Governments create money when they spend. Commercial banks create money when they lend. Both processes happen every working day. If creating money automatically caused inflation, modern economies would be permanently experiencing rapidly rising prices. They aren’t.
But, but……the argument is about “how much” money is being created.
Governments create money when they spend. Commercial banks create money when they lend.
And there lies all your problems.
Once again he’s trying to justify spending infinity money. The scenery changes daily but the play is always the same.
Is the conclusion that the fat man should be able to print money too?
If eating makes people fat then everyone would be fat. They aren’t
lol
Every modern economy has been experiencing constant inflation ever since they started printing money. This, despite the fact that progress in most areas of life should have lowered the cost of living.
Trying to get the word “rapidly” to do an awful lot of work here.
But that would mean the benefit of increases in productivity would accrue to the consumers.
We can’t have that now, can we?
I have often pointed out that the productivity increases that Big Business has created have been largely stolen by Big Government in the form of extra taxation and spending. Thus BB has enabled BG. You couldn’t have BG if business was smaller and more human scale.
To my way of thinking you can have Small Business and Small Government, and BB and BG, but you can never have BB and SG. They are fundamentally incompatible. Either the BB comes to dominate the SG, causing a political backlash that results in the BB being broken up by law (as happened in the US over Standard oil etc) or (far more likely) the SG realises there’s loads of extra profit to be extracted and spent, so just ramps itself up into a BG in relatively short order.
Either way the BB/SG relationship is fundamentally unstable, whereas the BB/BG one is mutually reinforcing. BB loves new regulations and taxes as it prevents new competition, BG loves new regulations and taxes as it gives them more power. So all we get is ever bigger businesses, ever bigger government and ever more regulations and taxes.
The only way out of it would be to destroy BB and let small ones replace them. This would destroy BG at the same time, because its tax base would also be destroyed. Whether this is possible outside of a violent revolution however is open to considerable conjecture.
But how would a small carmaker, or a small cola producer, or thousands of small cheese producers, make products at a price most people could tolerate?
Economies of scale are real.
Would farmers make more or less if there were no Tesco?
I am constantly amazed at the fact that it is more expensive to buy stuff in an actual farm’s literal shop than it is to but the same stuff in supermarket.
This makes no obvious sense, even if you factor in that people are prepared to pay more to a local shop for whatever reason, but it does seem to be constantly true.
“But how would a small carmaker, or a small cola producer, or thousands of small cheese producers, make products at a price most people could tolerate?”
It probably could compete, if there weren’t the myriad of regulations that only BB can afford to navigate.
“I am constantly amazed at the fact that it is more expensive to buy stuff in an actual farm’s literal shop than it is to but the same stuff in supermarket.”
If the farm shop didn’t have to getting planning permission at vast expense, pay business rates, pay minimum wages, pay VAT, fund staff pensions, employ people who disappear for months because they are ‘sick’ and abide by an encyclopaedic list of regulations, maybe its produce might be cheaper than Tescos. Or at least competitive.
Hence my point. Small business probably could approach Tesco level prices if left unregulated and untaxed, but that would leave no surplus for the State to expropriate for its own ends. Tesco can sell stuff at the current prices AND fund the State’s bottomless desire for cash and regulation. The fact the productivity surplus is there means the State WILL expropriate it. We can never have the even cheaper prices that unregulated and untaxed BB could provide to us, because the State cannot resist dipping its hand into the till. The only way to stop them is for the till to be empty, ie there’s no productivity surplus to expropriate.
You’re Tesco/small shop scenario seems unlikely. The big supermarkets benefit strongly from economy of scale. But economy of scale is also a benefit in taxation. With reduced taxation small shops could be more competitive. That could pass the point where the cost to the customer balance changes. Shopping locally cheaper in cheaper in time/money. If small shops get more customers, then their economy of scale changes & thus their pricing. Further moving the balance.
