A bunch of cunts, mostly in the Australian sense. Except that one guy.

Money and wealth

Until an hour ago I thought that the creation of wealth is not a zero-sum game: for example, you and I start with raw materials ... we both make something ... more wealth now exists in the world than existed before we worked ... and therefore we're now both *WEALTHIER* -- neither of us has made the other poorer.

It has just occured to me that the use of money/currency changes that equation: because for example the amount of manufactured goods may increase, but the (national or international) money supply stays the same.

Specifically, I may create goods ... but unless I can convert those goods to money I am not getting any *RICHER* ... and if I do sell these goods, then someone else (my customer, and/or the other, previous supplier, my competitor, that my customer used to buy from) is now poorer.

I'm not sure what I'm saying ... only that if I accept money as the measure of my wealth, then and therefore the acquisition of wealth *becomes* a zero sum game!! Because the one thing I can't "make" is money, except by "taking" money from someone else. Hmm!
Permalink Christopher Wells 
March 25th, 2005
I think that is basically how modern economies work.

However; central banks can make extra money by printing more of it. Essentially, if there is not enough money in circulation to buy all the new goods that get made, the treasury can increase the money supply to balance things out.
Permalink Ian Boys 
March 25th, 2005
Actually since we are no longer on the Gold Standard, banks can literally print as much money as they want.

Obviously if they print too much, the value goes to zero and they're screwed.


And bartering is still alive and well. I have been bartering graphic design for web development for quite a while now. A simple exchange of skills/effort makes both sides wealthier.
Permalink KC 
March 25th, 2005
The rate of money is controlled by the Fed. It's tied to the interest rate & the % of money the banks are actually required to have on hand vs. the amount they loan out.
Permalink MarkTAW 
March 25th, 2005
Suppose we magic a million new cars into existence tomorrow.  Nobody has any more money than they did--but what do you suppose is going to happen to the price of cars?

You were right the first time.
Permalink Matt Conrad 
March 25th, 2005
You guys need to go read a basic macro-economics textbook, then come back to this thread.
Permalink Calgarian 
March 25th, 2005
"Suppose we magic a million new cars into existence tomorrow.  Nobody has any more money than they did--but what do you suppose is going to happen to the price of cars?"

The price of cars will drop through the floor. But this will be deflationary, so the government will increase the money supply to stop it happening.

Note: "government" might mean central banks acting in accordance with statutes.
Permalink Ian Boys 
March 25th, 2005
Christopher, I think your analysis is flawed.

First, I don't think it's reasonable to assume that money is the sole measure of wealth. If you have other assets -- real estate, equipment, livestock, whatever -- those assets are certainly worth something. Their value may change due to market conditions, but so may the value of cash.

Second, when you and someone else engage in a transaction, there should be a net gain overall. Each of you gives up something in order to gain something that you value more. If that weren't the case, why would I bother trading with you?

Third, the money supply should not be nearly as fixed as you imply. For example, if you walk into a bank and get a loan, the bank essentially creates money on the spot. They have to keep some reserve against the loan -- but they can, for instance, put $100,000 in your account while setting aside only $10,000 (or whatever the required percentage is) in reserve funds. Hence they've effectively conjured $90,000 out of thin air.

Economies can certainly exist without formal currency. Currency is just preferable to barter for a whole lot of different reasons -- it's reliable, standardized, fungible, transportable, divisible, and non-perishable, etc.
Permalink John C. 
March 26th, 2005
"...they can, for instance, put $100,000 in your account while setting aside only $10,000 (or whatever the required percentage is) in reserve funds. Hence they've effectively conjured $90,000 out of thin air."

What? If the (non-reserve) bank lends you $100,000, they must actually have the $100,000 to lend you in the first place. They don't and can't "create" it. When the loan transaction completes, the bank is down $100,000 and you are up $100,000. Keeping $10,000 in reserve just means the bank can't lend every penny they have. They can only lend 90% of it (say).

(The money that banks lend is money deposited with them by others, or borrowed wholesale. If nobody deposited money with the bank, and if the banks didn't borrow money on the open markets, they couldn't lend any money.)
Permalink Ian Boys 
March 26th, 2005
But the money they loan out is money that's been loaned to them by you in the form of savings accounts. If everyone took their money out of the bank... Well, they can't because the bank's already loaned it out.

