Say
This isn’t the gotcha that you think it is. Inflation is kept at a positive number on purpose. Deflation causes a self-reinforcing spiral that brings everyone’s wealth down. If inflation is too high that’s a problem too, but it’s less of a problem than deflation.
… With that said, the huge amount that prices have gone up recently is caused by corporate profiteering, which is a serious issue that needs to be addressed.
A sane economic take on lemmy?! Blasphemy.
I’ll add this; Stop buying shit. I’m not talking rent and food. I’m talking “consumer confidence” stuff. If you don’t need it to live, stop.
Example; Ammo got wildly overpriced. So we stopped buying. Like magic, prices tanked! Ain’t that crazy?
Of course that’s stupid oversimplified, but the basic idea is sound.
Locally, people were bitching about Taco Bell’s quality. OK. Stop buying Taco Bell. They’ll either crash (that store) or correct. Win-win.
I would love a legislative way to stop corporations from wildly profiteering off our asses, but I don’t know what that looks like.
The corporations are absolutely aware that people have stopped being price conscious.
I understand everyone who can afford a $6 case of coca cola can also afford a $12 case. At some point you have to just choose not to buy it, or the price will just keep rising.
I mean, you are the one making the logical fallacy of assuming they are defending the exact opposite… They’re basically just saying, “inflation bad”, and you come in and say, “deflation bad, too!”.
OK? They weren’t defending deflation? You even admit inflation has been out of hand lately…
You spelled “corporate market manipulation” wrong.
Why does deflation bring your wealth down? If I saved miney in a deflationary period my purchasing power would go up. Deflation means the amount of goods you can buy with the same currency increases over time, inflation means the amount of goods you can buy over time goes down. So actually deflation makes your wealth go up it seems to me.
If you already have money, deflation is good for your net financial position, sure. If you work for your money, deflation could mean your boss has to either cut your wages, or fire you. Even if that money can buy more, people are very unwilling to take a pay cut.
That means if there’s a sudden (but small) drop in productivity in an industry, inflation can paper over it, and deflation amplifies it, and potentially means the industry collapses.
One additional factor is that there is only a slight delay for prices to catch up with inflation but a major delay for wages to rebound. In a roundabout way inflation allows companies to cut wages without it feeling as shitty to the workers. This is why the central banks throw on the money printer when they fear an incoming recession.
This might seem unfair to the workers but is usually the preferred solution over tons of people losing their jobs.
It’s good for you in the very short term, but bad quickly after that. It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less, and businesses bring in less and less money, so they lower prices more to try to entice you to buy, but the dropping prices only make you want to wait to buy even longer, this keeps spiraling downward and businesses keep bringing in less and less money, and so very soon they have to start firing people, and then more and more companies wind up out of business, causing more and more unemployment, and on and on and on, for everyone involved it all goes very bad.
It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less
This is the part people always lose me when explaining deflation is bad. Why would I suddenly be holding on to cash just because it’s “worth more”? Why would I be buying way LESS than I do now? I would still have bills to pay, I’d still have groceries I need to buy, and since all of that would be cheaper I might even have enough left after to actually buy things I want rather than need. Maybe I could actually afford to eat out every now and then, unlike now. Maybe I could actually afford to support the game developers I like instead of pirating everything. The average person doesn’t have the luxury of hoarding money, if we were in a deflationary period they’d be spending just as much money as before, they’d just get more in return for it. Even in the scenario that I do save some of it, it would be for the purpose of saving up for a big purchase like replacing my shitty car, which isn’t an option at all atm.
No, deflation by itself is good for the average person. It’s the outside factor of billionaires and corporations trying to maximize every last cent of profit that makes deflation a bad thing… and what do you know, it’s the same billionaires and corporations throwing inflation into over drive with their excessive price gouging.
I don’t know maybe it’s just me, but it sure seems like neither deflation nor inflation are the problem here. Both situations have their own unique challenges, but the thing making either a totally dire situation is the greedy billionaires and corporations. We should do something about that.
Your problem is with consumerism.
Entertain for a minute the though of a world with absolutely no consumerism or financial elites where no-one ever buys anything unnecessary or made of plastic.
In a deflationary scenario, everybody holds on to every dollar they make which they don’t have to spend on nevessities. Savings account are worse than the underside of the mattress, since deflation means negative interest rates by definition.
So where do you find the money to finance medical research, new roads, or anything that would return a future net benefit to society? Money under a mattress serves no purpose to society whatsoever.
Get your reason outta here and support a centralized economy like the rest of us!
Efficient at extracting wealth from humans
And giving all of that yummy wealth to a small handful of scummy humans.
Those aren’t humans.
what thread are we in again
I am not even saying that capitalism is remotely acceptable but prices going up doesn’t imply inefficient of the system. Inflation could be a reason and inflation says nothing about efficiency.
