What exactly is the rate of deflation in this example? The price of a hot dog dropped 50%, but the price of labor dropped only 25%.
Yes, I was making the point that just because your wage is lower, it does not mean you are poorer.
Nope. The price of labor must also be halved, so everybody can buy exactly what they could before.
Read my example again. I was saying if goods become twice as cheap to produce - let's say due to a revolutionary new hotdog-making-machine - then the result is that prices go down, without wages necessarily going down.
Investment is spending any asset toward creating a system to return more value than what was spent. Investing is not saving. When you buy into an investment, you do not keep ownership of your money. You buy a certificate saying you contributed a certain percentage to the endeavor.
I didn't say investment was saving, I said that savings *drive* investment. You cannot have an investment if there are no savings, because nobody has the money to spare.
You don't seem to understand what the point of commerce is. The whole reason commerce ever happens is to give people things they want. If I want a good, a functional economy should ensure that I have the resources to acquire that good. In a strong economy, everybody can get what they want easily - supply meets demand. The numbers on the currency don't matter at all for that purpose.
Agreed.
Unfortunately, humans don't think that way. They see the numbers and remember what numbers used to be. They predict where the numbers will be in the future, and they adjust habits based on that. with an increased demand for money, there is less money available to the people who want money in exchange for their products, including those who want to sell their labor directly. If labor costs stay perfectly in sync with the deflation, everything is fine, except workers will see the numbers on their paycheck continually decrease, so they'll cut spending even more, until they only purchase bare essentials for life. Yes, they could purchase the same amount as before, but they won't realize that when they're just seeing ever-smaller numbers in front of them.
Humans do think that way, and taking the numbers into account is the proper way to think about it. I think you are also conflating deflation in terms of the decreased money supply definition plus the decreased prices definition. Initially it meant the former, so I will use "prices lowering" to refer to the latter. Now, why do prices go down? Why can you continually buy better and better computers for lower and lower prices? Now what does that have to do with wages going down?
Also I think you are assuming people are stupider than they are. If they can purchase the same amount as before, then they will. Why would they not realize it? People realize that they can buy less and less food with the same amount of money, for example.
Without people buying those nonessential goods, the companies making those goods will collapse, leaving those workers jobless (and even faster if wages deflate more slowly than the price of consumer goods). Those unemployed people see even smaller budgets for purchases, continuing the cycle. Eventually there is an equilibrium at the point of desperation, where people can produce just enough for themselves to survive, and all nonessential commerce is effectively halted. Excess production is pointless, because people won't spend the money to buy it.
If I have purchased all the nonessential goods I need, and I have money left over, then I'm going to go and figure out what to do with that money. If there's not a lot of it, then I will save it. If there's a bunch, I will spend some to have fun. If there's a crapton, I might invest it. I don't see why this would change just because the numbers are getting smaller.
You're conflating prices for value. What really matters in terms of economic wealth is purchasing power - what one dollar can buy you. If today $1 buys you one hotdog and your salary is $10/hour, yet a year from now $1 buys you two hotdogs yet your salary is $7.50/hour, your salary has gone "down", yet your purchasing power has actually increased (assuming hotdogs are the only product in this small example). It doesn't matter what the absolute number of your wage is, what matters is your purchasing power.
Your reasoning that deflation is good for single products, but not the economy as a whole, doesn't hold. The economy is made up of an aggregate of single products. If all products suddenly become twice as cheap to produce, and the prices are all halved, the result isn't a poorer economy - it's an economy in which everybody can buy twice as much stuff as before. The companies that produce those products won't suddenly be unable to afford to pay their employees less - the goods were cheaper to produce, which is why they were able to lower prices in the first place. And they would lower their prices, in order to undercut the competition and get more sales, and since all companies would do this eventually a new equilibrium would be reached.
Further confusing the issue is that people expect to get raises now to "keep up with inflation". This doesn't mean people are actually getting more purchasing power - it means that in order to maintain the same exact purchasing power, they now need more nominal dollars. In a stable economy - neither inflationary nor deflationary - the same effect would be achieved by not changing salaries. In a deflationary economy, the same effect would be achieved by lowering salaries. But this lower salary doesn't mean you are poorer, it means you have the same purchasing power as before. Further, people generally do get raises above and beyond inflation as they become more productive or valuable to the company, so this does not mean their salaries would necessarily decrease in a deflationary economy.
You are also confused about loans in that the interest rate for a loan does take into account the inflation rate. In a deflationary economy, the same considerations would be made.
What a deflationary economy means is generally that the same amount of dollars purchases more goods, or alternatively that a lower amount of dollars purchases the same amount of goods. This doesn't mean your house will instantly start depreciating. If your house has exactly as much *value* as before, and the dollar gets stronger and stronger, then yes, the price will go down. But that's not depreciation, that's keeping the value constant. If the price of your house increases over time at the same rate as inflation, it doesn't mean it is becoming more valuable - it means its value is remaining exactly the same, but the dollar amount is larger.
Contrary to what you claim about investments drying up, just the opposite would happen in a deflationary economy. Saving would be greatly rewarded, since the value of your money would go up even if you just keep it in a mattress somewhere. Savings are what drive investments - an investment is basically taking a bunch of savings and applying it with the hope of making more money. As people save more, more money would become available for investments, the interest rates would go down, and when the price of money - the interest rate - is right, people would take out loans in order to start new businesses or help build their existing businesses.
Deflation is bad because SMART people stop buying things that will be cheaper tomorrow.
That's not the half of it. The real problem is that food also starts getting cheaper, which will cause SMART people to stop buying food, eventually dying from starvation.
