Philosophy of Everything

It is said that money value results from the quantity of money that are chasing the products. It is actually the opposite: money value depends on the rate of products chasing money. It sounds similar, but it is not the same. Let's take it slowly. The value of the money depends on the products that can be bought with a monetary unit. That value depends on the product price. The seller will always try to maximize its profit, so we will try to sell each product with the highest possible price. Higher price is an inflationary pression: one unit of money will buy less products. What opposes to the inflationary pression from the sellers? One limitation is the share of wallet that the consumer affords to allocate for that product. If a product is too expensive, potential customer might delay of give up buying that product. This creates a problem for the producer. But let's see closer why. The pressure for the producer to sell cheaper - in order to sell something - comes from its debt....

It's common knowledge that if you print more money, you will produce inflation. However, things are more complex than that. You can have both inflation and deflation in the same time. More often, we have relatively low inflation on common products and high inflation on specific products - think real estate. Money velocity First, there is that "money velocity" that equals the equation Products * Price = Money * Velocity . The money velocity is intuitive, but cannot be practically measured except from this equation - thanks to my namesake friend for this idea.

We have many anecdotal evidences that economical capitalism creates more welfare than economical communism. However, we lack a clear model to explain what is necessary for the capitalism to work and what is only contingent - not contributing or even affecting the welfare creation. Without such model, we are left debating with ideological arguments like "private property is a natural right" or the anecdotal argument that "communism never worked well enough". The opposing side would naturally reply with some other anecdotal evidence about the shortcomings of capitalism and the possibility that "communism failed because it was not correctly implemented". I will argue here that we can actually model the way private property positively impact the creation of overall welfare. On the other hand, we can also identify cases when private property can negatively impact the overall welfare. I use "common welfare" in the common, intuitive sense: th...

We often hear the expression "this creates jobs". But job creation cannot be good in itself. The state could create well payed jobs for everyone for doing nothing. Even with jobs, if nobody produces food, then people would starve. What is important is welfare creation - goods and services, that is often accompanied by occupied people that have jobs. Such welfare creation should equate to a better life for the ones who consume that created welfare. There are many nuances here. In these days, only a fraction of jobs is actually involved in creating goods and services that directly affect the quality of life. There is a high portion of jobs that are involved in organizing the welfare creation and redistribution. This includes management, state administration, banks, lawyers, police and more. Without a system to control the fair exchange of goods through money, people would tend to break contracts and steal from the welfare created by others. While such "administrative...

Better reads: Data Consistency in Distributed System - CAP, PACELC Morality series - a heptalogy This blog is mainly focused on my Philosophical and theoretical ideas. From time to time I have practical posts that are too few to deserve a blog by themselves. I still hope my other work (like above) is even more valuable than such practical article as below. * * * Black Friday is a selling race over the gift budgets: the budgets that have a peak around the start of December What is the lowest possible price on "Black Friday"? Sellers will try to make this unpredictable. However, there are certain price strategies that any rational seller should apply. This can give you hints about the likelihood of obtaining a lower price on Black Friday, Cyber Monday and similar. Why having price cuts at all? Normally, any producer or seller would want to have the highest gain from the products it sales, therefore a higher price is desirable. However, selling more many pieces of a pro...

Welfare Welfare = produced  goods + redistribution curve At the basic level, welfare in society is just a matter of produced good (including services) and the redistribution curve. Money is not welfare in itself, as you cannot eat money. However, money is the system that controls the production and redistribution of goods. People with more money are entitled to consume more goods in this moment. But they can also chose to delay the consumption and have no impact in their welfare for the moment, then consume goods at a later time. Or money can lose value and can be never exchanged for the expected value. Money is motivation to produce goods Money also controls the motivation in the production of goods - like in working for salary or creating a company to get rich. Money permits to save the value of the goods that you produce now and later consume goods produces later - like when you retire. Money is used to redistribute goods to people that cannot produce goods (like unem...

This is not about a specific flaw in Bitcoin, however Bitcoin is a preeminent exponent of the crypto-currency galaxy. Any cryptocurrency that don't have a sufficient loan base have these problems. Bitcoin, especially, looks more and more like a Ponzi scheme that is just ready to blow. Only that there will be no Charles Ponzi to sue, only a lot of people that lost money and a few winners that sold the bitcoins before the bang. Or, with another metaphor, Bitcoin is like a global poker game where some will take the pot and the others will bite the dust. It may happen tomorrow or after years, but for me this is the only reasonable end. Until then, everybody believes they have a very good hand... Here are my arguments: No loans, no value

There is a certain economical logic in companies going bankrupt or being forced to do layoffs. When a company does not provide enough value anymore to society, it should release some of the resources (namely people and materials) for doing something more useful for society. There are, of course, some pitfalls here. When someone that is fired cannot find another job, the actual value in society is decreasing. Even premature retirement can have a similar loss effect on society if that person was still creating some value and after retirement he doesn't find something useful to do (like volunteering, helping family).

We love "cutting edge" technology. We need to have the latest gadget, we need to use this new trendy framework, we need to use the latest update of our favorite software. Newer should be better, right? Actually, each new technology brings a promise of improvement and an additional hidden small risk. You are trying the new innovative painkiller drug that promises to solve your low intensity, but still disturbing, migraines . You can get a real improvement on your condition, you could get no significant improvement or, with a small probability, you could die, like in the recent drug trial in France . Indeed, that was an experimental drug, and many others that took the drug were not affected. Well, this is exactly the danger: if the really bad effects only happens with low probability, it might not even be caught in the trial period...

What gives value to money? There was a time when money was pure gold. Later, money was a certificate that you own a quantity of gold in bank (banknotes). Now the money are just quality paper, without any deposit behind. How that it has any value? Some said that money is just a convention, and the fact that the state accepts that coin as the "legal tender" gives it value. However, we know many coins that lost theirs value despite the state effort to  sustain it. How that other coins survives? I claim that debt is the one that gives value to the today's (fiat) money.

Human intuition behaves similar to a neural network software algorithm: it produces an estimation of a certain probability, based on prior experience. The same with an artificial neural network, human intuition needs to have sufficient training experiences on that field so it can extract regularities. The training experiences should be able to provide adequate and rapid feedback that can be used to adjust the internal model, for both biological and software neurons.