To be precise, the investors who are left holding at the end of the cycle get punished. The early investors who got out make out like robbers.
This system incentivizes pump-and-dump.
We could allocate resources to productive assets by fiscal spending, but that is prevented by politics. Only when "the market" gets its cut can any infrastructure be built in the US. That's also true for much of the medical establishment and pension/retirement systems. If the market was efficient, we wouldn't be complaining about it. Unfortunately, a "free market" and an efficient market (and you could argue whether infrastructure or medicine or income insurance even make sense as markets) are not the same. Most markets that have many individual consumers require regulation to be even close to efficient. Like political and financial enforcement they are too easy to manipulate and the consequences of malfeasance are substantially less than the profits to be made.
So you need a smart balance. And you need competent, honest people in both business AND government.
I don’t think that government necessarily is inefficient. The DMV could be a very efficient place. The fact that it isn’t should cause at least some pause for those advocating more government spending (such as myself).
And the same is true for business. Comcast is terrible. But it doesn’t HAVE to be. Rent-seeking and anti-competitive behavior makes it terrible.
The problem with the above is it weakens democratic institutions by removing the exercise of power from the people the population select to lead.
Inefficiency to me can not possibly be more clearly demonstrated than by ape pictures losing hundreds of thousands of dollars for their purchasers. But we also have examples like Uber spending cash on hand to drive competitors under without having a plan to maintain their own services without heavy subsidy.
I sold a car of mine to Carvana in October. I returned the license plate to the DMV immediately, which is how they're notified that you no longer own the vehicle, waited 7 days, then cancelled my insurance policy on that car. A month later, I got a letter from the DMV that it is a crime to not carry insurance on my vehicle and I will have to reinstate the insurance and pay a $70 fine for letting it lapse. On the car I no longer own, that was now titled in another state and resold by Carvana already.
It took 2 more months and 3 different forms to get the DMV to accept that I no longer owned the car and to stop pursuing me for this "crime".
Sounds like your state has a big problem.
In my state (New York), appointments are generally available within a week and walk-ins are welcome, but those with appointments get priority.
I've never spent more than 30 minutes or so at a NY DMV location and most transactions are available online, including replacement of lost/stolen licenses.
In fact, I decided on Wednesday (11 May 2022) that I wanted to trade in my license for an "Enhanced Driver's License"[0] (EDL) which, among other things, will be required for domestic air travel[1] in a year or so.
That's one of the few transactions that must be done in person. I went online to book an appointment and was presented with a whole bunch of appointment times next week. I chose Thursday (19 May 2022) as it worked best with my schedule, but I could have gone on the 16th if I'd wanted.
So, no. Not all DMVs are a pain or inefficient. Want to make that better in your state? Elect people who will work for you. Just a crazy thought.
The license plate should follow the car and ownership should be changed online as part of the transaction. It sounds incredibly wasteful that every time a car changes ownership the seller must hand over the plates in person to the DMV. And is there no national registry of cars or data sharing between states? Strange that a car can be registered twice.
If your drivers license is stolen you should be able to just order a new one online and have it delivered in the mail. I have been inside the building of our DMV equivalent two times. One time when I did theoretical exam to be allowed a practical driving test, and once for the driving test. I got a temporary license when I passed and the proper license in the mail the next week. This was 20 years ago.
In California the DMV experience was greatly improved by having appointments, and for walk in, you get a number and at least have an idea when you'll be called, so you can sit in a waiting area, not have to stand for hours.
COVID has reduced staffing so that makes appointments harder to get.
Also, imagining that corporate offices are models of efficiency is an error.
It's totally baffling to me when there's 'the DMV' in US films/tv, because that's just not a place (nor anything equivalent) we have to go to, whether it's 'only fifteen minutes' or more.
(Sure, when my driving licence expires in 10y, or I change address, I'll need to spend a minute or so on an online form.)
Things have not improved, to say the least.
For that reason, I suspect it's good idea to leave interpretive space for the possibility that a given bureaucracy has been intentionally hamstrung, or is Kafkaesque by design.
I suspect calling Comcast is miserable because the process is designed to exhaust and manipulate you out of quitting, for example.
I suspect it's possible to build systems that enable you to ensure an ER visit will cost $500 instead of $10000--but our insurance companies may feel like the uncertainty deters people from seeking care.
Some systems are more resilient to dishonesty and incompetence than others. I suspect a mixed system is the most resilient. But we CAN change the behavior by choosing to reward competence and honesty by who we elect, who we hire, and who we do business with.
You can do most things online with a much better UX than most commercial websites. No crappy ads or pop-ups. Plus when you do need to go in, you book a time slot at a DMV center online.
Recently I had to bring my daughter for a driving license to the one in Brockton, MA. When you go in, they give you a token number. The currently processing token number is shown on a huge LED display on the wall. Hundreds of customers are in there, many of them don't speak much English, etc., but things move pretty smoothly and fast. Very efficient.
If I had to deal with customers at the DMV, I think I'd be grouchy too.
Another reason to try and get as much of it online as possible, which I think is most of it nowadays.
One of my requirements of a retirement destination is municipal broadband. No BS, just a fair price for a service that's actually treated like a utility.
The idle rich who can't find anywhere worthwhile to play with their nearly-free money (until recently ZIRPish) are a bug in the system. Oh, but lets pretend we are captains of industry by saturating the world with sure-failures. "I wEnT tO GsB!"
And government is absolutely inefficient, which is a good thing actually. Despite the efforts of conservatives, government still has to account for many many corner cases and special needs. Ask any Agile TDD aficionado how this affects velocity.