However your the State’s bottomless desire for cash and regulation etc is spot on. The greed of government is infinite.
…you can have Small Business and Small Government, and BB and BG, but you can never have BB and SG.
Depends on how big BG is. There have been plenty of BGs presiding over SB economies – often with any BBs nationalised.
Profound. Almost Nobel-y profound.
My own, similar, bugbear is universal suffrage. US being the thing that motors the big government/big business axis. (in my view).
I think the US comes before the BB/BG axis.
Thoughts?
I would say not necessarily a pre-requisite, but does enable it to be self-sustaining. BG taxes BB to buy votes to retain control.
But the issue of “how much” demands of you that you can count, if only on your fingers.
He’s completely unhinged. As per usual, no matter which school of economics you actually subscribe to, he selectively cherry-picks the theory to paint an absurdly idealistic picture.
He conveniently skips over the uncomfortable reality of capacity constraints, tax drains, and inflation control, stripping away all nuance just to push his favourite agenda: total state control over the economy, with himself sitting comfortably at the wheel. Total lunacy.
Governments create money when they spend. Commercial banks create money when they lend. Both processes happen every working day.
Pari pass money is destroyed when governments tax, and when banks get their loans paid back.
Or have I missed something?
The excellent Phil Janes has it summed up:
He’s completely unhinged. As per usual, no matter which school of economics you actually subscribe to, he selectively cherry-picks the theory to paint an absurdly idealistic picture.
He conveniently skips over the uncomfortable reality of capacity constraints, tax drains, and inflation control, stripping away all nuance just to push his favourite agenda: total state control over the economy, with himself sitting comfortably at the wheel. Total lunacy
I know I normally cut and paste the full horror but its such a poor entry, even by his standards, that I genuinely won’t insult the audience here. What I will say is if I had submitted that as a GCSE student I would expect to be given at best a ‘D’ – for someone who proclaims himself as some kind of economic authority its near comical.But in fairness most MMT adherents are comedians really.
Looks like he’s fallen out with Guardian now. I wonder if they have refused him a column.
Sam Jones
The weirdest thing I have seen is his series ‘My view on ………….’
Besides triggering memories of Roger Daltrey lyrics , his sources are nearly all his own articles, which in my long ago time in academic circles was strictly verboten.
I think an air of desperation and palpable frustration that his economic situation requires this level of grift in his seventies permeate every post.
You are correct there is a lot of cutting and pasting on his site (My view on, Debate Ammunition, Glossary entry etc). I wonder if his sons are doing this (perhaps with help from AI) to justify their ’employment’.
What matters is who creates the value the tokens are exchanged for. The token-creation should not be in the hands of profligate people who intend to swap the tokens for value without ever creating value. They are not creating money, they are taking on debt. Just as I can take on debt with my credit card to buy something of value and ppay the debt with future income. But I can’t do that indefinitely, it will catch up with me and I’ll lose the card and still have to repay the debt or go bankrupt.
I beg to differ. What matters is consumers. If productivity rises, that creates a surplus. So the bargaining power is with the consumer. Producers have to compete to sell.
Y
The current set-up benefits the wealthy because wealth is in assets. Imaginary money exchangeable for real money by selling. Wealth is then taxed, so the money ends up with those doing the taxing & their beneficiaries.
“Governments create money when they spend. “
Do they? If a government taxes £1 and spends £1, has it created any money? My local town/parish council taxes me a certain amount and spends it on stuff locally, has it created any money?
I’d say it depends on what value lies behind the £1. Taxes by definition are real money exchangeable for goods & services but what has council created with it? Is it a producer or not.?
“By definition” – but what if there are no goods and services …
See Golgafrincham “B” Ark
Tax money has to be paid in money you can buy goods & services with. HMRC generally won’t accept share certs, used cars or holidays in Skegness.
Since the value of money is created in commerce there must be matching value in the economy to exchange for it.
That’s how it should work. The big fly in the ointment is government printing the tokens of value used for money. Big nasty fly.
