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Is wealth finite? Economics-R

mannybolonemannybolone Los Angeles, CA 15,025 Posts
edited September 2008 in Strut Central
A question to any economics-trained folks out there (Big Stacks?): in American society, is wealth more or less a finite resource or is it possible for total wealth to grow without redistribution? b,121b,121Thanks!
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  • Options
    Unknown
    This probably doesn't answer your question, but...b,121b,121Resources are limited. Wants are unlimited.b,121b,121A manipulation of these facts have created the current crisis.
  • The_NonThe_Non 5,691 Posts
    Your theorem doesn't take into account innovation.
  • Options
    Unknown
    /font1
    Quote:/font1h,121b,121Your theorem doesn't take into account innovation. b,121b,121h,121
    font class="post"1b,121b,121It's not my theorem. It's a basic tenet of economics.
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    Uh, I didn't think I was encouraging a cat fight.b,121b,121And my question isn't spurred by the current crisis: I'm more interested in whether the total distribution of wealth in American society tends more towards zero-sum or if it's possible to infuse new wealth WITHOUT redistribution.
  • The_NonThe_Non 5,691 Posts
    /font1
    Quote:/font1h,121b,121/font1Quote:/font1h,121b,121Your theorem doesn't take into account innovation. b,121b,121h,121
    font class="post"1b,121b,121It's not my theorem. It's a basic tenet of economics. b,121b,121h,121font class="post"1b,121b,121I was talking to Odub numbnuts.
  • Options
    Unknown
    /font1
    Quote:/font1h,121b,121Uh, I didn't think I was encouraging a cat fight. b,121b,121h,121
    font class="post"1b,121b,121No cat fight, Manny.b,121b,121I thought your initial question was influenced by the current financial situation.b,121b,121My bad.
  • Options
    Unknown
    /font1
    Quote:/font1h,121b,121/font1Quote:/font1h,121b,121/font1Quote:/font1h,121b,121Your theorem doesn't take into account innovation. b,121b,121h,121
    font class="post"1b,121b,121It's not my theorem. It's a basic tenet of economics. b,121b,121h,121font class="post"1b,121b,121I was talking to Odub numbnuts. b,121b,121h,121font class="post"1b,121b,121My name was "RE"ed in your response. Also, Manny's 'question' isn't a theorem, while my posting sounds like one.b,121b,121img src="/ubbthreads/images/graemlins/doggie.gif" alt="" 21b,121b,121But at least your 'innovation' statement makes sense now....sort of.b,121b,121
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    /font1
    Quote:/font1h,121b,121Your theorem doesn't take into account innovation. b,121b,121h,121
    font class="post"1b,121b,121Hey numbnuts img src="/ubbthreads/images/graemlins/smile.gif" alt="" 21 - I didn't posit a theorem. I posed a question.
  • verb606verb606 2,518 Posts
    Wealth is an abstract concept that involves the amount of a resource and the value of that resource, no? b,121b,121Concrete resources are finite. Abstract resources (like services) are finite in the sense there's a limit to manpower and other resources that provide that service. b,121b,121The value of a resource is infinite, I suppose. But you can redistribute a value, you can only redistribute resources. b,121b,121I dunno, I'm just bullshittin'.
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    Sorry, I guess I should have been more precise in my definitions. I'm talking about wealth as in "net worth". So not an abstract concept but rather, a more concrete, quantifiable measure of class standing. b,121b,121Given that, if net worth is based around resources that are finite, more or less, then I'm guessing (and here's a theorem) that you can't "create"1wealth in a society; you can only really move it around so it's more equitably distributed. b,121b,121The one thing nagging me about that however is, say, a largely export economy that is producing goods domestically that are selling well overseas. In that case, you could argue that total net worth in a society could increase without redistribution since the wealth is coming from OUTSIDE that society. b,121b,121(Which then leads to the question of whether global wealth is finite or not).
  • DrBorisQDrBorisQ 298 Posts
    Well to some extent this depends on how you define 'wealth'. But...b,121b,121Basically as time goes on and innovation occurs, this allows us to produce more goods (or services) with the same amount of resources.b,121b,121For example:b,121b,121A wooden able is worth $10 and you need one tree to make a1table.b,121b,121If you take one tree and make one table, you have created $10 of 'worth'. If now someone figures out how to make two tables from one tree (for example a better design for the supports so you don't need as much wood) then you can create two tables. Hence now having $20 of 'worth'.b,121b,121Basically speaking the human mind is not a finite resource.b,121b,121This is a really basic example, and obviously a lot of other factors come into play. But hopefully you get the gist.b,121b,121Edit: to relate it a bit more back to your question in terms of net wealth as a class thing. Were once only one guy owned a table, now two guys own a1table...
