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Classical liberalism. The individual before the state, non-interventionist, free-market based society.
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By quetzalcoatl
#14616852
Here is a paper published by the Bank of England, Money creation in the modern economy.

"...the majority of money in the modern economy is created by commercial banks making loans..."
"...banks do not act simply as intermediaries, lending out deposits that savers place with them..."
"...QE initially increases the amount of bank deposits those companies hold (in place of the assets they sell). Those companies will then wish to rebalance their portfolios of assets by buying higher-yielding assets, raising the price of those assets and stimulating spending in the economy..."
"... households and companies who receive the money created by new lending may take actions that affect the stock of money — they could quickly ‘destroy’ money by using it to repay their existing debt, for instance..."

The same observations hold for the US, and you can read similar papers from the Fed.

The neutral language of the paper might lull you a bit, but they are quite explicitly saying that banks do not lend out money they receive from depositors. It is also saying that bank lending creates money, period ('ex nihilo', as has been noted by others). The whole fractional reserve debate is mostly a red herring, since banks don't lend from their reserves in the first place.

The main restraints on bank money creation are the necessity of having a profitable portfolio, and government regulation of the banking system.
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By Harmattan
#14616867
Truth To Power wrote:Because GOVERNMENT has over-ruled the capitalist market outcome through massive interventions

When I discuss capitalism I mean the union of capitalism and strong governments to create social-democracy. I consider unbridled markets as not only unfair and cruel but also inefficient, spontaneously converging to aristocracy. Just like a state-directed economy is inefficient and cruel - in different ways.

Only people who care about liberty, justice, and prosperity (i.e., not you).

Can you point out a period of history where liberty, justice and prosperity have been better than they are today? My goals are the same as yours, we only disagree on the best path.

Traders aren't the problem, but rather rent seekers who find ways to force others (especially taxpayers) to shoulder the downside risks, while they pocket the upside rewards themselves.

You should not underestimate the capacity of greed to produce favorable outcomes for all. Not always but often, at least with a strong government to prune the fat, build the common substrate and share the fruits.
By lucky
#14616868
Lexington wrote:They can't create new reserves since reserves are things like vault cash which come from the central bank.

Truth To Power wrote:No, pretty much any demand deposit can serve as reserves, including ones the bank creates.

Lexington is right, TTP is wrong, as simple as that. Bank reserves are by definition what the bank has in its central bank account plus the paper and metal cash in its vault.
By Truth To Power
#14616892
Harmattan wrote:You should not underestimate the capacity of greed to produce favorable outcomes for all.

Greed -- unfortunately mistranslated as, "love of money" -- is the root of all manner of evil. It CANNOT produce favorable outcomes for all, or even for a majority.
Lexington wrote:They can't create new reserves since reserves are things like vault cash which come from the central bank.

Truth To Power wrote:No, pretty much any demand deposit can serve as reserves, including ones the bank creates.

lucky wrote:Lexington is right, TTP is wrong, as simple as that.


Bank reserves are by definition what the bank has in its central bank account plus the paper and metal cash in its vault.

And what, exactly, does it have in its central bank account? Could it be demand deposits, which it and other banks have created? What is the difference between the money on deposit in a demand account that consists of loan proceeds the bank has just created, and money in a demand account that a customer has deposited using loan proceeds from another bank (which created it)? Both can be used as reserves, because there is no difference between them. The bank just has to be a bit prudent, and make sure it has enough funds on hand to clear transactions, and enough vault cash to satisfy demand for cash withdrawals. These days, demand deposits can be moved around so fast -- including into a bank's reserve account -- that banks have almost total freedom to use whatever deposits they want as reserves.
Truth To Power wrote:Because GOVERNMENT has over-ruled the capitalist market outcome through massive interventions

Harmattan wrote:When I discuss capitalism I mean the union of capitalism and strong governments to create social-democracy. I consider unbridled markets as not only unfair and cruel but also inefficient, spontaneously converging to aristocracy. Just like a state-directed economy is inefficient and cruel - in different ways.

