| | Ed:
I am not the Emperor of Enough, but I thought that was pretty good.
I think there is a kind of magic implied when we try to separate Mankind from the cold laws of the Universe.
I mean, sure; Mankind -- as men, as a very large set of possibilities -could- think our way to the top of every hill imaginable.
And in fact, all of the O2 molecules currently in the room you are in -could- suddenly migrate to occupy a 3mm layer next to the ceiling. After all, someone wins the lottery every day.
Or, under no influence other than chance, it is in theory possible for all of the high energy molecules in the room to segregate on the left side, and all of the low energy molecules in the room to segregate on the right side.
But if we compute the probabilities of that happening, we might have to wait for a length of time that is several orders of magnitude longer than the estimated age of the universe. And so, we don't consider it as actually being possible; such ordered arrangements need 'help'...and the rules of the universe enforce a payment that such help creates net additional disorder in the universe in order to achieve such local ordering.
So, to economies; mankind values ordered arrangements over random arrangements. Why is that? Maybe there is a deep philosophical reason, or maybe the reason is more fundamental. Because it is easy to create disorder from order; the universe will do that for us, without any assistance. But not so order; order in the universe is inevitably decreasing over time(starting from a singularity, a boundary condition of maximum order.) It requires focused efficient effort to create additional local order-- to run the universe locally uphill.
The cost of ordered arrangements? Additional disorder elsewhere in the universe. Warm from hot and cold. Gray from black and white. Purely reversible actions are few and far between and largely imagined theoreticals.
Especially with mankind in total. It is one thing to consider the potential genius of some men; it is another think to ponder the potential genius of all of mankind. There are instances of the former all the time, while the latter is as likely to occur as all of those O2 molecules aligning in that 3mm layer next to the ceiling. The dice say, never going to happen. No magic.
Capital is a kind of ordered value; its expenditure has an opportunity cost, which is both the disorder that resulted from its creation, coupled with the potential loss of additional order/value that it has the ability to imperfectly -- that is, at some realizable human efficiency to achieve -- create in the future.
We get off our stump and choose to go fishing. Even the most brilliant fisherman in the world is not guaranteed a successful outing every day. His efficiency at converting present value into future value is not guaranteed. Sometimes ROI is negative, even for the best imaginable. He must achieve that alchemy often enough to survive. He automatically has incentive to subject present value to total loss, and that is, his long term survival.
We can't stand still; the universe has arranged things such that present value deteriorates, even when standing still. So even sitting on our stump and staying out of the game does not preserve present value, much less, provide consumable value. We must manage risk and win often enough to succeed over the long term. And, that is simply to survive, much less, prevail.
As our economies get more complex, we can try to finesse this by shedding risk onto others, but we can't eliminate the universe's cold rules. And, that is exactly what our economies have become, a massive shedding of risk and an attempt to finesse incentives in order to drive economies, which really means, cajoling enough of humanity to make the effort to run uphill.
Thermodynamics does have something to say about order from disorder in the universe; the only real stretch here is, is order valued in our economies?
regards,
Fred
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The main problem for this country is: Will the United States follow the course of the economic policies adopted by almost all foreign nations, even by many of those which had been foremost in the evolution of capitalism? ... To answer such a question one must look upon the ideas about economic matters held by public opinion. The question is: Do the American voters know that the unprecedented improvement in their standard of living that the last hundred years brought was the result of a steady rise in the per-head quota of capital invested? Do they realize that every measure leading to capital decumulation jeopardizes their prosperity? ... Today only the businessmen worry about the provision of new capital for the expansion and improvement of their plants. The rest of the people are indifferent with regard to this issue, not knowing that their well-being and that of their children is at stake. What is needed is to make the importance of these problems understood by everybody. No party platform is to be considered as satisfactory that does not contain the following point: As the prosperity of the nation and the height of wage rates depend on a continual increase in the capital invested in its plants, mines and farms, it is one of the foremost tasks of good government to remove all obstacles that hinder the accumulation and investment of new capital.
