What is demand? Where does it come from?

In a market:

Demand is created and realized through production. Without a good or service to trade, you can demand nothing. Demand relies on production of a marketable good. Without that production of the marketable good, no demand is created. Simply adding more currency to the marketplace or encouraging purchasing of certain goods over others does not increase production in an economy.

Enron wrote:In a market:

Demand is created and realized through production. Without a good or service to trade, you can demand nothing. Demand relies on production of a marketable good. Without that production of the marketable good, no demand is created. Simply adding more currency to the marketplace or encouraging purchasing of certain goods over others does not increase production in an economy.

Demand is not created through production. You can look at the auto industry and see that. Supply is created through production. Without demand, supply remains inventory.

Demand is created through wherewithal and confidence. Currently, there is a lack of wherewithal, and those who have it lack confidence.

Goldwing Tom wrote:

Enron wrote:In a market:

Demand is created and realized through production. Without a good or service to trade, you can demand nothing. Demand relies on production of a marketable good. Without that production of the marketable good, no demand is created. Simply adding more currency to the marketplace or encouraging purchasing of certain goods over others does not increase production in an economy.

Demand is not created through production. You can look at the auto industry and see that. Supply is created through production. Without demand, supply remains inventory.

Demand is created through wherewithal and confidence. Currently, there is a lack of wherewithal, and those who have it lack confidence.

The auto industry producing things that are not marketable at the MSRP, does not show that demand is not created through production of marketable goods. Remember, I said production of MARKETABLE goods (aka goods that people will want). You say that demand is created through wherewithal and confidence... please explain to me how a confident person with ability can demand something in trade without producing anything. You can have all of the confidence in the world and all of the raw resources in the world, but without producing marketable goods from those resources, there will not be demand. There will be no increase in the amount of "capital goods" or "finished goods" without production.

Enron wrote:

Goldwing Tom wrote:

Enron wrote:In a market:

Demand is created and realized through production. Without a good or service to trade, you can demand nothing. Demand relies on production of a marketable good. Without that production of the marketable good, no demand is created. Simply adding more currency to the marketplace or encouraging purchasing of certain goods over others does not increase production in an economy.

Demand is not created through production. You can look at the auto industry and see that. Supply is created through production. Without demand, supply remains inventory.

Demand is created through wherewithal and confidence. Currently, there is a lack of wherewithal, and those who have it lack confidence.

The auto industry producing things that are not marketable at the MSRP, does not show that demand is not created through production of marketable goods. Remember, I said production of MARKETABLE goods (aka goods that people will want). You say that demand is created through wherewithal and confidence... please explain to me how a confident person with ability can demand something in trade without producing anything. You can have all of the confidence in the world and all of the raw resources in the world, but without producing marketable goods from those resources, there will not be demand. There will be no increase in the amount of "capital goods" or "finished goods" without production.

Supply will always rise to meet demand. However, supply in excess of demand remains inventory. The auto industry is not suffering because people do not want new cars. It is suffering because people cannot afford new cars, and those who may be able to afford new cars are tightening their belts in case their wherewithal is taken from them and/or because they are not confident that other costs associated to life will not eat up their wherewithal. It is the same with the housing market. It is not that people do not want to buy newer or larger houses that so many houses are on the market. It is that people cannot afford to buy newer or larger houses, and those who may be able to are not confident about the future.

Ergo, the supplies of these commodities did not increase demand. The lack of demand resulting from lack of wherewithal and/or confidence keeps the supplies of these commodities on the books as inventory.

Goldwing Tom wrote:Supply will always rise to meet demand. However, supply in excess of demand remains inventory. The auto industry is not suffering because people do not want new cars. It is suffering because people cannot afford new cars, and those who may be able to afford new cars are tightening their belts in case their wherewithal is taken from them and/or because they are not confident that other costs associated to life will not eat up their wherewithal. It is the same with the housing market. It is not that people do not want to buy newer or larger houses that so many houses are on the market. It is that people cannot afford to buy newer or larger houses, and those who may be able to are not confident about the future.

Ergo, the supplies of these commodities did not increase demand. The lack of demand resulting from lack of wherewithal and/or confidence keeps the supplies of these commodities on the books as inventory.

Now we are getting somewhere. Supply will always rise to meet demand? What is demand? Demand is being able to demand something in trade for what you have. I think you mean "preferences" when you are talking about demand. Yes, people's preferences will often be met by the market, but production is required to meet such preferences. You can have preferences without supply. You cannot have demand without supply.

