Do any of you know of/have a critique of/can explain the economic theory of Frederick Soddy?Background (my crude understanding of it, so far) : Nobel winning chemist decides to learn about economics / finance / banking, tries and fails for two years, then is hit by a revelation ... it's all just a scam, a deep fraud. Goes on to reformulate economics based upon "sound scientific principles" taking account of the laws of energy and so on. Stands well back, expecting to be lauded, and is then totally ignored, his theory sucked down the memory hole.Given the relentless sequence of bubble after bubble, fraud after fraud and bailout after bailout, it's quite clear that some new ideas (- I think some bigwigs have even called for a "Manhattan Project" in economics) are required. However, it may just be the case that the solution has already been worked out, and that it's old, but unimplemented, ideas we need.Over to you.

First, I've not studied Soddy's theory, so this is no critique of him (or you), per se. I will say that the "Manhattan Project" metaphor (and notion of economics based on sound scientific principles) seems deeply flawed (although great for lobbying for research grants) due to four reasons:1) The Wrong Model: First, the "Manhattan Project" model is wholly incorrect because the challenge of fixing the economy is entirely unlike the challenge of inventing the atomic bomb. The A-bomb was a one-off centralized project to build a very small number of devices at near-unlimited expense per device for use in a secure environment by only the most skilled, hand-picked people. In contrast, the economy (and its regulation) is an ongoing decentralized process to handle extremely large numbers of transactions under severe cost constraints for use in an uncontrolled environment by the general public.2) The Wrong People: It's likely that scientists and economists (especially the most brilliant of them) are wholly unsuited to truly understanding and managing our global economic system. The majority of scientists are psychologically built to be knowledge-seekers. In contrast, the majority of active agents in the financial system are psychologically built to be gain-seekers. (Just ask these two populations whether they would prefer to make a scientific discovery or make $1000 dollars to see what I mean.) Paul Wilmott's example of the card deck and the magician (see his blog and BBC article) nicely illustrates how the innate thinking of smart knowledge-seeking people fails in an environment that is dominated by clever gain-seeking people.3) The Wrong Assumptions: The properties of uranium at the end of the Manhattan Project were the same as those at the start of the project. News that fission was possible or that uranium and plutonium were competing didn't cause the uranium atoms to think of new ways to profit from fission or to somehow out perform or to sabotage the performance of plutonium. If science is the discovery of invariants and engineering is the application of those invariants, then finance (and business) is often about finding ways to game or innovate around those invariants to make the invariants irrelevant, obsolete, or untrue.4) The Wrong Scale: Perhaps the larger issue is the fundamental intractability of goal. The simple fact that the economy is a massively distributed system with billions of interacting agents implies that no small subset of those agents can even hope to understand or to regulate system (without draconian steps that would freeze the system). With a ratio of one project scientist for every tens to hundreds of millions of continuously active economic agents, the likelihood that the public will outsmart the blue ribbon task force (probably before the ink is dry on their report) is 100%. (NOTE: I'm not saying that we shouldn't TRY to regulate, only that we shouldn't expect that it will solve "the problem" because there is no stable "the problem" to solve.)I fully agree that we need new paradigms but suggest that the proper epistemology for economics is vastly different from the epistemology for science and engineering.

Like T4A, I am not familiar with Soddy's work. But summaries seem to identify a key feature as as some sort of equivalence between wealth and energy. This doesn't seem too distant from Marx's view as wealth being the result of labour. (In physics, work converts energy from one form to another. The Second Law of Thermodynamics says "You can't get 'owt for nowt".)What is interesting about this notion is that the relationship between work, energy and wealth may well be an invariant that players cannot game. In other words, players in economics may seek to game the distribution or form of wealth, but it's inherent nature is unchanged. For instance, it seems to me to be a reasonable view that wealth is a form of energy that is particularly useful for humans. It is "created" by transforming energy (e.g. from resources that are also a form of energy) by the application of labour.Whilst it's true that "finance is not physics", it is also true that finance exists in the physical world and is therefore bound by the laws of physics.

