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May 13, 2005

I had an incredibly long phone conversation with Jay '04 the other night.

I tried fleshing out my theory of the money particle. Two recent occurances led to the formulation of this theory. First, a few months ago I received my cost of living increase. Second, while waiting for my gyro at a local E. Village joint I read the New Yorker. Specifically, I read its price tag.

I asked myself - how many people, in the Soho offices where I work, actually pay out of pocket for the New Yorker? So what happens when the cost of it goes up? Price, cost of living and compensation increases occur in an inconsistent fashion. But their inconsistency provides a mapping of the distribution of power in a free society (and thus, a free economy).

Do you have the leverage to demand a cost of living increase? Probably not if you're the archetypal factory worker in Michigan.

The ebbs and flows of money in a free economy must therefore reflect the changing distribution of power, given a hollistic enough definition of power (education, information, capital, political influence, etc...) Let's factor in the cultural, so that we can say that a culture has power over you if it can encourage you to say, pay your workers more than the absolute lowest you can get them to work for (the GM of the 60s type deal).

Hmm, I'd better get going... I'll continue this later and I'll throw in a curveball to the conservative economists who I know have a thing to say about what this indicates for tax policy.

I think Jay and I also discussed patent and copyright law... we rationally figured it out. No one in the real world will ever listen, but we did...

Posted by rxu at May 13, 2005 05:56 PM

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