Fiat game mechanics force them to "invest" in "productive" assets in order to stay ahead of inflation.
Scare quotes used because a ton of the price of those assets now reflects a monetary premium. I.e. a portion of the price of a house is its value for living or renting out in a given area, but a lot of it is its value as a scarce asset that is somewhat resistant to inflation.
Needless to say, this is not a great allocation of resources and is an incredibly inefficient way for saving to work.
> Fiat game mechanics force them to "invest" in "productive" assets in order to stay ahead of inflation
So you’re suggesting this is a bad thing? And the alternative of hoarding unproductive assets is preferable?
> houses...a lot of it is its value as a scarce asset that is somewhat resistant to inflation.
The reason houses are expensive has nothing to do with being resistant to inflation. They get expensive when the supply of the land they sit on gets used up relative to the number of people who want to live in a given area.
Houses in rural Kentucky aren’t expensive at all, because nobody wants to live there. That’s the main factor driving prices, not some inflation hedge. If the only reason people bought houses was to hedge inflation, they’d be better off buying stocks which are even more productive and produce returns above inflation.
> this is not a great allocation of resources and is an incredibly inefficient way for saving to work.
After reading this, I could not be more confused.
So you’re saying that, the inflation mechanics of fiat is bad because it encourages people to invest in productive businesses and build useful real estate? And it’d be more efficient for society if everybody kept a useless stash of gold bars in their basement and took no risk?
How would this make less people want to live in SF and houses suddenly cheaper?
> Although I'll admit that since my employer is looking at 100% remote, it opens the door to moving to a nicer/cheaper house outside of the office-commutable bubble.
This is the key part--many people desire a home they can build a life in, but limiting it to the commuting orbit of a few select cities really limits the possibilities of what that home can be.
The selection at a price point is worse, and the extra financial resources it consumes lower what the home can be.
This is before you get into being part of the captive tax base of a poorly-run city with little incentive to change...
Wait, the government gives investors essentially infinite cheap credit, resources get allocated in an incredibly perverse manner, and it's Friedrich fucking Hayek who has it wrong????
I certainly don't think Hayek is above criticism, but this author definitely is not making the point he thinks he is.
This isn't some kind of "no true Scotsman" thing either. The current market is exactly what someone like Hayek would expect given the monetary manipulations of the past 10+ years.
Exactly. I'm not a libertarian or Hayek fanboy by any means but these types of companies are what you would expect in a world of shrinking investment opportunities and lots of excess capital (as evidenced by the falling interest rates). Add to that a few oil rich countries which desperately try to diversify their economies and therefore put lots of their petro dollars into various VC funds.
Are investment opportunities really shrinking or is this a result of central banks never having really unwound their whole QE programmes, in fact many of them buy up as many 'safe' assets as possible.
I'm pretty sure Hayek would identify the issue as government intervention. It's not only central banks with their massive buy-ups of high quality corp/gov debt that's the matter here (forcing investors into ever riskier asset classes like VC funds). Given current world events I'm pretty sure a part of it is academia is broken too.
One thing that puzzled me for a long time is why there aren't more biotech startups, or why there aren't any (it seems) unicorn biotech firms. The potential of biotech seems unlimited. One day I found out a possible reason - VCs are afraid of biotech firms because they virtually all start by taking some academic paper that sounds promising, and building a lab to try and replicate it. But the papers don't replicate, so the company tanks and the VC loses everything. The figure I heard is around 50% of the papers don't replicate, which seemed shockingly high at the time.
Well, later I encountered an even worse figure: AmGen Oncology claimed only 11% of cancer papers replicated.
The cost of trying to find the next big idea in biotech seems astronomical with those kinds of odds. In effect the biotech world is flooded with ideas that sound good but fall at the first hurdle. No wonder investors prefer the software world, it's way less dependent on universities. Not many startups get started by saying, "we're going to commercialise this amazing sounding paper put out by the U of X". Even AI startups which I suppose come the closest are mostly being driven by corporate research labs, and even then, a16z dunked cold water on AI as a startup category.
Theoretical articles like this ("proving" that X won't work) are almost always doomed to be wrong, because you can't enumerate all possible ways that something COULD work, but won't.
A shorter way to say that is that something can fail thousands of times, but only has to succeed once. If the right technical, social and business factors come together, you get working micropayments.
I’m surprised Google et al. haven’t been forced to make more contractual disclosures at the time of a user submitting an extension or app.
Absent blaring warnings like “you understand that if you build any type of business on this platform we reserve the right to destroy it at any time for any reason”, it’s pretty hard to see how users had any ability to understand the implicit and explicit contracts they were entering into.
This isn’t much different than “Nathan for You” style hiding of onerous terms deep in hilariously small fine print, and judges tend not to look fondly on such games.
1. I agree as to the need to get off the Google lands.
2. Being able to create business relationships to build on other people’s property and work without fear of their yanking the rug out is an incredibly important part of a working society.
It would be a lot better for language adoption if people would write more blog posts showing best practices for tooling, and less vague stuff about how awesome the language is.
For example, the startup time thing is completely irrelevant if you use Emacs/VSCode with a standalone REPL that you connect to.
It's non-trivial to set this up (more because of lack of consolidated info rather than time it takes), but it can easily be standardized across machines/envs (I Dockerize all projects in a simple way to allow team members to get started up with REPLs easily).
To run this, you'd just put them all in one directory, run cider-up.sh, and then connect to the REPL with Cider in EMACS, or in Calva for VSCode with "Jack in to or Connect to REPL Server" and then "localhost" "4444"
Voting apps are basically political money laundering schemes. Using them to make comments about software vs other industries suggests either stupidity, laziness, or malice.
It's functionally shows up as a cost, but that doesn't make it a tax.
Consider: if a company had no profits at all, then for some period of time it would still (1) pay its employees (2) pay the payroll tax on behalf of those employees. The amount of payroll tax is 100% determined by employee compensation, not corporate profit (even if those two are indirectly connected).
You're more or less arguing that employee compensation is a tax too, since it also "raises the price the company has to pay and thus lowers profits".
Employee compensation does indeed raise the price the company has to pay. However, it doesn’t end up in government coffers, making it not a tax. This isn’t rocket science.
> It effectively raises the price the company has to pay and thus lowers profits.
Just like any other tax on employee income does, yes; unlike taxes on company profits, and like other taxes on employee income, it's effect on the company can be minimized by finding (or developing) and adopting less labor-cost intensive business methods even if they are higher (before tax) total cost.
Scare quotes used because a ton of the price of those assets now reflects a monetary premium. I.e. a portion of the price of a house is its value for living or renting out in a given area, but a lot of it is its value as a scarce asset that is somewhat resistant to inflation.
Needless to say, this is not a great allocation of resources and is an incredibly inefficient way for saving to work.