Economics vs. plutonomics: increasing returns

Diminishing returns

The “law of diminishing returns” is a concept from economics that many people learn from popular culture, even if they have no particular interest in economics.  This concept, like that of the “invisible hand” and many other concepts from economics, is almost as widely misunderstood and misapplied as it is known.  This concept can also be used in a comparison that helps to reveal a fundamental distinction between economics and plutonomics, demonstrating the inherent limitations and tendency toward oversimplification in the former.

Increasing returns

In plutonomics, since capacity is recognized as a factor in wealth, certain types of activities produce increasing, rather than decreasing, returns over the course of a sufficiently long period of time.  In particular, when an activity results in an increase in both enjoyment and an increase in the skills needed for that activity, each marginal unit of engagement with that activity will produce, over the longterm, increasing returns, as long as increasingly complex substrates for the activity are available.

Reading is a good example.  With each book one reads, one’s body of knowledge—including vocabulary and knowledge of historical facts, for instance—and one’s ability to read increases.  Over time, a reader finds that she can read a new book in less time and also gain as much or more from that new book as she would have at an earlier stage in her reading career. She has the ability to appreciate, for instance, many more allusions, literary devices, and so on that the book has to offer than she would have earlier in her career.

This very experience is often found when an avid reader reads a book as an adult that they had previously read as a child:  there is a lot more to the book than the reader had had the capacity to appreciate in the earlier stage of life.

This result can be, albeit imperfectly, translated into terms that an economist might understand: the increase in the “return” from the marginal book occurs because the “cost” in terms of time and effort has decreased while the “benefit” has remained constant or grown.

Note:  increasing returns will depend on availability of suitable substrates.

When time permits, this entry will expanded and supplemented with additional examples.

‘Wealth’ Book Gains Steam: Plutonomics Theory Finds Followers in Economics, Business and Finance

Plutonomics | A Unified Theory of Wealth by S. E. Harrison

Summary:  Plutonomics: A Unified Theory of Wealth gains a small but enthusiastic readership in business and academia. Addressing not only economic and financial wealth but also such unquantifiable factors as health and quality of life, Plutonomics represents a significant departure from conventional wealth theory.

(Original date:  May 31, 2007 (ePoet))

Los Angeles-based publisher ePoet(R) LLC confirmed today that S. E. Harrison’s Plutonomics has gained a small but enthusiastic readership in both business and academia. Recognized as the first modern theory to accommodate not only economic and financial wealth but also such unquantifiable factors as health and quality-of-life, Plutonomics: A Unified Theory of Wealth may be particularly attractive to those book buyers who are disillusioned with conventional economic thinking, especially its negative environmental and social effects.
“The response has really exceeded our expectations,” commented an ePoet spokesperson. “New ideas can be slow to catch on, but plutonomics has gained some converts, somewhat to our surprise.”

One quality that readers embrace appears to be that of simplicity, the publisher reported. Unlike conventional economic and finance theories, which grow in complexity year after year, Plutonomics gets straight to the fundamentals of wealth—and then stays there.
“Readability and accessibility were goals for this project from the get-go,” the representative continued. “We tried to make the format of the book itself—the short chapters, the easy illustrations, the quotations from other thinkers—powerfully serve this goal of approachability.”

A number of reader comments visible at the Plutonomics web site (plutonomics.com) indicate a warm reception. Ranging from founders and management of publicly traded companies to accountants, lawyers, students, and workers in nonprofit organizations, some commenters express a preference for the practical applications of Plutonomics while others prefer its poetic style.

“Fine wine”, comments one reader.

“I am shocked and awed”, comments another.

“It struck me that every single word … used in the book is essential for its meaning … just like every word in a poem has an important function …. As a result, Plutonomics is as concise and enjoyable as it could get”, adds a recent economics graduate.

ePoet LLC (ePoet) is a California limited liability company based in Los Angeles, California. For more information on Plutonomics, visit http://www.plutonomics.com.

Plutonomics | A Unified Theory of Wealth by S. E. Harrison
Plutonomics | A Unified Theory of Wealth by S. E. Harrison

Wealth 2.0: ePoet Publishes an Economic—Make that “Plutonomic”—Theory of Wealth for the Information Age

Plutonomics | A Unified Theory of Wealth by S. E. Harrison

Summary:  California-based publisher ePoet announced today the publication of Plutonomics: A Unified Theory of Wealth. The new book may represent the first modern theory to capture all manner of wealth phenomena in a single conceptual structure, making it useful as both a theoretical framework and a practical, self-help tool.

(Original article date:  November 23, 2006 (ePoet))

California-based publisher ePoet(R) announced today the publication of Plutonomics: A Unified Theory of Wealth, a new non-fiction book by S. E. Harrison. As the title suggests, Plutonomics may be the first modern theory to capture all manner of wealth phenomena—from money and property to citizenship and reputation—in a single conceptual structure.

“We are very excited about bringing the Plutonomics project to fruition,” commented marketing director Rebecca Nelson. “Both defenders and detractors should find it an enjoyable literary journey.”

Embracing an unusual format by California layout artist Mike Ng, Plutonomics consists of 77 chapters, with each chapter appearing on a single right-side page. The left-side pages provide illustrations, definitions and “quotes for comparison”—ranging from Shakespeare to Marx, Pavlov to Aristotle—that offer an intellectual context for the right-side text. This format, in catering to the sound-bite generation, has garnered favorable comments from reviewers:

“Innovatively designed… [for] the busy reader,” noted Ari L. Noonan of The Front Page. “Definitely worth your investment,” he continued.

In keeping with its modern tone, Plutonomics also provides an index, glossary and bibliography via the World Wide Web rather than including them in print. The electronic supplementary materials appear on a Plutonomics blog site hosted by Word Press, where users can also explore the origins of the term “plutonomics” and follow hyperlinks to works of economics, finance, psychology and philosophy cited in the book.

“I guess Plutonomics is really a ‘hybrid’ book: it’s part e-book and part regular print book,” Nelson continued. “We thought this approach remained consonant with the message while also giving readers the best of both a ‘sit-down’ book and a blog.”

Featuring a foil-embossed cover of gold on purple by Los Angeles designer Christopher Tjalsma, “Plutonomics” cuts a figure as striking as its content. And for easy readability, New York-based illustrator Jonathan Klemstine has turned sophisticated content into simple, easy-to-follow diagrams. Meanwhile, back cover comments from businesspeople nationwide convey some of the excitement surrounding the new release.

Plutonomics: A Unified Theory of Wealth is available through Amazon.com (ISBN: 0-9776420-0-3) as well as through plutonomics.com.

ePoet(R), the Bard of Business(TM), is a California limited liability company providing writing services to the business and technology developer communities.

Plutonomics | A Unified Theory of Wealth by S. E. Harrison
Plutonomics | A Unified Theory of Wealth by S. E. Harrison