Congratulations, you just reinvented economics.

Seriously though, the purpose of money is an intermediary. As I repeat often, money is potentially anything that is a) scarce, and b) useful. Money solves the barter problem, which can also be understood as the O(n^2) search problem and relieves the necessity for "double coincidence of wants"; or simply, you can buy something from someone with money without them wanting whatever you're providing. Hence, the search solution.

As to "I do not see why prices should ever drop below the cost of production": well, you have to consider that the cost of production varies among agents. It's true that in the absence of exceptional circumstances, the market cost shouldn't drop under production cost. However, notice I mentioned exceptional circumstances: those includes shortages, opportunity cost (selling something at a loss to buy something that's guaranteed to go up even more in value), price fixing, fulfilling debt obligations (i.e margin calls - again I'd like to see credit implemented in LT), ...

Continue interesting debate here.

I think that's a little harsh. Economics isn't just one thing.

Having said that, it has been quite fun watching Josh occasionally say something that sounds eerily like Marx as he tries to solve these issues.

McDuff wrote:I think that's a little harsh. Economics isn't just one thing.

Having said that, it has been quite fun watching Josh occasionally say something that sounds eerily like Marx as he tries to solve these issues.

This is what lead him make such a strict system that would only work in a computer.

And try it out in the real world for kicks.

Its a slippery slope Josh! BE CAREFUL! /sarcasm

Video Games Lead to Violence PEOPLE!

https://www.youtube.com/watch?v=_EGlrPl0N_o

You forget that Marx's biggest work was called "Capital"

Can't tell if derogatory or not

Either way, yep, I realize that's pretty much what happened. But in order to properly implement something you have to understand it! So if LT is to have a strong economy, it was necessary that I come to an understanding of the fundamental concepts (money, supply/demand, labor, competition, etc.) in my own way Until that moment I didn't see all of the sweeping simplifications that it enables

I think reinvention is underrated

Reinvention of a concept in ones mind brings a unique and valuable kind of clarity that simply can't be taught.

jimhsu wrote:Seriously though, the purpose of money is an intermediary. As I repeat often, money is potentially anything that is a) scarce, and b) useful.

The second criterion is debatable if your money happens to be giant discs of stone.

It's not derogatory from my point of view. Das Kapital remains one of the more insightful pieces of economics ever written, arguably more so than the General Theory, and arguably containing insights into capitalism's tendency towards crisis that academic economists are still struggling to grasp 150 years later (mainly due to an institutional obsession with equilibrium).

It's just a shame that more people don't read it, but this is only partly explained by the fact that people think Marx only wrote about Communism and have thus tainted him with memories of Mao. It's also about 54 tonnes in 3 volumes, and Marx was a brilliant economist but something of an obtuse prose stylist, so it's not exactly easy to understand sometimes, even if you're not reading it in the original German. I haven't even read all of it, some of it's like chewing straw.

But anyway, sometimes I see Josh write a discovery about economics and think "hmm, that's straight outta Marx."

The classical economists are worth reading much more than the neoclassical ones in many respects anyway. The classical economists like Smith, Marx and Ricardo may often have been wrong about some things, but they were pioneering and trendsetting in the discipline and thus making mistakes honestly, and you can learn things from the ways they were wrong as well as the ways they continue to be presciently right. Neoclassical economists are often obstinately clinging onto ideas which are well-established as mistakes and trying to invent complicated ways to prevent people spotting them, so you can't learn anything from their mistakes except something about the nature of the dismal science as a discipline.

McDuff wrote:It's not derogatory from my point of view.

I think Josh might have been speaking about the thread in general.

I know, but I'm also aware that people can get all ornery when you mention Marx, so wanted to be sure I was clarifying my position.

ColdSpiral wrote:

jimhsu wrote:Seriously though, the purpose of money is an intermediary. As I repeat often, money is potentially anything that is a) scarce, and b) useful.

The second criterion is debatable if your money happens to be giant discs of stone.

Indeed.

I presumed sarcasm doesn't transmit well over the internet

Regarding the rai stones (love that example), note that even in that case, what is actually traded aren't the stones, but the rights to the stones -- in fact they were probably the first (surviving at least) concept of modern banking. (The stones themselves are useful in that they can demonstrate ownership (different shapes, sizes, etc) and are self-securing (due to the sheer mass). A very stable, highly secure, extremely illiquid asset - we've got plenty of those (real estate, gold, copyright and intangibles). "Money" in LT should work similarily; its usefulness is derived from its ability to be converted to, and from, useful goods.

Regarding

Which means ze LT markets are now 100% real bid/ask-based markets

Thank. You.
/ponders market-making as a future profession in LT. Seriously, I made my first billion (and some more) in EVE mainly by market-making from the (relative) comfort of a station.
Market rule 101: Liquidity is inversely proportional to the bid-ask spread.

You will implement remote market orders, correct? (Sell X units of ore on a station 5 jumps away for no less than 150cr; buy all ore in a 3 jump radius from station X for no more than 100cr, etc). Heck, if you have the time, go the whole hog and implement conditional orders, all-or-none (AON), brackets, ... and that's not even counting derivatives (gnarly mess there; I actually implemented Black-Scholes in a videogame (Skyrim), but gave up with the actual option market implementation).