Shit on capitalism. Be my guest. Just don’t make bad arguments.
I thought they were coming at it from a supply & demand angle.
Inelastic demand on food and housing yet prices still go up.
That might be the case but generalized statement that are wrong, are wrong.
Don’t generalize to the point of failure of your point. Especially in public, the in-group might understand you but the out-group will misunderstand and judge you and your ideology based on their misunderstanding.
Ok explain why the prices in my local supermarkets go up every three weeks. Go ahead. Whats the argument.
I’m not an expert in macroeconomics but I’d say some global effects are likely due to the invasion of Ukraine (global exporter of wheat) ABC News and US Gov, the rising price of oil (some fertilizer uses fossil fuels)NBC, and possibly that the world has changed due to Covid and that a lot of things had shifted along with it CNN. A country that once was in the top 5 of grain exporters dropping off the global map is going to shake things quite a bit and oil unfortunately affects so many different markets.
I know all this. We can go through all sorts of explanation to see why, it still does not make it okay.
Thank you for the explanation :)
Let’s say for the sake of the argument and not remotely because I believe it is the case nor any other reason than for the sake of the argument, your prices go up due to inefficiency, that doesn’t change the fact a increase in pricing doesn’t prove inefficiency. Just that sometimes it is the reason.
My pet is a dog. Not all pet are dogs. The existence of pets doesn’t prove the existence of dogs nor are all pets dogs.
Do you keep paying those prices every three weeks? There’s your answer.
We need water, so uh, what do you think lmao. The cost of necessities going up and still paying for it doesn’t equate to it being acceptable, bootlicker.
You’re paying for water at your local supermarket?wtf is wrong with you?
What kind of fucking moron gets water from a supermarket?! If you have to buy water from a shop, why don’t you get it from a distillery? Fuck you’re dumb and deserve everything wrong in your life.
People like me with specific diseases or issues need a specific brand we can get from supermarkets or the source itself. I cant drink filtered tap water or other stuff or i might actually die. Ever thought about that scenario? To me water is medicine and absolutely an expense. Back the fuck off and tone it down with the swearing. Shame on you! Username checks out. Don’t bother replying you are blocked.
this is some stupid bullshit. if he thinks there’s magic water, he’s insane.
but mostly, he fucking retarded, because I said “distilled” and he ignored that, and wrote “filtered”, so that he could strawman to “win” an argument about how he’s not dumb as shit.
jfc, people. this is why Lemmy sucks.
Because it’s efficient at transferring wealth upwards.
Normally a strong democracy with multiple parties, checks and balances would help stop this. But the new META in economics is to just buy politicians to do your bidding for you. Kinda hoping the Supreme Court will patch that at some point, but it’s not looking likely.
I would be a social democrat for just that reason. But with climate change looming, my options have narrowed.
Definitely harder to patch out features then bugs.
It is efficient, in increasing the wealth of the wealthy.
The system is working as intended.
The rich get richer
… The system is working as intended.
I realize this isn’t really the place for this discussion but capitalism doesn’t know what the word “efficient” means. Is it efficient to have to buy the same thing twice? Is it efficient to only make cheap shitty and yet still overpriced versions of everything for the consuming public, shit that is designed to fail? Is pollution efficient? Is ruining everyone’s lives efficient? Pointless jobs? Rich people? These things are efficient the way fucking for virginity is efficient. The way Elon’s Twitter has been efficient. The way shitting the bed is efficient. Which is to say, it’s really fucking not.
Capitalism is the most efficient way of extracting as much value from one’s employees, and sales from one’s customers as possible.
Efficiency isn’t always a good thing, such as in this case.
It’s broader that that: it’s the most efficient way of extracting money from everything else in general.
Hence just how common it is to see large companies getting massive subsidies or having laws written to benefit them (notice, for example, the Disney Corporation rigging the system to extract more value from the broader society by getting the Copyright terms extended ahain and again), none of which is sales or employment related.
Capitalism doesn’t limit itself to things of a trading nature (which includes employment, which is basically people selling their work to others) and that’s the core of the problem with it: it naturally corrupts anything around it which can help provide not just trade advantages but even force the rest of society to give larger entities “free” money even outside trade (subsidies, bailouts) or forcing into being paid for that which would be naturally free (i.e. copyright, water rights, even land).
Some people think Crony Capitalism is not real Capitalism, but is actually real Capitalism in it’s purest form: the best ROI in this game of who makes the most money comes from buying the referees and those who make the rules.
Couldn’t have said it better. Our society is bound to collapse, and it’s us, “the peasants”, which will be dealt the blow.
