How an economy functions ; how the pretense of an economy functions.

Saturday, 07 November, Year 7 d.Tr. | Author: Mircea Popescu

Settle down, we're going for a ride.

Real Fake
Q: What was Revlon ? Q: What was Myspace ?
A few factories + the things that go with that. A website + the things that go with that.
How much was it worth ? How much was it worth ?
About ten thousand man-years' worth of labour.i About a billion dollars.
What happened to it ? What happened to it ?
It went bankrupt (except obviously "not really"). It went bankrupt (except obviously "not really").
Where did the ten thousand man-years go ? Where did the billion dollars go ?
They were lost. They never existed.
What did they make ? What did they make ?
Items. Public goods.ii
How did you acquire their products ? How did you acquire their products ?
By paying. You didn't, they acquired you, as a product.
How do you make a replacement ? How do you make a replacement ?
Either ten thousand people spend a year working, or one guy spends ten thousand years working, or something in between these extremes. It self-regenerates.
What happened to the economy when Revlon went bankrupt ? What happened to the economy when Myspace went bankrupt ?
The productive capacity of the economy degraded somewhat which eventually, after plenty of intricate back and forth, resulted in a weakening of the value of the currency. The exposure of the virtual economy in real economic terms diminished, resulting in a strengthening of the virtual currency.iii
What decides whether there was going to be a replacement made ? What decides whether there was going to be a replacement made ?
If the young, the ambitious, the hungry found it within themselves to take a risk on making a new Revlon rather that any of the myriad of other things ready to carry their investment of youth, ambitious, hungry, there'd be another Revlon. Otherwise, not. That's how the atrocious 70s hair and bizarre sexual practices of the 50s went out - opportunity cost. If the people in charge of committing the appearance of financial support to pretenses of reality judge the risk of taking a bath (ie, the smoke and/or mirrors being exposed for what they are) is well offset by the gain of perceived reality, seriousness, "brick and mortar"-ness, there'd be another Myspace. Otherwise, not.
What can the government do to create more Revlons ? What can the government do to create more Myspaces ?
Nothing directly. Indirectly better education, better infrastructure in general seems to correlate. Nothing indirectly. Just make it.
Does the government think it should make another Revlon ? Does the government think it should make another Myspace ?
No. Yes.
Why not ? Why ?
Because it can't possibly be their job to decide how the resources of society are to be employed, nor is it feasible for them to acquire sufficient information to allow even vaguely efficient deployment of such. Because the society has absolutely no resources and finds itself entirely adrift in a meaningless sea of ireality. Consequently it's the job as well as the duty of government to create the Schelling points of pretense, given that if they don't do it, nothing exists. It's not a question of allocating actually existing resources - none exist, all allocation is purely imaginaryiv ; it's not a question of collecting information - nobody has anything real to say, they're merely waiting to hear the party line to echo so they can be "right" in the sense of coherence.
What happens when someone opts out of the system ? What happens when someone opts out of the system ?
That person doesn't get to wear make-up. The value of the system diminishes (on a power-law).
How long can this go on ? How long can this go on ?
Either forever, but not like this ; or else for short intervals in various mutually-incompatible if somewhat contiguous forms. Much like the human body can go on "forever", but only if you agree to count the eventual worms it will feed as "the human body". Forever. A watch dropped into a black hole takes forever to strike midnight, and similarly a society lost in fiction will never, ever, subjectively hit the wall.
Who has better sex ? Who has better sex ?
People other than you. "You"s other than people.
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  1. The minimum wage wasn't quite 15 dollars yet back in 1984. []
  2. The soviet-era proxy for this nebulous notion is "Fabrica de impachetat fum", aka The Smoke Packaging Plant.

    Public goods are not merely valueless in the sense that no one's willing to pay for them ; they are also pointless. A company that produces "US presidents" is not producing anything whatsoever - if it didn't, they'd still have presidents. For as long as the last guy's walking around there's going to be a president, and once the last guy croaks the point is moot anyway. (For extra credit : what does this say about the average US college ?)
    []

  3. No, you still can't buy Russia. []
  4. Think Hitler moving around imaginary regiments that existed on paper only and ordering attacks, "das war ein Befehl!11"-style. That's what we're talking about, der Steiner-Angriff while the Russians are covering Berlin with artillery fire. []
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