I've always been skeptical of the wealth == energy analogy due to the effects of knowledge, innovation, and productivity.Physics has it's energy conservation and conversion invariants. In the physical world, E=mc^2. But in the economic world, a new bit of knowledge, created with potentially trivial labor, can significantly change the value of c for all time, or make c a function of the type of m, or cause a splitting of the types of E in the world. In short, the invariant isn't invariant. I also think labor != work in the physical sense of the word. Both the quality and quantity of labor vary tremendously (even if the economic statistics record a constant X people employed). I know that my wife can get a lot more done in a day than I can! Studies of programmers find that code productivity values (koL/FTE-year) that can vary by one or two orders of magnitude. Studies of companies show the same effect. Some companies really are much more productive than others on a per-unit-labor basis.Although the global economy certainly inhabits a physical world, the inputs from that physical world play a diminishing role in the outputs of the economy. For example, energy costs as a fraction of GDP have fallen over the decades (by a factor of 3 for the U.S. since 1970, IIRC). For all the gnashing of teeth over $200/bbl oil last year, that price surge had much less economic impact than did the corresponding price surge in the 1970s (when the economy was much less energy efficient). The percentage of the global economy devoted to manufacturing of physical goods continues to fall. What are the invariants that govern the physical inputs and wealth outputs of an iPhone app?

QuoteOriginally posted by: Traden4AlphaI've always been skeptical of the wealth == energy analogy due to the effects of knowledge, innovation, and productivity. Physics has it's energy conservation and conversion invariants. In the physical world, E=mc^2. Wealth is a measure of energy in a particular form, not of energy itself and this form is different to the forms that energy usually takes in pure physics. Heat (kinetic energy of atoms) is different to atomic energy (energy stored in an atom), which is different to wealth (energy converted from a resource to a more humanly desirable product).QuoteBut in the economic world, a new bit of knowledge, created with potentially trivial labor, can significantly change the value of c for all time, or make c a function of the type of m, or cause a splitting of the types of E in the world. In short, the invariant isn't invariant. And now this error is leading you to conclude that the laws of physics are wrong -- even in the physical world (which finance inhabits). Discontinuity in the effect of knowledge does not invalidate E=mc^2, it merely invalidates your assumptions about the value of labour when it comes to creating wealth. (For example to consider innovative creativity as being trivial labour is to isolate only that part of labour that is specifically directed at the result achieved.)Hours of hard work pushing a rock up hill contribute nothing to heating a beaker of water. But lighting a bunsen burner is "trivial labour" that contributes very quickly. QuoteI also think labor != work in the physical sense of the word. Both the quality and quantity of labor vary tremendously (even if the economic statistics record a constant X people employed). I know that my wife can get a lot more done in a day than I can! Studies of programmers find that code productivity values (koL/FTE-year) that can vary by one or two orders of magnitude. Studies of companies show the same effect. Some companies really are much more productive than others on a per-unit-labor basis.And now your erroneous assumptions about the value of labour (which you now seem to measure in terms of hours at work only, regardless of how that work is directed) lead you to confuse the value of labour with efficiency in directing labour towards a particular goal.To compare the work done by different forms of labour, you have to know about the energy equivalent between the different forms (e.g. the mechanical equivalent of heat) the result of that labour takes in the light of the efficiency with which that labour is directed (and whether or not you have a bunsen burner available). Likewise to compare the value of different examples of labour in economics, you have to compare the value of the products that result in the light of the efficiency with which that labour is directed and what means of production (which includes the skill of a worker) are available.

According to this wikipedia articleSoddy wrote that real wealth was subject to the inescapable entropy law of thermodynamics and would rot, rust, or wear out with age, while money and debt – as accounting devices invented by humans – were subject only to the laws of mathematics.Rather than decaying, virtual wealth, in the form of debt, compounding at the rate of interest, actually grows without bounds.He seems to have predicted the effects of the last year (confusion of real wealth with virtual wealth) fairly precisely.