But that is just an admission that capitalism doesn't produce a desirable outcome, but an unjust and harmful one, which has to be continuously corrected by government intervention.

Not much of a system, if you ask me.
Only people who care about liberty, justice, and prosperity (i.e., not you).

Can you point out a period of history where liberty, justice and prosperity have been better than they are today?

I can point out that liberty, justice, and prosperity are better in countries that don't let capitalism have free rein, but over-rule its natural effects.

Don't get me wrong. I realize capitalism is better than socialism, feudalism, etc. But that's like saying it was better to be a slave in the antebellum South than "free" in 19th C West Africa (i.e., destitute, with no security of rights, and in constant and well justified terror of enslavement or worse by the sorts of people who wielded power in those societies).
My goals are the same as yours, we only disagree on the best path.

Really? I've never encountered an apologist for capitalism yet who was prepared to see rich, greedy, privileged parasites reduced to a condition commensurate with their net contributions to society.
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By Lexington
#14616966
Truth to Power wrote:And what, exactly, does it have in its central bank account? Could it be demand deposits, which it and other banks have created?


No, they can't, any more than I can go to Wells Fargo with a slip of paper saying "$100" and ask them to increase my account by that amount. These have to be actual US dollars, either vault cash or electronic (so-called Fed Funds - see here for a description from the New York Fed, or the Wikipedia articles on Fed funds, or just bank reserves). This makes sense, since when your depositors want to withdraw money they aren't going to be satisfied with an IOU from your bank or someone else's - they want cash.

Truth To Power wrote:What is the difference between the money on deposit in a demand account that consists of loan proceeds the bank has just created, and money in a demand account that a customer has deposited using loan proceeds from another bank (which created it)? Both can be used as reserves, because there is no difference between them.


Demand deposits are not cash. Also when you transfer funds between banks, it causes exactly that quantity of reserves (cash, usually electronically, via Fedwire) to be transferred between banks, not an IOU or "loan proceeds". When you go to an ATM you don't get an IOU from your bank, you get cash; why would a bank get an IOU when it receives a check? No, it will settle in cash - that's its right, just as much as much as you do on your bank account when there's a transfer.
By lucky
#14616984
Truth To Power wrote:These days, demand deposits can be moved around so fast -- including into a bank's reserve account

This makes no sense whatsoever, given that a balance in a client's checking account is the bank's liability, while a balance in the reserve account at the central bank is the bank's asset.
By layman
#14617018
The enslavement of formerly independent and free agricultural workers


Cant resist pointing out this is the biggest myth in history.

Hunter gatherer society may be argued as an improvements. Peasant farmers though is just about the worst we ever had it. The agricultural revolution was the biggest con of all time when it comes to health, life and liberty. All went down hill quickly.
By Rich
#14617075
layman wrote:The agricultural revolution was the biggest con of all time when it comes to health, life and liberty. All went down hill quickly.
Well I'm not aware of any neolithic Lenin or Jefferson. But leaving that aside the agricultural revolution did very well on the life front at least in terms of quantity. There was lots more of it. This was the problem, over breeding. Its the same with British agricultural revolution and and the industrial revolution. Things were crap for the average (median) Britain in 1830, despite the huge advances in technology and capital accumulation. So the leftie immediately starts jumping up and down and wanking off about the evils of the Capitalists and Capatalism. No it was because of the massive expansion of Britain's population.

Humans seem to have a compulsion to over populate, our reproduction levels have fallen allowing a welcome reduction in overcrowding and resource shortages, so what's our response, lets flood the country with people who are still knocking out babies like there's no tomorrow.
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By Harmattan
#14617198
Truth To Power wrote: But that is just an admission that capitalism doesn't produce a desirable outcome, but an unjust and harmful one, which has to be continuously corrected by government intervention.

Not much of a system, if you ask me.

If by system you mean a set of a few theoretical rules that magically work, then no such thing is possible.

If by system you mean a complex and tangled set of informal and evolving spaghetti relationships that actually work most of the time despite the formidable chaos that mankind is, then capitalism is certainly the backbone of a system that actually works.