The auto industry is failing for many reasons in combination. The main reason is that they have produced cars with the assumption that they will be worth more than they actually are to people. This has allowed them to justify higher costs that were partially imposed by government backed unions.

You say that housing is hurting because people can't afford the houses. That indicates that housing "prices" must and will fall. I would like to discuss the housing problem on a seperate thread. There is hardly a better case against government intervention.

We disagree on the interpretation again. Demand is that for which people are willing to trade resources to obtain.

Currently, there is demand for jobs, but there is little supply of jobs. There is a supply of willing workers, but little demand for employees. If those jobs can be created through some sort of incentive (like tax breaks), then those who receive those jobs will be truly employed. Those truly employed people may create some true demand for cars. Cars will then be produced by others who also will be truly employed. Those truly employed auto workers may create some demand for vacations, which will be supplied by people truly employed by airlines and resorts. Those airline workers may create some demand for barbers, beauticians, and such.

However, at this time, those who are demanding jobs that don't exist probably resort to cutting their own hair.

Goldwing Tom wrote:We disagree on the interpretation again. Demand is that for which people are willing to trade resources to obtain.

People have to have the resources to trade, in order for their to be demand.

Goldwing Tom wrote:Currently, there is demand for jobs, but there is little supply of jobs. There is a supply of willing workers, but little demand for employees. If those jobs can be created through some sort of incentive (like tax breaks), then those who receive those jobs will be truly employed. Those truly employed people may create some true demand for cars. Cars will then be produced by others who also will be truly employed. Those truly employed auto workers may create some demand for vacations, which will be supplied by people truly employed by airlines and resorts. Those airline workers may create some demand for barbers, beauticians, and such.

However, at this time, those who are demanding jobs that don't exist probably resort to cutting their own hair.

I am all for cutting taxes. Your argument for cutting taxes is valid. Some people use this sort of argument for increased gov't spending, which does not hold water the same as your illustration. The only clarification that I would like to make is that a taxes are a disincentive, so removal of that disincentive is different than providing artificial incentive. Also, removal of some of the restrictions on the right to contract your own labor (like minimum wage laws) would go further to eliminate some unemployment.

Savings is required for capital accumulation, which promotes further division of labor and productivity. Spending and consuming does not help further the wealth of a society. Read some of what Mises has said about savings. I know that Keynes and others believed that spending and consuming somehow creates wealth, but it doesn't.

The only source of the generation of additional capital
goods is saving. If all the goods produced are consumed, no
new capital comes into being.
The Anti-Capitalistic Mentality, p. 84

Capital is not a free gift of God or of nature. It is the outcome
of a provident restriction of consumption on the part of
man. It is created and increased by saving and maintained by
the abstention from dissaving.
The Anti-Capitalistic Mentality, p. 84

At the outset of every step forward on the road to a more
plentiful existence is saving—the provisionment of products
that makes it possible to prolong the average period of time
elapsing between the beginning of the production process and
its turning out of a product ready for use and consumption. . . .
Without saving and capital accumulation there could not be any
striving toward nonmaterial ends.
Human Action, No Entry; p. 260

The most ingenious technological inventions would be practically
useless if the capital goods required for their utilization
had not been accumulated by saving.
The Anti-Capitalistic Mentality, p. 39

We are the lucky heirs of our fathers and forefathers whose
saving has accumulated the capital goods with the aid of which
we are working today. We favorite children of the age of electricity
still derive advantage from the original saving of the
primitive fishermen who, in producing the first nets and
canoes, devoted a part of their working time to provision for a
remoter future.
Human Action, p. 489; p. 492

I think the preceding decade has shown us beyond a shadow of a doubt that supply, demand, and the currencies supposedly used to facilitate both is a giant shell game. It's irrational to judge any system solely on its demonstrated faults; one must also look to its demonstrated merits.

Of course, what I'm saying is that the vast majority of industrial and technological advancement we've experienced during the information age is almost entirely due to credit expansion and the consequent availability of "money." Feel free to disagree.

B-Ran wrote:Of course, what I'm saying is that the vast majority of industrial and technological advancement we've experienced during the information age is almost entirely due to credit expansion and the consequent availability of "money." Feel free to disagree.

Will do.

Okay, then where did the free-flowing "money" to make it all happen come from? I can tell you this: it wasn't from all the tech companies diligently saving up to afford all the infrastructure and capital good necessary to give up the plethora of doodads that we've become inundated with over the last fifteen or so years.

