Nice point about money. I believe that even barter exchanges are construed as income. So there is no escape from the taxation trap except, perhaps, complete self-sufficiency.
-- Russ On Sun, Apr 12, 2009 at 8:48 PM, Tom Carter <[email protected]> wrote: > Russ - > Thanks . . . > > As far as thinking about how economies "really" work . . . what follows > is not really a response to your questions, but a source for thinking about > transitions from subsistence/barter to a "monetized" system . . . > > A clever scheme: > > 1.) Find a region where there is a subsistence/barter "economy" (with, > typically, tribal/communal shared land). > > 2.) With "high minded" fanfare, institute "land reform." That is, > divide the land up into small plots, and assign "ownership" of the plots to > individuals. > > 3.) Now, the clever part: establish a "land tax," but make sure that > the "land tax" must be paid in currency. Note that an "income tax" won't > work, because then people could remain in their subsistence/barter mode, > avoid having any accountable "income," and thus avoid the "taxation" trap . > . . > > 4.) Before long, everyone will have to either switch to "cash crops," > or engage in "wage labor" (or, more likely, both) in order to get currency > to pay the "land tax." > > 5.) You will then have a "monetized" economy, together with a ready > pool of "wage laborers," and "consumers" who purchase goods, since they have > moved to "cash crops," away from subsistence farming. > > A quick Google search yields this essay (the Google search was: colonial > land taxation cash crop): > > http://www.cfeps.org/pubs/wp-pdf/WP25-Forstater.pdf > > A quote from the essay: "The history of direct taxation in colonial > capitalism also has some widertheoretical implications. It shows, for > example, “that ‘monetization’ did not spring forth > from barter; nor did it require ‘trust’—as most stories about the origins > of money claim” > 15 (Wray, 1998, p. 61). In the colonial capitalist context, money was > clearly a “creature of > the state” " > > Anyway . . . > > tom > > > > On Apr 12, 2009, at 5:07 PM, Russ Abbott wrote: > > Hey Tom, > > Very nice work. Do you have anything that would help build intuition about > how it all works? > > Also, what I'm after is an understanding of how an economy works. Your > model says that an economy that satisfies certain conditions will > (inevitably) wind up with a certain wealth distribution. But it doesn't tell > me what's happening in the economy -- only that some people will become rich > and a lot more will become poor. I'd like to develop a feeling for what's > actually going on in the economy. > > For example, in my original model in which (a) each agent needs to consume > one unit of each of N different resources at each time step (b) there are N > agents each of which produces N units of a particular resource i (different > from each agent) and (c) agents trade (barter style) units of resource one > for one as needed, it seems to me that there will be no wealth accumulation. > Everything that is produced is consumed, and as long as agents are able to > trade with each other on a one-for-one basis, every agent survives but no > agent accumulates any excess. So that doesn't quite fit the model. > > Furthermore, what happens if some agents (as a result of technological > advances) are able to produce N units of a resource in less than one time > step? Then those agents will have time on their hands and can produce > something other than the resource that they contribute to the community. So > they start producing resources that no one needs -- but that perhaps some > agents want. > > The agents with time on their hands then exchange these discretionary > resources among each other. Again this might be modeled as a barter system > -- although some convenient resource could come to serve as a unit of > measure and medium of exchange. If you take this to the limit so that every > agent is producing nothing but discretionary resources (i.e., the "needs" > are so cheap to produce that there is no point keeping track of them), then > what? In this model, every agent creates N units of value every time step. > So there will never be any agents with no resources. > > In addition, since every transaction involves the exchange of units of > resource of the same value, it seems like there is no room for accumulation > of wealth. (This is assuming that one acquires a resource in order to > consume, i.e., destroy, it.) So when two agents exchange resources, they are > both left poorer since they each consume the received resource. In this > model an agent grows wealthy only by not exchanging resources and keeping > all the resources it produces. It then has the ability eventually to go on a > shopping spree, pig out, and consume lots and lots of resources at one > time. But what else is that wealth good for in this economy? > > So all this doesn't quite seem to fit the model you are describing. > > -- Russ > > > On Sun, Apr 12, 2009 at 4:31 PM, Tom Carter <[email protected]>wrote: > >> All - >> The real "random walks" link: >> >> >> http://csustan.csustan.edu/~tom/SFI-CSSS/2009/LectureNotes/Random%20Walk/<http://csustan.csustan.edu/%7Etom/SFI-CSSS/2009/LectureNotes/Random%20Walk/> >> >> tom >> >> On Apr 12, 2009, at 3:58 PM, Tom Carter wrote: >> >> All - >> Apropos some of this, there are notes from lectures I've given recently >> on some of these topics here: >> >> Math Club lecture <http://csustan.csustan.edu/%7Etom/math-club> (including >> some discussion of the "wealth model," and some "power