We are discussing humanity, not Peano algebra. You cannot take for granted that a significantly better outcome is possible, at least with the current technological levels. Systems' merits can only be evaluated comparatively.

Really? I've never encountered an apologist for capitalism yet who was prepared to see rich, greedy, privileged parasites reduced to a condition commensurate with their net contributions to society.

I thought you were desiring prosperity, liberty and justice, not true equality - whatever that means. I am not convinced that an economic system can be found at the present technological levels that can achieve all at the same time.

Now I admit that I am on the good end of the stick (I not always was) and I refuse to renounce it. But what about you? I bet you are a westerner and most of this planet is dirty poor. Are you ready to divide your income by seven, which implies to drastically cut on your life quality and hygiene and security, maybe face starvation sometimes, and accept a greater mortality rate for yourself and your family? No, I am sure that you do not want that. By the way you can do it already, without waiting for a revolution. Are you doing it? No, of course not.

Now in 2015 most of Africa uses capitalism to enjoy a 3% yearly growth, with many countries in the 5% - 10% range. There were and there are times when capitalism was/is a hindrance for Africa, but circumstances changed and both Africans and good-willing westerners derived lessons of the past and learned how to canalize capitalism for Africa's profit.
By mikema63
#14617210
Hunter gatherer society may be argued as an improvements. Peasant farmers though is just about the worst we ever had it. The agricultural revolution was the biggest con of all time when it comes to health, life and liberty. All went down hill quickly.


For society as a whole however it was better, because it allowed for higher population and specialization.
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By Harmattan
#14617221
layman wrote:Hunter gatherer society may be argued as an improvements. Peasant farmers though is just about the worst we ever had it. The agricultural revolution was the biggest con of all time when it comes to health, life and liberty. All went down hill quickly.

Sure, starving every winter and working twice more to walk kilometers every day, tracks beasts, make arrows and such is the road to freedom.

Besides everyone knows that living in the woods is so good for your health: multiple cuts (walking bare foot is great for health), plenty of contacts with excrements, various infectious sources and invasive fungi, disease-spreading insects and pests, snakes, boars, bears, bees, etc. And of course the best friends of the half-naked guy in the woods: cold and humidity.

Based on your description, one should wonder why those hunters gatherers even started farming.
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By Lexington
#14617231
There's an article by Jared Diamon (with, perhaps, an unnecessarily provocative title) on this topic. I think the article as a whole is interesting but I'll bold out the TLDR highlights:

The Worst Mistake in the History of the Human Race

To science we owe dramatic changes in our smug self-image. Astronomy taught us that our earth isn't the center of the universe but merely one of billions of heavenly bodies. From biology we learned that we weren't specially created by God but evolved along with millions of other species. Now archaeology is demolishing another sacred belief: that human history over the past million years has been a long tale of progress. In particular, recent discoveries suggest that the adoption of agriculture, supposedly our most decisive step toward a better life, was in many ways a catastrophe from which we have never recovered. With agriculture came the gross social and sexual inequality, the disease and despotism, that curse our existence. At first, the evidence against this revisionist interpretation will strike twentieth century Americans as irrefutable. We're better off in almost every respect than people of the Middle Ages, who in turn had it easier than cavemen, who in turn were better off than apes. Just count our advantages. We enjoy the most abundant and varied foods, the best tools and material goods, some of the longest and healthiest lives, in history. Most of us are safe from starvation and predators. We get our energy from oil and machines, not from our sweat. What neo-Luddite among us would trade his life for that of a medieval peasant, a caveman, or an ape?

For most of our history we supported ourselves by hunting and gathering: we hunted wild animals and foraged for wild plants. It's a life that philosophers have traditionally regarded as nasty, brutish, and short. Since no food is grown and little is stored, there is (in this view) no respite from the struggle that starts anew each day to find wild foods and avoid starving. Our escape from this misery was facilitated only 10,000 years ago, when in different parts of the world people began to domesticate plants and animals. The agricultural revolution spread until today it's nearly universal and few tribes of hunter-gatherers survive.