B-Ran wrote:Okay, then where did the free-flowing "money" to make it all happen come from? I can tell you this: it wasn't from all the tech companies diligently saving up to afford all the infrastructure and capital good necessary to give up the plethora of doodads that we've become inundated with over the last fifteen or so years.

Government doesn't create capital. They can only redirect capital. Yes, government can print money, but printing of money only redirects capital.

I was never contending that government created capital... But they certainly created currency, even if the currency they created was just stacks and stacks of worthless paper covered in green dye.

Regardless, people used those stacks and stacks of paper covered in green dye as if they were legitimate means of commerce, the net effect being the longest sustained expansion of our economy since the period directly following WWII... That is, if you believe the metrics. You don't have to though. I wouldn't blame you if you didn't.

B-Ran wrote:I was never contending that government created capital... But they certainly created currency, even if the currency they created was just stacks and stacks of worthless paper covered in green dye.

Regardless, people used those stacks and stacks of paper covered in green dye as if they were legitimate means of commerce, the net effect being the longest sustained expansion of our economy since the period directly following WWII... That is, if you believe the metrics. You don't have to though. I wouldn't blame you if you didn't.

I would argue that we have been able to have some forms of sustainable growth despite our reckless monetary policy, not due to our monetary policy. Unfortunately, the allocation of resources that follows a credit expansion do not reflect the markets demand. Instead, they reflect artificial demand. When new money is injected into the economy, that new money competes with other money already in the economy. The market reacts as if there was proportionally more demand in the sector that receives the capital injection. Since creating money doesn't create capital, creating money simply redirects capital in a way that the market has not demanded. The monetary expansion in the 20's led to the Great Depression. The monetary expansion to support "Guns and Butter" of the 60's led to the stagflation and recession of the 70's. The massive credit expansion of the 90's led to the tech bubble that popped and would have led to a recession. Instead of allowing the recession to take place, replacing the tech bubble with the housing bubble looked like a solution. The capital injected into the housing market led to too many lenders, too many realtors, too many homebuilders, too many appraisers, too many houses being built with too many materials. We are beginning to see the reality of the tech bubble and the housing bubble coming around full term. During the housing bubble, did people feel rich? Yeah. People bought plasmas, boats, and other toys like never before. People were owning 2 houses that previously couldn't buy one. Now, we are paying the price. We will continue to pay the price for some time, because our government thinks that the best way out of the problem, is the way that we got into the problem... massive credit expansion.

I agree, we have been in a unique situation since just after WWII. Since we have been the world's reserve currency, we have been able to abuse our currency more than most countries would be able to abuse their currency. Since we have other major world banks that agree to help keep the dollar afloat, we have gotten away with the unthinkable. With the amount of dollars that we printed, the only way that the dollar was able to survive this far is that it was the reserve currency and America was the free'est county in the world for quite a time.

I totally understand what you're saying about misallocation here, and I agree with you.

But here's an interesting question: why did the market get it all so wrong?

B-Ran wrote:I totally understand what you're saying about misallocation here, and I agree with you.

But here's an interesting question: why did the market get it all so wrong?

Misallocation is a natural response to "artificial demand". The market naturally responds in this way when monetary policy allows such expansion of credit. This is why our monetary policy is so harmful. In order to understand why the market reacts in a way that is unsustainable during credit expansion, we can look at a perfect example: The housing bubble. Without government backing, credit could not have flooded the housing market like it did. When that credit flooded the housing market, it started trends that people mistook as sustainable. For example, 20% year over year appreciation was normal in many areas. With 20% year over year appreciation because buyers able to have increased credit available for purchasing a home, people began to make decisions based on the assumption that the rise in prices of real estate was something to expect. Many people believed that they could buy a house and live in it for a few years, and make $100,000 off of appreciation alone. Many people bought investment properties that were bringing in a negative cash-flow each month because they looked at the real estate trends and believed them to be sustainable. Many businesses began building homes like crazy. These sorts of things happen when credit is injected into an industry. If there was not a credit injection into the housing market, the speculative bubble that is crashing now would not have started. Don't get me wrong, I believe that the market does not respond well to government interference, which is my argument against government interference, not against the market.

I agree with you about the causal relationship between easy credit and an eventual collapse of that easy credit...