Thanks for the responses, gentlemen; many good points.I thought it worthwhile to bring this deeply theoretical and philosophical question up now (- let's face it, 3 years ago a topic such as this would have been given short shrift) as it seems to be clear that something really -bad- has happened and no amount of cooking the books still further can help (- what's their latest effort? An Ocean Finance debt consolidation loan?!) I'd also like to add that once I hit middle age it occurred to me that not everything "old geezers" say is wrong or stupid so older ideas might have some merit; while there are no doubt many obscure economists out there, Soddy's chemistry Nobel looked indicative that he might have been on to something "useful" (- while accepting that argument-from-authority is a logical fallacy.)It does seem that this theory of his is genuinely obscure (- the wonky-pedia article seems a bit thin, though I note the reference to Hubbert) and has been flushed from the general consciousness; all I could find on the web was an american chap with a questionable-looking website flogging a book which was his "update" of the theory; I didn't really want to part with the readies to a potential kook, so I thought I would ask here first.What I could gather of it, he sees the system as composed of 3 basic elements; 2 on each side, and one in the middle; the two sides are "production" and "consumption", while the "bit in the middle" is whatever financial/economic system you've put in place to drive it all. The side elements are the parts which impinge the real world of physical reality and must respect its laws, while the middle is a virtual world constructed and enforced by human law and custom. Obviously with the middle part you have great leeway to organise things just the way you want, but equally as you drift outwards ever closer to "reality" you are constrained much more strongly.Soddy's theory of the "middle bit" - the interesting part - I could not find a description of anywhere! - and since it was 50 bucks plus shipping to find out more, ... I decided to spend the cash on a round of drinks. Although we seem to be at a dead-end as far as the illustrious chemist is concerned, continuing the theme of looking for new ideas among the old - there was a thesis recently posted on the new financial section of arxiv from a german guy (- sorry, don't have the reference to hand; you can all google as well I can anyway) which was a historical study of various money and banking systems - one of the conclusions, en passant, was that a "tally stick" system used up to about 1300 actually worked rather well, the author claiming that there had been no bubble/crash type catastrophes when it had been used. I was flabbergasted to read this - Dark Age minds could solve this "immense" problem and it wasn't even a Leonardo or a Galileo, but ... Scrot the Pig Farmer and Moog the Dung Collector. A sobering thought. (An interesting aside in this historical study was that debtor nations will often wage war against their creditors ... just as US and Chinese warships are having a staring contest in the South China Sea.)Having been grounded in more rigorous disciplines I always felt that economics was really just pseudo-science adorned with an astonishing rococo of mathematical sophistry. But I have noticed that critical papers do get written - they are just simply ignored if they do not fit the favoured agenda. Some examples I have encountered -Vladimir Nuri argues that "(fractional reserve) banking is economic parasitism"Joseph McAuley argues "free market doesn't even work in theory never mind practice"Steve Keen argues "economics needs debunked"The quotes are my summaries of their basic positions.The particular point about the "tally stick" idea is that - if sound - a modern day analogue would be relatively easy to implement given our communications infrastructure and smartcard technology. It seems to eradicate, for want of a better expression, "funny money" as everything is backed.The general points made about physical principles I agree with - we need some equivalent/analogues of "energy" and "entropy" in finance - points well made by fermion, at the risk of getting too technical too quickly! - traden4alpha's perceptive counterpoint has also been made by one of the above critics I mentioned; McAuley has pointed out that there aren't any such analogous "conserved quantities" so we can't formulate economic/finance like it was a physical theory which relies on its symmetries and conervation laws to provide a mathematical scaffolding.By the way, the "Manhattan Project" remarks I included were somewhat diverting of the discussion (- all valid points, traden4alpha) but I do think Soros and someone other "name" came out with precisely those words just as the ordure was beginning to seriously impact the rotational ventilation device.A curious reference which you may appreciate - in his massive tome "Tragedy and Hope" (- an unusual and candidly illuminating history book), Carroll Quigley towards the end, looking towards the future starts to work himself into a real tizzy - he is worried about what happens when too many "claims on wealth" are chasing too little "real wealth". This was in 1966.I don't have any personal thoughts on any of this (roof over my head and food in the larder, what me worry?) - I am just looking for information and intelligent debate; when looking for real practical solutions you have to leave your ideology at the door - it is curious how all the various groups are swarming out of the woodwork claiming how the current situation proves the correctness of their beliefs; old Marxists ("karl predicted all this 150 years ago, he saw boom and bust all right"), the Austrians ("credit expansion blah blah blah"), the Keynesians, the Ayn Rand groupies, etc.A final, final remark - as no long, rambling, forum comment is ever complete with a reference to Hitler and the Nazis, I shall continue to respect the tradition - the Nazis backed their currency with a massive program of public works; can this ever work, or is a just another unsustainable racket?Your thoughts please gentlemen - we only have 48 hours to save the Earth.