From the progressivist perspective on which I was brought up, to ask "Why did almost all our hunter-gatherer ancestors adopt agriculture?" is silly. Of course they adopted it because agriculture is an efficient way to get more food for less work. Planted crops yield far more tons per acre than roots and berries. Just imagine a band of savages, exhausted from searching for nuts or chasing wild animals, suddenly grazing for the first time at a fruit-laden orchard or a pasture full of sheep. How many milliseconds do you think it would take them to appreciate the advantages of agriculture?

The progressivist party line sometimes even goes so far as to credit agriculture with the remarkable flowering of art that has taken place over the past few thousand years. Since crops can be stored, and since it takes less time to pick food from a garden than to find it in the wild, agriculture gave us free time that hunter-gatherers never had. Thus it was agriculture that enabled us to build the Parthenon and compose the B-minor Mass.

While the case for the progressivist view seems overwhelming, it's hard to prove. How do you show that the lives of people 10,000 years ago got better when they abandoned hunting and gathering for farming? Until recently, archaeologists had to resort to indirect tests, whose results (surprisingly) failed to support the progressivist view. Here's one example of an indirect test: Are twentieth century hunter-gatherers really worse off than farmers? Scattered throughout the world, several dozen groups of so-called primitive people, like the Kalahari bushmen, continue to support themselves that way. It turns out that these people have plenty of leisure time, sleep a good deal, and work less hard than their farming neighbors. For instance, the average time devoted each week to obtaining food is only 12 to 19 hours for one group of Bushmen, 14 hours or less for the Hadza nomads of Tanzania. One Bushman, when asked why he hadn't emulated neighboring tribes by adopting agriculture, replied, "Why should we, when there are so many mongongo nuts in the world?"

While farmers concentrate on high-carbohydrate crops like rice and potatoes, the mix of wild plants and animals in the diets of surviving hunter-gatherers provides more protein and a bettter balance of other nutrients. In one study, the Bushmen's average daily food intake (during a month when food was plentiful) was 2,140 calories and 93 grams of protein, considerably greater than the recommended daily allowance for people of their size. It's almost inconceivable that Bushmen, who eat 75 or so wild plants, could die of starvation the way hundreds of thousands of Irish farmers and their families did during the potato famine of the 1840s.

So the lives of at least the surviving hunter-gatherers aren't nasty and brutish, even though farmes have pushed them into some of the world's worst real estate. But modern hunter-gatherer societies that have rubbed shoulders with farming societies for thousands of years don't tell us about conditions before the agricultural revolution. The progressivist view is really making a claim about the distant past: that the lives of primitive people improved when they switched from gathering to farming. Archaeologists can date that switch by distinguishing remains of wild plants and animals from those of domesticated ones in prehistoric garbage dumps.

How can one deduce the health of the prehistoric garbage makers, and thereby directly test the progressivist view? That question has become answerable only in recent years, in part through the newly emerging techniques of paleopathology, the study of signs of disease in the remains of ancient peoples.

In some lucky situations, the paleopathologist has almost as much material to study as a pathologist today. For example, archaeologists in the Chilean deserts found well preserved mummies whose medical conditions at time of death could be determined by autopsy (Discover, October). And feces of long-dead Indians who lived in dry caves in Nevada remain sufficiently well preserved to be examined for hookworm and other parasites.

Usually the only human remains available for study are skeletons, but they permit a surprising number of deductions. To begin with, a skeleton reveals its owner's sex, weight, and approximate age. In the few cases where there are many skeletons, one can construct mortality tables like the ones life insurance companies use to calculate expected life span and risk of death at any given age. Paleopathologists can also calculate growth rates by measuring bones of people of different ages, examine teeth for enamel defects (signs of childhood malnutrition), and recognize scars left on bones by anemia, tuberculosis, leprosy, and other diseases.

One straight forward example of what paleopathologists have learned from skeletons concerns historical changes in height. Skeletons from Greece and Turkey show that the average height of hunger-gatherers toward the end of the ice ages was a generous 5' 9'' for men, 5' 5'' for women. With the adoption of agriculture, height crashed, and by 3000 B. C. had reached a low of only 5' 3'' for men, 5' for women. By classical times heights were very slowly on the rise again, but modern Greeks and Turks have still not regained the average height of their distant ancestors.