Regarding Ark B. If no one wants what they’re selling they don’t sell any. Their problem. Until your government turned the UK into Ark B
Sorry, but tax money can’t buy goods and services if there is no-one providing goods and services. Bureaucrats sitting in offices get paid but produce nothing.
Oh, for Pete’s sake!
If the supply of money increases faster than the increase in the production of goods and services, then prices will tend to increase [e.g.16th century Spain (which also IIRC saw a change in the relative value of silver to gold), Russia, Weimar, Zimbabwe Wilson 1974-9], but if production increases faster than the rate of increase in money, prices will fall – as happened after most wars until Atlee’s 1945-51 government. Look at 1816-, 1919-
They can create money to spend. But just spending money by the government does not create it. Unless he is saying they just shred the tax money taken in?
Shred tax income and then print money to spend rather than recycle? Not very ‘sustainable’;)
And the government does create inflation – deliberately. In my lifetime I’ve seen a can of soda from a vending machine go from 15 cents to over a dollar. The idea that economies don’t experience constant inflation is ridiculous. They *deliberately engineer* a certain amount of baseline inflation.
Tim’s said creating money is necessary as an economy expands. I don’t see it, personally, but who’s to argue with the experts?
A restaurant that does 100 covers at lunch when previously it did 50 needs more plates. An xpansion of the money supply along with an expansion of GDP seems reasonable. BTW, not my idea, Milton Friedman.
Why not just break up the existing money supply into more and more granular, smaller pieces?
A la Bitcoin
Yes.
That’s a curios answer. The number of diners is limited. If the restaurant is selling 50 more meals then the total of other restaurants must be selling 50 less. Productivity unchanged. If by “plates” you mean the china, in the restaurant business china is a consumable. It gets broken. The flow of replacements will cover the discrepancy. The same amount of china is being produced across all restaurants.
It’s not an excuse for increasing the money supply. Try again without the appeal to authority 😛
The number of total diners has increased though. Everyone is selling more lunches.
But the number of people eating can’t have changed, can it? There’s still no suggestion there’s been a change in total productivity. Remember, Tim’s trying to justify an increase in the money supply. His example doesn’t.
The more they protest their knowledge of economics, the quicker you should count your money.
I think Tim was trying to give a simplified version of the PQ = VM identity: the average price level times the quantity of goods traded in a period equals the velocity of trade during the period times the money supply.
If you trade more stuff, or trade it more often, you need more money to lubricate the trades.
Bitcoin is a good example. By design, the money supply only increases slowly. The result is that what used to be the price of a pizza is now worth millions, because in the day when only a handful wanted Bitcoins to trade with, supply was adequate, but with lots of people partaking now, there’s a scarcity of money that results in the price of Bitcoins being hugely inflated.
You can consider money to be just another commodity being bartered for other goods, and for money itself to have a price determined by supply and demand. This is a useful way of looking at it when considering currency exchanges: considering the price of pounds Sterling measured in US dollars, for example. But it also applies to the money supply within a country.
Inflation isn’t about the money supply M, it’s about the average price level P, and the requirement to have the money supply track the demand for it is distinct from the baked in target of a few percent for inflation. The purpose of that is to keep people buying stuff, and keep the economy moving. If you get deflation and dropping prices, people stop buying stuff and stop investing in businesses and start hoarding money, and everyone loses their jobs.
It’s mostly not the government that creates money – it’s mostly the borrowers. When you take out a mortgage, you turn the contract you sign into money (a promise to pay value at a later date). Loans, promises, contracts, they’re all money, and *we* create them when we need them. If more people take out mortgages, because of the increase in population or because more people own their own homes these days or because lots more people live alone rather than in extended families, that puts more money into the economy. If everyone stops taking out mortgages and loans and instead concentrates on paying them off early, the money supply drops. Supply and demand should naturally keep them in balance. However, governments like to keep things more stable and predictable than that, so they buy and sell money too to keep the price of goods fairly stable and keep the economy moving smoothly.
