Conflating Inventions (Technological Progress) with Capital in Economics
Will Thomas and I gave a talk on Austrian Economics at Atlas Summit 2016, where I pointed out that Austrian Business Cycle Theory (ABCT) does not fit the empirical facts. ABCT claims that increasing savings/capital are the cause of economic growth, which is very similar to what classical and neo-classical economics states. I pointed out that in fact it is increasing levels of technology (inventions) that are the cause of economic growth not increases in capital. One of the questioners after the talk stated that inventions (technology) are part of capital. (Click link for the full article)
A far more accurate/correct statement is that "innovations create capital". Inventions are just innovations in technology.
Easy question, do you or your family have health insurance, yes or no?
Second question: If one of your family members suddenly got hit in a car crash or came down with cancer, how "assured" would you feel with them not having it?
Yeah, I'll take the insurance.
Back on topic? Oh yes, inventions and capital...
Anyhow, whoever invented (figured out) how to use fear to sell assurance (piece of mind) did generate a boatload of capital, enough to drive many economies for many centuries.
PS Since I'm helping to pay for GMC survival when's my Hummer going to be delivered?
Here are a list of dictators many of them having as much or more wealth that Buffet http://www.investopedia.com/financial...
http://reason.com/archives/2016/04/28...
On the other hand, There are millions of people who have'nt "invented" anything and neither are "cronies" but are extremely wealthy. Artists, rappers, financiers, real estate investors, etc. You have'nt explained how the non-inventors in our economy through some magical process are able to create wealth. According to your theory, only "inventions" create wealth. As you can plainly see, that is nonsense.
Nice to "meet" with you again.
The way I see it, you came up with the idea of a better net, invested your life time and money to procure the necessary cordage for the net, both comprising the value of invested capital, and thus enabled yourself to profit from the higher volume of sales from caught fish.
Visualizing the whole scheme ahead of time is what entrepreneurs do.
What say you?
Stay well.
Maritimus
It occurred to me that the debate about innovation versus capital primacy has a generous similarity to the debate about which comes first, the chicken or the egg.
Both technological innovation and capital are necessary for creation of wealth and economic development. Would you agree?
Every animal lives in the Malthusian Trap except for short periods after a positive genetic change. Thus humans also lived in the Malthusian Trap (edge of starvation) most of their history. If you are living on the edge of starvation there is no surplus (capital) to be stored. The only way to create an excess is to invent something. So inventions are what create the excess (capital), capital does not create inventions. Capital is inanimate and cannot create something that requires reason. Getting cause and effect right is very important in science.
As products of the split between man’s soul and body, there are two kinds of teachers of the Morality of Death: the mystics of spirit and the mystics of muscle, whom you call the spiritualists and the materialists, those who believe in consciousness without existence and those who believe in existence without consciousness. Both demand the surrender of your mind, one to their revelations, the other to their reflexes. No matter how loudly they posture in the roles of irreconcilable antagonists, their moral codes are alike, and so are their aims: in matter—the enslavement of man’s body, in spirit—the destruction of his mind.
The good, say the mystics of spirit, is God, a being whose only definition is that he is beyond man’s power to conceive—a definition that invalidates man’s consciousness and nullifies his concepts of existence. The good, say the mystics of muscle, is Society—a thing which they define as an organism that possesses no physical form, a super-being embodied in no one in particular and everyone in general except yourself. Man’s mind, say the mystics of spirit, must be subordinated to the will of God. Man’s mind, say the mystics of muscle, must be subordinated to the will of Society. Man’s standard of value, say the mystics of spirit, is the pleasure of God, whose standards are beyond man’s power of comprehension and must be accepted on faith. Man’s standard of value, say the mystics of muscle, is the pleasure of Society, whose standards are beyond man’s right of judgment and must be obeyed as a primary absolute. The purpose of man’s life, say both, is to become an abject zombie who serves a purpose he does not know, for reasons he is not to question. His reward, say the mystics of spirit, will be given to him beyond the grave. His reward, say the mystics of muscle, will be given on earth—to his great-grandchildren.
Selfishness—say both—is man’s evil. Man’s good—say both—is to give up his personal desires, to deny himself, renounce himself, surrender; man’s good is to negate the life he lives. Sacrifice—cry both—is the essence of morality, the highest virtue within man’s reach.