inequality (≠)

I wrote this post 4/13/2019 and never published it. I guess I thought it needed more work, or maybe me to do some math.

Well, somebody recently did some of these calculations for the US since 1975.

Guess what? The 1% owes the rest of us $50T. Not surprising.

My unpublished post:

Take the integral back through time of percentage of value of labor by workers vs owners. This is how much the 1% owes to the rest of us. Because if we reward labor more equitably for the last 200 years, those increases are going to seriously compound and put much more of the generated capital in the accounts of the workers vs those of the owners. Break it up into 5 segments:

1. 0.01%
2. 1%
3. 10%
4. 11-50%
5. bottom 50%

For every civilization back to the 1st, estimate GDP numbers, then assign shares to the 5 levels of society. Oops, hard part, figure out how wealth gets distributed between civilizations. Run with estimated real numbers for our history. Then make numbers just a bit more equitable, and rerun and compute how much extra wealth the higher levels stole from the lower levels.

Remember, like in the "egalitarian" US, in 1681 King Charles II of England gave William Penn the whole, fucking state of Pennsylvania, free and clear. I'm sure Penn & his descendants did not get a huge, huge advantage from that [sarcasm].

So if we did the math back 6000 years, & figured out how much the alphas, "nobility", kings, etc., have ripped us off, what would that number be? Current net worth of the world, ~$1000T. Probably pretty close to that. I mean, after all they are the 1%. If things were equitable, they would have $10T of the $1000T, the rest of us would have $990T. Instead, they have $500T, the next 49% of us have a similar amount, but those of us in the bottom 50% have pretty much 0 or negative.

Time for some payback, IMO.

All Pretty Good

1st up, "Invisible Planets", by Hannu Rajaniemi, 2016, 303 pages, 83k words. Hannu is one of my favorite new authors of recent years, I can't imagine how I had not read this yet. 19 stories, the last 2 of which were composed using somewhat experimental methods. A good mix of material, some serious post-singularity stuff of course. I learned that "perkele" and "saatana" are the most popular Finnish cuss words. A great read.

I just noticed, Ken Liu also had an anthology named "Invisible Planets", which I blogged in February. Both came out in 2016.

2nd, "City Under the Stars", by Gardner Dozois and Michael Swanwick, 2020, 216 pages, 58k words. I miss Gardner Dozois, I read his Year's Best for 35 years, up until his death in 2018. Swanwick tells the story of how the novel was created: 45 years ago, Dozois wrote what eventually - 20 years later, with Swanwick - became the novella "City of God", which I think I read back in the day. They were going to do a trilogy, but it dragged on. Dozois' death prompted Swanwick to take what they had & create this novel as a memorial to his friend.

It'a a good read, an apocalyptic post-singularity tale.

3rd, "By Force Alone", by Lavie Tidhar, 2020, 461 pages, 125k words. This just came out & for some reason I decided to read it. As I was starting, I'm like, "Do I really want to read another Arthur & Merlin book?" But, I'm glad I did. Tidhar takes complete and utter liberty with the Arthurian canon - always a good thing.

He also does a fun thing making cultural references.

• Lancelot is a Judean who knows kung-fu & is a member of a Holy Grail cult. The full description:

  Lancelot, the Knight of the Cart, Initiate of the Inner Circle of the Venerated Secret Brotherhood of the Seekers of the Grail, Master of the Flying Sword, the Aurochs’ Charge and the Judean Lightning Strike, traveling swordsman and powerful practitioner of the ancient art of gongfu

• "attack ships on fire off the coast of Smyrna"
• "Knew the five-point palm-exploding-heart technique, or so he claimed, at any rate. Never taught it to me."
• Gongfu moves: "Monkey’s Paw and the King in Yellow and the Turn of the Screw"
• "Intruder … alert…"
• "Who knows? Who cares? They're dead."