When you buy/sell crypto - money changes hands. That money wasn't really "allocated" to crypto, beyond miner fees, just redistributed. That cash still exists.
The resources being allocated are graphics cards, human time, and electricity AFAICT.
The power usage of crypto is relatively small compared to other active human endeavors. It's power usage doesn't approach other arbitrary value stores like gold and government backed fiat markets. Could it go somewhere else? Yeah - but could we reasonably produce enough to offset it in a positive sum game - definitely. As long as renewables are cost efficient (read: truly competitive with non-renewables) and are net-zero on emissions this misallocation of resources would be allocated to renewable power production in an efficient market.
Graphics cards being misallocated... I'm not sure saying markets are inefficient because a financial market is outbidding video gamers is a compelling argument. Scientific use of graphics cards seems like a small part of the market, but I may be mistaken here.5
Gold is a requirement for industrial purposes, for jewellry, for chemical processes for medication.
Visa/Mastercard perform many hundred of thousand transactions per second.
BTC is limited to 350k per day, and consumes the equivalent CO2 impact as Austria. It can't and won't ever scale, which leaves it open to market manipulation and centralization as transactions move off-chain.
It's not a small amount of energy wasted, and there are significantly more valuable uses for that energy, such as aluminum production or water desalination.
https://www.statista.com/statistics/299609/gold-demand-by-in...
That might be true but 46.64% of gold demand is for "investment", and a further 8.58% is for "central banks". In other words, most gold produced is hoarded and not used for anything productive. If you're against bitcoin because you think it's a non-productive use of energy, you should also be against investment/central bank use of gold.
Bitcoin is intentionally wasteful, and I say this as a technical admirer. Its genius is the extremely simple idea of making writes to a distributed database so unimaginably harder than reads, so that untrusted network peers behave themselves and don't invalidate the state of the shared ledger. The network literally just asks you to spend your time counting to N at the top of your lungs so you don't cheat, if that's not waste then I don't know what is waste.
This 'waste' is necessary when you don't trust your peers, you're buying trust with it, cold hard trust, as rock solid as P != NP. But look at the sheer hype crypto has amassed since 2017 and tell me with a straight face that all those "applications" need trustless distributed peers. NFTs literally store the actual data of the token on centralized servers that can go down or go wild with your data at any moment they goddamn please, the NFT on the blockchain is merely a thin reference.
The ideal path for distributed trustless blockchains would have been as a small niche, an "elite shock trooper" technique when distributed trust among trustless peers is absolutely necessary. Ideally, miners would understand the simple fact that it's of no use to keep bringing better and better silicon to the arena, as the network swallows all in its big mouth anyway, and the network would then grow naturally so that it's approximately the power of NETWORK_SIZE * CURRENT_PC_POWER at any current year, instead of a never ending race to the bottom of sacrificing more and more silicon to the God Of The Hash.
Alas, from the crooked timber of humanity no straight thing was ever made.
Silicon and other electronic parts also get dumped into this market, when the capacity used to build those devices could be used for other things.
That is an unbelievable statement just on the face of it.
But if we say: "What is the energy use per transaction?" what then?
The inefficiency of crypto currency is legendary.
Gold mining and bitcoin are currently roughly on-par. But gold's energy usage isn't just mining. It's the entire supply chain from Cash 4 Gold stores, long term storage, smelting/recycling, etc. I don't have a good reference for the total cost of gold.
That is not true from what I see (modulo contract enforcement and policing of anti-social elements). There are many examples of smoothly functioning markets. With my economics geek hat on the things required for a market include:
* All participants must have choice, be able to enter and leave in the medium term.
* There must be clear information available about the properties of the goods and/or services
* There must be clear information about the prices.
The first condition (choice) can be rough on suppliers. The "choice" for a coffee shop is closing or bankruptcy. But for the supplier of electricity from a hydroelectric dam the choice is different. There are no clear boundaries.
For the consumer they can substitute potatoes for kumera but there is no substitute for food. Everybody must eat.
So: Reticulated water and electricity are bad things for markets. Vegetables (except during famine) and entertainment services are good
The government has heavy handed regulations distorting the market and spent the last years creating money out of thin air and killing small businesses.
The government propping the market up during the pandemic kept alive the myth that the market is always growing but also caused a terrible inflation.
Now that the market is going back to reality the government can't just print more money again - or inflation will kill the entire country.
The incoming crash will hopefully pop some of the bubbles the government created in the last 20 years. But it will be painful.
I'm trying to follow this but not understanding it. What do you mean by " Only when "the market" gets its cut". A you referring to public/private partnerships here or pork barrel politics? Something else entirely?
Probably should start putting some energy into getting ready for pre-industrial age living again.
[1]: https://www.bbc.com/future/article/20191108-why-the-world-is...
Too many people just want too much shit. 7 billion people are really not that many - but 7 billion people who wants to live like Westerners that's a big problem.
All the while we are still living in the age of exploitation. We can build marvelous things now but our recycling is still stuck somewhere in the medieval ages...
This whole party can only last if the recycling of an iPhone becomes as financially sexy as building one...
Every single one of those industries uses multiple CRUD apps in the course of their business operations. The database is one of the most important technologies of our civilization.
Snark aside, it is bit disheartening to see all this capital being thrown into handwave-y Web3 verticals.
I used to enjoy MMOs too. I stopped playing and took up gardening of all things :). I'm still not sure what the economic value of web2 is yet, but if you find out I'll attend your showHN.