QuoteOriginally posted by: LazyDogSoddy's theory of the "middle bit" - the interesting part - I could not find a description of anywhere! - and since it was 50 bucks plus shipping to find out more, ... I decided to spend the cash on a round of drinks. This choice (which I can see making myself, too) exemplifies the declining role of real assets in modern society. At a broader level, physical assets are being deflated in favor of ephemeral experiences -- people would rather have fun than have stuff. The service economy is triumphing over the industrial economy. That trend makes Soddy's ideas rather less applicable.QuoteOriginally posted by: LazyDogAlthough we seem to be at a dead-end as far as the illustrious chemist is concerned, continuing the theme of looking for new ideas among the old - there was a thesis recently posted on the new financial section of arxiv from a german guy (- sorry, don't have the reference to hand; you can all google as well I can anyway) which was a historical study of various money and banking systems - one of the conclusions, en passant, was that a "tally stick" system used up to about 1300 actually worked rather well, the author claiming that there had been no bubble/crash type catastrophes when it had been used. I was flabbergasted to read this - Dark Age minds could solve this "immense" problem and it wasn't even a Leonardo or a Galileo, but ... Scrot the Pig Farmer and Moog the Dung Collector. A sobering thought. (An interesting aside in this historical study was that debtor nations will often wage war against their creditors ... just as US and Chinese warships are having a staring contest in the South China Sea.)Tally sticks are merely another form of fiat currency -- nothing prevents the tally stick maker from notching and using unlimited numbers of tally sticks (except for inflation and the "full faith and credit" concerns found with any fiat currency). That tally sticks formed a stable currency in the past is probably more due to the poor development of logistics in the ancient world than due to inherent qualities of the tally stick concept. If used in a modern context (e.g., electronic tally sticks), then you could do anything with a tally stick that you can do with fiat currency, including the sorts of fractional-reserve lending and securitization activities blamed as a cause of this crisis.This last issue is a major problem for economic theory (and why methods from physics and chemistry are so ill-suited to economics). Too many people, especially scientists, have the base-level assumption that schemes that worked well in the past will work well in the future.QuoteOriginally posted by: LazyDogA curious reference which you may appreciate - in his massive tome "Tragedy and Hope" (- an unusual and candidly illuminating history book), Carroll Quigley towards the end, looking towards the future starts to work himself into a real tizzy - he is worried about what happens when too many "claims on wealth" are chasing too little "real wealth". This was in 1966.Yes, this is a serious problem that is actually worse than we might think. Personally, I don't believe that "real assets" exist in any useful way. Yes, some assets might have a very long history of being more readily exchangeable for a wider range of goods, in a wider range of venues, over a wider range of timeframes and with less volatility of exchange rate. But we must NEVER confuse historical liquidity or price stability with a guarantee of future liquidity and stability. That assumption of ever-present liquidity was a fatal mistake for Iceland, ARS (Auction Rate Securities), housing, mortgage securitization, and just about ever other economic bubble. Yes, an ozt of gold feels more tangible than a stack of paper money, but try using that gold to buy $900 worth of groceries at a Wal-Mart and you'll discover that the metal isn't worth as much as you might think. My point is that all asset values depend on a social and economic context and that makes all asset values a function of animal spirits rather than physical laws.The larger point is that all "assets" have a component of Soddy's virtuality to them because their value is defined by a latent mathematical promise about the future. That is, the value of the asset is derived from the time-discounted potential to use that asset to produce value or to exchange that asset for other things of value.QuoteOriginally posted by: LazyDogA final, final remark - as no long, rambling, forum comment is ever complete with a reference to Hitler and the Nazis, I shall continue to respect the tradition - the Nazis backed their currency with a massive program of public works; can this ever work, or is a just another unsustainable racket?I see two scenarios in which public works do work. First, if the works increase the society's realized incremental taxable returns through increased productive capacity in the context of unmet demand. That is, if the public works results in new economic activity that generates taxes sufficient to cover that public spending, then that spending works. Second, one can also justify public spending as a form of insurance against unrest. In such situations, the total wealth of the society may end up lower, but not as low as if unrest were allowed to damage key public infrastructure (e.g., people stealing the phone and electrical wires to recycle the copper).

One of Soddy's books, "The Role of Money" (1934) is available as a scanned PDF download at the internet achive:http://www.archive.org/details/roleofmo ... bpDownload links on the left of that page.