Haha, at one point he mentioned a sword being "tempered and quenched". Steel is not "tempered and quenched", it is "quenched and tempered". I worked as an engineer at Tube Turns, division of Chemetron, a steel and other metal fittings (Stainless, Inconel, Monel) manufacturer, from 1974 to 1977. And you would never say "tempered and quenched", the phrase was "quenched and tempered". So I manspained about it on Twitter to Tidhar, and he liked it.

The book is a page turner. It focuses on Arthur's politics and rise to power. The love triangle is given short shift, as are lots of other things. The Nine Sisters, who include The Lady of the Lake Nimue and Morgan le Fay (who is not Arthur's 1/2 sister), get a fair amount of attention.

In a very interesting afterword, Tidhar traces the history of the Arthurian canon, interest in which has ebbed and flowed for centuries. Hah, Thomas Malory of "Le Morte d'Arthur" in 1485 was "a murderer, robber and rapist" - who knew?

One of My Best Friends Has a Friend Who Is a Macro-Economist!

So 1 of my oldest friends, who've I known since maybe 1984, & who was my boss from 1986-1995, has a friend who is a macro-economist! Per my friend:

This was his response when I told him I had a friend who was enamored with MMT...

Do an intervention. Tell him/her MMT isn’t modern (the ideas were formed as Abba Lerners Functional Finance of the 1940s), isn’t much of a theory (instead it’s being propounded by hacks on Twitter) and doesn’t have much to do with monetary policy as most of its adherents seem to believe fiscal policy dominates demand which would have Milton Friedman rolling in his grave. To the extent that it does its nothing more than the Argentina / Venezuela model.

My initial response was,

Actually, I usually think of Friedman as burning in hell.

Then I decided I wasn't intimidated by the clip he sent me of his friend being interviewed on CNBC and emailed him this response.

So, there's Descriptive MMT & Prescriptive MMT.

Descriptive MMT basically just admits, all $$$ are created by the Fed, no government with its own sovereign currency ever has to borrow money, they can print the money. Money is a unit of measure, you can't run out of a unit of measure. The thing you really need to worry about is resources. You can run out of them.

Prescriptive MMT is indeed based on Lerners Functional Finance from the 1940s. It is pretty weak tea. It's main (only?) component is JG/ELR - Job Guarantee / Employer of Last Resort, which says the Federal Government should have a jobs program in place, a la WPA, that guarantees employment. It is counter-cyclical with the economy, which is a good thing.

I started studying Economics when I retired in 2012. Very, very discouraging. Basically, it is not a science. Basically, it's mostly crap. Kuznets Curve, which said economic inequality would take care of itself, crap. Phillips Curve, which is a big deal and relates wages, inflation, & unemployment, crap.

Your friend referencing Argentina/Venezuela tells me that he is a monetarist - too much money in circulation creates (hyper)inflation. Also crap. In the very few known instances of hyperinflation, there were horrible, horrible other things going on, too much money did not cause the hyperinflation. Rolling the $$$ presses was indeed unsuccessful in counteracting the other horrible, horrible things.

Descriptive MMT was the 1st economics I read in 8 years where I'm like, "Finally - something that makes sense!"

Here is my lengthy (24k words) review/summary of "Modern Money Theory", 2e, by L. Randall Wray, which I think is kind of the goto. Not a well written book. But give my review/summary a skim.

Keynes & Marx both thought that, around now, capitalism would have done its job & created enough capital that the human race could do whatever it wants, and we could retire capitalism.

Are we there yet? (See my review/summary of "Economics of Arrival", 7.4k words).

My estimate of current global capital, including dark money, is $1000T. Why are interest rates approaching negative? Because the world has pretty much all the capital it needs. The stock market remains the only place you can get any ROI, &, hooray, they now know the Fed will prop them up regardless. Nice how Wall Street buys into MMT! How about the rest of us?

If the Fed were to create $10T in QE "for the rest of us", it would represent an increase of 1% in the world's capital. OMG, HYPERINFLATION! Krugman (who is not an MMT fan :-( ) still mentions how all the conservative economists who predicted hyperinflation after the Fed announced QE in 2009 still insist that they are right?!?!? Not a single 1 has retracted their prediction.