I suspect things would go better if they didn’t keep mucking about with it for political reasons. The free market usually knows best – it is trying to resist what the markets are telling you that causes trouble. But it’s not the worst thing they do, so I don’t get very excited about it.
I think it’s wrong to think of money as a commodity. Money isn’t a thing it’s a process. It’s a facet of commerce. Without commerce it has no meaning. It’s actually created by commerce.
One has to separate money from the tokens of value used to represent it. Print them & commerce revalues them. They’re always valued by the goods & services can be exchanged for them. That’s why, when government prints money, inflation is the result.
If you get deflation and dropping prices, people stop buying stuff and stop investing in businesses and start hoarding money, and everyone loses their jobs.
I don’t think that necessarily follows. The purpose of production in consumption. Why should people stop consuming? Is the assumption is that people buy more than they need & should be encouraged to do so?
Money is a promise to carry out a process. You could say it is a thing that will become a process.
Only when it prints too many of them.
PQ = VM. Double M and leave Q and V fixed, and it doubles P. But if the ratio of Q to V is changing, all bets are off.
Because it will enable them to consume more at a later date. £1 will buy you a pie today or two pies next year. Which would you rather consume? One pie or two? So you won’t buy pie today. You’ll save the money for next year and buy two pies.
Or consider investing the £1 on a pie-making tool that halves the cost of pies, but delays when you can get them by a year. In a world without deflation you win in the long run, getting pies for £0.50 each. In a world where prices halve each year, the price of pies approaches zero the longer you wait. Buying the tool gets you a year’s worth of price reduction at the cost of a year’s delay. Not as beneficial.
With inflation, people invest their savings in businesses or spend it on luxuries because if they don’t find a way to grow their money, inflation will drain its value towards zero. Deflation means that if you hide it under the mattress, its value will increase over time. Good, you say. But if everyone does that, there will be no investment and no spending on luxuries. You’ll get a world of young misers saving for their retirement and then (if you wait long enough) spending it all in their final years, when they can get the most for it.
Inflation only has a temporary impact. If you instantaneously add a few zeroes to the end of all the numbers, it makes no difference to your actual wealth. If you earn 100 cruzeiros and your expenditure comes to 90 cruzeiros, you’re fine. If you earn 100,000 cruzeiro novos and your expenditure comes to 90,000 cruzeiro novos, you’re equally fine. You only lose in the interim between prices going up and wages going up to match them.
Inflation forces you to keep your money moving, keep it working.
Suppose government got more efficient over time at providing public goods. Other things being equal a tiny bit of deflation would follow. I would not be one to argue that such a country would stop working
Short term deflation isn’t a problem. Deflation in a subset of goods and services isn’t a problem. Long term widespread deflation, long enough to condition people’s expectations of the future, has been argued to be a problem. It’s the reason generally given by economists for having a positive target inflation level of 2-3%.
It’s called the boom-and-bust cycle. The economy has a tendency to oscillate – it rapidly expands, with a boom in investment and increases in production, then that drops prices which causes everyone to stop spending and start saving, and you have a bust where all the businesses that just started up go bankrupt, first for lack of trade, then because when seeing the oncoming bust everyone panics and starts hoarding their savings and cutting back their expenditure even harder.
That causes shortages, prices rise, there’s profit again in expanding, and the next boom of investment and growth starts.
Personally, I have a suspicion that in the long run it would be better to stop messing with it and allow deflation if that’s the way the markets were pushing things. If you’re getting wild oscillations, it’s for a reason. Something is wrong – something is being blocked or not working properly, the oscillations are from the market trying to work around the blockage, and if you left it to it then maybe it would sort itself out eventually.
But that’s just a guess, based on a faith that the free markets know better than any human expert, myself included. We don’t have a completely free market. It’s being messed with in a multitude of different ways, which might be causing it. It could be anything. Or it could just be that the natural outcome of leaving things be is oscillations, and you either interfere to damp them, or suffer the mood swings.
