Some blah-blah theory.

Improvements in living standards will no longer be measured or obtained 
using the traditional market. Cash has lost its reliability as a way to 
measure value.

In a traditional market, money was used to eliminate ambiguity or dishonesty 
in business deals. It expressed value in numbers, and numbers are one of the 
things everyone agrees on.

To ask a damn fool question, why would you want to eliminate ambiguity or 
dishonesty? Because you want a fair deal, obviously. You want value. You 
don't want money, you want value.

But the bubble of 1997 to 2007 was a mismatch of money and value. You might 
have a hundred dollars, but it turns out you can't eat them. Things had 
moved on already, and yet cash was still pouring into capital markets. 
They've now collapsed.

It was Labour's big mistake to believe things were still the same - that 
capital markets were the most important thing, and that the City needed to 
be nurtured. But companies just took the money and pissed it up the wall, 
failing to produce value.

If cash is no longer reliable, what hope is there? Well, if there were other 
more reliable and more accurate ways to spot a good deal that will bring you 
value, it would be logical to use them.

Enter networks. Technology provides the means to create and use networks. A 
network is just you calling your pal on your mobile and arranging to meet in 
the pub. Or it's a colossal web of contacts like the Internet.

Networks are a means to social production as opposed to industrial 
production. For example, Facebook is social production - you may think it's 
totally crap, but nevertheless it's a means for producing something that 
millions of people value.

Networks are also a means to judge value, and judge it better than cash 
does. Waterstones might advertise a book and tell you it's great, but you're 
more likely to buy it if your friend recommends it or if you read the 
reviews on Amazon. In other words, if you use a network.

"If improvements in welfare are increasingly independent of the market, it 
would make sense to shift resources out of market production, for example by 
reducing working hours. The financial crisis seems certain to produce at 
least a temporary drop in average hours, but the experience of the 
Depression and the Japanese slowdown of the 1990s suggest that the effect 
may be permanent

Creativity, broadly defined, seems likely to become more important, while 
markets, particularly financial markets, become less so. Firms that want to 
survive and prosper will have to behave quite differently from the way the 
did in the past. Google is an obvious example of a firm that is trying to do 
this, if not always succeeding."

http://crookedtimber.org/2009/03/05/the-end-of-the-cash-nexus/

"At a superficial level, it's obvious that people act differently, and are 
expected to act differently, in the context of relationships mediated by 
money than in other contexts. Behaviour that would be regarded favourably in 
a non-monetary context is regarded as foolish or even reprehensible in a 
monetary context.

One of the most important general differences relates to rationality and 
reciprocity. In a non-market context, careful calculation of costs and 
benefits and an insistence on exact reciprocity is generally deprecated. By 
contrast, in market contexts, the first rule is never to give more than you 
get.

This rule applies in market contexts but not in social contexts, where such 
careful calculation is, as Benkler notes, generally deprecated, because 
markets create opportunities for systematic arbitrage that do not apply in 
other contexts. In an environment where exchanges are not carefully 
calculated, a trader who consistently gives slightly short weight can amass 
substantial profits. If trading partners assume honourable behaviour, none 
will suffer enough to notice, but eventually arbitrageurs will drive out 
their less calculating trading partners...

The crucial feature of economic motives in a money economy is not that they 
are less noble or desirable than alternatives such as desire for fame, but 
that a money economy provides a total system of rationality, from which most 
of the motives linked with social production are excluded."

http://johnquiggin.com/index.php/archives/2006/06/16/my-piece-from-todays-fin-review-section/

DVH ha scritto:
> Some blah-blah theory.
> 
> Improvements in living standards will no longer be measured or obtained 
> using the traditional market. Cash has lost its reliability as a way to 
> measure value.

First of all I'm not english mothertongue, so excuse me for my bad 
english. In every theory of the value money doesn't measure value 
(utility or labour do it)...

> 
> In a traditional market, money was used to eliminate ambiguity or dishonesty 
> in business deals. It expressed value in numbers, and numbers are one of the 
> things everyone agrees on.

No, money are used because useful to avoid C(n,2)relative price in place 
within the economic system, and correlated exchanges.

> 
> To ask a damn fool question, why would you want to eliminate ambiguity or 
> dishonesty? Because you want a fair deal, obviously. You want value. You 
> don't want money, you want value.

Honesty isn't an economic value, but real question is related to rules, 
not to money itself. Modern epistemology (Robbins) thinks that value in 
sense you are using is not an issue of the economic theory. Is this 
position accettable? If and only if we assume that human behaviour was 
fixed forever by god (for people who trust in god) or by nature...
> 
> But the bubble of 1997 to 2007 was a mismatch of money and value. You might 
> have a hundred dollars, but it turns out you can't eat them. Things had 
> moved on already, and yet cash was still pouring into capital markets. 
> They've now collapsed.

No, i think it's necessary to focus on dynamics. System tend to 
equilibrium when some variables mantains over the time a certain mutual 
relationship (investment / savings / consumption / population / 
distribution of income). Starting from 90's distribution system was not 
in a overall equilibrium: you can pay 20 chineese workers with the wage 
of an european. At second, savings (generated by income concentration: 
see among time Gini's index trend) are higher then real investments, so 
financial institutions (banks, hedge fund, etc.) have created an 
overstructure and, consequently, bubbles.
There are in place (as in twin crisis of Far East, Mexico, etc.) also 
moral hazard behaviours: hedge funds speculated on local currency, and 
this brought also a currency crisis, after financial one.

> 
> It was Labour's big mistake to believe things were still the same - that 
> capital markets were the most important thing, and that the City needed to 
> be nurtured. But companies just took the money and pissed it up the wall, 
> failing to produce value.

I agree. Money without production is only paper good to clean ass...

> 
> If cash is no longer reliable, what hope is there? Well, if there were other 
> more reliable and more accurate ways to spot a good deal that will bring you 
> value, it would be logical to use them.

Money is reliable or not, depending upon rules...

> 
> Enter networks. Technology provides the means to create and use networks. A 
> network is just you calling your pal on your mobile and arranging to meet in 
> the pub. Or it's a colossal web of contacts like the Internet.
> 
> Networks are a means to social production as opposed to industrial 
> production. For example, Facebook is social production - you may think it's 
> totally crap, but nevertheless it's a means for producing something that 
> millions of people value.
> 
> Networks are also a means to judge value, and judge it better than cash 
> does. Waterstones might advertise a book and tell you it's great, but you're 
> more likely to buy it if your friend recommends it or if you read the 
> reviews on Amazon. In other words, if you use a network.

Yes, but a network could fail, as Owen's communities :-(

> 

>