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Comment by DrewADesign | Hacker News Reader

Economics is essentially the study of resource allocation. We will have resources that will need to be allocated. I really doubt that AI will somehow neutralize the economies of scale in various realms that make centralized manufacturing necessary, let alone economics in general.

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I so wish this were true, but unfortunately economics has a catch-all called "externalities" for anything that doesn't fit neatly into its implicit assessments of what value is. Pollution is tricky, so we push it outside the boundaries of value-estimation, along with any social nuance that we deem unquantifiable, and carry on as is everything is understood.

economics being deeply imperfect doesn’t really change my point

Indeed, but I think it renders your point obsolete, since deeply imperfect resource allocation isn't really resource allocation at all, it is (in this case) resource accumulation.

Are you suggesting that compound interest serves to redistribute the wealth coming from extractive industries?

Are you suggesting that economics is primarily concerned with compounding interest?

no, i am suggesting that economics is primarily concerned with resource accumulation.

my point about compound interest is that it is a major mechanism that prevents equitable redistrubution of resources, and is thus a factor in making economics (as it stands) bad at resource allocation.

Economics is the study of resource allocation at various levels ranging from individuals to global societies and everything in between. Resource accumulation is certainly something people, groups of people, organizations, societies, etc tend to do, and so it is something economists would study. Many economists are greedy jerks that believe hoarding wealth is a good thing. None of that changes what economics is any more than any any political faction changes what political science is.

This is late, probably too late, but if you really want to get into the weeds of this, here is a better summary that what I can produce, from a paper that explains it better than I can:

"The model is a work of fiction based on the tacit and false assumption of frictionless barter. Attempting to apply such microeconomic foundations to understand a monetary economy means that mistakes in reasoning are inevitable." (p.239)

https://academic.oup.com/cje/article/48/2/235/7492210

A paper that criticizes microfoundations counters what I said?

Later.

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