The money supply is - if I remember my macroeconomics correctly - larger than the amount of money in circulation. I believe by something typically around 3-4 times, as I said, controlled by the FED and created by the banks. Sort of like how you can own a television, car, house, and furniture that you haven't yet paid for.

Banks are really just deal brokers. John has money, Mary wants to borrow some. I'll borrow money from John at 3% interest and loan it to Mary at 17% interest. We just hope that John doesn't ask for that money back before Mary returns it. Haven't any of you seen It's a Wonderful Life?

Back to the OP's question: What is wealth? I would define it by what we can buy with it. 1. Things, 2. Time, 3. Influence.

If a craftsman builds a desk, or a student puts together some wood and cinder blocks to make a desk. The value of that desk can be defined by how much money they saved by building it - for the craftsman hundreds of dollars, for the student, dozens.

The accumulation of money means the accumulation of time. Eventually everyone retires and lives off of their assets and investments. That's time bought with money.

And finally, influence. It takes money to run a political campaign, or lobby Congress. It takes money to dress nicely and go to the right schools. You can attain status without wealth and v.v., but the two are highly correlated.
Permalink MarkTAW 
March 26th, 2005
Heh! The bank can lend $100,000 to A. The bank still "has" the $100,000 because A owes them the money plus interest. Since the bank still "has" the $100,000, it can lend $100,000 to B as well. Now two people owe the bank $100,000, even though it only started with one lot of $100,000. Has the bank just doubled its assets? What happens if both A and B repay the loan? Hmmm...in order for the bank to lend $100,000 to B, it has to borrow $100,000 from C using the loan to A as security. After both A and B repay their loans, the bank can pay back C, thus being left with only the $100,000 it started with, plus interest received and paid.

There has to be a law of conservation of money. Otherwise everyone would start private banks and get rich.
Permalink Ian Boys 
March 26th, 2005
> You were right the first time.

Yes but I think I was right the second time, too: if we were to "magic" cars, this would put the existing auto-making industries (workers and investors) out of business: in fact, we magically make their income and their capital disappear!

Perhaps programmers have, historically, worked quite a lot of exactly this kind of magic.

> I don't think it's reasonable to assume that money is the sole measure of wealth.

Yes: something like that, but I don't know what, might be the only escape from this bind ...

> If you have other assets -- real estate, equipment, livestock, whatever ...

I don't: I only have money. Maybe that's a mistake.

> Second, when you and someone else engage in a transaction, there should be a net gain overall.

True, there should a gain in wealth or advantage: but their wouldn't be a net gain in money.

Heinlein joked about that in _The Moon Is A Harsh Mistress_ when he wrote, "you could put two chinese coolies on the surface of the moon and they'd get rich by selling rocks to each other".

> Hence they've effectively conjured $90,000 out of thin air.

I *was* assuming that any increase in the money supply is inflationary, i.e. devaluing people's savings; perhaps I was wrong: it isn't inflationary, if the amount of wealth also increases.

But anyway: don't they simply counter-balance that $100K you mentioned, which they "created", by adding "minus $100K" (i.e. a debt) to my account? So, again, no net change in the amount of money?

> Currency is just preferable to barter for a whole lot of different reasons

Arguably so; but I'm watching globalization happen: seeing it shake up national economies and currencies, sometimes with a nation's "savings" wiped out when its currency hyper-inflates, or its means of production disappearing like magic when international capital moves off-shore, or speculation on the price of real-estate (buyers squeezed out of markets for essential goods and services, and/or investors subsequently losing their shirts during bursting bubbles); and trying to make sense of that.

It seems to me that wealth should be tangible, real, somehow, otherwise it isn't real wealth; and if a situation isn't zero-sum, then it's win-win and rational people cooperate; whereas if it *is* zero-sum then it's competitive and win-lose and treacherous ... and there's something about *money* that makes it all seem more slippery, somehow. People may say that slippery is good, that it makes for a "frictionless and efficient" market; but it isn't nice IMO to see inflation and your currency devalue, if your wealth (your savings) is in money ... and, so far as I know, money is one of the few commodities you can use to buy things with, so it's difficult to do without it. Clearly though, I ought to begin to appreciate that money is not the whole story. Hmm!
Permalink Christopher Wells 
March 26th, 2005
"Currency is just preferable to barter for a whole lot of different reasons -- it's reliable, standardized, fungible, transportable, divisible, and non-perishable, etc."

