Topic: Economic Inequality - page 2. (Read 8896 times)

I agree BTC will be very rough for society, but I do not see why BTC should not go forward.

BTC, like capitalism, will not be good for people, but for market. And capitalism is the philosophy or system that won in the competition. And pure rough unhuman capitalism needs currency like bitcoin, where nobody can regulate it.

BTC as deflationary currency is overreacted. "Debt derived" money that will be based on Bitcoin monetary base can well be inflationary (as we can see deflation with pure fiat money).

Bullshit.  This nonsense is the sort of propaganda that comes from the money printers who are hoping to keep their fiat scam alive.  Fortunately for them, there are plenty of sheeple out there willing to fall for it, even when it's clearly contradicted by the facts.

It is not a theory, it is fact that overall deflation hurts the economy that experiences deflation. History has shown that modest amounts of inflation tend to result in higher overall economic growth then the inflation rate. Also the fewer examples of deflation that are available has also had economic negative growth (eg - recession/depression).

Why don't you think of it like this - If you might need to buy a new TV in the near future - you know your current one is going to fail in the near future - are you going to buy one today at current prices, or would you rather wait a few months when the price will be a few dollars more expensive? All else being equal, you will buy it today. If you were in the reverse situation in that the price will decline in a few months then you would delay your purchase which would result in less economic activity in the current month which means the retailer and the tv manufacturer is able to employ less workers (due to lower revenue/profits) which means each of them has less money to spend

Poor ppl in 1st world yes. Poor people in ROW no. The difference is social net and public services that are on much higher level in rich and mid-income countries.

Alternative pow is that poor ppl today are worse off, because nobody gives a shit about them. In the past even the poorest had some space in society. Even slaves were at least tools that were needed by their owner. The truth about recent capitalism maybe is that it does not need majority of people.

It is not applicable always.
You have 500 worthless paper dollars. You can spend them today on an i-Phone. Or you could wait till next year and buy it a lot cheaper.

People still choose to buy i-phones because there see utility value in the one year that they hold an i-Phone. Similarly, even in a deflationary environment people will continue to make purchases if they see value in what they buy.

I think that even with wealth inequality, poor people now are still better off than poor people 100 years ago. the issue that I have is that wealth inequality shifts us away from a meritocracy. If you are born rich you have access to better schools, more money to invest, and a culture that encourages growth. Being born poor means lower-grade schools and less of a chance to really push forward. This, I believe (I could be wrong), leads to an inefficiency. Instead of say 100 people in the position to realize great ideas we would now only have 10. This leads to stagnancy.

It's common sense.  To see if you agree, try it yourself:

1. You have 378 worthless paper dollars.  You can spend them today on a shiny new Bitcoin,* or wait until next year, when you could buy 1/2 of a Bitcoin with your 378 worthless paper dollars because inflation.
What would you do?

2. You have one shiny new Bitcoin, and, for reasons known only to statist pigs and other Keynesian, you wish to invest it in USD.  You can buy 378 dollars with it today, or wait until next year, when you could buy 756, because dollar inflation.
What would you do?

*This is a perfect, hypothetical Bitcoin, it's buying power will never go down.

yeh, i know this is "the belief". the reason why i was asking for an explanation is, that i somehow dont really agree with that belief.
i think its just a "theory" that justifies the use of inflationary currency

The belief is that if the value of the money rises, people are less inclined to spend it. I feel that the ramifications of this effect are vastly overblown.

In a free economy, saving in money,  investment and consumption will have a balance guided by prices, including the interest rate. Investments are also of different types. Some are in the production structure near the consumption, and some is far away.

Something like:

Surveying for metal -> building a mine -> produce from mine -> transport ore ->  smelt metal -> metal products -> produce metal parts -> produce metal things -> distribute by sea and land -> show off and sell to consumer.

Another one for energy

Seismic surveying -> build platforms -> drill -> produce -> transport -> refine -> transport -> produce electric power -> build distribution network -> consume

Normally, extended saving will reduce consumption and the interest rate, leading to investments in the early stages, which is smart, because the savings will be consumed later. If the public consumes more, investments will come in the shops and services, investments will increase because savers will have to protect their money from inflation.