Another example of paleopathology at work is the study of Indian skeletons from burial mounds in the Illinois and Ohio river valleys. At Dickson Mounds, located near the confluence of the Spoon and Illinois rivers, archaeologists have excavated some 800 skeletons that paint a picture of the health changes that occurred when a hunter-gatherer culture gave way to intensive maize farming around A. D. 1150. Studies by George Armelagos and his colleagues then at the University of Massachusetts show these early farmers paid a price for their new-found livelihood. Compared to the hunter-gatherers who preceded them, the farmers had a nearly 50 per cent increase in enamel defects indicative of malnutrition, a fourfold increase in iron-deficiency anemia (evidenced by a bone condition called porotic hyperostosis), a theefold rise in bone lesions reflecting infectious disease in general, and an increase in degenerative conditions of the spine, probably reflecting a lot of hard physical labor. "Life expectancy at birth in the pre-agricultural community was bout twenty-six years," says Armelagos, "but in the post-agricultural community it was nineteen years. So these episodes of nutritional stress and infectious disease were seriously affecting their ability to survive."

The evidence suggests that the Indians at Dickson Mounds, like many other primitive peoples, took up farming not by choice but from necessity in order to feed their constantly growing numbers. "I don't think most hunger-gatherers farmed until they had to, and when they switched to farming they traded quality for quantity," says Mark Cohen of the State University of New York at Plattsburgh, co-editor with Armelagos, of one of the seminal books in the field, Paleopathology at the Origins of Agriculture. "When I first started making that argument ten years ago, not many people agreed with me. Now it's become a respectable, albeit controversial, side of the debate."

There are at least three sets of reasons to explain the findings that agriculture was bad for health. First, hunter-gatherers enjoyed a varied diet, while early fanners obtained most of their food from one or a few starchy crops. The farmers gained cheap calories at the cost of poor nutrition, (today just three high-carbohydrate plants -- wheat, rice, and corn -- provide the bulk of the calories consumed by the human species, yet each one is deficient in certain vitamins or amino acids essential to life.) Second, because of dependence on a limited number of crops, farmers ran the risk of starvation if one crop failed. Finally, the mere fact that agriculture encouraged people to clump together in crowded societies, many of which then carried on trade with other crowded societies, led to the spread of parasites and infectious disease. (Some archaeologists think it was the crowding, rather than agriculture, that promoted disease, but this is a chicken-and-egg argument, because crowding encourages agriculture and vice versa.) Epidemics couldn't take hold when populations were scattered in small bands that constantly shifted camp. Tuberculosis and diarrheal disease had to await the rise of farming, measles and bubonic plague the appearnce of large cities.

Besides malnutrition, starvation, and epidemic diseases, farming helped bring another curse upon humanity: deep class divisions. Hunter-gatherers have little or no stored food, and no concentrated food sources, like an orchard or a herd of cows: they live off the wild plants and animals they obtain each day. Therefore, there can be no kings, no class of social parasites who grow fat on food seized from others. Only in a farming population could a healthy, non-producing elite set itself above the disease-ridden masses. Skeletons from Greek tombs at Mycenae c. 1500 B. C. suggest that royals enjoyed a better diet than commoners, since the royal skeletons were two or three inches taller and had better teeth (on the average, one instead of six cavities or missing teeth). Among Chilean mummies from c. A. D. 1000, the elite were distinguished not only by ornaments and gold hair clips but also by a fourfold lower rate of bone lesions caused by disease.

Similar contrasts in nutrition and health persist on a global scale today. To people in rich countries like the U. S., it sounds ridiculous to extol the virtues of hunting and gathering. But Americans are an elite, dependent on oil and minerals that must often be imported from countries with poorer health and nutrition. If one could choose between being a peasant farmer in Ethiopia or a bushman gatherer in the Kalahari, which do you think would be the better choice?

