Gyroscopic Investing

doodle,

Feel free to argue the merits of a low consumption lifestyle if you want to.  I completely agree with a lot of it, but I have a wife and three kids who see the world through different eyes than me, and who am I to tell them they're wrong about what makes them feel good?

As far as what a steady state economy looks like, go to any Third World country and you can see it up close.

MediumTex wrote: Reading doodle's posts reminds me of reading a travel blog about a trip I've already taken.

It also implies doodle is in his 20's or a very, very late bloomer.  I suspect he subconsciously puts himself into adverse situations that prove harmful to his psyche.  He'll keep doing that until he learns to stop.

doodle wrote: Your system relies on duping people into buying things based on the belief that these items will bring them happiness. You even admitted to this point. What happens if the day arrives when it cant anymore?

That's a vast oversimplification of how markets work.  There are needs just as there are wants.  You're obsessing more over the wants and its persuasive marketing than the needs.

Women are the most suspectible to want-based marketing because their psyche is oriented to seeking out symbols of success/status.  You're ultimately arguing against biology here.

MachineGhost wrote: Women are the most suspectible to want-based marketing because their psyche is oriented to seeking out symbols of success/status.  You're ultimately arguing against biology here.

Oh boy! I predict another 14 pages in this thread, at least. 

l82start wrote: i think gumbys problem is that a MMR, fiat, debt based economy has to expand to work.  picturing one that doesn't have to expand to work is outside that box, and it requires abandoning some critical and possibly some central aspects of that system in order to become steady state....

Heh. It's not MY problem. I don't care one way or the other how you guys spend your money. When I talk about MR (it's not "MMR" by the way), I am just explaining the reality of THE system as it currently is set up. You don't have to like it. But that's the way it is.

MR doesn't have to "work". It's just a description of the system.

MediumTex wrote: doodle,

Feel free to argue the merits of a low consumption lifestyle if you want to.  I completely agree with a lot of it, but I have a wife and three kids who see the world through different eyes than me, and who am I to tell them they're wrong about what makes them feel good?

As far as what a steady state economy looks like, go to any Third World country and you can see it up close.

Regarding low consumption...this is red herring that you guys keep throwing back into the ring to distract this argument from proceeding in the direction I'm trying to drive at. I can't define low for crying out loud...that is an individual decision that people must make for themselves. Compared with a Jainist I'm a consuming pig. Compared to Gumby I'm apparently an ascetic. I get that each person has to find that level for themselves. But every person eventually has a point where increasing consumption does not lead to increased happiness. He can keep consuming but eventually the marginal increases in his happiness flatlines.

If people come to the realization that more stuff isnt making them happier like you have, MT, and they are happy with what they have (notice the hypothetical ifs....I'm not advocating anything so don't red herring me again!!!) you think that we will become a third world country?

In other words there are only two states possible in this world...grow or shrink to abject poverty? We can't just mellow out with 0 growth and chill out....rest on the laurels of what we have done over the last 200 years?

MachineGhost wrote:

MediumTex wrote: Reading doodle's posts reminds me of reading a travel blog about a trip I've already taken.

It also implies doodle is in his 20's or a very, very late bloomer.  I suspect he subconsciously puts himself into adverse situations that prove harmful to his psyche.  He'll keep doing that until he learns to stop.

Ad hominem attacks....nice. Well add that to the straw men and red herrings already here.

Gumby wrote:

l82start wrote: i think gumbys problem is that a MMR, fiat, debt based economy has to expand to work.  picturing one that doesn't have to expand to work is outside that box, and it requires abandoning some critical and possibly some central aspects of that system in order to become steady state....

Heh. It's not MY problem. I don't care one way or the other how you guys spend your money. When I talk about MR (it's not "MMR" by the way), I am just explaining the reality of THE system as it currently is set up. You don't have to like it. But that's the way it is.

MR doesn't have to "work". It's just a description of the system.

Your system violates the laws of nature if it can't exist in a state of non growth. I think that is something that merits questioning.

You claim that happiness will flatline after a certain "point" of consumption. Do you have any proof of this? Or is this just a hypothesis that Budduh told his monks?

The evidence from society seems to suggest that people need to keep consuming to be happy.

Gumby wrote: You claim that happiness will flatline after a certain "point" of consumption. Do you have any proof of this? Or is this just a hypothesis that Budduh told his monks?

The evidence from society seems to suggest that people need to keep consuming to be happy.

Red herring! I'm not saying that you stop consuming, I'm saying that you stop the GROWTH RATE of consumption. I still consume, I just don't consume 5 percent more than I did the previous year in some sort of exponential fashion. If population levels off (which it must eventually or humans will just continue to reproduce until they exceed the mass of the earth itself) and they reach a point where their consumption is at a steady state....then how do you have five percent economic growth every year?

Gumby wrote: You claim that happiness will flatline after a certain "point" of consumption. Do you have any proof of this? Or is this just a hypothesis that Budduh told his monks?