Oh boy, deflation sure is bad! I just hate it when things get cheaper.::shakes head::
I can't believe it's still considered informative to say "Deflation is bad because SMART people stop buying things that will be cheaper tomorrow". Consider the price of computers. Computers always, always get way cheaper and way more powerful over time. If what you said is true, then this would be BAD because SMART people would not buy computers, since it'll always be cheaper tomorrow. Yet what actually happens? People but craptons of computers all the time. Yes, the fact that they get cheaper and better over time factors into it. You use that to make an informed decision as to when to buy a computer.
Inflation and deflation are confused terms because they've come to mean two different things: 1) increase or decrease in money supply, and 2) increase or decrease in prices. While a change in money supply does generally affect prices, they are not the same thing. Many factors contribute to a price, including supply and demand.
The fact is that prices going down is *not* in and of itself a bad thing. This is what you want - it generally means the economy is getting more and more efficient and that the wealth of the nation is increasing. As time goes on, in a free market, generally the quality of goods will increase and the prices will go down. The only time this doesn't happen is when there's regulation or when the government increases the money supply. And the fact is, the government increasing the money supply is just a very stealthy tax, a way to devalue the currency that everybody holds, which is a form of stealing. It also makes the economy less efficient in general as the effect of an increased money supply on prices is not uniform and it takes time for people to adjust to the new value of the currency. All in all it's just an awful thing and a way to allow the government to spend way more than the people would willingly pay for via taxes.
You are implying he should read the article before reaching for his keyboard and spouting off the first thought that comes to his self-evaluatedly brilliant mind? You expect too much sir!
I do not believe in those neoliberal ideals anymore, because that doesn't seem to work over here, in fact it does appear to have been the cause of the fast social decay in Europe, every approach in that direction made it worse. Every little lenience that was given to the economy was exploited to the maximum extend within the shortest time, mostly at the cost of employees.
[...]
I don't say that economic liberalism can't possibly work, just that it won't work under the current circumstances. At the moment it's an utopia, similar to the different directions of Anarchism, while it is very nice in theory it doesn't fit human mentality.
Yea that might very well be the case.
Today it appears to be far too late to fix things just by deregulating the markets, give everyone sudden freedom. This would required radical changes in international laws since companies had the advantage to design the whole system for decades.
Yea the transition part is always a difficult one. Though I heard a great analogy which applies here: a destroyed and abandoned church is not a good indicator of what things are like without religion. If we could have a system we know works then it'd be worth it trying to get there eventually. But there are many problems, a big one being that the people in power benefit from the current system and wouldn't want to change it, plus they get people dependent on the system so people will support it as well even if ultimately they'd be better off without it.
Just take a look at the messed up financial market, it's probably the most deregulated marked, caused the most recent crisis and continues to use most ridiculous theories, because they seem to work most of the time.
While it might be deregulated, it's not really unregulated. It's more set up to guarantee profit to the bankers whatever happens. They can take risks and get paid if they succeed, or get bailed out if they don't. It's really ridiculous. The thing with regulation is that it forms an intricate net wherein if you remove any one regulation, it's hard to tell what exactly will happen because of the interaction with all the other regulations. So it's not always the case that removing a particular regulation will lead to a freer and more efficient market, because there might be another regulation that leads to ridiculous behavior unless it's checked by other regulations.
Here in Germany there are indicators that higher wages don't destroy the economy at all, throughout the states of Germany there is a positive correlation between average wages and economic power. Meaning that here in my federal state for example, unemployment is fairly low, risk of poverty is low, the average income is the highest of all states, which aren't merely a city; economically we are the 2nd strongest state.
Oh but of course, it'd be extremely unlikely for higher wages to not be correlated with economic power. I'm not arguing against higher wages. If that's what you took from my posts then you're mistaken. Higher wages are great and of course the higher wages, the better. But is it really that higher wages lead to a powerful economy, or rather that higher wages are a natural result of a powerful economy? It's like saying that high prices are a sign of a strong economy - look how expensive new york and london and moscow are - so let's artificially increase all our prices so that our economy does better. Sound ridiculous? That's just what they did during the great depression. Somehow people thought that prices being low was the cause of the depression so they paid farmers to destroy food and not work to raise the prices of food... which is ridiculous.
The credo is "never update unless you absolutely have to". I bought an iPhone 5S to replace my 3GS from way back and I am thrilled with how ridiculously snappy it is. I like the new UI also, but I could see how it would be painful if it's slow.
Trade Unions, that are composed by people working those jobs, decided that 8.5€/hour would be reasonable, the Social Democrats and the Green Party agreed, The Left wanted 10€ per hour.
Doesn't union labor usually cost more than the minimum wage?
A lot of working class people are in Trade Unions, join strikes, that are very rare, like this one, but people in Trade Unions aren't welcome in all companies. Often they simply don't get employed when they state to be a member of one of the Trade Unions, since they're potential trouble makers. Officially it would be discrimination, but due to the free market the employer may find any other reason to not employ them.
I don't see why it shouldn't be allowed to refuse to hire somebody because they're in a Trade Union. It seems that it should be the employers choice as to whom they choose to associate with.
On politicians attempting to plan the economy: Politicians have been planning, and are planned by, the economy for decades, accepting donations from company owners, coincidentally changing regulations in their favour. Today it's called Lobbying and has a clear direction "serve the economy, screw the public".
No, the direction is actually "serve the company, screw the economy and the public". Lobbying is awful. It is legitimized corruption, as you said, but it doesn't help the economy. It screws over other people in favor for themselves by using the force of law. It goes quite against the free market and I wholeheartedly agree that it shouldn't be allowed to happen.
The working citizens have nobody to represent them other than Trade Unions, since working class citizens simply lack the cohesion and leverage to achieve anything, all the do is to cast their vote every 4 years. One might think that politicians are representatives of the people. Here in Germany we also call the process of voting "die Stimme abgeben", which literally translates to "cede your voice", since hardly any politician cares about what you have to say once the election is over. And this isn't the case only here in Germany.