Because it will enable them to consume more at a later date. £1 will buy you a pie today or two pies next year. Which would you rather consume? One pie or two? So you won’t buy pie today. You’ll save the money for next year and buy two pies.
So nobody buys anything during the year? They wait for the January sales when it will be cheaper? You’re thinking like an economist. It’s complete bollox. Actual people think a thing bought now & usable now has more value than a thing bought in the future for the same price. Time value of money.
Your problem is, like most people, you don’t actually understand money & what it does. Commerce is barter & money is a tool calculates relative values. That’s all. You’re actually stating that in your second to final paragraph. Maybe you should read it..
I realised I should actually have written a thing bought now & usable now has more value than a thing bought in the future for a lower price.
Because that describes what people actually do. Economics is a world of its own. Mostly theory. It doesn’t necessarily describe reality.
I think you’re conflating the tokens of value with the process. Money is the result of commerce, it’s a process. Remove the commerce, it’s meaningless. The tokens of value are what we use to represent a stage in the process. There no need for any particular token of value as long as the parties to the commerce agree on which one.
And conflating the process with the token is MMT & government monetary policy.
The number of diners is not limited in such a simple way. The extra diners might have previously dined at home or skipped lunch entirely.
And in any case, it’s only supposed to be an analogy – not a perfect description of the world.
My point. It’s a pretty poor analogy when you have to include substitution to make it work
It’s why I don’t have much time for economists. Chesterton’s fence. Batiat’s broken windows. Just fuck off. They don’t think people hadn’t worked them out a thousand years earlier? They were only novel ideas to economists. Adam Smith just reprised what people involved in commerce knew all along.
A really good description of economics is “Oh, so people do this, do they?”
All the stuff that goes “People should do this” is both not economics and also bullshit.
I have, for a couple of decades now, been saying that near all economics is just encoded folk wisdom.
Everything is obvious once you understand it.
I, too, have long thought that most of economics is statements of the obvious. You wouldn’t think the obvious could result in so much disagreement, would you? But my experience has been that there is nothing so obvious that you can’t find someone who will argue against it.
Bastiat said the same thing. “Which is best for man, and for society, abundance or scarcity? What! you exclaim, can that be a question? Has any one ever asserted, or is it possible to maintain, that scarcity is at the foundation of human wellbeing? Yes, this has been asserted, and is maintained every day; and I hesitate not to affirm that the theory of scarcity is much the most popular.”
I came to the conclusion that it isn’t that people don’t understand or factually disagree with economics – it’s that they don’t want it to be true. If you boil something down to a concept so simple and obvious that they can’t argue with it, they’ll say it’s an over-simplified approximation based on naive assumptions, and the economy is more complicated than that. Give a long, wordy, and complicated explanation, and they’ll miss the point. Or sometimes they’ll repeat your own point in different words and using economic ideas and assumptions themselves and say that proves you wrong. It can be mildly frustrating.
“Which is best for man, and for society, abundance or scarcity?”
Depends which man, doesn’t? Scarcity’s great if you have a lot of what’s scarce.
My point would be that people have been doing commerce & thus economics for several thousand years. So it’s highly unlikely they won’t have discovered this stuff in the process.
It’s like some of the science & math attributed to the ancient Greeks. It’s impossible to do the relevant crafts without discovering them to a usable accuracy & the crafts long predate the Greeks.
People can trade for thousands of years without understanding how or why trade works. You don’t need to. You just do your own thing at a local level. You see prices go up and prices go down and you have no idea why. It’s like the wind and rain. That’s just the way things are. Humans tended to ascribe all that stuff to the whim of the Gods.
Same thing happens today. We’re all part of a global trade network, and yet 90% of the people I talk to don’t even know what the laws of supply and demand are. And if I tell them, they don’t believe me.
