Stats for nerds
4recommend
10mentions
6people
2012–2023years
50% recommend40% neutral10% critical
Mentions per year
What Hacker News says
- > Or do you believe that in the long term, profit margins drop to zero?
> If capital is abundant, can companies remain profitable without there being a positive return on capital? (I.e. do those profits flow to entities other than shareholders?)
> ...are steady-state corporate profits zero?
I learned the answers to these questions from economist George Reisman. I recommend his book Capitalism, specifically chapters 16 - 17, where he explains the answers and how he arrived at them. The book is available for free in PDF format here: https://capitalism.net/CAPITALISM_Internet.pdf
In short, the net amount of profit in the economy every year is the sum of the "net investment" plus "net consumption" during that year. "Net investment" and "net consumption" are both precisely defined in the text. Net investment is related to the changes in money supply and to the difference between the marginal productivity of capital versus the current rate of profit. And net consumption is related to the consumption behaviors of capital owners and the government. There is no general tendency towards a zero rate of aggregate net profit since there is no general tendency towards aggregate net investment + net consumption being zero.
- Most of those investopedia inflation theories were debunked by George Reisman in the book "Capitalism". There's an awful lot of garbage circulating around as to what inflation is and what causes it.
The most ridiculous was Gerald Ford's WIP (Whip Inflation Now) campaign in the 70's:
https://en.wikipedia.org/wiki/Whip_inflation_now
Now, banks do create money when they make loans. But this is not inflationary as the loans are made against collateral, i.e. it is matched against value. And when the loan is repaid, the money is destroyed.
When banks make loans that have no collateral and are not paid back, it is inflationary. Guess who does that? The government! Most of what the government says about inflation is propaganda, because (like Gerald Ford) they want to blame anything and everything but government policy.
It's as much propaganda as people blaming "the speculators" for increasing housing prices.
- For a thorough understanding of free-markets and the laws of economics, Capitalism: A Treatise on Economics by George Reisman. Economic Sophisms by Frédéric Bastiat. Socialism by Ludwig von Mises.
- The Law - Frédéric Bastiat. http://bastiat.org/en/the_law.html
Capitalism - A Treatise on Economics - George Reisman. http://www.capitalism.net/Capitalism/CAPITALISM_Internet.pdf
The Works of Lysander Spooner. http://lysanderspooner.org/node/2
The Machinery of Freedom David Friedman. - http://daviddfriedman.com/The_Machinery_of_Freedom_.pdf
Democratizing Innovation - Eric Von Hippel. http://web.mit.edu/evhippel/www/democ1.htm
The Sources of Innovation - Eric Von Hippel. http://web.mit.edu/evhippel/www/sources.htm
Introduction to Information Retrieval - http://nlp.stanford.edu/IR-book/html/htmledition/irbook.html
Information Theory, Inference, and Learning Algorithms - David MacKay. http://www.inference.phy.cam.ac.uk/itprnn/book.html
Introduction to Cybernetics - William Ross Ashby. http://pespmc1.vub.ac.be/books/IntroCyb.pdf
"Man-Computer Symbiosis" and "The Computer As A Communication Device" - J.C.R. Licklider. http://memex.org/licklider.pdf
Design For A Brain - William Ross Ashby. https://archive.org/details/designforbrainor00ashb
The Writings of Douglas Engelbart. http://www.dougengelbart.org/library/library.html
and if you like maths, don't miss this great list of free maths texts by George Cain: https://people.math.gatech.edu/~cain/textbooks/onlinebooks.h...
- Two fundamental arguments of the thesis that we will not "run out" of natural resources for productive purpose have been made eloquently in:
- The Ultimate Resource by Julian Simon [1] --the human mind has limitless potential to select and pursue the use of materials; and
- Capitalism by George Reisman [2] -- the phenomenon of price responds to actual supply and demand, and prompts profit-seekers to develop and switch production accordingly.
[1] http://www.amazon.com/dp/0691003815
[2] http://www.amazon.com/dp/B0084RU67S, see Part One, Chapter 3
- > In 1973 and 1974, OPEC countries imposed a partial oil embargo in response to the 1973–4 Middle East war
George Reisman in "Capitalism" writes that the oil price shocks were due to Nixon placing price controls on oil. More evidence for this view is that when Reagan signed an Executive Order eliminating them, gas lines disappeared overnight and did not return.