Yea, voting's not a great system. I think you don't realize that a free market is actually beneficial not only for employers but also for workers. Free market forces tend towards a worker being paid exactly what he is worth to the company - no more, but also no less. The more valuable a worker is, the higher his salary will go. Of course, his employer and all other employers want to pay him as little as possible for as much work as possible, and he wants to get paid as much as possible for as little work as possible. That's only natural. But the more productive he is, the more willing people will be to pay him more. Consider it from the context of filling a new position. You have two candidates, one of which is far more skilled than the other. You definitely want to pay them as little as possible, but you know if you offer too less the will turn you down. Imagine trying to hire a programmer for $5,000/year or something ridiculous - he will turn you down. The more skilled and productive he is, the higher a rate he can charge.
Now it's true a lot of companies pay people less than what they are worth... but then people end up leaving those companies. Like a bunch of people I've spoken to at a software company here in NY all say they are paid way less than they should be, and most of them have either left or are planning when to leave. Ultimately that hurts the company and more competitive companies will soak up the talent by offering them higher pay.
Now, if you have only one or a few companies in a town then they can offer less money because there's nowhere else for the workers to get a job. But that's a temporary situation. Given a free market - no government forces impeding entry to the market - other companies will flock to the place with cheap labor because it'll be profitable to do so. Bu
Hmm. Who are you to decide that 8€/hour is reasonable? Or some politicians attempting to plan the economy? Wouldn't people who are directly involved with that job - be it employing somebody or working that job - be better suited to decide what rate they are willing to work at or hire somebody out at? To put it in your terms: Does it not violate somebody's dignity to make it illegal for them to work at a rate which they have decided for themselves that they are willing to work at?
The misconception about minimum wage is that all the jobs that previously existed that paid less than the minimum wage will still exist, but will be paid more. Wouldn't that be great! Then of course it would be great to set the minimum wage as high as possible. The fact of the matter is that this is not the case, though. By setting a minimum wage of 8€/hour, you are outlawing any job which can only exist if it's paid at less than 8€/hour. True, there are some essential jobs which currently pay less than that and which will still be needed, so those jobs will now pay more. However, all the non-essential jobs that are worth less than 8€/hour will gradually disappear.
Ultimately all you are doing by imposing a minimum wage is restricting people's freedom - both those of the employers and those of the employees. Further, you are damaging one group of people - the most unskilled workers, whose labor is worth the least and will thus be first in line to be fired - in order to benefit another group of people - those who will still manage to have jobs after the minimum wage goes into effect. Do you not value all human rights equally? If you are for the minimum wage then you implicitly say that you value the human rights of the lesser skilled workers less than the human rights of the more skilled workers, since the former will be hurt by the minimum wage law.
They do not outlaw jobs, they outlaw payment that is too low.
Those jobs will still exist, and will still be the same.
Ok, then why stop at 8€/hour? Why not set the minimum wage at 100€/hour? By your logic, those jobs will still exist, they will be the same, but people will get an amazing salary to boot!
The rest is interesting but I'm just addressing the flawed economic reasoning behind minimum wage, not the particular politics of Germany.
It's basically modern slavery, they earn 5€ per hour, which for them is a lot of money, but would be ridiculously low for German living costs including insurance, health care and other expenses. [...] Now that a minimum wage (around 8€) was promised to be introduced in 2016 from the coalition of Germany's upcoming government, we'll see how things will develop.
Thank God they're going to outlaw jobs that pay people who are willing to work those jobs an amount they consider a lot of money! This will surely make both the employers willing to pay that amount and the employees gladly willing to work at the amount far better off.
[...] people, as a whole, are social animals who have rules about how to get along. Some call it a social contract, some call it common courtesy; the language is unimportant. The point is, we live in close proximity and get along with each other.
In order to do that without everyone just living on their own plot of land and being totally self-sufficient (which has never been the way tribes of any size existed), we divide labor and exchange our labor and goods with each other. This doesn't require a lot of complex rules but it does require a few.
Inevitably, there will be disputes about what's right and wrong. There will be times when some recognized authority must mediate. In a small tribe that might be the elders.
Also inevitably, because people are not just social but also occasionally covetous and violent, there will be times when groups come together and engage in the wholesale rejection of societal norms. They decide to live by violence, the threat of it, and plunder instead of societal norms. That recognized authority will then be called upon to marshall the collective resources of the group to restore order.
Agreed so far. I think the only solution will be when people aren't covetous and violent, but the fact of the matter currently is that they are, and we have to do something about it. Pacifism doesn't work because then you just get bowled over by the first violent gang to come your way.
Now, scale that up to over 300 million people. Local tribal elders cannot handle, on a purely voluntary basis, the volume of problems that will arise. Some sort of organized group of folks will need to spend all their time working on, at minimum, the most basic tasks of staffing a justice system and providing for the common defense.
Those administrators are called "government". Courts and some sort of minimal military are administered by that government.
In short, we need a government. For one to exist, it must be paid for.
No one appreciates the need of a government until they personally need it, yet it can't exist without general contributions from everyone. People won't give to it like a charity, so it levies taxes.
Thus, taxes really are voluntary.
Em, no, you haven't shown they are voluntary. You said it can't exist without general contributions from everyone, so the government has to levy (aka forcibly collect) it from everyone. If I don't want to pay taxes, I can't do that without consequences. This means it is not voluntary, but compulsory. Your arguments about the necessity of compulsory taxation don't change the fact that it is compulsory.
Most people prefer paying taxes to the alternative which is anarchy. Nobody likes paying them but they recognize the necessity.
If they preferred paying taxes alternative to anarachy, then there would be no need to force people to pay taxes. For example, people prefer housing to not having housing. Yet there is no need for an entity to force people to pay for housing - people do it voluntarily. The fact that the government can't exist without compulsory taxation shows that people don't think it brings enough value to warrant the amount they are required to pay. And this is really obvious when you consider just how enormous and overblown and wasteful the government is.