It also means some people can get rich off the backs of others.
Permalink MarkTAW 
March 26th, 2005
I should explaining how "a bank loans out $100,000, but must keep $10,000" works.

Suppose there was no such requirement. Suppose a bank has no assets, but the bank lends out a billion dollars. The bank now has one billions dollars in liabilities (the billion dollars it just loaned out), and the bank has one billion dollars in assets (the billion dollars people owe the bank).

If nobody ever defaulted on their loans, and interest rates never changed, this would work out perfectly for the bank. However, if one of those loans defaults, the bank becomes insolvent.

If you have a "90% reserve requirement", in order to loan out a billion dollars, you need a hundred million in assets. Now, after making the loans, the bank hse a billion dollars in liabilities, and 1.1 billion dollars in assets.

The bank doesn't become insolvent if someone defaults on a loan, or if interest rates change. However, if the ratio falls low enough, government regulators should demand the bank increase its assets.

A bank is also at risk if interest rates change, because say it lends out a 30 year mortgage, but borrows at the short-term rate.
Permalink Anonymous 
March 26th, 2005
Yes, banks are required by law to have a certain asset:debt ratio, and it's that ratio more than anything else that determines the amount of money in circulation. Raising the ratio lowers the amount of money in circulation, lowering it raises the amount of money in circulation.

We tend to think of money as paper that gets printed in Philadelphia or Delaware or Washington, but it's not. We could print 10 times the money we do now, but all that would do is devalue the dollar 10 times. Everyone would have the same proportional wealth (give or take), we would just need fatter wallets to accomodate all the extra bills.

Money is a product of the GDP, interest rates (interest rates define the cost of money - i.e. money is selling at 3% interest), and the asset:debt ratio banks are required to have set forth by the Federal Reserve bank.

All this information is subject to 10 years of killing brain cells & the competence of my college Maro Economics professor.
Permalink MarkTAW 
March 26th, 2005
> Yes, banks are required by law to ...
> All this information is subject to ...

And it's quite theoretical: I'm not trying to run a bank, am I, nor a country? Or perhaps, if I have money, then I should be trying to run a bank. Hmm.
Permalink Christopher Wells 
March 26th, 2005
Well... your OP is also theoretical. Besides, I answered it when I said "Back to the OP's question: What is wealth?"
Permalink MarkTAW 
March 26th, 2005
I'm sorry to contradict you, Mark, but I didn't ask a question: I tried to describe a problem.

Your answer to "what is wealth?" seemed all-inclusive and wide-ranging (you only omitted "4. Labor" ... wealth is labor, e.g. the "labor theory of value"; wealth buys labour, labour produces wealth).

The prescriptive aspects of your answer were "Make things yourself if you want to save money, save [aka invest] for retirement, and dress nicely if you want to influence politics".
Permalink Christopher Wells 
March 26th, 2005
Well, I did subvert your original topic, but I do feel like I've explored it satisfactorily.

Money is a method for storing value. Value only exists in terms of what it can buy - objects, time and influence. Remove the value, and the money has no meaning. Value can be created by creating objects other people desire. Money can be created. Money is not a zero sum game.
Permalink MarkTAW 
March 26th, 2005
From my intro Econ text by Joseph Stiglitz:

Money is what it does...

As a medium of exchange
As a store of value
As a unit of account (measure relative values)

M1,M2,M3, Credit...
Permalink Rick Tsang 
March 26th, 2005
"the (national or international) money supply stays the same."

Not true. Most countries may not actually constantly print more money (although everyone does occasionally, to replace the worn-out cash), but the Central Banks have a supply of cash that they can release into the bloodstream accordingly. In fact, since most transactions these days do not involve cash at all, governments can (through loans, subsidies etc) literally generate money out of nowhere, the only downside being a budget deficit that can be left for later generations to take care of; or just downplayed.

"Suppose we magic a million new cars into existence tomorrow."

The production cost of the cars will be near-zero, so the dealers will not have an incentive to get their investment back, and the cars can sit on their lots till the end of time, waiting for a moron to pay MSRP. With a bit of consensus, the prices of cars will not go anywhere.

