Comment by college_physics | Hacker News Reader

Comment by college_physics | Hacker News Reader

college_physics

Financial nihilism is a subset and derives from economic nihilism. The latter is basically the entirely agnostic stance of classical economic thinking that aims to decouple from the troublesome subjectivity of morality. Infamously, a lethal war adds to economic activity as people are busy building and selling weapons of destruction, thereby adding to GDP.

But financial nihilism is far more potent than its parent because it reflects not only slow moving "real economic activity" but the rapid dynamics of systems such as the monetary system and traded markets. Both of these have very strong "make-believe" character that are prone to create rapid collective "low-effort" bubbles. To make the difference clear, it is much easier to speculate on e.g., on solarcoin, or solar power generation stocks than actually manufacture and install a solar panel.

Ultimately economic nihilism itself is a subset and derives from moral nihilism, discounting the notion that society is held together by moral values and unspoken contracts. The transactional, dog-eats-dog Hobbesian world does not burden us with having to sort out conflicting views of what constitutes "Good society". Enjoy it.

> Infamously, a lethal war adds to economic activity as people are busy building and selling weapons of destruction, thereby adding to GDP.

I don't think it's a given that a lethal war adds real value when you incorporate the opportunity cost of not having the war. It's been argued that WWII is what ended the Great Depression, but I think that's partly due to the somewhat unique economic circumstances at the time, and due the enormous reallocations of resources and scientific discoveries that occurred.

I'd be deeply, deeply skeptical of any argument that any major wars before or since have been net-positive in creating real economic value for humanity. I think even (and perhaps especially) the most dogged Austrian-school free-market economists would agree with this position.

WW2 didn't end the Great Depression, borrowing and spending huge percentages of GDP. From 1941 to 1946, the US borrowed 90 percent of GDP and injected it into the economy. The war was a catalyst, but unfreezing the economy with stimulus is what ended the Great Depression.

Agree that when digging into the detail war is a mixed economic bag. There is the destructive aspect of war which obviously destroys economic value, then there is the "organized theft" aspect which is more like a zero-sum game of redistribution and there is the "producing the means of war" aspect which (also quite obviously) adds economic value.

The issue with economic nihilism is that it would indeed count these +/- beans as fungible quantities.

> zero-sum

In the Econ 101 model of the world, there are no beans to be gained in war. Changing what you produce does not increase what you produce. There are only beans to be lost, by producing weapons of war instead of producing what markets actually need and want.

This is called the "broken window fallacy". See e.g. https://mises.org/library/broken-window-fallacy.

I have many disagreements with the author of that article, e.g. I think his model of the economy is not realistic enough to be useful. But I think perhaps his model is exactly the kind of model that people have in mind when they think of economic nihilism: an infinite number of perfectly-fungible cyborgs all trading perfectly-fungible goods and services in an idealized frictionless free market. But it is in exactly this model that the broken window fallacy is the most obviously fallacious!

"Ultimately economic nihilism itself is a subset and derives from moral nihilism, discounting the notion that society is held together by moral values and unspoken contracts."

Is this what moral nihilism says? I was under the impression that moral nihilism states that there are no objective or inherent moral values and rules which doesn't imply that society might need agreement on a subset of (made up) moral values to function.

> there are no objective or inherent moral values and rules

as a philosophical system this might be so (and I fully agree moral values are made up and fairly arbitrary) but like so many philosophical debates this is to some extend counting angels on a pin's tip.

the moral nihilism I am refering to is the practical lived experience / choices of many individuals which are actually not completely devoid of any morality, just discounting some historically prevalent patterns, in particular those that might constrain an individual's actions

going back to logical coherence, I would think already the term "society" implies some agreement? Practical moral nihilists get out of this loop by arguing that "There is no such thing as society" :-)

Adam Smith has morality baked into his works pretty solidly. Not sure I would see that decoupling as classic economic thinking.

Agree... I think I would put Adam Smith in the paleoclassical bucket as distinct from the neoclassical one.

The problem is terms like neoclassical already have established meaning in the field of economics, so it's probably best to use those terms in order to avoid confusion. Adam Smith is pretty much the father of classical economics, and most of the classical economists were doing works of political economy. The vast majority of them are very much concerned with the morality of the systems they advocate for. Neoclassical economics is most of the mainstream economists that come after Keynes up until the stagflation in the 70s. Now we have new classical economics, new Keynesian economics, and the new neoclassical synthesis. It gets pretty messy, but I'm not sure adding new terminology that has different meaning to the established terminology is particularly helpful.

> Infamously, a lethal war adds to economic activity as people are busy building and selling weapons of destruction, thereby adding to GDP.

Economic statistics for Russia and Ukraine would like a word.

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