Also, taxes really are paid in exchange for something of value. Think of it as insurance; you pay your taxes and what you get is a court system and a defensive collective that will serve the common good when the need arises.
That would be fine, except that I cannot forgo paying taxes in exchange for not taking advantage of the services. Even if I move to another country, where I definitely don't benefit from the majority of what the US government provides, I'm still required to pay taxes. This is whatI mean when I say that they aren't paid in exchange for something of value. They are paid, and then
It's not a belief, but rather, a fact. You haven't addressed the issue of why you don't consider taxation to be theft. In what manner is it fundamentally different from theft?
1) It is involuntary - if you don't pay it, then there are consequences, such as people taking your stuff away or imprisoning you. Even if there is a vote, direct or representative, on whether to enact a tax, it's still not voluntary, because if the vote passes you still have to pay it, even if you voted against.
2) It's not in exchange for services. If you don't use the services that taxation pays for, you still have to pay the taxes. This ties into #1.
I could go on but I'd rather address your specific arguments than try to guess at what they are.
[...] and you're not OK with any of that theft, then you must also believe that government is not necessary. After all, if it's not paid for, it won't exist.
This is really another issue. You wondered why the IRS was so vilified, and I pointed out that it's because it supports theft, so you can't expect people to like you no matter how nice you are about it.
There are folks with similar beliefs. Google for them and you'll find people who argue for radically small-scale human social groups that govern by consensus without formal mechanisms.
I think you'll find the record of success of such groups is pretty abysmal but you're clearly not alone in your feelings. There are people who have been there and done that.
None of that changes the fact that taxation is theft. Besides which, your comments are very intellectually lazy and incredibly vague.
Read up on them. You may find common ground with people who will become lifelong friends. Or you may be a bit disillusioned. Or maybe a bit of both. Whatever the outcome, don't just sit still in a state of "I don't have any better solutions"; that's not satisfying at all.
It's quite satisfying for me to know that I don't have all the answers. It's also satisfying for me to know that I won't have all the answers just by reading and discussing various belief systems with some folks. The most likely outcome of that is I won't have all the answers, but then I'll believe that I do, and thus perpetuate all sorts of nonsense like a tool. Besides which, I know that it's impossible to convince anybody by talking to them - the other has to be willing to listen and change their mind, and then it's them that changes their mind based on what I say, not me changing their mind. Further, I don't want to go into politics. So in conclusion, I don't see the point of spending too much effort on this.
My overarching theory though is that humanity's problems won't be solved by any system in particular, because humanity's problems lie deeper than that. It's in our animal nature, our instincts for fear, aggression, violence, domination, love, compassion, etc., that drive us to hurt each other and ourselves in all sorts of ways. Solving the latter issue (which can definitely not be done by any violent or coercive means) would then naturally lead into a system which works well given nobody is driven by some force to hurt each other or themselves. But the system in particular doesn't matter.
Until then, all I can do is point out various inconsistencies - like simultaneously having laws proscribing robbery and laws enforcing taxation - so that open-minded, reasonable people might be inspired to straighten out how their internal reasoning works.
...an engine of theft, i.e. taking people's money without them necessarily wanting to give it to you, with the threat of violence and jail time if they don't comply.
By that definition, all taxes are theft. None can be collected, period, without violating basic human rights.
Correct.
I find that position sufficiently extreme that I reject it outright. Governments must be able to collect some taxes.
But why?
We can all agree that the current system could be improved but to simply wave your hands and pronounce all taxes to be theft is not, by any stretch, a workable position. Are you really arguing that anarchy, the inevitable result of all government being denied the ability to collect any taxes until that government ceases to exist, is a viable social system?
I'll admit I don't have all the answers. All I'm pointing out is that taxation is indeed theft, and by arguing that taxation is OK because it's required for the government to survive which then has X benefits, you are essentially arguing that theft is OK if it's done in a well-organized-enough manner and the people robbing you give you at least some of the money back in whatever form.
Or are you saying that you'd be OK with a little theft, just enough to support the basic functions of government, thus allowing your to maintain your righteous hate of all evil government entities while still enjoying basic government services like a common defense and a court system? If that's your position, you must work up quite a sweat with all those moral and ethical contortions you've been practicing.
I'm not OK with a little theft either. I'm just at the unsatisfactory point wherein I know the current system sucks and is fundamentally flawed but I don't have any better solutions.
Well that's what you get for supporting an engine of theft, i.e. taking people's money without them necessarily wanting to give it to you, with the threat of violence and jail time if they don't comply. As to whether this theft is ultimately beneficial for the country as a whole, that is another discussion.
I'm thinking more of the Kickstarter model. You try to raise a bunch of money and then, if you have enough, you write the book or produce the TV show or whatever. Then once it's produced anybody can see it for free. You could provide non-digital incentives to the people who fund you early, like going to meet them in person or writing them into the book or the show or whatever.
Also it requires way, way more effort to print and bind a book than it does to copy a file. Once it's in digital form it's essentially valueless because the bytes are so cheap to store and transmit. This is why I think media in the future will gravitate more towards a "voluntary payment" model. That is, it'll be more successful to have millions view your work and a small % of them pay, than to try to get everybody who views your work to pay.
We cannot hope to solve the world health problem if we go about butchering the English language. That inexorably leads to sloppy thinking and poor mental habits which causes degeneration of the brain cells involved in higher-order thinking. Without those brain cells, dear Wescotte, there is almost no chance that humanity will be able to muster up the intelligence and coordination required to solve these complex, multifaceted, intricate problems.
Slashdot Mirror
I dunno, a lot of websites are super-heavy, and definitely way faster and snappier with a beefy machine.
... generating animate matter from inanimate matter, and conscious and self-aware animate matter from non-. It's truly fascinating!