Farming may have encouraged inequality between the sexes, as well. Freed from the need to transport their babies during a nomadic existence, and under pressure to produce more hands to till the fields, farming women tended to have more frequent pregnancies than their hunter-gatherer counterparts -- with consequent drains on their health. Among the Chilean mummies for example, more women than men had bone lesions from infectious disease.

Women in agricultural societies were sometimes made beasts of burden. In New Guinea farming communities today I often see women staggering under loads of vegetables and firewood while the men walk empty-handed. Once while on a field trip there studying birds, I offered to pay some villagers to carry supplies from an airstrip to my mountain camp. The heaviest item was a 110-pound bag of rice, which I lashed to a pole and assigned to a team of four men to shoulder together. When I eventually caught up with the villagers, the men were carrying light loads, while one small woman weighing less than the bag of rice was bent under it, supporting its weight by a cord across her temples.

As for the claim that agriculture encouraged the flowering of art by providing us with leisure time, modern hunter-gatherers have at least as much free time as do farmers. The whole emphasis on leisure time as a critical factor seems to me misguided. Gorillas have had ample free time to build their own Parthenon, had they wanted to. While post-agricultural technological advances did make new art forms possible and preservation of art easier, great paintings and sculptures were already being produced by hunter-gatherers 15,000 years ago, and were still being produced as recently as the last century by such hunter-gatherers as some Eskimos and the Indians of the Pacific Northwest.

Thus with the advent of agriculture and elite became better off, but most people became worse off. Instead of swallowing the progressivist party line that we chose agriculture because it was good for us, we must ask how we got trapped by it despite its pitfalls.

One answer boils down to the adage "Might makes right." Farming could support many more people than hunting, albeit with a poorer quality of life. (Population densities of hunter-gatherers are rarely over on person per ten square miles, while farmers average 100 times that.) Partly, this is because a field planted entirely in edible crops lets one feed far more mouths than a forest with scattered edible plants. Partly, too, it's because nomadic hunter-gatherers have to keep their children spaced at four-year intervals by infanticide and other means, since a mother must carry her toddler until it's old enough to keep up with the adults. Because farm women don't have that burden, they can and often do bear a child every two years.

As population densities of hunter-gatherers slowly rose at the end of the ice ages, bands had to choose between feeding more mouths by taking the first steps toward agriculture, or else finding ways to limit growth. Some bands chose the former solution, unable to anticipate the evils of farming, and seduced by the transient abundance they enjoyed until population growth caught up with increased food production. Such bands outbred and then drove off or killed the bands that chose to remain hunter-gatherers, because a hundred malnourished farmers can still outfight one healthy hunter. It's not that hunter-gatherers abandoned their life style, but that those sensible enough not to abandon it were forced out of all areas except the ones farmers didn't want.

At this point it's instructive to recall the common complaint that archaeology is a luxury, concerned with the remote past, and offering no lessons for the present. Archaeologists studying the rise of farming have reconstructed a crucial stage at which we made the worst mistake in human history. Forced to choose between limiting population or trying to increase food production, we chose the latter and ended up with starvation, warfare, and tyranny.

Hunter-gatherers practiced the most successful and longest-lasting life style in human history. In contrast, we're still struggling with the mess into which agriculture has tumbled us, and it's unclear whether we can solve it. Suppose that an archaeologist who had visited from outer space were trying to explain human history to his fellow spacelings. He might illustrate the results of his digs by a 24-hour clock on which one hour represents 100,000 years of real past time. If the history of the human race began at midnight, then we would now be almost at the end of our first day. We lived as hunter-gatherers for nearly the whole of that day, from midnight through dawn, noon, and sunset. Finally, at 11:54 p. m. we adopted agriculture. As our second midnight approaches, will the plight of famine-stricken peasants gradually spread to engulf us all? Or will we somehow achieve those seductive blessings that we imagine behind agriculture's glittering facade, and that have so far eluded us?


This paints a pretty awful picture of life for farmers vs the hunter gatherers: literally malnourished enough to be inches shorter than their hunter-gathering forebears and years cut off their life expectancy. The farmer even got less leisure time. He certainly faced more disease.