"If the (non-reserve) bank lends you $100,000, they must actually have the $100,000 to lend you in the first place"

Here's the thing. If the bank loans you $100,000, depositing it into your account, you will probably not withdraw it in cash. In fact you probably won't be able to. But what you will do is go to the Porsche dealership and tell them that the bank will deposit $100,000 into the dealership's account once you get the keys to your Cayenne. The dealership's account is probably in the same bank. So now the bank owes the dealership $100,000. The dealership pays Porsche of America. The bank now owes $80,000 to PoA and $20,000 to the dealership. Will PoA transfer the money to Stuttgart at the end of the quarter? No point - it'll just mark on its books that Porsche Cars GmbH is $80,000 richer. The $80,000 will be transferred to a Pittsburg company's account in the same bank to pay for the steel that goes into making new Porsches, and the $20,000 the dealership makes goes to the salaries of the workers, in the same bank, who use the money to pay off their mortgages and Boxters, loans taken out of the same bank.

The moral of that story is: The bank still has the $100,000 in its accounts, you owe it $120,000 including interest, and it's made more money in transaction charges than it will be paying to the account holders - since none of them will keep the $100,000 in their account long enough to earn the 3% interest.

"Perhaps programmers have, historically, worked quite a lot of exactly this kind of magic."

Programmers convert groceries, utility bills and video card upgrades into software.
Permalink Flasher T 
March 26th, 2005
If you produce something in less time than it takes to consume it, you have created wealth. An economy creates more wealth by allowing people to specialize. If people do what they are best at, more goods can be created overall. The wealth of the economy as a whole grows as a consequence. Automation allows for an even higher rate of productivity, which again increases the total wealth.

Money is not what allows people to grow rich at the expense of others - trade is what does that. Even in a pure barter economy, you will have people whose sole function is to trade. They themselves do not produce anything, but because they can move goods from surplus to deficiency, they can extract wealth from the transfer. An employer is thus the first point of trade from employee to customer. (A medieval landowner having serfs work the land is another example of this - they are creating the wealth, but because he owns the land they work, he takes what they created, extracts a portion for himself, and transfers the rest.)

This may sound like Marxism - that labor is the source of all wealth - but Marxism neglects the important factor of technology (automation) that I mentioned above. Adding more people to an economic system will increase its wealth somewhat linearly (probably more than that due to network effects caused by specialization and trading), but technology acts as a multiplier. I do not believe Marxism takes that into account. It is difficult to calculate the true value of a technological advance, but the idea of licensing it and collecting a royalty is as close as I can think of for allowing an equitable collection of revenue from a technological advance.

Just my $.02.
Permalink Aaron F Stanton 
March 26th, 2005
It's all based on the perception of value.

If you go into a restuarant and look at the menu, you see various items with various prices. If you're a vegetarian, the hamburger has zero value to you. If you're really craving a hamburger, they might be able to - but are unlikely to - charge you more. If you're totally ambivalent, you could look at the price and say "nah, I don't want to pay that much".

The restaurant sees the value as one thing and -depending on your preferences - you see it as something also.
Permalink KC 
March 26th, 2005
Yes - I forgot to include that. Sorry.

When producing things, they have to be things that people actually want and/or need. You can use persuasive advertising to make them want it, but if it's something nobody will want, you;ve wasted your time in making it.
Permalink Aaron F Stanton 
March 26th, 2005
It is cool that you are trying to reason this stuff out for yourself. There are a lot of fallacies you're going to stumble into along the way, but that's not necessarily bad, as long as you don't establish permanent residence there.

Alternatively, you might enjoy Henry Hazlitt's _Economics In One Lesson_. It's short, clear, well written, and thought provoking. Highly recommended.

Good luck.
Permalink Matt Conrad 
March 26th, 2005
I don't object to people pointing out fallacies I may have fallen into. Thanks for the pointer, I'll check it out.
Permalink Aaron F Stanton 
March 26th, 2005
Just added the 50th anniversary edition (seemed the most recent) to my Amazon wish list. Maybe I'll get around to buying it someday.

Thanks again.
Permalink Aaron F Stanton 
March 26th, 2005
Heh. I was actually responding to the OP. But I'd recommend the book to anybody curious about basic economics.