  • twoplytwoply Only Built 4 Manzanita Links 2,914 Posts
    But what if even ten tables is worth less to you than a1tree?
  • RockadelicRockadelic Out Digging 13,993 Posts
    /font1
    Quote:/font1h,121b,121But what if even ten tables is worth less to you than a1tree? b,121b,121h,121
    font class="post"1b,121 Product
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    /font1
    Quote:/font1h,121b,121b,121Edit: to relate it a bit more back to your question in terms of net wealth as a class thing. Were once only one guy owned a table, now two guys own a1table... b,121b,121h,121
    font class="post"1b,121b,121Doesn't that assume both guys can afford a $10 table? b,121b,121AND, if there are twice as many tables out there (potentially), wouldn't that likely lower the cost (and thus1value) of the table?
  • PATXPATX 2,820 Posts
    I think ODub is asking if it's possible to "make the pie higher."1(GW Bush quote)b,121b,121So by "resources"1you are saying that wealth cannot be created from services and knowledge processes, only raw materials or technological processes using those raw materials?
  • DrBorisQDrBorisQ 298 Posts
    /font1
    Quote:/font1h,121b,121/font1Quote:/font1h,121b,121b,121Edit: to relate it a bit more back to your question in terms of net wealth as a class thing. Were once only one guy owned a table, now two guys own a1table... b,121b,121h,121
    font class="post"1b,121b,121Doesn't that assume both guys can afford a $10 table? b,121b,121AND, if there are twice as many tables out there (potentially), wouldn't that likely lower the cost (and thus1value) of the table? b,121b,121h,121font class="post"1b,121b,121Well yes, depends on the demand for the tables - and the shape of the demand curve. In reality two tables probably wouldn't be worth $20, maybe $15 or something.
  • RockadelicRockadelic Out Digging 13,993 Posts
    /font1
    Quote:/font1h,121b,121b,121So by "resources"1you are saying that wealth cannot be created from services and knowledge processes, only raw materials or technological processes using those raw materials? b,121b,121h,121
    font class="post"1b,121b,121The two are far better when served together.
  • DrBorisQDrBorisQ 298 Posts
    /font1
    Quote:/font1h,121b,121b,121So by "resources"1you are saying that wealth cannot be created from services and knowledge processes, only raw materials or technological processes using those raw materials? b,121b,121h,121
    font class="post"1b,121b,121No, resources can come to mean almost anything. If an accountant can find a way of delivering his/her services more efficiently (using less inputs, i.e his time) then more value has been created than before.b,121b,121Again assuming there is a market for said services.
  • PATXPATX 2,820 Posts
    We should take money out of the discussion. I mean Bear Sterns was very wealthy, problem was they had no cash in the bank.
  • verb606verb606 2,518 Posts
    /font1
    Quote:/font1h,121b,121b,121b,121Given that, if net worth is based around resources that are finite, more or less, then I'm guessing (and here's a theorem) that you can't "create"1wealth in a society; you can only really move it around so it's more equitably distributed. b,121b,121b,121b,121b,121b,121h,121
    font class="post"1b,121b,121b,121I basically agree with this, but just to play devil's advocate I'm gonna throw the value thing out again.b,121b,121Much of many people's net worth is "stock,"1which even though it's largely abstract, is considered finite. I have X shares of stock. But the value of that stock fluctuates. b,121b,121So even though I have a finite number of shares of stock, the value of that stock, and by extension my net worth, can increase to a great degree without any real work or distribution happening. b,121b,121So Odub, would you consider that "creation"1of wealth?
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    *laugh* I thought I would ask what I presumed to be a fairly basic question but I clearly presumed wrong. b,121b,121Let me try this a different way:b,121b,121In a society - such as ours - marked by tremendous disparities in net worth (which I'm calling "wealth" here - a definition1which would hold weight in an economics or sociology setting) amongst families, is it possible to increase equality without some form of redistribution?
  • PATXPATX 2,820 Posts
    "increase equality" means what?