But let's be honest here: "the market" is a misnomer. There is no "the market." There are only individuals making decisions. Ultimately, the thing that caused the credit market to expand the way it did in the first place was individuals taking on credit. The thing that caused it to collapse was individuals defaulting on the credit that they could not afford and in the process causing MBSs to tank when the heavily-leveraged mortgages backing them failed to back them anymore, which in turn decapitalized hedge funds and other investment instruments, which in turn stifled investment in actual companies, which in turn caused those companies to have less working capital, which in turn caused them to lay off employees who had taken on credit they caould barely afford in the first place, thus bringing us back to the beginning of the vicious cycle we're in right now.

It's futile to speculate about "what would have happened" because we just don't know, and there really is no way to tell. All I know is while government interference in the market certainly didn't help the situation, it couldn't have been the cause. Government never forced anyone to take on credit. Individuals did that. Government might have provided an artificial incentive which made the option more attractive (and they certainly should be faulted for that), but I think the problem was also individuals having an unreasonable expectation of pay-off. In other words, people got greedy, and government had no problem with facilitating that greed because it made it look like we had a powerful, vital economy.

Ultimately, though, it is the consumer who was in control... This goes back to another point I made in another thread, though: there are no decisions that are made in a vacuum. The choices of some consumers have consequences that effect other consumers, even though it was only their one choice being made. This current situation provides a great deal of evidence in that direction, and also a great deal of evidence for the potentially misincentiving nature of the Fed, which I will not disagree with.

B-Ran wrote:I agree with you about the causal relationship between easy credit and an eventual collapse of that easy credit...

But let's be honest here: "the market" is a misnomer. There is no "the market." There are only individuals making decisions. Ultimately, the thing that caused the credit market to expand the way it did in the first place was individuals taking on credit. The thing that caused it to collapse was individuals defaulting on the credit that they could not afford and in the process causing MBSs to tank when the heavily-leveraged mortgages backing them failed to back them anymore, which in turn decapitalized hedge funds and other investment instruments, which in turn stifled investment in actual companies, which in turn caused those companies to have less working capital, which in turn caused them to lay off employees who had taken on credit they caould barely afford in the first place, thus bringing us back to the beginning of the vicious cycle we're in right now.

It's futile to speculate about "what would have happened" because we just don't know, and there really is no way to tell. All I know is while government interference in the market certainly didn't help the situation, it couldn't have been the cause. Government never forced anyone to take on credit. Individuals did that. Government might have provided an artificial incentive which made the option more attractive (and they certainly should be faulted for that), but I think the problem was also individuals having an unreasonable expectation of pay-off. In other words, people got greedy, and government had no problem with facilitating that greed because it made it look like we had a powerful, vital economy.

Ultimately, though, it is the consumer who was in control... This goes back to another point I made in another thread, though: there are no decisions that are made in a vacuum. The choices of some consumers have consequences that effect other consumers, even though it was only their one choice being made. This current situation provides a great deal of evidence in that direction, and also a great deal of evidence for the potentially misincentiving nature of the Fed, which I will not disagree with.

The point that I want to make is that when the Fed distorts the major factors in the market, to serve some seemingly noble purpose (like home-ownership), they are changing the incentives and distorting the market in an unsustainable way. Distorting the market on a whim takes the incentives for speculating and multiplies the potential gain. Let's not forget, many got rich by buying and selling property in the last boom. It was not necessarily a bad investment for many. The people who were caught in this mess, like others who are caught in speculative bubbles, are the last ones out.

Another point that is important to note, is that the government was basically guaranteeing these investments in mortgage backed securities abroad. At least, that is the justification that is being used for the bailouts. That promise of intervention also distorted the amount of available credit for home mortgages. With practical government backing, and injection of new funds into the market, credit was cheaper and more available than ever.

The question that I have answered is whether or not we should have the government stimulate the economy through credit expansion. The answer is "no". While consumers are ultimately responsible to make their own financial decisions, the factors for one to consider once government is involved in managing the credit markets become extremely distorted. For example, right now, people are generally opting to sit out of the market. Conventional wisdom tells us that now is a good time to hold cash. However, with the Fed printing more money than ever before, the distortion even on cash's value is beginning to be felt.

Even if you blame the consumers for the bubble, you can't argue that the bubble would have occurred without the help of the federal government. In a free-market system, demand is generated when someone has something to trade for something else. The incentives of the free market are directed by what others in the economy want. When the government interferes through credit expansion, it is essentially redirecting capital away from what the individuals in the economy would have used the capital for, and to what the government officials have deemed more important.

Essentially, this is the boom-bust cycle. Austrians described this well, and now other schools of economics recognize this as the Austrian Business Cycle. Although, I haven't described the cycle in its every detail, the ABC is what we are talking about.

