From: Chris Hibbert (hibbert@mydruthers.com)
Date: Sun Jan 07 2007 - 22:50:36 MST
> I think you're getting at a problem, that, if energy is currency,
> then the energy available in the home system is limited, which
> doesn't allow for endless exponential inflation.
>
> If it doesn't, that would imply that economic growth is limited by
> energy supply. Not in the intuitive way you might be imagining, such
> as the US economy being limited by oil supply, but in a more
> surprising sense, that even if you have a sustainable ecosystem, and
> people have enough energy to move around and do their business, it is
> still impossible for economic growth to be exponential. This would
> surprise me greatly.
I've heard people claim that capitalism would be impossible without an
expanding money supply before, but I've never seen it codified in the
economic literature. Is there a strong claim, backed by serious theory
behind this?
And the idea that the monetary inflation has to be exponential is also
new. What evidence is there that this is necessary?
In any case, it's quite possible to have an expanding currency without
the backing resource expanding. It's already the case in our stock and
commodities markets that many goods are traded with a velocity that
exceeds the actual supplies of the goods. People buy and sell more
options than actually exist in the underlying stocks, and the same thing
happens with several physical commodities.
So what problem are you worried about?
Chris
--
Currently reading: Barack Obama, The Audacity of Hope; Robert
Pape, Dying to Win: the Strategic Logic of Suicice Terrorism
Cass Sunstein, Infotopia; Sherri Tepper, Six Moon Dance;
Chris Hibbert
hibbert@mydruthers.com
Blog: http://pancrit.org
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