Quote Originally Posted by Fisherking View Post
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.