QuoteOriginally posted by: Traden4AlphaToo many people, especially scientists, have the base-level assumption that schemes that worked well in the past will work well in the future.I don't know why you love to malign scientists so. Real scientists understand very well the difference between invariants and variables, between statics and dynamics, between laws and observations. It seems to me the people who made the mistake you refer to were the get-rich-quick-on-the-backs-of-other-people crowd.QuotePersonally, I don't believe that "real assets" exist in any useful way. Yes, some assets might have a very long history of being more readily exchangeable for a wider range of goods, in a wider range of venues, over a wider range of timeframes and with less volatility of exchange rate. But we must NEVER confuse historical liquidity or price stability with a guarantee of future liquidity and stability. That assumption of ever-present liquidity was a fatal mistake for Iceland, ARS (Auction Rate Securities), housing, mortgage securitization, and just about ever other economic bubble. Yes, an ozt of gold feels more tangible than a stack of paper money, but try using that gold to buy $900 worth of groceries at a Wal-Mart and you'll discover that the metal isn't worth as much as you might think. My point is that all asset values depend on a social and economic context and that makes all asset values a function of animal spirits rather than physical laws.The larger point is that all "assets" have a component of Soddy's virtuality to them because their value is defined by a latent mathematical promise about the future. That is, the value of the asset is derived from the time-discounted potential to use that asset to produce value or to exchange that asset for other things of value.The dependency of asset value on context is nothing like the same thing as "real assets don't exist in any useful way". It just means that they mutate with time, because context changes with time. You made a good point about context but then ruined it with an over-reaching extrapolation.QuoteI see two scenarios in which public works do work. First, if the works increase the society's realized incremental taxable returns through increased productive capacity in the context of unmet demand. That is, if the public works results in new economic activity that generates taxes sufficient to cover that public spending, then that spending works. Second, one can also justify public spending as a form of insurance against unrest. In such situations, the total wealth of the society may end up lower, but not as low as if unrest were allowed to damage key public infrastructure (e.g., people stealing the phone and electrical wires to recycle the copper).Or if capitalism is permitted to destroy the economic infrastructure (as we have just seen).

QuoteOriginally posted by: LazyDogStands well back, expecting to be lauded, and is then totally ignored, his theory sucked down the memory hole.I don't know who Frederick Soddy is either, so I cannot comment on his theory.But I will say that this is basically the response that I got in 1999 when I published Axiomatic Theory of Economics.Economists are cowards. Physicists aren't like that. Even that idiot Velikovsky got a hearing.

Thanks for the reference navanit - I'm going to have a quick read through of it over the next couple of days and then post some good quotations; it's about 244 pages in large type, but his style is rather more wordy than a modern ear is used to - it's quite clear though that the guy had some real intellectual horsepower.Thanks for chipping-in Grozny, I noted the related nature of the parallel thread you had started and thought there might be some crossover eventually.The comment about Velikovsky's bizarre theories (- currently being resurrected by the "Electric Universe" people) is a good one; his ideas (Venus hit the Earth 80000 years ago?) spurred on a lot of research in celestial mechanics of the solar system; his ideas were debunked ultimately but the spinoffs were extremely useful, including origin of the moon, and a realisation that we get hit a lot more often than we once thought, hence the need for monitoring of rogue asteroids, and maybe even planetary defence.Even if your theories are right Grozny, and can even be easily explained to the layman - you are not going to be popular. No one likes a smart-arse, no one likes to hear bad news, and no one wants to change a system which benefits them greatly.A couple of years ago Goldman Sachs published/sponsored an academic study/survey of General Equilibrium Theory; a real weighty tome, with much mathematical proof going on in it. The FT review of it was something like (my paraphrase) "this is proof that the system works, and everything is alright in the universe" (- ?Panglossian); and of course it is, if you are Goldman Sachs.