What exactly is the rate of deflation in this example? The price of a hot dog dropped 50%, but the price of labor dropped only 25%.
Yes, I was making the point that just because your wage is lower, it does not mean you are poorer.
Nope. The price of labor must also be halved, so everybody can buy exactly what they could before.
Read my example again. I was saying if goods become twice as cheap to produce - let's say due to a revolutionary new hotdog-making-machine - then the result is that prices go down, without wages necessarily going down.
Investment is spending any asset toward creating a system to return more value than what was spent. Investing is not saving. When you buy into an investment, you do not keep ownership of your money. You buy a certificate saying you contributed a certain percentage to the endeavor.
I didn't say investment was saving, I said that savings *drive* investment. You cannot have an investment if there are no savings, because nobody has the money to spare.
You don't seem to understand what the point of commerce is. The whole reason commerce ever happens is to give people things they want. If I want a good, a functional economy should ensure that I have the resources to acquire that good. In a strong economy, everybody can get what they want easily - supply meets demand. The numbers on the currency don't matter at all for that purpose.
Agreed.
Unfortunately, humans don't think that way. They see the numbers and remember what numbers used to be. They predict where the numbers will be in the future, and they adjust habits based on that. with an increased demand for money, there is less money available to the people who want money in exchange for their products, including those who want to sell their labor directly. If labor costs stay perfectly in sync with the deflation, everything is fine, except workers will see the numbers on their paycheck continually decrease, so they'll cut spending even more, until they only purchase bare essentials for life. Yes, they could purchase the same amount as before, but they won't realize that when they're just seeing ever-smaller numbers in front of them.
Humans do think that way, and taking the numbers into account is the proper way to think about it. I think you are also conflating deflation in terms of the decreased money supply definition plus the decreased prices definition. Initially it meant the former, so I will use "prices lowering" to refer to the latter. Now, why do prices go down? Why can you continually buy better and better computers for lower and lower prices? Now what does that have to do with wages going down?
Also I think you are assuming people are stupider than they are. If they can purchase the same amount as before, then they will. Why would they not realize it? People realize that they can buy less and less food with the same amount of money, for example.
Without people buying those nonessential goods, the companies making those goods will collapse, leaving those workers jobless (and even faster if wages deflate more slowly than the price of consumer goods). Those unemployed people see even smaller budgets for purchases, continuing the cycle. Eventually there is an equilibrium at the point of desperation, where people can produce just enough for themselves to survive, and all nonessential commerce is effectively halted. Excess production is pointless, because people won't spend the money to buy it.
If I have purchased all the nonessential goods I need, and I have money left over, then I'm going to go and figure out what to do with that money. If there's not a lot of it, then I will save it. If there's a bunch, I will spend some to have fun. If there's a crapton, I might invest it. I don't see why this would change just because the numbers are getting smaller.
You're conflating prices for value. What really matters in terms of economic wealth is purchasing power - what one dollar can buy you. If today $1 buys you one hotdog and your salary is $10/hour, yet a year from now $1 buys you two hotdogs yet your salary is $7.50/hour, your salary has gone "down", yet your purchasing power has actually increased (assuming hotdogs are the only product in this small example). It doesn't matter what the absolute number of your wage is, what matters is your purchasing power.
Your reasoning that deflation is good for single products, but not the economy as a whole, doesn't hold. The economy is made up of an aggregate of single products. If all products suddenly become twice as cheap to produce, and the prices are all halved, the result isn't a poorer economy - it's an economy in which everybody can buy twice as much stuff as before. The companies that produce those products won't suddenly be unable to afford to pay their employees less - the goods were cheaper to produce, which is why they were able to lower prices in the first place. And they would lower their prices, in order to undercut the competition and get more sales, and since all companies would do this eventually a new equilibrium would be reached.
Further confusing the issue is that people expect to get raises now to "keep up with inflation". This doesn't mean people are actually getting more purchasing power - it means that in order to maintain the same exact purchasing power, they now need more nominal dollars. In a stable economy - neither inflationary nor deflationary - the same effect would be achieved by not changing salaries. In a deflationary economy, the same effect would be achieved by lowering salaries. But this lower salary doesn't mean you are poorer, it means you have the same purchasing power as before. Further, people generally do get raises above and beyond inflation as they become more productive or valuable to the company, so this does not mean their salaries would necessarily decrease in a deflationary economy.
You are also confused about loans in that the interest rate for a loan does take into account the inflation rate. In a deflationary economy, the same considerations would be made.
What a deflationary economy means is generally that the same amount of dollars purchases more goods, or alternatively that a lower amount of dollars purchases the same amount of goods. This doesn't mean your house will instantly start depreciating. If your house has exactly as much *value* as before, and the dollar gets stronger and stronger, then yes, the price will go down. But that's not depreciation, that's keeping the value constant. If the price of your house increases over time at the same rate as inflation, it doesn't mean it is becoming more valuable - it means its value is remaining exactly the same, but the dollar amount is larger.
Contrary to what you claim about investments drying up, just the opposite would happen in a deflationary economy. Saving would be greatly rewarded, since the value of your money would go up even if you just keep it in a mattress somewhere. Savings are what drive investments - an investment is basically taking a bunch of savings and applying it with the hope of making more money. As people save more, more money would become available for investments, the interest rates would go down, and when the price of money - the interest rate - is right, people would take out loans in order to start new businesses or help build their existing businesses.
Deflation is bad because SMART people stop buying things that will be cheaper tomorrow.
That's not the half of it. The real problem is that food also starts getting cheaper, which will cause SMART people to stop buying food, eventually dying from starvation.
Hahahah. Good catch! I missed that one.
