Tagged: stock

stocks and flows

Something intelligible from this article by dymitri:

Joan Robinson frequently recounts that the great Michal Kalecki once exclaimed to her “I have found out what economics is; it is the science of confusing stocks with flows!” The trouble with the flat earth economists, is that they confuse the dynamic flows of production and consumption that make up an economy with static piles of stuff. Robinson further reasoned that “it is this confusion that has kept the Quantity Theory of Money alive until today.”

With ecosquared, we separate money from things, ie a quantisation of things. The closest we get to this is the cumulative relative values from SEA. That is, Gary may be highly valued this month, and so he gets more money flow. In the current ecosquared system, there is no numerical application of subjective value to things. Will this evolve sometime?

A parallel system will evolve to keep track of things, much like books in a library, so we know who has what at any moment, and there will be a relationship between the value we produce for one another and the sharing of things. Can this should be conducted through our personal relationships, simply sharing with one another, like food around a table?

Not sure about the equation in the article. Seems too simple by half. Nor the political biases. The interesting bit remains in separating flow from stock.

flow_stock

This is a classic economists understanding of stock and flow. This diagram indicates that business or economics is the flow of things. So, the number of things that enter the shop through the back door, the inflow, the number of things that leave the front door, the outflow sales, and the stuff that remains on the shop shelves, the stock. This could also apply to the movement of people, and not just in the sense of slavery. Over time, companies are ‘stock’, where the ratio of inflow and outflow of people delineate whether the company is growing or shrinking.

Ecosquared has a slightly different interpretation of flow and stock. Simply, the flow is to do with the application of number to time and people, ie MTTP. The stock is the real world stuff we share. How is the stuff we share regulated? How can we distribute the stuff in our shops without ‘money’ as an intermediary?

At this point in ecosquared, money is attracted to the value participants produce and distributed according to SEA. This money can be used in the traditional way, buying stuff. As the ecosquared entity grows, and entire communities are running with MTTP and SEA, where there is no ‘external’ attractor of money, how do the distribution of goods get divided?

No answer to this yet.