laws" discussion) >> >> Black-Scholes/High >> Finance<http://csustan.csustan.edu/%7Etom/SFI-CSSS/2008/LectureNotes/HighFinance> >> >> Random >> Walks<http://csustan.csustan.edu/%7Etom/SFI-CSSS/2009/LectureNotes/Random%2520Walk> >> >> tom >> >> On Apr 12, 2009, at 11:16 AM, Stephen Guerin wrote: >> >> Russ writes: >> >> there are N agents; N resources are needed for survival. So if the >> aggregate production is evenly distributed everyone has a subsistence >> living. >> >> >> I don't think this is necessarily true. >> >> Your mentioning a gift economy is further a reason to look at a model as >> simple as the Tom Carter/Victor Yakovenko model I mentioned where agents are >> giving a dollar to another random agent (ie gifting). This model, with >> minimal assumptions, generates non-equitable distribution of wealth where >> very few agents end up holding most of the wealth (Boltzmann distribution) >> even though the average wealth in the model is unchanged at $50/agent. >> >> The important constraint in the model is that agents can only have >> positive amounts of cash/goods -- they can't gift a dollar they don't have. >> >> Just as energy distributes itself as a boltzmann distribution as particles >> can not have less than zero energy after a collision (transaction). >> Basically we have diffusion against a wall in both models. Of course we can >> introduce debt and progressive taxes to the economic model to mess with the >> dynamics, but I think it's important to recognize the non-equity is there >> from the beginning with very minimal assumptions. Note that the wealthy >> agents do turnover in this model so the definition of what is equitable is >> important. >> >> -Steve >> >> >> >> On Apr 12, 2009, at 11:40 AM, Russ Abbott wrote: >> >> Thanks for all the responses. What prompted my question was thinking >> about the "end state" of the current financial crisis. The question is: >> what does a successful stable economy look like? Only secondarily was I >> asking about markets, wealth distribution across society, etc., which is >> what many of the existing models focus on. >> >> >> In attempting to describe the foundations of a stable economy I was making >> the following assumptions. >> >> • We live off the gift of free energy -- the sun. So in some sense a >> stable economy requires little more than harvesting that energy. >> >> • As human beings we have the innate (i.e., also free) ability to >> transform that energy into other forms that we need. For example, most of us >> on this list are capable of writing code. I'm taking skills like that as >> more free gifts from nature. Yes, it requires, education, study, practice, >> etc., but ultimately it grows out of our being alive, a free gift. >> >> • In talking about "free gifts" from nature, I'm not trying to be >> spiritual, new age-y, etc. It just seems to me to be the way the world >> works. So I'm willing to build it into the model. >> >> • But, even though we live off these free gifts, we all need energy to >> survive. If you look at my "Reductionist blind spot" paper, you see that we >> are what I call dynamic entities. Dynamic entities need to import externally >> supplied energy to persist -- in our case food, at least. So even though we >> find ourselves in a world in which there is externally supplied energy >> available to be imported (from the sun and its stored versions), we are each >> still required to do something to import it for ourselves. That is, we must >> each work for a living. >> >> • Presumably a standard economic model says that we live at a subsistence >> level if the amount of work we do matches our needs. If I spend all my >> working hours doing nothing more than earning what I need to survive, that's >> subsistence. >> >> • I want to allow specialization so I suggested that each agent >> specializes in producing some resource but that the aggregate amount >> produced exactly satisfies the needs of the producers. That is, each agent >> produces N units of his specialty resource; there are N agents; N resources >> are needed for survival. So if the aggregate production is evenly >> distributed everyone has a subsistence living. >> >> • A society/economy grows "richer" when it can produce enough resources >> for itself without requiring everyone to work on producing those resources. >> In that case, the available excess labor can produce discretionary items, >> like art, pop music, software, soft drinks, philosophy, etc. >> >> • As technology advances a smaller and smaller percentage of the >> population is needed to produce the necessities. The rest can spend their >> time producing discretionary items. >> >> • So at this point we are all well fed, and we are all willing to spend >> our extra money supporting our local NPR stations. >> >> • But what happens when there is shock to the economy and people find >> that they have less "wealth" than they thought they had? Presumably they >> will spend less on discretionary items, and the people who create those >> items will be out of work. Where do we go from there? >> >> So I am looking for a model to explore these kinds of issues. >> >> >> I must say that I'm surprised at the number of things I had to write down >> to explain what I am after. I thought it would be simpler. And I want >> something as simple as possible. >> >> >> Any thoughts/suggestions? >> >> >> -- Russ >> >> >> On Sun, Apr 12, 2009 at 9:14 AM, Victoria Hughes <[email protected]> >> wrote: >> >> > Attention and action = the price to consume. >> >> >> is it possible to have an idea / new information and not in some way, >> internally or externally, react