When the question is "Should the government manage our money supply and continue to increase the money supply?" The answer is no. Whether or not there is blame to put on the consumer for not knowing that the government was causing a housing bubble, the government created a situation that eliminated a natural check and balance of the market. I am not talking of personal finance. I am talking about how the economy should be structured.

B-Ran wrote:It's futile to speculate about "what would have happened" because we just don't know, and there really is no way to tell. All I know is while government interference in the market certainly didn't help the situation, it couldn't have been the cause. Government never forced anyone to take on credit. Individuals did that. Government might have provided an artificial incentive which made the option more attractive (and they certainly should be faulted for that), but I think the problem was also individuals having an unreasonable expectation of pay-off. In other words, people got greedy, and government had no problem with facilitating that greed because it made it look like we had a powerful, vital economy.

I do not think it is futile. However, if you say that it is futile to try to speculate what would've happened without the expansion of the credit market, you cannot attribute successes to the expansion of the credit market either (like the USA's economic successes since WWII).

True!

It is probably wise to not speculate on "what might have happened" had the free market been the way of the world, for the speculation will bring with it the realization that gravity eventually brings a free market to the inevitable end like that of a swinging pendulum: standstill. I do not disagree with the bust following boom synopsis. However, in a totally free market, there is nothing that promotes boom following bust. That will only occur after something eventually begins the flow of money, or some sort of redistributive process, again, likely a Marxist revolution if nothing else.

I still disagree with your definition of demand. Demand can exist without supply. There is demand for jobs that do not exist. People are willing to trade their time for jobs, but there is little demand for that time despite the supply. However, if there were demand for that time, even if it were somehow artificially created, the result would be true employment which would result in true demand for things that either (a) do not currently exist, or (b) currently exists as inventory.

A contention that this is counter-productive is nonsense. The artificial means for employment could be created through tax incentives to businesses. This would result in increased revenues for the government due to increased spending by consumers, and reduced demand on government resources (or creation of money) due to reduced stipends. That these maybe should not exist does not consider the reality that these things do exist, much the same as it can be argued that immortality could be realized if death did not exist.

Goldwing Tom wrote:It is probably wise to not speculate on "what might have happened" had the free market been the way of the world, for the speculation will bring with it the realization that gravity eventually brings a free market to the inevitable end like that of a swinging pendulum: standstill. I do not disagree with the bust following boom synopsis. However, in a totally free market, there is nothing that promotes boom following bust. That will only occur after something eventually begins the flow of money, or some sort of redistributive process, again, likely a Marxist revolution if nothing else.

I still disagree with your definition of demand. Demand can exist without supply. There is demand for jobs that do not exist. People are willing to trade their time for jobs, but there is little demand for that time despite the supply. However, if there were demand for that time, even if it were somehow artificially created, the result would be true employment which would result in true demand for things that either (a) do not currently exist, or (b) currently exists as inventory.

A contention that this is counter-productive is nonsense. The artificial means for employment could be created through tax incentives to businesses. This would result in increased revenues for the government due to increased spending by consumers, and reduced demand on government resources (or creation of money) due to reduced stipends. That these maybe should not exist does not consider the reality that these things do exist, much the same as it can be argued that immortality could be realized if death did not exist.

GT,

Just a few things: For one, please stop with the misapplied physical laws to economics. Your application of gravity is simply a metaphor to illustrate your point. It proves nothing. Simply saying that economics follow physics laws is meaningless. I could also illustrate my points using the laws of physics, but what good would it do? Analogies only illustrate points, they can not validate them. No, there is no gravity that brings a free market to its end.

Your definition of demand aligns with peoples' every want and need. Sure, if that is what you want to describe, that's fine. However, in a free-market, wishes and dreams can not be held as the counter-party of a voluntary exchange in demand for a good or a service. While your definition of demand in a free market, implies nothing. The supply/demand curve was not based off of supply on one side and hopes and dreams on the other. Defining demand as something that exists by people simply wanting things is missing the point that with voluntary exchange, you can demand something for what you have. If people refuse to meet your demands in exchange, you simply keep what you have. Without something to trade, demand is merely masturbatory. Imagine someone walking up to you and demanding that you give them your car. Luckily, they are a law abiding citizen and you (for argument's sake) live in a free-market economy. How ridiculous would that be? Someone demanding your car without having anything to offer in trade. Pretty silly.

I already said: I am all for tax cuts. Your understanding of what government spending causes, is incomplete. You are not looking at where the money comes from. When you look at where the money comes from, you realize that it a misdirection of actual capital is all that can occur when the government tries to spend its way out of a depression. See the Great Depression and the current economic crisis for examples.