Now obviously today things are very different, when we're living far from subisistence and we live in a world of abundance compared to our farmer and hunter-gather ancestors alike. But it probably wasn't like that for our neolithic ancestors.
By mikema63
#14617233
In the end though, all that really counted was population size and natural selection, which says something rather tragic about the nature or human existence.
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By quetzalcoatl
#14617234
mikema63 wrote:In the end though, all that really counted was population size and natural selection, which says something rather tragic about the nature or human existence.


The agricultural revolution made larger populations possible, and then ironically made them impossible to support by any other method.
By Rich
#14617239
quetzalcoatl wrote:The agricultural revolution made larger populations possible, and then ironically made them impossible to support by any other method.
yes over population not only reduces the mean wealth per person, it also creates greater inequality. High levels of inequality undermine democracy.
By Truth To Power
#14617776
quetzalcoatl wrote:The agricultural revolution made larger populations possible, and then ironically made them impossible to support by any other method.

Rich wrote:yes over population not only reduces the mean wealth per person, it also creates greater inequality. High levels of inequality undermine democracy.

Actually, recent research has found a positive relationship between the population of a city and its average per-capita income; there is a synergy that increases wealth production more than proportionally to population. The high levels of inequality are an artefact of landowner privilege, as Henry George explained so clearly and irrefutably in "Progress and Poverty." Higher population, technological progress, and accumulation of capital all have the effect of pushing the no-land-rent margin outward, reducing wages while increasing land rents.

The experiment has been done, and the results are in: when the Black Death suddenly deleted 1/4 of Europe's population, wages soared, while land rents crashed. That was the beginning of the modern middle class. The same relationship holds in the other direction: higher population means greater labor productivity (as explained above), but lower wages. Higher land rents absorb all the additional production, and more. It's the Law of Rent. You can't fight it.
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By quetzalcoatl
#14617792
Truth To Power wrote: The high levels of inequality are an artefact of landowner privilege, as Henry George explained so clearly and irrefutably in "Progress and Poverty." Higher population, technological progress, and accumulation of capital all have the effect of pushing the no-land-rent margin outward, reducing wages while increasing land rents.


I envy those of you who have an overarching explanation of everything. The sense of certainty must seem quite intoxicating. For me the cost of stilling that internal voice of dissent is too high.
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By kobe
#14617804
Diamon makes some great points there, and supports his hypothesis well. I just don't see the end game of his position. The main enemy of hunter-gatherer societies are other humans, not necessarily the elements themselves. Agricultural societies love to conquer peoples and search for more goods, because such societies value social stratification and consumption-seeking. He even says it himself:

As population densities of hunter-gatherers slowly rose at the end of the ice ages, bands had to choose between feeding more mouths by taking the first steps toward agriculture, or else finding ways to limit growth. Some bands chose the former solution, unable to anticipate the evils of farming, and seduced by the transient abundance they enjoyed until population growth caught up with increased food production. Such bands outbred and then drove off or killed the bands that chose to remain hunter-gatherers, because a hundred malnourished farmers can still outfight one healthy hunter. It's not that hunter-gatherers abandoned their life style, but that those sensible enough not to abandon it were forced out of all areas except the ones farmers didn't want.


It's foolhardy to characterize agriculture as a choice. It's more of a meme that inevitably surfaces. What caused agriculture in the middle east is not what caused agriculture in the Americas. Unfortunately for the proponents of primitivists, the main problem is that no matter how much we change the narrative about hunter-gatherers, the fact remains that their subsistence strategies cannot compete with agricultural subsistence strategies because the latter can straight overpower the former. The best that can be hoped for hunter-gatherer societies is that they are allowed to continue to exist. Saying that one is better than the other is a moot point, because we already know which strategy wins every time, despite being less efficient.
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By QatzelOk
#14617866
Harmattan wrote:How much are economic crises worth when this system managed to eliminate hunger and provide us with warm houses, cascades of hot water in the morning, plenty of enjoyments and intellectual stimulations. !

You forgot to mention the delicious, warm, mother's milk that has been provided by many women the last few centuries. Also, courtesy of the Federal Reserve, right?

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