What economic approach would actually work?

[Fisherking]

Sometimes I just want to despair. Do I sound stupid or are you just not capable of answering a simple question?

I asked you about the benefit of deflation for the small man and you explain to me what inflation and deflation are. That's not what I asked because I already know what they are.
The rich man benefits from falling prices as much or more than the poor man does, so that is surely not an answer to my question.

I know I sound angry but that's because this happens relatively often, don't take it personal.


As for regulation, no, they don't, and yes, they have to be forced. We have soil degradation all over the world, so farmers are actually making their soil unusable in the long term right now. Why do they do it? Because they don't notice it yet and they have plenty of short-term benefits that incentivize this behavior. The incentives aren't changed because those who could do that also benefit from it right now and may just think the next generation can deal with it once it becomes an unavoidable problem. The people who think the soil needs to be preserved and looked after right now before people start to actually starve from the effects of the misuse cannot do that because it's not their soil and they aren't allowed to.

Humanity as a whole is not very good at cooperating for long-term benefits if and when this runs counter to advantages that can be gained in the context of short-term competition. Using regulation to force the behavior that is beneficial in the long term is sometimes the only option. See all the regulation to make the air cleaner, the markets didn't do jack about that, just look at China. The government in China let the markets handle it for a long time and the result was smog and sickness everywhere and now they're introducing legislation...

VW and others cheated with the diesel cars because the market incentivized this instead of actually making them cleaner.

I suppose I misunderstood the question.

Those with large investment stand to lose more in a deflationary cycle. Their goods are worth less and they are on the hook for money that is increasing in value. This is naturally those with more means than a simple labourer who couldn’t afford to invest until he had more money to work with. The labourer may lose his job when his employer can’t afford to pay him but the employer may lose his company if he cannot find a better place in the economy.

I hope that’s clear. If not, try again.

As to regulation, Germany’s recovery after the war was an almost unregulated economy and one of the quickest in history, simply because of it.

As to the rest, what is the structure of the Chinese economy? It isn’t fully capitalist or fully communist. There is an emerging super rich and a peasant class. Do the peasants own their land or work it for the government? Do you blame the workers or the owners? I have no clear idea.

[Husar]

I suppose I misunderstood the question.

Those with large investment stand to lose more in a deflationary cycle. Their goods are worth less and they are on the hook for money that is increasing in value. This is naturally those with more means than a simple labourer who couldn’t afford to invest until he had more money to work with. The labourer may lose his job when his employer can’t afford to pay him but the employer may lose his company if he cannot find a better place in the economy.

I hope that’s clear. If not, try again.

As to regulation, Germany’s recovery after the war was an almost unregulated economy and one of the quickest in history, simply because of it.

As to the rest, what is the structure of the Chinese economy? It isn’t fully capitalist or fully communist. There is an emerging super rich and a peasant class. Do the peasants own their land or work it for the government? Do you blame the workers or the owners? I have no clear idea.

Thanks for the answer.

The problem is if investment is not profitable, then nobody invests and your economy is outcompeted by others because it lacks specialization and trade, which are more efficient. As you say, the employer may lose, or give up, the company, and just rely on his net worth in money that increases in value anyway. However, then you get to some kind of self-sufficiency model, which is heavily outcompeted by pooled resources in an economy with inflation. How do you want to keep a non-competitive model stable in a world where many people feel the need to outcompete their peers and may reject their model to follow the other one and outcompete you?

Germany's recovery after the war was also benefitted a lot by the Marshall Plan, which was in effect because the USA were competing with the Soviet Union and needed stable allies in Europe for fear of losing even more influence in Europe. The USSR also didn't manage to outcompete the capitalist model in the end. That's not to say I like the economy as it is, but any alternative model has to have some kind of incentives over capitalist ones because I'm aware that many other people are perfectly fine with competing about that carrot of becoming rich being held in front of them and I don't think that is going to change over night.

I'm blaming everyone, or "the system", maybe just "humanity" and some of its basic instincts. Take the basic example of a super market. You go there with 10 € and you can choose between two packages of 20 tasty, unhealthy sausages in plastic packaging and one package of ten healthy vegan sausages wrapped in bio-degradable packaging. Let's assume you are aware that the former may make you sick in the long term and you will basically eat their packaging material the next time you buy fish or other seafood in the form of microplastic, and you also know that the second choice will not have these disadvantages, but it tastes worse and you will only be able to eat one of them every fourth day due to the lower number you get for your money. Which option will most people take? What do you think? And is it logically the better choice in the long term?

In other cases one may actually want to take the healthy option, but every super market in a sensible range around ones home only offers the type of food in plastic packaging in the first place... How does one get the market to offer the alternative in the first place? Take clothing made of hemp instead of cotton for example. It's better in almost every way, but rarely available and a simple T-Shirt costs 90€ when you find one online... If that is the market optimizing itself for the customer....well, I just don't buy it.

[Fragony]

Long-term would be keeping diffrerence in income as small as possible, everybody would benefit from that. Problem is that top-down solutions never work, they have never had. A more intrusive government has never been a good idea, you simply can't give that overhead too much control without losing a lot. I like the libertarian take on things but there are no solutions

[Husar]

Long-term would be keeping diffrerence in income as small as possible, everybody would benefit from that. Problem is that top-down solutions never work, they have never had. A more intrusive government has never been a good idea, you simply can't give that overhead too much control without losing a lot. I like the libertarian take on things but there are no solutions

Aren't corporations organized top-down?

[Seamus Fermanagh]

Aren't corporations organized top-down?

The large majority. However, there are some that have created their hierarchy more organically, developing greater structure as needed rather than imposing it from the outset. After time, it all morphs to top down bureaucracy.

[Fragony]

Aren't corporations organized top-down?

Up to them, I like being independant. I can choose not to work somewhere but I can't avoid the government and that is what leftist people want control of

[Husar]

Up to them, I like being independant. I can choose not to work somewhere but I can't avoid the government and that is what leftist people want control of

Try to produce cars or food for 7 billion people using only independents.

[rory_20_uk]

I'm an independent. But I freely admit that my sole role is to provide temporary assistance to bigger companies to do what they do. I do well out of it and they get to sort a temporary situation. But I have no strategy beyond helping the others.

[Fragony]

Try to produce cars or food for 7 billion people using only independents.

That's not my trade Hus I sell arts and antiques.

[Montmorency]

Try to produce cars or food for 7 billion people using only independents.

Isn't this a good time to talk about Germany's Mittelstand vis-a-vis pre-Hartz IV (though still extant in some form) workers' councils and self/co-determination?