If you pour water into a big hole in the ground and leave it for a few hours, it figures out for itself how to move it all around to produce a perfectly mirror-flat, horizontal surface. A square kilometre of water has a trillion square millimetres in it, and every square millimetre has to figure out how much water is on every other square millimetre and adjust its level by transferring excess water to or from its neighbours to route it to where it’s needed. It’s a stupendous computation. But water is not noted for its intellectual nature – how does it do it?
It does it by only being aware of its immediate locality. Water accelerates in the direction of the gradient. The local behaviour results in global behaviour, but the global behaviour happens as a result of the local rules without the water having to know anything about it.
Likewise with people. People think scarcity’s great if you have a lot of what’s scarce. But that’s a local rule. That’s when it’s only you that has the monopoly. What if everyone is trying to create scarcity? Then you gain from the scarcity you create, while losing from the scarcity everyone else creates. So in the 1970s every trade union was trying to impose a monopoly on the supply of labour and create a shortage to raise their wages – the price of labour – believing it was the way to get rich. But every other industry was doing the same, so prices in the shop were rising faster than wages. Less stuff was being produced – because of all the strikes and industrial action and worker’s rights and better working conditions – so there was less stuff for their money to buy. The scarcity they aimed to impose on their neighbours became general. Wages and prices spiralled upwards, and everyone got poorer.
A local rule – scarcity’s great if you have a lot of what’s scarce – had global consequences that people didn’t understand or predict, despite being themselves the critical part of the system that implemented it. They didn’t understand it then. If you talk to trade unionists today, you’ll find they still don’t understand it now.
It’s perfectly possible to engage in relevant crafts without understanding how or why it works. The ancient Greeks were dirt-poor by our standards, because they didn’t understand much. It was only when a few of us started to figure out how things worked beyond that local, immediate scale around the time of the Enlightenment and Industrial Revolution that things took off, and we built the system that made us rich beyond the wildest dreams of our ancestors. But even now, most of us don’t understand even the basics of how it works, and none of us understand it all. And yet we keep trying to tinker with it, to make it work ‘better’, using our local rules like ‘scarcity’s great if you have a lot of what’s scarce’.
How can you explain to someone with the intelligence of a water molecule why creating artificial scarcity isn’t actually great? Start with the simplest possible picture that illustrates the principle, and then when they’ve got that, slowly start layering in all the complexities and exceptions and approximations. The simplified models and stories economists tell aren’t what they believe. They’re a teaching aid.
It’s perfectly possible to engage in relevant crafts without understanding how or why it works.
What like pi?
You can draw circles without knowing the value of pi. You can measure them with a length of string and know that the ratio is three and a bit. What exactly do you think people need to know?
The ancient Greeks didn’t think numbers were real if you couldn’t construct them with ruler and compasses, and since pi can’t be so constructed, the Greeks would not have considered it to be a genuine number if they had known. Indeed, the question worried them greatly. Squaring the circle was one of the great unsolved problems of classical times.
Why is pi three and a bit? Where does the number come from?
pi may be viewed as the ultimate value of a series of numbers where x=(360Degrees/y)times1times(siny)/2 as y tends to zero.
I’ll remember that the next time I’m short of a bit of string.
🙂
The simple answer is that it is the natural logarithm of minus one.
(Being picky, it’s magnitude. But it’s mathematically more natural to think of angles as imaginary numbers.)
But the ancient Greeks didn’t know what a logarithm was, would not have accepted minus one to be a valid number (how can you start with nothing and take one away?) and would definitely have not known what to do with imaginary numbers. And the connection of logarithms to geometry is obscure even to many modern people. (You really need Clifford Algebras to explain it properly, although if you’re not fussed about the mathematical formalities it’s not that hard to understand.)
But it’s easy enough to measure it with a bit of string.
You rather miss the point. Pi is purely arbitrary number. The product of mathematics. Mathematics requires constants. There is absolutely no reason to believe constants are universal in time & space in a large scale universe.
