I’ve spoken at length about the virtues of capitalism before on this blog and on twitter, yet it does have some downsides that are often downplayed. This is not to say that competition and merit are poor judges of how well capital has been allocated, however it is to say that many of the milestones that lay ahead of humanity are ultimately long-term investments that do not look good on shareholder reports. On the other hand, it also requires diverting money from consumption to investment for a long period of time in order to finance research and development of knowledge that will pay dividends in decades or perhaps centuries.
This is perhaps why technological development appears to shoot ahead in times of war, as most of us are willing to sacrifice in order to obtain reasonable security. Throughout history there is a history of the more technological nation winning the conflict, therefore investing heavily in scientific research in a time of war makes sense. On the other hand, in times of relative peace, people tend to be less open to spending billions on technological development that they may not see the benefits of, and would rather have lower taxes, more entitlements and higher consumption.
Basic macro economic theory tells us that money can be used in 3 ways, investment, savings and consumption. This is just as correct for a single person as it is for a country. For years advisers have been telling people to “pay yourself first“, which is a way of saying save and invest before you consume. The difference between investments and savings is that the goal of an investment is to ensure future income, whereas saving removes the money from circulation and save it for a rainy day.
Investing, Saving and Consuming Time
With investment there are 2 sides to the story, there is investment to maintain the present situation and investment in order to build a better future situation. For instance, if you own your home, maintaining it would be an investment that helps it maintain its value. On the other hand, if you invest in your own business, you are doing so in order to facilitate a higher income later on. Consumption represents the amount you spend on things that are not saving or investments, such as standard living costs and various other things.
For a country, it is much the same thing. A country can invest in infrastructure, in research, it can lend money to other countries, or it can consume its resources. The West has developed a habit of dialing up consumption and letting infrastructure falter, in essence through spending money on things that does not contribute to future investment, but rather maintaining the present. The interesting thing about economics is that you can always form an argument that consumption ultimately leads to demand, demand always leads to someone seeking return on capital satisfying that demand, and thus it leads capital to flow into the industry where above average returns are being followed from industries offering less return on capital.
This is perfect from the capitalist’s perspective and an example of the system working, however it also means that capital does not flow to solutions until they are more profitable than the alternatives. For instance, even if everyone decided to agree that we as a species need to get off fossil fuels tomorrow, we would be willing to take the hit in terms of lower energy pr $ for changing towards green or nuclear energy.
For instance, more people die from ebola and dengue fever than from erectile dysfunction and small breasts, however it is more profitable to find solutions to the latter. It is also more profitable to invest in oil and fossil fuels, than in new energy technology at the present moment. It will probably also be more profitable to let someone else invest in the R&D required to make green energy or nuclear energy more usable, and then copy them, as opposed to doing original research.
This is the thought experiment that lead me to writing this post. As a species we know that the earth has a finite amount of resources and we have a growing population. If we assume that the population growth will continue, and with it more demand will come for not just food and water, but for other items. Then it follows that sooner or later we will find ourselves in a situation with rapidly increasing prices (demand much greater than supply) as a result of demand increasing exponentially, and supply rapidly decreasing.
We know that there is a universe out there that can in essence make every resource abundant, because of the sheer scale of the Universe. We have experienced a similar situation before when Europeans migrates to the abundant free land in America. In order to facilitate this, they had to have transport to get there (ships), there had to be an infrastructure to bring supplies and necessities from Europe, finally enough resources and equipment in America to allow the country to be built.
If we apply the same principles to space exploration, it follows that:
A) You need feasible forms of transport.
B) You need a logistics infrastructure to facilitate colonization.
C) There needs to be production facilities in situ in order to facilitate expansion.
This would suggest that in order to further the goal of colonizing space or merely engaging in mining of asteroids and the construction of solar harvesting operations, would require much prior investments in both transportation and logistics. Where will this investment come from if present day humans are busy consuming most of the available resources and only investing enough to maintain the means of production?
Summary and conclusions
The way this relates to the red pill wisdom, is in terms of energy. If you are constantly burning yourself out in the present mindlessly consuming your energy, rather than directing it towards investments that will pay dividends down the line, you are ensuring that your past will become your future. If we think of a man’s total available time and energy we all get approximately 27375 days, that translates into 657000 hours of total life, and 438000 hours once you estimate an average of 8 hours sleeping.
If you work a regular job from the time you graduate college at 22 – 30 (I’ll be using 26 in the math) up to retirement at lets say 70, that will be: 44 years of your life multiplied by lets say 48 work weeks a year at 40 hours pr week (1920 hours pr year) x 44 years, for a total of 84480 hours of your life spent working. That totals up to 12% of your life.
The key is to “pay yourself first” by investing a portion of your time in something that will yield more time in the future. The concept of anyone “not having the time” is the same as the concept of a person who buys 2 cups of $4 coffee every day not having any expenses they can cut. Its a question of being willing to give up a little instant gratification in order to realize unlimited potential later on. That is the core problem we are suffering from, both in aggregate and on an individual level.
We have been convinced by corporations and an economic system founded on unlimited growth, that spending is a virtue and saving is a sin. When it comes to money, this funnels capital into the hands of the “corporate overlords” when it comes to time, expending all of it in the moment does as well.