Oh boy, deflation sure is bad! I just hate it when things get cheaper. ::shakes head::
I can't believe it's still considered informative to say "Deflation is bad because SMART people stop buying things that will be cheaper tomorrow". Consider the price of computers. Computers always, always get way cheaper and way more powerful over time. If what you said is true, then this would be BAD because SMART people would not buy computers, since it'll always be cheaper tomorrow. Yet what actually happens? People but craptons of computers all the time. Yes, the fact that they get cheaper and better over time factors into it. You use that to make an informed decision as to when to buy a computer.
Inflation and deflation are confused terms because they've come to mean two different things: 1) increase or decrease in money supply, and 2) increase or decrease in prices. While a change in money supply does generally affect prices, they are not the same thing. Many factors contribute to a price, including supply and demand.
The fact is that prices going down is *not* in and of itself a bad thing. This is what you want - it generally means the economy is getting more and more efficient and that the wealth of the nation is increasing. As time goes on, in a free market, generally the quality of goods will increase and the prices will go down. The only time this doesn't happen is when there's regulation or when the government increases the money supply. And the fact is, the government increasing the money supply is just a very stealthy tax, a way to devalue the currency that everybody holds, which is a form of stealing. It also makes the economy less efficient in general as the effect of an increased money supply on prices is not uniform and it takes time for people to adjust to the new value of the currency. All in all it's just an awful thing and a way to allow the government to spend way more than the people would willingly pay for via taxes.
You are implying he should read the article before reaching for his keyboard and spouting off the first thought that comes to his self-evaluatedly brilliant mind? You expect too much sir!
They want it
They will get it
I have mod points, I'll mod it for you - wait shit.
I do not believe in those neoliberal ideals anymore, because that doesn't seem to work over here, in fact it does appear to have been the cause of the fast social decay in Europe, every approach in that direction made it worse. Every little lenience that was given to the economy was exploited to the maximum extend within the shortest time, mostly at the cost of employees. [...] I don't say that economic liberalism can't possibly work, just that it won't work under the current circumstances. At the moment it's an utopia, similar to the different directions of Anarchism, while it is very nice in theory it doesn't fit human mentality.
Yea that might very well be the case.
Today it appears to be far too late to fix things just by deregulating the markets, give everyone sudden freedom. This would required radical changes in international laws since companies had the advantage to design the whole system for decades.
Yea the transition part is always a difficult one. Though I heard a great analogy which applies here: a destroyed and abandoned church is not a good indicator of what things are like without religion. If we could have a system we know works then it'd be worth it trying to get there eventually. But there are many problems, a big one being that the people in power benefit from the current system and wouldn't want to change it, plus they get people dependent on the system so people will support it as well even if ultimately they'd be better off without it.
Just take a look at the messed up financial market, it's probably the most deregulated marked, caused the most recent crisis and continues to use most ridiculous theories, because they seem to work most of the time.
While it might be deregulated, it's not really unregulated. It's more set up to guarantee profit to the bankers whatever happens. They can take risks and get paid if they succeed, or get bailed out if they don't. It's really ridiculous. The thing with regulation is that it forms an intricate net wherein if you remove any one regulation, it's hard to tell what exactly will happen because of the interaction with all the other regulations. So it's not always the case that removing a particular regulation will lead to a freer and more efficient market, because there might be another regulation that leads to ridiculous behavior unless it's checked by other regulations.
Here in Germany there are indicators that higher wages don't destroy the economy at all, throughout the states of Germany there is a positive correlation between average wages and economic power. Meaning that here in my federal state for example, unemployment is fairly low, risk of poverty is low, the average income is the highest of all states, which aren't merely a city; economically we are the 2nd strongest state.
Oh but of course, it'd be extremely unlikely for higher wages to not be correlated with economic power. I'm not arguing against higher wages. If that's what you took from my posts then you're mistaken. Higher wages are great and of course the higher wages, the better. But is it really that higher wages lead to a powerful economy, or rather that higher wages are a natural result of a powerful economy? It's like saying that high prices are a sign of a strong economy - look how expensive new york and london and moscow are - so let's artificially increase all our prices so that our economy does better. Sound ridiculous? That's just what they did during the great depression. Somehow people thought that prices being low was the cause of the depression so they paid farmers to destroy food and not work to raise the prices of food... which is ridiculous.
Anyways, nice chatting!
*shrug* I like it. It makes me happy when I use it.
The credo is "never update unless you absolutely have to". I bought an iPhone 5S to replace my 3GS from way back and I am thrilled with how ridiculously snappy it is. I like the new UI also, but I could see how it would be painful if it's slow.
Trade Unions, that are composed by people working those jobs, decided that 8.5€/hour would be reasonable, the Social Democrats and the Green Party agreed, The Left wanted 10€ per hour.
Doesn't union labor usually cost more than the minimum wage?
A lot of working class people are in Trade Unions, join strikes, that are very rare, like this one, but people in Trade Unions aren't welcome in all companies. Often they simply don't get employed when they state to be a member of one of the Trade Unions, since they're potential trouble makers. Officially it would be discrimination, but due to the free market the employer may find any other reason to not employ them.
I don't see why it shouldn't be allowed to refuse to hire somebody because they're in a Trade Union. It seems that it should be the employers choice as to whom they choose to associate with.
On politicians attempting to plan the economy: Politicians have been planning, and are planned by, the economy for decades, accepting donations from company owners, coincidentally changing regulations in their favour. Today it's called Lobbying and has a clear direction "serve the economy, screw the public".
No, the direction is actually "serve the company, screw the economy and the public". Lobbying is awful. It is legitimized corruption, as you said, but it doesn't help the economy. It screws over other people in favor for themselves by using the force of law. It goes quite against the free market and I wholeheartedly agree that it shouldn't be allowed to happen.
The working citizens have nobody to represent them other than Trade Unions, since working class citizens simply lack the cohesion and leverage to achieve anything, all the do is to cast their vote every 4 years. One might think that politicians are representatives of the people. Here in Germany we also call the process of voting "die Stimme abgeben", which literally translates to "cede your voice", since hardly any politician cares about what you have to say once the election is over. And this isn't the case only here in Germany.