Enron wrote:

Goldwing Tom wrote:It is probably wise to not speculate on "what might have happened" had the free market been the way of the world, for the speculation will bring with it the realization that gravity eventually brings a free market to the inevitable end like that of a swinging pendulum: standstill. I do not disagree with the bust following boom synopsis. However, in a totally free market, there is nothing that promotes boom following bust. That will only occur after something eventually begins the flow of money, or some sort of redistributive process, again, likely a Marxist revolution if nothing else.

I still disagree with your definition of demand. Demand can exist without supply. There is demand for jobs that do not exist. People are willing to trade their time for jobs, but there is little demand for that time despite the supply. However, if there were demand for that time, even if it were somehow artificially created, the result would be true employment which would result in true demand for things that either (a) do not currently exist, or (b) currently exists as inventory.

A contention that this is counter-productive is nonsense. The artificial means for employment could be created through tax incentives to businesses. This would result in increased revenues for the government due to increased spending by consumers, and reduced demand on government resources (or creation of money) due to reduced stipends. That these maybe should not exist does not consider the reality that these things do exist, much the same as it can be argued that immortality could be realized if death did not exist.

GT,

Just a few things: For one, please stop with the misapplied physical laws to economics. Your application of gravity is simply a metaphor to illustrate your point. It proves nothing. Simply saying that economics follow physics laws is meaningless. I could also illustrate my points using the laws of physics, but what good would it do? Analogies only illustrate points, they can not validate them. No, there is no gravity that brings a free market to its end.

Your definition of demand aligns with peoples' every want and need. Sure, if that is what you want to describe, that's fine. However, in a free-market, wishes and dreams can not be held as the counter-party of a voluntary exchange in demand for a good or a service. While your definition of demand in a free market, implies nothing. The supply/demand curve was not based off of supply on one side and hopes and dreams on the other. Defining demand as something that exists by people simply wanting things is missing the point that with voluntary exchange, you can demand something for what you have. If people refuse to meet your demands in exchange, you simply keep what you have. Without something to trade, demand is merely masturbatory. Imagine someone walking up to you and demanding that you give them your car. Luckily, they are a law abiding citizen and you (for argument's sake) live in a free-market economy. How ridiculous would that be? Someone demanding your car without having anything to offer in trade. Pretty silly.

I already said: I am all for tax cuts. Your understanding of what government spending causes, is incomplete. You are not looking at where the money comes from. When you look at where the money comes from, you realize that it a misdirection of actual capital is all that can occur when the government tries to spend its way out of a depression. See the Great Depression and the current economic crisis for examples.

You should probably rethink your reply. I believe it was probably hastily typed out without much thought for what was said. It seems a bit malevolent as if you are attacking me and not my thoughts.

It is the gravitational amassment of people for whom resources are denied that is the basis for the Marxist theory of revolution. It is the gravitational amassment of people for whom safety and adequate pay was denied that was the cause for labor unions. Gravity applies to everything whether you want it to or not. It even applies to human thoughts.

You seem to want to wipe the slate clean on government spending as if that also does not exist. If you are planning to get from where we are to where you want us to be, it would be wise to figure out the steps necessary to get us there. It is not as if we will wake up tomorrow, and there won't be government spending, and a free market will be in place. You also may want to consider that many of our founding fathers wanted a free market economy, and it morphed in time to what it is today. Why? How? Who did it? What could be done to ensure that it will not happen again?

You also are taking both sides on demand. If demand is that which people are willing to trade resources for, then there is demand for jobs. Time is a resource. If there is no supply of jobs, that does not mean there is no demand for jobs.

I said that I understand the boom to bust part of the free market theory. Tell me how it goes back from bust to boom without stealing land from Indians or killing off millions of people to preserve our way of life.

Goldwing Tom wrote:You should probably rethink your reply. I believe it was probably hastily typed out without much thought for what was said. It seems a bit malevolent as if you are attacking me and not my thoughts.

I did not reply in haste. I am unsure why you think I was attacking you and not your thoughts. I can assure you, I was only intending on attacking your ideas.

Goldwing Tom wrote:It is the gravitational amassment of people for whom resources are denied that is the basis for the Marxist theory of revolution. It is the gravitational amassment of people for whom safety and adequate pay was denied that was the cause for labor unions. Gravity applies to everything whether you want it to or not. It even applies to human thoughts.