The evidence from society seems to suggest that people need to keep consuming to be happy.

Yes, I have evidence. The fact that Americans (the worlds biggest consumers) are not bursting off the charts in studies that look at happiness, contentment, mental well being etc. In addition to consuming the most amount of material goods of anyone on this planet, we also are the biggest consumers of anti depressants. In fact, our populations happiness is usually exceeded in studies by countires whose material well being is not nearly as high as ours. Does that evidence satisfy you? Now, can we move off the red herring moralistic aspect of this discussion? I'm not making a moral judgement, I'm stating what appears to be a fact. If you disagree with the facts that doesn't make you moral or immoral. The facts are the facts.

No. It's not a red herring. You keep hammering the point that increased consumption doesn't lead to happiness. You've probably said it about 50 times in this thread. And I'm asking you, how do you know this?

You assume that people will be happy if they follow a MMM lifestyle, but I'm not convinced that's true. Are you aware of the term "Hedonic Consumption". If not you should read up...

https://faculty-gsb.stanford.edu/khan/d ... mption.pdf

You advocate for only "utilitarian consumption" yet society seems to prefer some "hedonic consumption". Even Harry Browne advocated spending money to treat yourself periodically (i.e Hedonic Consumption)

The fact that Americans aren't bursting off the charts with happiness doesn't prove anything. Hedonic consumption is often done to improve ones happiness temporarily.

Hedonic consumption has been happening forever. It's not something new.

Gumby wrote: No. It's not a red herring. You keep hammering the point that increased consumption doesn't lead to happiness. You've probably said it about 50 times in this thread. And I'm asking you, how do you know this?

You assume that people will be happy if they follow a MMM lifestyle, but I'm not convinced that's true. Are you aware of the term "Hedonic Consumption". If not you should read up...

https://faculty-gsb.stanford.edu/khan/d ... mption.pdf

You advocate for only "utilitarian consumption" yet society seems to prefer some "hedonic consumption". Even Harry Browne advocated spending money to treat yourself periodically (i.e Hedonic Consumption)

I don't have any problem with hedonistic consumption. I went out for a beer last night with GF after all. But if next week I went out for 2 beers, followed by 4 beers, followed by 8 beers. In other words my consumption exhibited a growth pattern, then I think I would be in some trouble. Decreasing marginal Utility seems to be a pretty sound economic law. After all, if one chocolate bar makes you happy, does two make you twice as happy? Most people would say no.

Gumby wrote: The fact that Americans aren't bursting off the charts with happiness doesn't prove anything. Hedonic consumption is often done to improve ones happiness temporarily.

Hedonic consumption has been happening forever. It's not something new.

Red herring again. I'm talking GROWTH in consumption and decreasing marginal utility. If sex were the only product for sale in the economy....sex once a day would make you happy...sex twice a day might make you twice as happy....sex 24 hours a day would probably make you miserable. At some point you are tapped out on sex and cannot increase your consumption of it. Your sex economy reaches a steady state because there are only 24 hours in a day and you can't have a 25th hour of sex to grow into. Now what?

The economy does not require people consuming exponentially on a micro level. Where did you get that idea that we need to consume exponential amounts if food, drink, luxury items, etc?

Gumby wrote: The economy does not require people consuming exponentially. Where did you get that idea that we need to consume exponential amounts if food, drink, luxury items, etc?

Compounded annual growth is the definition of exponential growth. If growth is not compounded annually then we have a steady state system that looks like a wave, up and down but never exceeding the water level.

Who says that compounded annual growth has to happen? MR will still describe the economy either way. If an economy is stagnant, shrinking or growing, why do you care one way or the other?

Gumby wrote: Who says that compounded annual growth has to happen? If an economy is stagnant, shrinking or growing, why do you care one way or the other?

We are going around in circles here because you cant get past the "why do you care" thing. MT, posited that if the economy hits a steady state we become a third world country. In other words it is impossible to maintain a decent standard of living without growth. Forget the "care" part for christs sake! Im asking a freaking question related to the mechanics of the system, im not looking at emotions right now.

Easy doodle. No need to get emotional about how you're not being emotional.  Maybe you should take a meditation break and then tell us how your stagnant economy would keep everyone employed so that everyone has the opportunity to partake in a little hedonistic consumption now and then.

Gumby wrote:

l82start wrote: i think gumbys problem is that a MMR, fiat, debt based economy has to expand to work.  picturing one that doesn't have to expand to work is outside that box, and it requires abandoning some critical and possibly some central aspects of that system in order to become steady state....

Heh. It's not MY problem. I don't care one way or the other how you guys spend your money. When I talk about MR (it's not "MMR" by the way), I am just explaining the reality of THE system as it currently is set up. You don't have to like it. But that's the way it is.

