Why Most Modern Markets are Ultimately Unreliable

[Funkyterrance]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

[Dukasaur]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

Skews in what sense? Unreliable in what way? These are very vague terms. What is it you would want done more reliably?

[Funkyterrance]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

Skews in what sense? Unreliable in what way? These are very vague terms. What is it you would want done more reliably?

It's nothing to do with what I want, it's just the reality of it. Any model that considers a limited variable as unlimited is unreliable, at least in the long term.

Aside: If you found a bag of money in a ditch, you could live pretty spectacularly for a period of time but any entity with a bit of sense would understand that the "good times" were created by a very fleeting circumstance and wouldn't have a reasonable expectation of just finding another bag in a ditch once the money ran out.

[Dukasaur]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

Skews in what sense? Unreliable in what way? These are very vague terms. What is it you would want done more reliably?

It's nothing to do with what I want, it's just the reality of it. Any model that considers a limited variable as unlimited is unreliable, at least in the long term.

Aside: If you found a bag of money in a ditch, you could live pretty spectacularly for a period of time but any entity with a bit of sense would understand that the "good times" were created by a very fleeting circumstance and wouldn't have a reasonable expectation of just finding another bag in a ditch once the money ran out.

Okay, I think I understand what you're saying, in your ham-handed and imprecise kind of way. Our economic expectations are predicated on the continuation of a limitless supply of oil, but oil is not limitless, so those expectations are wrong. Is that what you mean?

But that's not correct. Economic expectations do take into account that resources are limited. In fact, that's how my first-year economics defined the core problem of economics: understanding how to allocate limited resources in the face of unlimited desires. Pretty much everything has a limit, even the air and water, and the market does look at those too.

[Funkyterrance]

I've never seen a specific market study on a small scale that takes this into consideration. This is the problem; the small scale isn't considerate of the large scale costs. I don't see this view as "ham fisted", I see it as looking at a bigger picture and seeing huge discrepancies between it and the little ones.

[waauw]

I've never seen a specific market study on a small scale that takes this into consideration. This is the problem; the small scale isn't considerate of the large scale costs. I don't see this view as "ham fisted", I see it as looking at a bigger picture and seeing huge discrepancies between it and the little ones.

And yet there is a surging popularity in corporations hiring environmental managers or environmental service companies.

[mrswdk]

Markets are a good place to get cheap, probably knock-off stuff, but if you're concerned about quality and accountability then a reputed store is always your best bet.

[Metsfanmax]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

Skews in what sense? Unreliable in what way? These are very vague terms. What is it you would want done more reliably?

It's nothing to do with what I want, it's just the reality of it. Any model that considers a limited variable as unlimited is unreliable, at least in the long term.

Aside: If you found a bag of money in a ditch, you could live pretty spectacularly for a period of time but any entity with a bit of sense would understand that the "good times" were created by a very fleeting circumstance and wouldn't have a reasonable expectation of just finding another bag in a ditch once the money ran out.

Okay, I think I understand what you're saying, in your ham-handed and imprecise kind of way. Our economic expectations are predicated on the continuation of a limitless supply of oil, but oil is not limitless, so those expectations are wrong. Is that what you mean?

But that's not correct. Economic expectations do take into account that resources are limited. In fact, that's how my first-year economics defined the core problem of economics: understanding how to allocate limited resources in the face of unlimited desires. Pretty much everything has a limit, even the air and water, and the market does look at those too.

It seems to me that he is making a tragedy of the commons argument: because there is no ultimate arbiter of economics, there's no way for the collective actions of individuals to deal with the limited supply of various resources, because to each individual the supply of resources is close to infinite.

[riskllama]

i thought BBS was the "ultimate arbiter" of economics, no?
i'm confused and hungry now...

[Dukasaur]

In a word: Petroleum.
A relatively free flow of energy is the unsustainable monkey wrench that skews the reality of most markets, particularly global ones and those of more or less affluent "communities".

Skews in what sense? Unreliable in what way? These are very vague terms. What is it you would want done more reliably?

It's nothing to do with what I want, it's just the reality of it. Any model that considers a limited variable as unlimited is unreliable, at least in the long term.

Aside: If you found a bag of money in a ditch, you could live pretty spectacularly for a period of time but any entity with a bit of sense would understand that the "good times" were created by a very fleeting circumstance and wouldn't have a reasonable expectation of just finding another bag in a ditch once the money ran out.

Okay, I think I understand what you're saying, in your ham-handed and imprecise kind of way. Our economic expectations are predicated on the continuation of a limitless supply of oil, but oil is not limitless, so those expectations are wrong. Is that what you mean?

But that's not correct. Economic expectations do take into account that resources are limited. In fact, that's how my first-year economics defined the core problem of economics: understanding how to allocate limited resources in the face of unlimited desires. Pretty much everything has a limit, even the air and water, and the market does look at those too.

It seems to me that he is making a tragedy of the commons argument: because there is no ultimate arbiter of economics, there's no way for the collective actions of individuals to deal with the limited supply of various resources, because to each individual the supply of resources is close to infinite.

The simplest response is that price is the ultimate arbiter of economics. As the price of something goes up, we realize that it's becoming scarcer and make moves to conserve it. If the price of something goes down, we treat it as disposable and tend to waste it.

The price of petroleum is relatively low now, so most people will drive the car to go to the corner store. When the price goes up again, you'll see more people parking the car and bringing out that dusty old bicycle from the back of the garage.

The ultimate in scarce resources are things like the Mona Lisa and the ceiling of the Sistine Chapel. Those have big walls, fireproof doors, and armies of security guards protecting them. They're worth millions. On the other hand, .jpgs of bad reproductions of the Mona Lisa or the Sistine Chapel are not scarce. They are worth nothing, and are wiped off hard drives en masse.

[mrswdk]

The Sistine Chapel makes all state religion buildings produce an extra 5 culture points per turn.

[Metsfanmax]

The Sistine Chapel makes all state religion buildings produce an extra 5 culture points per turn.

I've wanted to get together a CC Civ V game for a while. You in?

[mrswdk]

I was talking about Civ IV, soz. I didn't really get into V that much.

[Metsfanmax]

I was talking about Civ IV, soz. I didn't really get into V that much.

Of course the Chinese guy likes unit stacking.

[mrswdk]

Too right. Power in numbers.

I also thought the city states in V were kind of annoying.

[notyou2]

i thought BBS was the "ultimate arbiter" of economics, no?
i'm confused and hungry now...

It's a BBS trap thread.

[tzor]

It's nothing to do with what I want, it's just the reality of it. Any model that considers a limited variable as unlimited is unreliable, at least in the long term.

Doesn't that doom all agrarian economies?

Wait a moment, you may be onto something here.