consortium is, of course, a reduction in

the freedom of that person or consortium. Usually, when one is
considering the economy, one does not play favourites in that way.
One considers the effects on all the people affected by some factor.
Unless money is lost because of a loan default, in which case it
vanishes, money lost by one party is available for use by others.
Whether the overall level of freedom is thereby reduced or increased
is impossible to say without considering the specific case.

                AM: Monetary profit to the bridge owner would be

money gained. It would come from people who use the
bridge

MT:

        That's a different flow. It's not related to the money used

to build the bridge. It’s a flow from the many who use the
bridge (assuming it’s a toll bridge, which most are not) to
the owner(s) of the bridge.

      AM: It's a closed loop look at the flow of money. Money is

invested for the purpose

      of returning or making more money. Money payed by the users

is a part of that flow.

I'm glad you mentioned closed loop. I thought you had forgotten it.

But again, you concentrate only on one point of the loop, rather
than on the whole loop.

AM:

      Yes, everything is control of a perception, so specificaly

“non-monetary profit” is the amount

      of value gained by spending money. Crossing a bridge is

controling one’s position for what ever

      higher purpose one has. Change in position is the

non-monetary profit.

What's the benefit of using the word "profit" here? Isn't it the

same as “value”? “Profit” seems to imply a difference between outlay
and income, whether monetary or non-monetary. All you are talking
about is the possibility of reducing a potential error in a
controlled perception. I called that a component of “freedom” and
the change in freedom the “value” of something. Isn’t that what you
mean by non-monetary profit?

                AM: If the money comes from taxes, it decreases

the freedom of people who are taxed.

        MT: And increases the freedom of those who were paid to

build the bridge. There’s no way you can say that the total
population freedom is either increased or decreased by the
building of an unused bridge. Which was the case would
depend on a lot of unspecified conditions, such as the
progressivity of the tax structure, how much was borrowed,
how the building of the bridge detracted or enhanced the
pleasure of the people using the land around its termini,
and much else.

AM:

      Those who are paid to build the bridge get the same amount

of money regardless of how the

      bridge is used. We can leave them completely out of the

equation (if we don’t look at new jobs

provided from an owner who made profit).

Or if we don't look at the new jobs provided by the income of people

who make the things bought using the money paid to build the bridge.
This is an aspect of what I meant above about your looking only at
one point of the loop.

In comparing two bridges, one used, the other unused

      - the used one increases the amount of freedom for the

owner (in terms of money) and the amount

      of freedom for the users (in terms of being able to control

their position better - faster, cheaper).

Yes. That is an instance of what Kent McLelland was talking about.

      An unused bridge decreases the amount of freedom of the

owner. The gain in freedom of the users

does not happen. It’s neither increased nor decreased.

Possibly true. You can't know. But you can know that the freedom of

the people paid to build the bridge was increased.

··· 
    On Thu, Apr 21, 2011 at 7:18 PM, Martin > Taylor <mmt-csg@mmtaylor.net> >         wrote:

======

              AM: I just have a vague idea at the moment:

increasing one’s freedom giving him freedom to coerce,
decreses other’s freedom from coercion.

        MT: I don't know what you mean by coercion, but

whatever you do mean, I doubt it is the first thing someone
would use increased freedom for. People do interact, though,
and in every interaction there is the likelihood that the
influence on one person on another’s perception acts as a
disturbance that requires action to correct. That’s a
restriction of the freedom of each. Is that what you mean by
coercion?

AM:

      Coertion would be using means that allow winning a conflict

by disturbing a system that keeps pain and fear low?

That’s not necesarily a bad thing on the level of society.

That may not be a bad thing, but it's awfully hard for the possible

coercer to know whether he’s doing it, and even harder for an
outside observer. I happened to see recently an episode of the
British comedy “Jeeves and Wooster” in which Wooster is being
terrorized by a would-be dictator who is threatening to tear him
limb from limb. Wooster learns that he can coerce the terrorizer
into doing whatever Wooster wants by uttering the word “Eulalie”. I
think that might be a little difficult to fit into an easy
definition of coercion.

[To continue this part of the discussion, I suggest we move it to

the Coercion thread].

Martin
30

[Martin Taylor 2011.04.22.15.17]
Ahhh! The Owner loses money. That’s very different from what you had
said – that the money was lost.

AM:

Yes. I do need to work on my use of language. I see I’m quite vague and imprecise at times.

What I mean by “money lost” is that it’s use didn’t fulfil the purpose it was meant to.

One part of it is that the money will not return to the owner. The other part is that the

users will not gain the value they would have gained if the money was well invested.

MT: You forget that the money not paid to the bridge owner in tolls is

available to be paid to other people for other things. To assign all
the value to the owner is a very biased view.

AM:

True. Money not payed for the bridge is available for other things. If someone does not want to use the bridge, he can

buy whatever he wants with that money. The amount of money he has is not influenced by the existence of the bridge.

But the fact that he wants to use the bridge and pays the toll means that he will gain more value by using it then if he

doesn’t use it. If we look at monetary value, some people will use the bridge because it is cheaper than a boat, so more

money is left for other things. Some people will use it because it’s faster than a boat, so they gain time. For whatever

purpose the bridge gets used, it necessarily means that the user gains value.

MT: Money lost by one person or consortium is, of course, a reduction in

the freedom of that person or consortium. Usually, when one is
considering the economy, one does not play favourites in that way.
One considers the effects on all the people affected by some factor.
Unless money is lost because of a loan default, in which case it
vanishes, money lost by one party is available for use by others.
Whether the overall level of freedom is thereby reduced or increased
is impossible to say without considering the specific case.

AM:

That’s what I’m trying to describe.

“Money lost” is a obviously a misleading expression. Something does get lost for the whole economy if there is a

bad investment, weather it’s made by a government or a private business. If a government simply spends the budget

money by paying people to move rocks around (build bridges that don’t get used), the money will stay in circulation,

but nothing of value would be created.

      AM: Yes, everything is control of a perception, so specificaly

“non-monetary profit” is the amount

      of value gained by spending money. Crossing a bridge is

controling one’s position for what ever

      higher purpose one has. Change in position is the

non-monetary profit.

MT: What's the benefit of using the word "profit" here? Isn't it the

same as “value”? “Profit” seems to imply a difference between outlay
and income, whether monetary or non-monetary. All you are talking
about is the possibility of reducing a potential error in a
controlled perception. I called that a component of “freedom” and
the change in freedom the “value” of something. Isn’t that what you
mean by non-monetary profit?

AM:

Sure, OK.

MT: Or if we don't look at the new jobs provided by the income of people

who make the things bought using the money paid to build the bridge.
This is an aspect of what I meant above about your looking only at
one point of the loop.

AM: I left the workers out of the equation because they use their money exactly the same, regardles of the

profit of the owner. We’re comparing a good and a bad investment, a used and an unused bridge. The workers

have the same amount of money and the same effect on economy.

Best

Adam

···

On Fri, Apr 22, 2011 at 9:39 PM, Martin Taylor mmt-csg@mmtaylor.net wrote: