economics Archives | Page 10 of 17

Tageconomics

Iceland’s currency stays afloat online

July 16, 2009 / Klint Finley

The in-game currency of EVE Online is the ISK. That’s right, the Icelandic króna. And where most multiplayer games have attempted to ban the translation of in-game assets to and from real-world money, EVE Online has not only permitted it but actively embraced it – so much so that daily speculation on world/game financial leverage is conducted openly on the official game web boards. As a result, the EVE Online ISK has remained fairly stable against virtually all the real currencies of the world for a few years now, fluctuating but not spiking, not crashing. There are people out there making an income, a real-life income, just handling the trades on the “floor”.

All of which is to say: Iceland has collapsed so thoroughly that at this point, its only economically viable export may very well be an internet spaceship game, and that internet spaceship game’s króna is for all intents and purposes a more real and valid and valuable currency than the actual country’s actual money.

Crisper: Signpost Says: “Welcome to the 21st Century”

(via Technovelgy via Theoretick)

Car companies are post-national

July 6, 2009 / Klint Finley

A new study from Cars.com sheds light on the absurdity of thinking cars have a “nationality.”

When you consider that even a post-bailout GM will expand its use of foreign labor, it shouldn’t be that hard to understand how an “American” car isn’t really so, just because its maker was founded in Detroit. […]

Now some might object to this, saying that even though these cars are “made-in-America”, the value still flows overseas, but really, even that’s not right. Toyota still pays taxes in America. Its stock is traded in the US, and is no doubt owned by individual retail accounts and mutual funds.

Business Insider: Toyota: America’s Car Company

(via Cryptogon)

Chris Anderson Is Worse Than Wal-Mart

June 30, 2009 / Klint Finley

On known plagarist and hack Chris Anderson’s terrible business practices:

What he is actually proposing is the complete divorce of capital and earnings from those who make the product that is being sold. The only thing that is “Free” in this instance is the labor of the people who earn Chris Anderson money.

What he is literally saying is that the business side of an editorial operation—which is, in this case, the owners, not merely the part of the organization that handles the business of the site—is the complete authority of the editorial operation. That they retain all of the value, and that they have no obligation to share any of that income with any other part of the business. (In his description, this website in question “makes good money,” which then pays the people who make the website something “nominal; a few bucks,” or nothing at all.)

All of which is to say that the owners provide none of the product which is actually being sold and retain nearly all of the profit of that labor.

What he is proposing is down somewhere, on the scale of ethics, well beneath Wal-Mart’s policies of no longer hiring any full-time workers so as to avoid health and unemployment insurance. It is in fact some weird sort of neo-feudal, post-contract-worker society, in which he will create a dystopian and eager volunteer-slave system of “attention-paid” enthusiasts (which is to say, people with no other options, and no capital of their own) to create products from which rich people can get richer.

The Awl: Chris Anderson Is Worse Than Wal-Mart

(via Richard Metzger)

US cities may have to be bulldozed in order to survive

June 19, 2009 / Klint Finley

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the “rust belt” of America’s Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

Telegraph: US cities may have to be bulldozed in order to survive

Previously: Parts of Flint May Go Feral

The Improbable Rise and Fall of E-Gold – plus: Head of Asheville Liberty Dollar operation arrested

June 9, 2009 / Klint Finley

Jackson et al. very clearly made some serious mistakes in how they ran (or didn’t run) their business. But compare the history of PayPal with that of E-Gold. Did E-Gold deserve to fall so hard?

Timberlake, the economics professor, is convinced that Jackson’s radical dream, his goal of upsetting the economic status quo and overturning the government’s monopoly on money, is what really got E-Gold targeted.

“No matter how innocent a person is you can always find a law that government agents can use to convict him of something,” Timberlake says, “And this is a perfect example of it. Any time anybody tries to produce money, the federal government is going to be on their tail.”

Threat Level: Bullion and Bandits

Meanwhile: Head of Asheville Liberty Dollar operation arrested.

Wendy McElroy notes “The Dollars do not resemble fed-issued coins except for in being round and flat;moreover the website made it very clear that the Dollars were a means of exchange among like-minded individuals who rejected Federal Reserve Notes as monopoly money” and suggests that the indictment is worded in such a way that the government could conceivably be planning on seizing all Liberty Dollars in circulation: “They seem to be giving themselves the legal muscle to steal caches of precious metal from individuals/businesses.”

See The New Currency War for more background.

