Quote Originally Posted by Husar View Post
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.