But that is my point. Pi isn’t an arbitrary number. It’s the natural logarithm of minus one, and is no more arbitrary than minus one is.
If you don’t know where it comes from, it’s easy to just assume it’s arbitrary, something the gods picked at random, or on a whim. Humans didn’t know where the weather came from, or plagues and disease, or the harvest and fertility. So they made up Gods to explain them. The fertility of the land doesn’t have anything to do with nutrients or drainage which they knew nothing about – whether you get a good harvest is down to the arbitrary whim of the Gods, and they spent a lot of time and thought appeasing them.
Later on, they realised there was a system to the world. It wasn’t just arbitrary, there were reasons why things happened as they did, and by learning the reasons, they found, slowly, gradually, they could manipulate things like fertility and the spread of plagues.
But man’s natural state is ignorance, and you can get by most of the time without knowing how things work or where all the external influences on our lives come from. We just take them as arbitrary circumstances imposed on us – whether by the Gods, or the stars and planets, or the hidden rulers of the world. We don’t see the mechanism.
Try pi in non-Eucldian geometry
Pi is the same there too.
Take spherical geometry. Draw a circle with a radius that subtends an angle θ at the centre of a sphere of radius R. Its radius is r = Rθ. Its circumference is C = 2πR sin(θ). The formula for the circumference of a circle in spherical geometry is C/r = 2πR sin(θ)/Rθ = 2π sin(θ)/θ. As the radius of the sphere tends to infinity (Euclidean geometry), or as the radius of the circle tends towards zero, sin(θ)/θ tends to 1, so you just get 2π.
The relationship between radius and circumference is actually more complicated in general, but we didn’t realise there was a term missing because in Euclidean geometry it’s always 1. Non-Euclidean geometry reveals the bit we missed.
The π in 2π sin(θ)/θ is the same π we know and love.
[Personally, I think these hidden bits of familiar geometry that only show up in the generalisations are absolutely fascinating! I’ve recently been studying Cayley-Klein geometries defined over projective planes, and it is illuminating to see just how much the Greeks missed because Euclidean geometry is so broken. (It’s one of the so-called ‘degenerate’ geometries since it’s based on a degenerate absolute conic.) The Euclidean and non-Euclidean geometries are related, all special cases of a more general system.]
There’s a strong argument that space/time is granular rather than uniform. So those numbers don’t work everywhere.
There’s a strong argument that down at the Planck scale we don’t have any idea what’s going on. It might be superstrings, it might be discrete, it might be nothing we can imagine, with no coherent concept of time or space. We don’t know.
Geometry is an idealisation that works at the scales we’re used to. It has a very neat mathematical structure behind it. Mathematicians generally call them Clifford Algebras, but Clifford himself called it Geometric Algebra.
Just as the Greeks said, our number system is modelled on the geometry of the spacetime we live in. However, the Greeks only recognised the magnitude of numbers (lengths, areas, and volumes). They failed to note they also have direction. If you give numbers a direction, and if you extend it to new sorts of numbers that don’t just represent lengths (along a line in a specified direction) but also areas (with direction defined by a plane) and volumes, then everything suddenly works beautifully and lots of things that looked like messy exceptions suddenly lock into place.
So let’s say you have three directed numbers that go around the sides of a triangle so that a+b+c = 0 (i.e. you travel a length a in a direction, and so on, then you end up back where you start). Then the angles between the sides are the numbers you have to multiply to rotate one length/direction into another. The internal angle between sides b and c is -b/c, which means if we start with c, we multiply it by (b/c) to get b, and then we reverse the direction because one of the lines is pointing into the corner and one is pointing out, and we want them both pointing out.
(b/c) isn’t a simple scalar number like we’re familiar with, unless b and c are parallel. If they point in different directions, then (b/c) is a combination of a scalar and a bivector, representing the orientation of the plane in which they both lie.