The economics of comic book universes

May 30, 2009 / Klint Finley

Aside from physical capital, economies must take advantage of their human capital to grow. But even with metahumans this is a tricky proposition. In an earlier post Mark discussed the potential benefits of having mutants performing tasks such as construction if they ever took a break from blowing stuff up. However, looking at economic development through the lens of the Solow model I feel that these mutants may ultimately prove unable to increase long-run living standards. Any effect that Magneto may have on productivity will only temporarily move the economy to a higher steady-state output per person (y/n). With his death the economy will move back to where it was (and probably experience some unpleasant distortions during the transition). The reason is that Magneto is essentially no different than a tractor or any other piece of capital equipment. He ages, depreciates and eventually dies. More importantly however, is the basic result of the Solow model: sustained growth in y/n can only be achieved if there is concurrent growth in our stock of knowledge and technology, something Magneto cannot contribute to. Without technological change, the economy will eventually reach a steady-state level of y/n and all growth will cease. Even so, the Marvel universe does have one ace in the hole, and he’s got a big green head!

That’s from the post Alien Technology and Economic Growth: Lessons from Solow from Eco-Comics, a blog dedicated to studying the economics of comic book universes.

(Thanks MathPunk)

Markets, Antimarkets and the Fate of the Nutrient Cycles

May 27, 2009 / Klint Finley

From the point of view of this essay, that is, as far as the distinction between markets and antimarkets is concerned, the splitting open of the nutrient cycles had important consequences. Every input to food production which came from outside the farm (not only fertilizers but also insecticides and herbicides) was one more point of entry for antimarkets, and hence, it implied a further loss of control by the food producers. While a century and a half ago farms produced most of what they needed (and hence ran on tight nutrient cycles), today American farms receive up to seventy percent of their inputs (including seed) from the outside. (7) Worse yet, the advent of direct genetic manipulation has allowed large corporations to intensify this dependency.

Although most of the early technical innovations in biotechnology were created by small companies engaged in market relations, antimarket organizations, using the economic power which their large size gives them, readily absorbed these innovators through vertical and horizontal integration. Moreover, these antimarkets were in many cases the same ones which already owned seed and fertilizer/pesticide divisions. Hence, rather than transferring genes for pest-resistance into new crop plants (thus freeing food producers from the need to buy pesticides) these corporations permanently fixed dependence on chemicals into the genetic base of the crops.

Ars Electronica: Markets, Antimarkets and the Fate of the Nutrient Cycles

This is the best case I’ve read for organic farming: a reduction in outside dependencies (ie, resilience).

New Yorker Summit Video: Nassim N. Taleb and Robert Shiller

May 14, 2009 / Klint Finley

(via Alex Burns)

The Netherlands Paradox – Capitalism and Socialism

May 10, 2009 / Klint Finley

I spent my initial months in Amsterdam under the impression that I was living in a quasi-socialistic system, built upon ideas that originated in the brains of Marx and Engels. This was one of the puzzling features of the Netherlands. It is and has long been a highly capitalistic country — the Dutch pioneered the multinational corporation and advanced the concept of shares of stock, and last year the country was the third-largest investor in U.S. businesses — and yet it has what I had been led to believe was a vast, socialistic welfare state. How can these polar-opposite value systems coexist? […]

The collaboration goes all the way to the top, where something called the Social Economic Council — consisting of trade-union, business and government representatives — advises the government on major issues. “It’s possible because our trade unions still play a prominent role,” said Alexander Rinnooy Kan, the chairman of the council. “In the U.S., the relationship between employers and unions is adversarial, but here we’ve learned there’s a joint interest in working together.”

There is another historical base to the Dutch social-welfare system, which curiously has been overlooked by American conservatives in their insistence on seeing such a system as a threat to their values. It is rooted in religion. “These were deeply religious people, who had a real commitment to looking after the poor,” Mak said of his ancestors. “They built orphanages and hospitals. The churches had a system of relief, which eventually was taken over by the state. So Americans should get over ‘socialism.’ This system developed not after Karl Marx, but after Martin Luther and Francis of Assisi.” […]

This points up something that seems to be overlooked when Americans dismiss European-style social-welfare systems: they are not necessarily state-run or state-financed. Rather, these societies have chosen to combine the various entities that play a role in social well-being — individuals, corporations, government, nongovernmental entities like unions and churches — in different ways, in an effort to balance individual freedom and overall social security.

New York Times: Going Dutch – How I Learned to Love the European Welfare State

(via Richard Metzger)

How not to save the world

May 9, 2009 / Klint Finley

Even more important than solving problems is identifying error. This Appropedia article is a work in progress, but is important.

Organics

Food miles

Rejecting Vaccinations

Recycling

Antibacterial Soap

Hybrid Vehicles

Carbon offsets and planting trees

Appropedia: How not to save the world

I think it’s worth pointing out that sustainability is not just about the environment, but about social and economic impacts too. There are non-environmental reasons to support to local food and recycling initiatives, for instance.

Technoccult

Mutate Your Mind