  • twoplytwoply Only Built 4 Manzanita Links 2,914 Posts
    If that's your question, you're not just talking about creating new wealth, you're also talking about putting a stop to the practice of funneling wealth from the many to the few.
  • DrBorisQDrBorisQ 298 Posts
    /font1
    Quote:/font1h,121b,121*laugh* I thought I would ask what I presumed to be a fairly basic question but I clearly presumed wrong. b,121b,121Let me try this a different way:b,121b,121In a society - such as ours - marked by tremendous disparities in net worth (which I'm calling "wealth" here - a definition1which would hold weight in an economics or sociology setting) amongst families, is it possible to increase equality without some form of redistribution? b,121b,121h,121
    font class="post"1b,121b,121In a word YES.b,121b,121If you have a vegetable patch in your garden that produces 10kg of tomatos a week, then you figure out that if you water it in the morning, rather than the afternoon1like you were doing you can get 12kg - then you have created 2kg of tomatos without any additional input.
  • RockadelicRockadelic Out Digging 13,993 Posts
    Wealth/Resources are finite, however, they may not yet be discovered or used to their maximum potential.
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    /font1
    Quote:/font1h,121b,121/font1Quote:/font1h,121b,121*laugh* I thought I would ask what I presumed to be a fairly basic question but I clearly presumed wrong. b,121b,121Let me try this a different way:b,121b,121In a society - such as ours - marked by tremendous disparities in net worth (which I'm calling "wealth" here - a definition1which would hold weight in an economics or sociology setting) amongst families, is it possible to increase equality without some form of redistribution? b,121b,121h,121
    font class="post"1b,121b,121In a word YES.b,121b,121If you have a vegetable patch in your garden that produces 10kg of tomatos a week, then you figure out that if you water it in the morning, rather than the afternoon1like you were doing you can get 12kg - then you have created 2kg of tomatos without any additional input. b,121b,121h,121font class="post"1b,121b,121Such an innovation would likely benefit the farmer selling those tomatoes more than field workers picking them though. The workers would get paid more - assuming they're paid by weight - but it's only because they're also working more and thus1the "innovation" here more likely benefits those at the top at a faster and greater rate than those at the bottom, thus1maintaining the existing class disparity, no?
  • JimBeamJimBeam Seattle. 2,012 Posts
    /font1
    Quote:/font1h,121b,121*laugh* I thought I would ask what I presumed to be a fairly basic question but I clearly presumed wrong. b,121b,121Let me try this a different way:b,121b,121In a society - such as ours - marked by tremendous disparities in net worth (which I'm calling "wealth" here - a definition1which would hold weight in an economics or sociology setting) amongst families, is it possible to increase equality without some form of redistribution? b,121b,121h,121
    font class="post"1b,121b,121what do you mean by redistribution?b,121people in here are making valid points about increasing the efficiency of capital (including human)-- more "bang for your buck"1in terms of resources.b,121However, I'm not sure if your use of the term "redistribution"1is more of a forced economic robin hood concept (through extreme progressive taxes, or simply taking from the wealthy and giving to the not,) or if you're asking what forces or actions can be taken in an economy to catalyze a more equal distribution of wealth-- because there are plenty of those.
  • twoplytwoply Only Built 4 Manzanita Links 2,914 Posts
    I assumed he meant is there a way to increase wealth for those who currently have less until there is an even distribution.
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    /font1
    Quote:/font1h,121b,121"increase equality" means what? b,121b,121h,121
    font class="post"1b,121b,121The top 10% of Americans control something1like 34% of the total net worth in society compared to the bottom 90% which controls less than 30%. b,121b,121So increasing equality would mean finding a way that the bottom 90% can increase their share of the total pie. b,121b,121My question is whether that's realistically possible without the top 10% having to surrender their share.
  • mannybolonemannybolone Los Angeles, CA 15,025 Posts
    /font1
    Quote:/font1h,121b,121 what forces or actions can be taken in an economy to catalyze a more equal distribution of wealth-- because there are plenty of those. b,121b,121h,121
    font class="post"1b,121b,121Yes, THIS is what I was getting at. b,121b,121So what are those forces or actions?b,121b,121And by "redistribution"1I don't mean robin hood shit per se...but if wealth is finite then I don't see how you're going to improve the class standing of people on the bottom in a way that's not going to affect the holdings of the people at the top.
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