110 sats \ 4 replies \ @ek 18 Oct 2023 \ parent \ on: _Broken Money_ book club, part 2 bitcoin
I thought the causal relationship is the other way around: Because we have functioning credit markets, it's actually hard to own a home without credit?
I think where that shows up is in the types of homes that get produced. Absent credit markets, more cheap starter homes would be produced, because young people can't afford to buy the kind of house they ultimately want to live in.
The consumption smoothing allowed by credit markets let's people live closer to the conditions justified by their lifetime earnings for more of their lifetime.
reply
It's interesting to think about how this is bound up, at least in my mind, with environmental predictability. For instance, once upon a time you were a plumber, and people had a good idea (or what they did) about the prospects of a plumber. And now, if you were trying to predict a person's prospects, wtf would you even guess?
If credit is super important to function in society, and yet the basis for estimating it is fraught and getting more fraught, what happens downstream of that? Does btc change this calculus at all?
reply
Forecasting lifetime earnings for particular professions might be getting more difficult, but earnings are somewhat reliably forecastable based just on factors like parental education and earnings, so there are lots of adjustments people can make to continue earning a living.
We are really bad at understanding non-linear trends, like technological advancement, though. That will likely cause people to underestimate their real lifetime earnings.
Bitcoin at least removes all the volatility from our unstable monetary regime, so it should improve consumption smoothing.
reply
We are really bad at understanding non-linear trends, like technological advancement, though. That will likely cause people to underestimate their real lifetime earnings.
Or perhaps to over-estimate them. I think generative AI is going to be a profound change in how work gets done, and what work there is to do. I think it will bring civilization to face a hard truth about who is capable of doing what.
Related to this comment in its implications.
reply