Yea, voting's not a great system. I think you don't realize that a free market is actually beneficial not only for employers but also for workers. Free market forces tend towards a worker being paid exactly what he is worth to the company - no more, but also no less. The more valuable a worker is, the higher his salary will go. Of course, his employer and all other employers want to pay him as little as possible for as much work as possible, and he wants to get paid as much as possible for as little work as possible. That's only natural. But the more productive he is, the more willing people will be to pay him more. Consider it from the context of filling a new position. You have two candidates, one of which is far more skilled than the other. You definitely want to pay them as little as possible, but you know if you offer too less the will turn you down. Imagine trying to hire a programmer for $5,000/year or something ridiculous - he will turn you down. The more skilled and productive he is, the higher a rate he can charge.
Now it's true a lot of companies pay people less than what they are worth... but then people end up leaving those companies. Like a bunch of people I've spoken to at a software company here in NY all say they are paid way less than they should be, and most of them have either left or are planning when to leave. Ultimately that hurts the company and more competitive companies will soak up the talent by offering them higher pay.
Now, if you have only one or a few companies in a town then they can offer less money because there's nowhere else for the workers to get a job. But that's a temporary situation. Given a free market - no government forces impeding entry to the market - other companies will flock to the place with cheap labor because it'll be profitable to do so. Bu
Hmm. Who are you to decide that 8€/hour is reasonable? Or some politicians attempting to plan the economy? Wouldn't people who are directly involved with that job - be it employing somebody or working that job - be better suited to decide what rate they are willing to work at or hire somebody out at? To put it in your terms: Does it not violate somebody's dignity to make it illegal for them to work at a rate which they have decided for themselves that they are willing to work at?
The misconception about minimum wage is that all the jobs that previously existed that paid less than the minimum wage will still exist, but will be paid more. Wouldn't that be great! Then of course it would be great to set the minimum wage as high as possible. The fact of the matter is that this is not the case, though. By setting a minimum wage of 8€/hour, you are outlawing any job which can only exist if it's paid at less than 8€/hour. True, there are some essential jobs which currently pay less than that and which will still be needed, so those jobs will now pay more. However, all the non-essential jobs that are worth less than 8€/hour will gradually disappear.
Ultimately all you are doing by imposing a minimum wage is restricting people's freedom - both those of the employers and those of the employees. Further, you are damaging one group of people - the most unskilled workers, whose labor is worth the least and will thus be first in line to be fired - in order to benefit another group of people - those who will still manage to have jobs after the minimum wage goes into effect. Do you not value all human rights equally? If you are for the minimum wage then you implicitly say that you value the human rights of the lesser skilled workers less than the human rights of the more skilled workers, since the former will be hurt by the minimum wage law.
They do not outlaw jobs, they outlaw payment that is too low. Those jobs will still exist, and will still be the same.
Ok, then why stop at 8€/hour? Why not set the minimum wage at 100€/hour? By your logic, those jobs will still exist, they will be the same, but people will get an amazing salary to boot!
The rest is interesting but I'm just addressing the flawed economic reasoning behind minimum wage, not the particular politics of Germany.
It's basically modern slavery, they earn 5€ per hour, which for them is a lot of money, but would be ridiculously low for German living costs including insurance, health care and other expenses. [...] Now that a minimum wage (around 8€) was promised to be introduced in 2016 from the coalition of Germany's upcoming government, we'll see how things will develop.
Thank God they're going to outlaw jobs that pay people who are willing to work those jobs an amount they consider a lot of money! This will surely make both the employers willing to pay that amount and the employees gladly willing to work at the amount far better off.
[...] people, as a whole, are social animals who have rules about how to get along. Some call it a social contract, some call it common courtesy; the language is unimportant. The point is, we live in close proximity and get along with each other.
In order to do that without everyone just living on their own plot of land and being totally self-sufficient (which has never been the way tribes of any size existed), we divide labor and exchange our labor and goods with each other. This doesn't require a lot of complex rules but it does require a few.
Inevitably, there will be disputes about what's right and wrong. There will be times when some recognized authority must mediate. In a small tribe that might be the elders.
Also inevitably, because people are not just social but also occasionally covetous and violent, there will be times when groups come together and engage in the wholesale rejection of societal norms. They decide to live by violence, the threat of it, and plunder instead of societal norms. That recognized authority will then be called upon to marshall the collective resources of the group to restore order.
Agreed so far. I think the only solution will be when people aren't covetous and violent, but the fact of the matter currently is that they are, and we have to do something about it. Pacifism doesn't work because then you just get bowled over by the first violent gang to come your way.
Now, scale that up to over 300 million people. Local tribal elders cannot handle, on a purely voluntary basis, the volume of problems that will arise. Some sort of organized group of folks will need to spend all their time working on, at minimum, the most basic tasks of staffing a justice system and providing for the common defense.
Those administrators are called "government". Courts and some sort of minimal military are administered by that government.
In short, we need a government. For one to exist, it must be paid for.
No one appreciates the need of a government until they personally need it, yet it can't exist without general contributions from everyone. People won't give to it like a charity, so it levies taxes.
Thus, taxes really are voluntary.
Em, no, you haven't shown they are voluntary. You said it can't exist without general contributions from everyone, so the government has to levy (aka forcibly collect) it from everyone. If I don't want to pay taxes, I can't do that without consequences. This means it is not voluntary, but compulsory. Your arguments about the necessity of compulsory taxation don't change the fact that it is compulsory.
Most people prefer paying taxes to the alternative which is anarchy. Nobody likes paying them but they recognize the necessity.
If they preferred paying taxes alternative to anarachy, then there would be no need to force people to pay taxes. For example, people prefer housing to not having housing. Yet there is no need for an entity to force people to pay for housing - people do it voluntarily. The fact that the government can't exist without compulsory taxation shows that people don't think it brings enough value to warrant the amount they are required to pay. And this is really obvious when you consider just how enormous and overblown and wasteful the government is.
