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1&2) Because it is either commodified, in which case it can be broken down into a liquidation value and a bezzle value, or it is a common, in which case it does not appear in the world of double-entry bookkeeping. One of those diaries that remains unwritten in the back of my head is on how privatisation (and intellectual property laws) fictitiously creates wealth by enclosing commons, thus making them appear on somebody's books where they weren't before (properly accounting for them would put the commons on the asset side of the sovereign balance sheet, but the asset side of the sovereign balance sheet is not often properly accounted for).

3) The equation is zero-sum because the bezzle is a residual - unlike the other entities, it is impossible to compute from first principles, so it is taken to be whatever is needed to balance the books. Additionally, this is a static equation - the dynamic equations are in the cash flow and production/consumption functions. But I'll have to work a bit more on those to re-cast them in an analytically productive form.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jul 18th, 2010 at 11:05:21 AM EST
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