MR doesn't have to "work". It's just a description of the system.

you may have misunderstood my meaning (my grammar fails me on occasion) you describe how the system "as it is" works, no problem, i agree with much of MR, worry about some of the implications of MR, and don't quite fully understand some of MR
how we spend our money is irrelevant just like how you spend yours is, this is more about a hypothetical change of values than it is about the real world or real peoples values, 

the question i think we are struggling to get at is not how the system we have works but how a system based on different values ( ERE, simple living, free time oriented) would work?, how would it mesh with a debt based system? could it mesh? and if not what would rise up to replace it? how would that replacement work? and maybe even what would the transition between the two look like?

they are not necessarily easy questions to answer,  even a world full of imaginary people with ERE lifestyles might want things like space exploration, medical breakthrough's, and other big scale projects, and careful examination might show those things to be impossible without an ever expanding economy...

Gumby, you dont want to engage the topic and therefore this cannot go any further. You want to turn this into a personal issue and your constant barrage of snide personal jibes are nothing but a strategy to distract the argument. You are immature and Im done debating with you.

Slotine, Im trying to understand your argument but i have to admit Im not grasping it right now.you mention the goal of macro economics to be price level and political stability. I agree but I dont see why that precludes having a steady state economy. We have an unemployment problem. Im asking whether instead of telling people to consume more to put people back to work, we could tell people to work less and consume the same amount. If the money supply were adjusted to allow this, we could put the unemployed back to work filling in the hours that the workers vacated to maintain production and consumption at the same level. Yes, this would require a shift in values...in other words people vacating the hours woulf have to value free time more than material goods to make it seem like a good idea, but if we cleared that hurdle could this not be a solution to the unemployment problem as well?

The tendency to think in terms of bell curves is tempting, but the actual shape of a curve often looks nothing like a bell.

When it comes to consumption, some desires may follow a marginal utility curve that looks just like a bell, but other curves may look nothing like a bell.  For example, take a consumer of football games who is only happy if his team wins the Super Bowl.  For him, his curve would look like a flatline throughout the season and then a huge spike at the very end if his team won the Super Bowl.

Human desires are funny, and the way they are satiated is also funny and hard to standardize.  I have had plenty of experiences where my pleasure would rise, then fall, then rise again, then maybe fall again, all based upon the same consumption experience.  I've had this experience buying Led Zeppelin albums, 12 packs of beer, and car repairs.  There's no bell curve to these things for me.

If I had stopped buying Led Zeppelin albums after I perceived that my marginal utility from the consumption of Led Zeppelin music was beginning to decline, I would have missed out on a lot of great music. 

What would you say to a depressed person who was contemplating suicide based on an economic analysis of the pleasure he was receiving from life?  If he showed you a bell curve demonstrating that the marginal utility he got from each day of life was declining would you tell him that suicide was a good idea, or would you tell him that things might get better and he should hang around to find out?  A marginal utility bell curve provides no hope for a return of satisfaction from a certain activity beyond a certain point, and I just don't think this reflects the way human actually work.

MT,

Getting past the marginal utility theory for a second, lets take the hypothetical scenario that ERE/MMM becomes all the rage....like bell bottoms in the 60s. People start to place a higher value on free time and less values on things that require money to buy. Is it possible for an ERE/MMM value system to still continue to provide a good and constant standard of living? KInd of like a modern dark ages....but not quite so dark. Or, if MMM becomes mainstream are we doomed?

In other words does ERE/MMM (less work, lower consumption, relaxing life) become feasible only when it is within a massive expansionary capitalist system?

doodle wrote: If people come to the realization that more stuff isnt making them happier like you have, MT, and they are happy with what they have (notice the hypothetical ifs....I'm not advocating anything so don't red herring me again!!!) you think that we will become a third world country?

In other words there are only two states possible in this world...grow or shrink to abject poverty? We can't just mellow out with 0 growth and chill out....rest on the laurels of what we have done over the last 200 years?

Maybe you are talking about an Amish-type of economy where we just lock in a certain level of technology and consumption at an arbitrary point and build a culture around maintaining those levels of technology and consumption because it is God's wish for us to do so.

That might work if you were trying to come up with a durable alternative to the current growth-based economy.

To make it work, though, you have to have a strong and expansive mechanism to stamp out the desire humans typically have for self-improvement in the form of more material possessions and status symbols.  The Amish have done this by making such displays sinful and this seems to provide a pretty good check against their human instincts.

Lots of arrangements could work to destroy the desire of humans to consumer ever-larger amounts, but I don't know how much fun it would be to live under many of these arrangements.

Kind of like the Amish, but without any arbitrary limits on science, technology and discovery. When I look at MMM and ERE it is not a top down approach, it is a bottom up change coming from a shift in conciousness or values. If many people on this forum have experienced this shift it is certainly within the realm of human attainability. We could still consume and explore and develop as a society under this arrangement...it doesnt have to be stagnant and boring but the outcomes would be to serve a different set of values. See, i dont believe that pure profit motivation is what drives most scientific advancement, but rather innate human curiosity to solve problems and improve things.