Also, taxes really are paid in exchange for something of value. Think of it as insurance; you pay your taxes and what you get is a court system and a defensive collective that will serve the common good when the need arises.
That would be fine, except that I cannot forgo paying taxes in exchange for not taking advantage of the services. Even if I move to another country, where I definitely don't benefit from the majority of what the US government provides, I'm still required to pay taxes. This is whatI mean when I say that they aren't paid in exchange for something of value. They are paid, and then
If you believe that all taxes are theft [...]
It's not a belief, but rather, a fact. You haven't addressed the issue of why you don't consider taxation to be theft. In what manner is it fundamentally different from theft?
1) It is involuntary - if you don't pay it, then there are consequences, such as people taking your stuff away or imprisoning you. Even if there is a vote, direct or representative, on whether to enact a tax, it's still not voluntary, because if the vote passes you still have to pay it, even if you voted against.
2) It's not in exchange for services. If you don't use the services that taxation pays for, you still have to pay the taxes. This ties into #1.
I could go on but I'd rather address your specific arguments than try to guess at what they are.
[...] and you're not OK with any of that theft, then you must also believe that government is not necessary. After all, if it's not paid for, it won't exist.
This is really another issue. You wondered why the IRS was so vilified, and I pointed out that it's because it supports theft, so you can't expect people to like you no matter how nice you are about it.
There are folks with similar beliefs. Google for them and you'll find people who argue for radically small-scale human social groups that govern by consensus without formal mechanisms.
I think you'll find the record of success of such groups is pretty abysmal but you're clearly not alone in your feelings. There are people who have been there and done that.
None of that changes the fact that taxation is theft. Besides which, your comments are very intellectually lazy and incredibly vague.
Read up on them. You may find common ground with people who will become lifelong friends. Or you may be a bit disillusioned. Or maybe a bit of both. Whatever the outcome, don't just sit still in a state of "I don't have any better solutions"; that's not satisfying at all.
It's quite satisfying for me to know that I don't have all the answers. It's also satisfying for me to know that I won't have all the answers just by reading and discussing various belief systems with some folks. The most likely outcome of that is I won't have all the answers, but then I'll believe that I do, and thus perpetuate all sorts of nonsense like a tool. Besides which, I know that it's impossible to convince anybody by talking to them - the other has to be willing to listen and change their mind, and then it's them that changes their mind based on what I say, not me changing their mind. Further, I don't want to go into politics. So in conclusion, I don't see the point of spending too much effort on this.
My overarching theory though is that humanity's problems won't be solved by any system in particular, because humanity's problems lie deeper than that. It's in our animal nature, our instincts for fear, aggression, violence, domination, love, compassion, etc., that drive us to hurt each other and ourselves in all sorts of ways. Solving the latter issue (which can definitely not be done by any violent or coercive means) would then naturally lead into a system which works well given nobody is driven by some force to hurt each other or themselves. But the system in particular doesn't matter.
Until then, all I can do is point out various inconsistencies - like simultaneously having laws proscribing robbery and laws enforcing taxation - so that open-minded, reasonable people might be inspired to straighten out how their internal reasoning works.
By that definition, all taxes are theft. None can be collected, period, without violating basic human rights.
Correct.
I find that position sufficiently extreme that I reject it outright. Governments must be able to collect some taxes.
But why?
We can all agree that the current system could be improved but to simply wave your hands and pronounce all taxes to be theft is not, by any stretch, a workable position. Are you really arguing that anarchy, the inevitable result of all government being denied the ability to collect any taxes until that government ceases to exist, is a viable social system?
I'll admit I don't have all the answers. All I'm pointing out is that taxation is indeed theft, and by arguing that taxation is OK because it's required for the government to survive which then has X benefits, you are essentially arguing that theft is OK if it's done in a well-organized-enough manner and the people robbing you give you at least some of the money back in whatever form.
Or are you saying that you'd be OK with a little theft, just enough to support the basic functions of government, thus allowing your to maintain your righteous hate of all evil government entities while still enjoying basic government services like a common defense and a court system? If that's your position, you must work up quite a sweat with all those moral and ethical contortions you've been practicing.
I'm not OK with a little theft either. I'm just at the unsatisfactory point wherein I know the current system sucks and is fundamentally flawed but I don't have any better solutions.
Oh and hi NSA & the IRS, yes I do pay my taxes!
Well that's what you get for supporting an engine of theft, i.e. taking people's money without them necessarily wanting to give it to you, with the threat of violence and jail time if they don't comply. As to whether this theft is ultimately beneficial for the country as a whole, that is another discussion.
I think you're forgetting that people can learn to lip-read?
I'm thinking more of the Kickstarter model. You try to raise a bunch of money and then, if you have enough, you write the book or produce the TV show or whatever. Then once it's produced anybody can see it for free. You could provide non-digital incentives to the people who fund you early, like going to meet them in person or writing them into the book or the show or whatever.
Also it requires way, way more effort to print and bind a book than it does to copy a file. Once it's in digital form it's essentially valueless because the bytes are so cheap to store and transmit. This is why I think media in the future will gravitate more towards a "voluntary payment" model. That is, it'll be more successful to have millions view your work and a small % of them pay, than to try to get everybody who views your work to pay.
We cannot hope to solve the world health problem if we go about butchering the English language. That inexorably leads to sloppy thinking and poor mental habits which causes degeneration of the brain cells involved in higher-order thinking. Without those brain cells, dear Wescotte, there is almost no chance that humanity will be able to muster up the intelligence and coordination required to solve these complex, multifaceted, intricate problems.
Surely you mean who's infecting whom? Let's get our priorities straight: grammar first, world-changing health improvements second.