You can probably find it at the library; it's been in print for a while.
Permalink Matt Conrad 
March 26th, 2005
Oh...thought you were commenting on my very basic economic theory. No problem.
Permalink Aaron F Stanton 
March 26th, 2005
No, I wasn't. But rereading your posts, you are mistaken when you imply that middlemen are making money "at the expense of others". Getting goods from a place where they are less useful to a place where they are more useful is a form of productive activity. It would not be a benefit for either Florida or for the rest of the country if all the oranges in the US stayed right where they were grown.
Permalink Matt Conrad 
March 26th, 2005
I think economics is a matter of opinion. It's a case of trying to figure out how people will behave when given certain stimuli, needs and desires. It's not a very concrete thing. Unlike science, there is no "correct" and "false" in black and white terms, there are only likelyhoods and probabilities. It's related to politics and culture too, since populations can be induced to behave in different ways according to the norms of the day and the country they live in.
Permalink Ian Boys 
March 26th, 2005
> Hazlitt's _Economics In One Lesson_

One of the reviews of that book on Google suggests that the book is [merely] a critique of government policies (specifically, of government interventions).

The man who became my boss, when he left the army and wanted to become an entrepreneur, went to university hoping it would teach him something relevent: he studied "economics", and was pretty disappointed.
Permalink Christopher Wells 
March 26th, 2005
The only reason I state that a middleman makes money "at the expense of others" is that if it were possible for someone to sell directly to the consumer, the creator of the product could net more than they would have if the middleman were involved.

There are several cases where the sale would not have taken place at all had the middleman not been there, in which case all parties benefit by having a middleman.

(See the discussion muppet and I had at http://discuss.joelonsoftware.com/default.asp?off.9.97736.67 for some more on this.)

I think it can be argued that all cases of "getting rich on the backs of others" can be termed special cases of middlemen getting involved - when you consider that an employer is really nothing but a middleman between the employee and the consumer.
Permalink Aaron F Stanton 
March 26th, 2005
The Hazlitt book is a discussion of economic fallacies, including the ideas needed to understand why they are fallacies. Yes, a lot of the book discusses common economic errors used to argue for this or that government intervention. But the focus is on explaining *why* an idea is an error in a way that the layperson can understand.

In particular, the book repeatedly emphasises the distinction between money and wealth, which is where this thread started. I can't speak to the case of your boss, but given your original post, I think you would find it interesting and useful.
Permalink Matt Conrad 
March 26th, 2005
The technical term for the bank being required to keep a percentage of loans in cash is "fractional reserves". The percentage is set by the Board of Governors of the Federal Reserve (Alan G. & friends).

The Fed got created because of a series of bank runs in 1914. The Fed issues all currency, set the fractional reserve requirements, regulate banks, conducts monetary policy (set interest rates, etc) and act as the lender of last resort.

If a bank has significant withdrawals (above their reserve limit), they are able to borrow from The Fed at a rate a little above the discount rate. Since this costs the bank money, it usually results in the people at the bank who were responsible for planning their reserves getting fired or demoted.

Otherwise, it's good to be the bank. You make your money on the spread between the lending and savings interest rates, plus the overnight investing that you do on deposits. The catch is you need several tens-of-millions of dollars to open one. Even with fractional reserves, when the first customer wants an auto loan, you must have the money to lend.
Permalink example 
March 26th, 2005
Money measures relative 'market values'.
Permalink Rick Tsang 
March 26th, 2005
Aaron, your model of exploitation seems to leave out conquerors, slaveholders, and just plain thieves. :)

When people say things like "the creator would make more money if they sold direct to the consumer", my instant reaction is to think "why don't they then"? Typically, it's because they benefit more by using a middleman. You seemed to understand this in your discussion with muppet.

I don't think the argument changes much if you're talking about employers, either. At least in the US, you're free to start up your own business any time you want. (As I see you know.) Most people still choose to take a job instead.
Permalink Matt Conrad 
March 26th, 2005
> In particular, the book repeatedly emphasises the distinction between money and wealth, which is where this thread started.

I was especially interested in the distinction between win-win and zero-sum.

> Most people still choose to take a job instead.

Right.

Now, employers and employees work together, to make product, to bring in revenue, which they then split between them. By cooperating, they increase the revenue available for splitting; but at splitting time it still seems like a zero-sum: the higher the employees' salaries the less profit for the investors, and vice versa.

I'm finding that the concerns and trains of thought that prompted my OP may be more satisfied by reading about cooperatives such as "Mondragon": http://www.sfworlds.com/linkworld/mondragon.html
Permalink Christopher Wells 
March 26th, 2005
I think it is quite simple. Money supply could be increased or decreased to match the GDP growth.
Permalink Rick Tsang 
March 26th, 2005
Money supply isn't a single valued variable, there are many different kinds of money.