A QE and ZIRP environment (which have to go together), will tend to prioritize investments in the early stages (because for example surveiling will end up at consumers after ten or twenty years or more, so the interest rate is absolutely critical), and the QE and ZIRP environment will at the same time prioritize consumption.

The result is that we invest too much in the early stages, and we get too low prices on ore and other raw commodities. And we invest too little in the latest stages, giving too high consumer prices.

Eventually, the imbalances will have to correct itself, with much suffering in the form of loan defaults and bankruptcies in the earlier stages, and reduced total output, meaning people have less stuff to consume. That is where we are now, or are about to find ourselves soon.

Take away point: You can not just invest, you have to invest at all times in the most profitable production, and ZIRP makes that impossible.

Just to be clear, I'm not trying to say that fiat currency causes wealth inequality or that Bitcoin will solve the problem of wealth inequality.  In fact, I'm saying that wealth inequality isn't a problem.  I was just pointing out that for those who do think that wealth inequality is a problem, it's illogical to conclude that a cause has to exist before an effect.  Saying that fiat currencies don't cause wealth inequality because wealth inequality existed before fiat currencies is like saying that guns don't cause death because death existed before guns.


Wealth inequality, in a free market, not only isn't a problem, it's a good thing.  A person that lives below their means and saves and invests the difference between their income and expenses should have more wealth than someone who squanders their money or lives beyond their means and accumulates debt.  In a world without wealth inequality, there is no incentive to be responsible, productive, or save, invest, and work harder because your wealth would just be transferred to those that aren't/don't.  Saving should be rewarded, not punished.

We already have delaying of purchases. Student loans, mortgages and retirement funds are all dollars that could be going towards consumer purchases.

why is deflation delaying purchases?

Kid alert 2 posts above me ,

KID ALERT

This is true. However bitcoin is not deflationary (yet). It will also technically be neither inflationary nor deflationary once all the bitcoin are mined as the number of bitcoin in circulation will never decline (at least not as part of the protocol).

Deflation is bad for the economy as it delays necessary purchases which slows economic growth

I am sure a deflationary currency (like bitcoin) is the worst for society in general, it's just a brake on economic growth. But happily we don't need to wory about that, your dreams will never come true  I have some bitcoins (because I want to earn some money) but it would be disastrous to society if it would be the main global currency, surpassing the market cap of the dollar... But I'm sure that will never happen and we will not even get close to that =)

I don't think so.  Obviously the problem goes beyond just one thing, or one cause.  The problems with wealth inequality in general are:

1.  I personally think there is a problem where, based on my particular station in life, I am afforded the opportunity to syphon off about 60% of my worker's productivity.  I don't actually produce anything, and yet I get the lions share of the profits of their work.  This isn't because I worked hard to get where I am, although I did.  I am well aware that it is based almost entirely off of where I was born and who I was born to.

2.  Looking at the larger picture we see that despite what the wealthy would have you believe, that they are wealthy because they earned it and worked hard, a quick glance at a list of the 0.1% will show you that in virtually every single case, they are there because they were born there.  As well, if you are in the 99.9%, you are there not because you worked less, but because you were born there.  And there is no crossover, ever.

3.  The wealth disparity itself makes it impossible to change the situation, bitcoin notwithstanding, simply because the wealthy are the ones that make the rules that everyone else has to follow.  In this day and age that often involves money policy but in previous ages it was land use, etc. 

If this justifies anything, it justifies everything.  Those in power today--bankers, politicians, etc.--all either worked for their position, inherited them, or both.

This really is the best of all possible worlds

It's not how human work. Humans act like this if there is scarcity, if we reach post scarcity due technology in 1000 years, any currency and forced labour and unequalities is objectively stupid and not necessary.

So am I right in discerning that the problem for you is not in wealth disparity per se, but specifically in wealth disparity at birth?  If two people are born with equal wealth and opportunity but one works hard while the other squanders their resources then is it ok for the more productive person to become wealthier?  Is it ok for him to then afford his children a comparative advantage in wealth and opportunity?

Might it be that the root problem behind wealth inequality is in the love of one's children?