to it? >> >> Memes spread. Humans by design infect each other on all levels. >> >> The Complex seems like a great example: by definition intends to do this. >> >> Idea / attention / action-reaction / experience / new idea. >> >> And so forth. >> >> Am enjoying the bouncing of ideas and information in this particular >> string... >> >> Tory >> >> >> On Apr 12, 2009, at 7:04 AM, Jochen Fromm wrote: >> >> >> The central property which emerges in markets is >> >> the price. The central law which rules markets is >> >> the law of supply and demand. A basic agent-based >> >> model for markets should explain how both, the >> >> price and the law of supply and demand, emerge >> >> in competitive markets. It should be simple to >> >> extend such a model to explain bubbles and crashes. >> >> As far as I know, there is no basic model of >> >> markets in general, there are only agent based models >> >> of specific markets, for example stock markets, >> >> financial markets and electricity markets. Perhaps >> >> the law of supply and demand is too simple to justify >> >> such a model? >> >> >> Epstein and Axtell's Sugarscape is a model where >> >> agents begin to accumulate "wealth" in some form, >> >> but it is more about evolution of societies and less >> >> about market mechanisms and economies. >> >> >> It would be interesting to apply a basic agent-based >> >> market model to the society of mind. If we consider the >> >> crowd within and the battle of ideas which is going on >> >> inside our minds, can we create an agent-based model >> >> to explain the 'market of information' ? We have a >> >> demand for new or highly emotional stuff, are constantly >> >> supplied with information from the outside, and the price >> >> we have to pay to consume it is attention. >> >> >> -J. >> >> >> ----- Original Message ----- From: Russ Abbott >> >> To: The Friday Morning Applied Complexity Coffee Group >> >> Sent: Sunday, April 12, 2009 9:00 AM >> >> Subject: [FRIAM] Agent-based market models >> >> >> Does anyone know of good examples of generic agent-based market economies? >> I'm thinking of something as simple as this. >> >> >> A population consists of agents each of which has certain continuing needs >> (such as food, clothing, shelter, Internet access, etc.) to survive. As a >> starting point, let's assume that each agent needs one unit of each of N >> resources every time period. Let's also assume that each agent is >> specialized and is capable of creating enough of one of the needed resources >> to satisfy the needs of N agents. (The fact that I used the same N in both >> places was intentional.) To keep it simple let's assume that these acts of >> creation occur from scratch, i.e., that the creator doesn't need raw >> materials, that all that's necessary for an agent to create a needed >> resource is that the agent be alive. The agents presumably develop a barter >> economy, trading the resources they create for the resources they need to >> stay alive. Perhaps markets develop, and perhaps money develops. At this >> point the economy should be fairly stable. Each agent creates enough stuff >> so that s/he can trade it for what s/he needs to stay live. >> >> >> Perhaps some of the agents learn how to be more efficient in creating >> their resource and begin to accumulate "wealth" in some form. Perhaps the >> agents have discretionary desires, which they fill if they have enough >> resources left over after meeting their basic needs. Perhaps there are >> communal services that are paid for by taxes or memberships. This could >> become increasingly elaborate. >> >> >> It seems to me that models of this sort must have been developed -- >> perhaps many times. Does anyone know of any references to this sort of work? >> >> >> Thanks. >> >> >> -- Russ Abbott >> >> _____________________________________________ >> >> Professor, Computer Science >> >> California State University, Los Angeles >> >> o Check out my blog at http://bluecatblog.wordpress.com/ >> >> >> >> ============================================================ >> >> FRIAM Applied Complexity Group listserv >> >> Meets Fridays 9a-11:30 at cafe at St. John's College >> >> lectures, archives, unsubscribe, maps at http://www.friam.org >> >> >> >> >> ============================================================ >> >> FRIAM Applied Complexity Group listserv >> >> Meets Fridays 9a-11:30 at cafe at St. John's College >> >> lectures, archives, unsubscribe, maps at http://www.friam.org >> >> >> ============================================================ >> >> FRIAM Applied Complexity Group listserv >> >> Meets Fridays 9a-11:30 at cafe at St. John's College >> >> lectures, archives, unsubscribe, maps at http://www.friam.org >> >> >> >> ============================================================ >> FRIAM Applied Complexity Group listserv >> Meets Fridays 9a-11:30 at cafe at St. John's College >> lectures, archives, unsubscribe, maps at http://www.friam.org >> >> >> ============================================================ >> FRIAM Applied Complexity Group listserv >> Meets Fridays 9a-11:30 at cafe at St. John's College >> lectures, archives, unsubscribe, maps at http://www.friam.org >> >> >> >> ============================================================ >> FRIAM Applied Complexity Group listserv >> Meets Fridays 9a-11:30 at cafe at St. John's College >> lectures, archives, unsubscribe, maps at http://www.friam.org >> > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org > > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org >
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