Gravity is a force pulling together all matter (which is anything you can physically touch). The more matter, the more gravity, so things that have a lot of matter such as planets and moons and stars pull more strongly.

You are confusing a metaphor with reality. Gravity is a physical force, not just any force in general. I understand your metaphor, but don't agree with it. However, you have gone farther. You have taken a metaphor and tried to argue that there is gravity in things that are immaterial.

It would be of equal validity for me to claim that freedom in a marketplace is like light. Once there is illumination into a particular segment, the inefficiencies become more apparent due to the new found lighting. Now, while I agree with this metaphor, surely I cannot believe that the free-market has all of the properties that light does.

Goldwing Tom wrote:You seem to want to wipe the slate clean on government spending as if that also does not exist. If you are planning to get from where we are to where you want us to be, it would be wise to figure out the steps necessary to get us there. It is not as if we will wake up tomorrow, and there won't be government spending, and a free market will be in place. You also may want to consider that many of our founding fathers wanted a free market economy, and it morphed in time to what it is today. Why? How? Who did it? What could be done to ensure that it will not happen again?

I am not pretending that the government isn't a giant parasite... I would be the first to tell you. I do not believe that tomorrow I will wake up in a different reality. I am simply arguing the point that what we need is less government spending (remember, I am all for your proposed tax cuts). I have and am considering why our government has morphed into the problem that it is today. Why? How? Who did it? All of that. I believe that one key for that not happening again, is open and honest thought on the issue and education of the people. That is why I am becoming educated, so I can help communicate the ideas that will hopefully help the people of this country return to freedom and even greater prosperity.

Goldwing Tom wrote:You also are taking both sides on demand. If demand is that which people are willing to trade resources for, then there is demand for jobs. Time is a resource. If there is no supply of jobs, that does not mean there is no demand for jobs.

If jobs is all you want, I can give anyone a job. It might not be on the terms that they want, but that seems to be a different questions. There is always work to do, just not at the pay that people want to accept for that job. There is definitely a difference in how supply and demand works for tangible goods and how it works with "jobs". I think that would be a good thread to start a discussion on whether or not categorizing jobs as something that there is "supply and demand" for. I would argue that before you can talk supply and demand, you need to be much more specific on terms than just talking about "jobs". The fact is, I could employ thousands, if they would only accept my offer of $.25 per day to campaign for my favorite politician. Why is this simple addition of "jobs" not going to change the "supply/demand" in the job market? Because no one will take that job. Also, if I offer people $10/hr to swim in an outhouse, I will probably not add a new job to the market. The fact is, jobs are something that an employer and an employee have to agree to. Since it is a mutual agreement, who is actually supplying the job? You can't have a job unless the employer agrees to certain terms that the employee also agrees to.

Goldwing Tom wrote:I said that I understand the boom to bust part of the free market theory. Tell me how it goes back from bust to boom without stealing land from Indians or killing off millions of people to preserve our way of life.

This is too loaded of a question to really answer. However, the free market does not rely on stealing land to make it work. Since you asked that question, I have doubts that you understand the boom-bust cycle. The boom-bust cycle is a hindrance to the prosperity of a particular economy... The point isn't to try to manufacture perma-boom. The point is to have more level sustainable growth.

Booms and busts happen without Indians losing their land, when the government causes artificial credit expansion without taking land from Indians.

Thank you for the explanation. The reply had a poorly worded sentence in it, which is not your custom. Perhaps I just read too much into that, and felt that you were hastily attacking me rather than my thoughts.

Though your definition of gravity is accurate, it is not complete. Gravity is a force which creates masses by drawing small entities into larger entities such that the smaller entities lose their separateness of identity by becoming part of the larger mass. It is the basis for democracy (majority rules), and it is the force that creates "common sense." It is not coincidental that "grave thoughts" (aka common sense) bears the base word for gravity. It is because that is the force that creates the mass bearing those thoughts, whether those thoughts are valid or not.

Your claim that "light" is merely a metaphor is equally short-sighted, for it will be the principles of enlightenment through which your dream for a free market economy will come to fruition. It will be dual-natured and quantitative, or your dream will not come "to light" within the gravitational masses as common sense.

I find it very difficult to find people who understand that, though I have received some nice comments regarding an article I wrote about it entitled "The Value of People's Opinions."

If you believe people's thoughts are immaterial, then the best you can do is accidentally defy the gravity of their thoughts. However, if you can start pulling apart their separateness from the masses that exist by using the principles of light, you will find your task much easier. I have not found that key, but that does not mean it doesn't exist. The best I have been able to do is to get concessions, but mostly I get arguments.