Then it is a simple algebraic fact that (-a/b)(-b/c)(-c/a) = -1. If we go round the triangle and combine the internal rotations, we wind up pointing in the opposite direction.
Because it’s conceptually easier to add angles rather than multiply them, we take logarithms to turn multiplication into addition. This only works if all the angles are in the same plane. But if we do that, we get: ln(-a/b) + ln(-b/c) + ln(-c/a) = ln(-1) = iÏ€, where i is the bivector representing a unit area of the common plane they’re all in. Since squaring a bivector gives a negative scalar, these act exactly like imaginary numbers in the algebra. This tells us that the angles of a triangle add up to Ï€ radians or 180 degrees.
Ï€ is the natural logarithm of minus one, and the minus one simply tells us that the algebra represents some geometrical transformations that end up with us pointing in the opposite direction.
Now, it may be possible to imagine some sort of ‘space’ where concepts like ‘pointing in the opposite direction’ didn’t make sense. There are Cayley-Klein geometries where angles are real and not imaginary, and instead of going round and ending up where they started after 360 degrees, they just go on forever in both directions. There are Cayley-Klein geometries where all angles are zero, and you can only define the ratios of angles (such as the dual-Euclidean geometry). But whenever they have some concept of turning round to point the other way, Ï€ comes out the same, because it’s just representing minus one.
In physics there’s obviously something missing. There’s no TOE. And observations don’t produce sensible results. Like undetectable dark matter & an apparently accelerating expanding universe. Gravity isn’t reconciled with the other forces. And no gravitron.
One explanation is that there’s an underlying structure to the universe that affects the visible. And the underlying structure may not be flat. And since the underlying structure affect our physics, the constants in physics may not be universal. For instance if the clock rate of time is different, the speed of light is different there from here, from our perspective. But not the there perspective. The nuclear forces still work as per.
This explanation is an anathema to astrophysicists because it removes maths. Maths requires constants & maybe there aren’t any The only tool they have. Basically, they’re all out of work.
So pi. Try drawing a circle a few million light years across. Cant be radius because the center may not be in the same place depending where you are on the circumference. Maybe impossible to actually draw a circle because where you started isn’t there when you try to complete.it.
1+1 may not be 2 on large scales.
That the universe is universally identical is a presumption of scientists because it enables them to do science. There’s particular reason, otherwise.
Why I tend to have more confidence in ordinary folks than the “educated”. They’re bright enough to realise the same action does not always produce the same result. They check to see if it has & save themselves a lot of grief.
And yet it was scientists who discovered and told you about dark matter, and the expansion of the universe, and curved spacetime, and clocks that didn’t run at the same rate. It wasn’t ordinary folks. The ordinary folks said the scientists were crazy!
If we discover the old assumptions and old laws were wrong, scientists get excited because there’s an interesting job to be done discovering new laws, better, more accurate, more elegant laws. It’s only if we knew how it all worked that there would be no need for scientists any more and we would all have to become engineers!
It subsides borrowers, increases asset prices & destroys the cash savings of the poor. What’s not to like if you’re a government?
And if banks create money when they lend – **why do they take deposits**? He never ever addresses that question.
Oh that’s easy. To get a loan from a bank you need an account with a bank. Opening an account requires you to make a deposit in the bank. The bank has a special incinerator for burning the deposits. You must have seen it behind the counter.
Whether or not you get inflation depends on both money and stuff.
Simplistically money/stuff = price.
For decades capitalist societies created more stuff cheaper, which given same amount of money causes deflation.
That allowed govts to print and waste loads of money neutralising the ‘more stuff deflation’ and cause a useful little bit of inflation.
Recently the ability to make more stuff cheaper has been knackered by regulation. The govt has continued to print and waste more and more money though. Hence big chunks of inflation on the way.
If they’ve managed to make less stuff more expensive, you’re on your way to much worse things than inflation. You’re on your way to going hungry.