Reserves, and M0-M3

http://www.business.uiuc.edu/seppala/econ563/lecture3.pdf is a reasonable set of notes.

However, in the case of M0, the amount of currency held by the public, this in the case of the US $ is a vague assessment as this more actual currency outside the US than inside, even so far as the current note designs. Countries where the US $ is treated as a second or preferred currency even maintain reserves of it in much the same way as their own currency.

The effect of this leakage of M0 into essentially M3 is unknown in general. In so far as it buys native goods and remains circulating within that external economy its effect on the US money supply is historical only. If its used to buy American goods and that currency winds up back in the US economy, even if via subsidiaries, then it theoretcally balances the money supply equation, however since it left the US local economy further M0 notes had been produced and so the net effect is actually inflation.
Permalink Simon Lucy 
March 27th, 2005
Sunday syntax. there is more, not this is more.
Permalink Simon Lucy 
March 27th, 2005
Employees negotiate what they're going to get paid before they start work, not after. If either side thinks the deal isn't a win for them, it doesn't go through.

Nothing wrong with liking worker coops, but the fact that there aren't more of them suggests there's a downside.
Permalink Matt Conrad 
March 27th, 2005
There's an increasing number of them. Democratic workplaces, like Ricardo Semler's, are gaining interest. I suspect the internet has something to do with it.
http://www.inc.com/articles/2004/03/7dayweekend.html

And it's against our culture, where business is a uniquely non-democratic thing. If you're a professional like a software developer, you may negotiate your wages; we're maybe 20% of the population. Most people probably can't.
Permalink Tayssir John Gabbour 
March 27th, 2005
That's why you have union.
Permalink Rick Tsang 
March 27th, 2005
Good God.

I don't want my business run as a democracy.

My name is on it and I go to jail/get fined if bad things happen, so I'll make the decisions thank you.
Permalink KC 
March 28th, 2005
The whole point of corporation is to get away with murder.

Captital without labour is useless. So is labour.
Permalink Rick Tsang 
March 28th, 2005
Semler's workplace doesn't meet his own ultimate ideal of democracy. There are gradations of democracy, which ultimately is about the notion that people should participate in decisions which affect them.
http://www.cioinsight.com/article2/0,1397,1569009,00.asp
http://www.bbc.co.uk/worldservice/learningenglish/work/handy/semler.shtml

You'll see these principles popping up spontaneously, perhaps in places like Google or even Microsoft.

And of course, Semler does occasionally mention businessmen who have no intention to use these principles, which is to be expected.
Permalink Tayssir John Gabbour 
March 29th, 2005
> the one thing I can't "make" is money

Of course you can. You might get sent down for it though.
Permalink  
March 29th, 2005
"It has just occured to me that the use of money/currency changes that equation: because for example the amount of manufactured goods may increase, but the (national or international) money supply stays the same."

I don't know about other economic schools of thought, but Henry George explains that money is not wealth. Wealth is things and stuff that you actually have.

Money is a promissory note representing an amount owed to you by someone else. That's why it reads "I promise to pay the bearer on demand the sum of..." If a population has lots of money, that merely represents the amount that people owe each other in that population.

It is argued that the British are richer because of "housing wealth" reaching a monetary value of £BIGNUM. Er, no, the wealth is the housing itself, and £BIGNUM is the amount the British owe to each other for the use of that housing.
Permalink Fernanda Stickpot 
March 31st, 2005
Yea, Fernanda, but if you sell your house off and then bugger off abroad you can buy something better and cheaper and live off the capital gains on the house you sold; you might even make enough for it to be worthwhile paying capital gains on the sale.
Permalink Stephen Jones 
March 31st, 2005
"Yea, Fernanda, but if you sell your house off and then bugger off abroad you can buy something better and cheaper and live off the capital gains on the house you sold; you might even make enough for it to be worthwhile paying capital gains on the sale."

That doesn't change the fact that the house itself is the wealth. When you sell the house, then it becomes capital according to Henry George's definition: wealth in the process of exchange.

The idea that the population of Britain becomes "wealthier" because, although the number of houses remains the same, the amount we owe each other for those houses has increased, is still wrong AFAIK.
Permalink Fernanda Stickpot 
April 1st, 2005

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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