So, if thoughts are not waves, and waves are not things, then I suppose Edison was just an idiot for thinking he could capture the words of Jesus, and the government had no need to seize his research when he died. Do you suppose he intended to go back in time or out into space, and what is the difference? I think he knew that there would be little gravity to contend with, and he would be able to find it by seeking out the "lightest waves," which, of course, would float above the "waves of common sense," which would be heavier because of the combined mass inherent in common sense.

While you contend that gravity only affects massive entities, you seem to miss that it bends light which is a photon that has no mass. Or maybe the stars we see are not really behind other stars and planets as scientists contend. Perhaps you think it bends only the particles, but those would only serve to create photons through quantitative interaction with electrons here. We see the photons, not the particles.

This is probably a bit deep for the economics board, and maybe should be a subject on the philosophy board. Both Keynes and Nozick went beyond economics into philosophy. The former you disagree with his economic platitudes, and the latter you are in concert with on his theory of economic justice.

You have an uphill battle, my friend. Your thoughts are light, not grave. If you can make them both, you will succeed. If not, then they will always be "over the heads" of common people floating out there somewhere that only Edison and the government know for certain.

Goldwing Tom wrote:Thank you for the explanation. The reply had a poorly worded sentence in it, which is not your custom. Perhaps I just read too much into that, and felt that you were hastily attacking me rather than my thoughts.

Though your definition of gravity is accurate, it is not complete. Gravity is a force which creates masses by drawing small entities into larger entities such that the smaller entities lose their separateness of identity by becoming part of the larger mass. It is the basis for democracy (majority rules), and it is the force that creates "common sense." It is not coincidental that "grave thoughts" (aka common sense) bears the base word for gravity. It is because that is the force that creates the mass bearing those thoughts, whether those thoughts are valid or not.

Your claim that "light" is merely a metaphor is equally short-sighted, for it will be the principles of enlightenment through which your dream for a free market economy will come to fruition. It will be dual-natured and quantitative, or your dream will not come "to light" within the gravitational masses as common sense.

I find it very difficult to find people who understand that, though I have received some nice comments regarding an article I wrote about it entitled "The Value of People's Opinions."

If you believe people's thoughts are immaterial, then the best you can do is accidentally defy the gravity of their thoughts. However, if you can start pulling apart their separateness from the masses that exist by using the principles of light, you will find your task much easier. I have not found that key, but that does not mean it doesn't exist. The best I have been able to do is to get concessions, but mostly I get arguments.

So, if thoughts are not waves, and waves are not things, then I suppose Edison was just an idiot for thinking he could capture the words of Jesus, and the government had no need to seize his research when he died. Do you suppose he intended to go back in time or out into space, and what is the difference? I think he knew that there would be little gravity to contend with, and he would be able to find it by seeking out the "lightest waves," which, of course, would float above the "waves of common sense," which would be heavier because of the combined mass inherent in common sense.

While you contend that gravity only affects massive entities, you seem to miss that it bends light which is a photon that has no mass. Or maybe the stars we see are not really behind other stars and planets as scientists contend. Perhaps you think it bends only the particles, but those would only serve to create photons through quantitative interaction with electrons here. We see the photons, not the particles.

This is probably a bit deep for the economics board, and maybe should be a subject on the philosophy board. Both Keynes and Nozick went beyond economics into philosophy. The former you disagree with his economic platitudes, and the latter you are in concert with on his theory of economic justice.

You have an uphill battle, my friend. Your thoughts are light, not grave. If you can make them both, you will succeed. If not, then they will always be "over the heads" of common people floating out there somewhere that only Edison and the government know for certain.

I understand what you are saying, however I think of human thought much differently. I understand the truth of the matter that there are brain waves, but I have no reason to believe that gravity affects the behavior of those brainwaves much. Anyway, yeah, I think another thread to discuss this would be interesting.

Side note: I do not believe that Edison was able to do space and time travel through some new discovery... but that is also for a different thread.

My advice to you: If you are studying human thought... study your own. You have access to your thoughts and no one else does. Since you know your thoughts in a way that no one else does, it is also true that you cannot know what another person's thoughts are except for the physical changes that happen during thought. For example, there are brain waves and electrical activity in someone's brain. However, you cannot experience their thoughts like they have. For this reason, I think it is the most important to study human thought by being introspective. Although there is value to other sorts of study, I think the self-realization that happens when examining your own mind is far more telling.