QuoteOriginally posted by: FermionQuoteOriginally posted by: Traden4AlphaToo many people, especially scientists, have the base-level assumption that schemes that worked well in the past will work well in the future.I don't know why you love to malign scientists so. Real scientists understand very well the difference between invariants and variables, between statics and dynamics, between laws and observations. It seems to me the people who made the mistake you refer to were the get-rich-quick-on-the-backs-of-other-people crowd.Sorry if my statements weren't clear. I respect scientists highly as long as they stick to domains in which their methods apply. I wouldn't hire a brain surgeon, a physicist, a chemist (or most economists) to do economics because none of these highly trained professionals has the right tools for the job. To say that a person trained in X should not attempt to do Y is not to malign that person but to comment on the applicability of the solutions employed for X to the problems encountered in Y.QuoteOriginally posted by: FermionQuotePersonally, I don't believe that "real assets" exist in any useful way. Yes, some assets might have a very long history of being more readily exchangeable for a wider range of goods, in a wider range of venues, over a wider range of timeframes and with less volatility of exchange rate. But we must NEVER confuse historical liquidity or price stability with a guarantee of future liquidity and stability. That assumption of ever-present liquidity was a fatal mistake for Iceland, ARS (Auction Rate Securities), housing, mortgage securitization, and just about ever other economic bubble. Yes, an ozt of gold feels more tangible than a stack of paper money, but try using that gold to buy $900 worth of groceries at a Wal-Mart and you'll discover that the metal isn't worth as much as you might think. My point is that all asset values depend on a social and economic context and that makes all asset values a function of animal spirits rather than physical laws.The larger point is that all "assets" have a component of Soddy's virtuality to them because their value is defined by a latent mathematical promise about the future. That is, the value of the asset is derived from the time-discounted potential to use that asset to produce value or to exchange that asset for other things of value.The dependency of asset value on context is nothing like the same thing as "real assets don't exist in any useful way". It just means that they mutate with time, because context changes with time. You made a good point about context but then ruined it with an over-reaching extrapolation.What are the properties of a "real asset"? And if a "real asset" can lose 99% of its value due to leveraged animal spirits then was it really real? QuoteOriginally posted by: FermionQuoteI see two scenarios in which public works do work. First, if the works increase the society's realized incremental taxable returns through increased productive capacity in the context of unmet demand. That is, if the public works results in new economic activity that generates taxes sufficient to cover that public spending, then that spending works. Second, one can also justify public spending as a form of insurance against unrest. In such situations, the total wealth of the society may end up lower, but not as low as if unrest were allowed to damage key public infrastructure (e.g., people stealing the phone and electrical wires to recycle the copper).Or if capitalism is permitted to destroy the economic infrastructure (as we have just seen).The bizarre part of this is that capitalism destroyed something that no one would have had without capitalism. Most of the people that are losing their homes wouldn't (and shouldn't) have had those homes in the first place. We've enjoyed the socialized gains of rampant consumer borrowing, now comes the socialized losses.

QuoteOriginally posted by: Traden4AlphaWhat are the properties of a "real asset"?If you're asking for a general principle, I'd say something that benefits humanity. Examples? Food, shelter.QuoteAnd if a "real asset" can lose 99% of its value due to leveraged animal spirits then was it really real?That's the distinction between real human need and fantasy-generated "need", isn't it? QuoteThe bizarre part of this is that capitalism destroyed something that no one would have had without capitalism.That's ideological speculation, not fact.QuoteMost of the people that are losing their homes wouldn't (and shouldn't) have had those homes in the first place.Humanity generates enough wealth to house the whole planet many times over.QuoteWe've enjoyed the socialized gains of rampant consumer borrowing, now comes the socialized losses.[/More fiction. Private gain is hardly "socialized". Over the last several decades, the gap between rich and poor widened considerably. And don't tell me that a "rising tide floats all boats", because it doesn't stop the big boats running the small boats down and sinking them.In fifty years from now, your arguments in defence of capitalism will look like the arguments in defence of slavery do to those of us alive today.

QuoteOriginally posted by: FermionQuoteOriginally posted by: Traden4AlphaWhat are the properties of a "real asset"?If you're asking for a general principle, I'd say something that benefits humanity. Examples? Food, shelter.QuoteAnd if a "real asset" can lose 99% of its value due to leveraged animal spirits then was it really real?That's the distinction between real human need and fantasy-generated "need", isn't it?Indeed! Most of what passes for "real wealth" or even the "bare essentials" in the developed nations would be considered decadent luxury to those in the developing countries or in times past. That's the curse of economic growth (regardless of course), isn't it. The bar that defines the poverty level continues to increase. Of course, in some areas, regulation actually reinforces poverty -- well-intentioned laws requiring basic standards on housing, vehicles, workplaces, etc. makes these "essentials" more expensive and make the poor poorer.QuoteOriginally posted by: FermionQuoteMost of the people that are losing their homes wouldn't (and shouldn't) have had those homes in the first place.Humanity generates enough wealth to house the whole planet many times over.Not true. Humanity does not create wealth, humans do. Only a fraction of humans generate enough wealth to house the whole planet many times over. That they don't to share that wealth with people who aren't creating wealth could be viewed as selfish or it could be viewed as avoiding parasites.QuoteOriginally posted by: FermionQuoteWe've enjoyed the socialized gains of rampant consumer borrowing, now comes the socialized losses.[/More fiction. Private gain is hardly "socialized". Over the last several decades, the gap between rich and poor widened considerably.And yet the % of US households that own an "X" (for X = {car, colour TV, washer, dryer, VCR, cellphone, air conditioning, etc.}) has steadily increased over those same decades. The average "poor" person in the US or EU has a hugely higher standard of living than his counterpart of decades ago.