What about space travel? Preclaimer: I’m a physics student. Before SpaceX and Indian companies, one ESA launch cost like 500 million dollars, which was impossible to achieve for scientists without direct ESA funding. Now, suddenly physicists can launch small satellites with less than a million.
and do you genuinely attribute that to capitalism or is that a necessary process that comes with developing a new technology and the infrastructure and expertise to operate it
do you genuinely not believe that that would have happened anyway
i’m sure it’d be hard to disentangle all the influences and come up with hard numbers for “how much” “capitalism” “contributed” and how much farther along cheap space flight is than it would have been under some nonexistent alternative system for which we have no real world examples, but to suggest space flight would not have gotten any cheaper than its initial price would be a tough position to defend, let’s put it that way.
And then let’s put it another way. Do you not think that a focused society, one run properly and without corruption (ie not human), could develop space flight faster, safer, and cheaper, than it could do while burdened with a bunch of greedy thieves who spend more of their resources on bribing politicians, lining their own pockets, and lying to the public about their products through the marketing department than they do on actual technological development?
Capitalism’s shit, m8. Just one big lie from start to finish with not a redeeming moment in between. It’s a vampire and you’re its food. Do you care if your food has opinions?
On the contrary, this is the proof that it is efficient. The right question to make is: Efficient for whom?
Optimized for what objective? Whose objective?
It’s efficient at exploitation
Capitalism isn’t concerned with efficiency, merely the most direct route to monopoly.
Wish more understood this.
The free market is an illusion at this point. The monopolies killed it.
The Legal Illegal monopolies.
I think you may be right.
Guys I love you and support most of the changes you want to make regarding the way we govern ourselves.
But sometimes I see some posts that make me wonder. I want to help solve capitalism and it’s problems. So I’m studying macroeconomics I’m studying economic theories in general.
Sorry,and with all due respect, sometimes there are some dumbass posts that show a complete lack of understanding of how things work in the world economy.
This is a meme, not meant to be taken seriously. (Although more people seem to be forgetting this)
As far as dumbasses… Welcome to the Internet
Since you didn’t explain why, I will. If society has deflation all investments stop because people can hold their money and it will grow. If you have a small amount of inflation then those will large amounts of capital are forced to invest it or lose it over time. Inflation is basically a wealth tax for non investors. Obviously inflation that is too high acts much like a wealth tax that is too high. Inflation effects the rich and poor unless they invest their capital which the rich will often do better. Over all thoigh a small amount of inflation is good for an economy to force people to invest capital in something.
Genuine question: does that mean deflation is never a good thing? Like, right now prices are skyrocketing (tbf, not just due to inflation, but it’s not like they’ll ever go down again). It would take ages for wages to catch up properly, if it ever will (since it could be argued that we were still catching up from before), so wouldn’t deflation be helpful here?
The economies work in cicles, it’s not that it’s bad or good. Long periods of the same, inflation, desinflation or to a leasser extent desinflation. Are what cause all these issues.
So if you work in the European central bank your goal would be to stabilise these changes to small periods of time, but you don’t always have control, because if the US wanted (for example), they could release enough euros that would throw our currency stability out the window.
(Of course this isn’t in their interest(not even China would want this I hope) because the world economy it’s too interconnected.)
So when you think your politicians have control over your economy, think again. They have a limited amount of control, along with policy it should be enough to run a country.
(Sorry I keeped going in the topic of the original comment after I answered you XD)
Deflation benefits those who have the most capital already. It turns capital itself into a productive asset, but it does not actually produce anything of real value so does not help society. It is manufactured scarcity, like bitcoin and etfs.
Sure, but it would also benefit working class people because stuff’s less expensive right? Inflation like we have now, also only seems to benefit people with capital while giving working class people less to spend and taking forever before the wages have equalized again (if they ever will). Wouldn’t at least some temporary deflation help equalize everything again?
Unfortunately deflation decreases the supply of capital but does not increase the supply of resources like food and such and does not decrease the demand for them. So it would not increase the true buying power the working class has. It would just disincentivize those with capital from investing in industry that could increase supply of food and such and instead people with excess capital will just hold on to their money.
The root of your concern is that the working classes buying power has been decreasing for decades which decreases their quality of life. The root cause of this issue is that supply has not been able to keep up with demand. The causes of this are large and varied depending on if we are talking about food, housing, or medicine etc. Inflation is one of the few tools the government has to cause industry to grow which will hopefully increase the supply of resources. Unfortunately there are many more factors in regards to supply and demand, and demand is increasing faster than supply.
so when do minimum wages start going up?
Yeah, would’ve been better if it said, “then why do profits keep going up,” because a theoretical efficient market should eventually result in zero profits.
If you assume that wealth is only created when it has a dollar value attached to it, that the only means of promoting enterprise is through private equity, and that people are too stupid to realize investing in a business when their currency is growing in value is both agnostic towards true value and, hopefully, allows them to gain more of those dollars that are increasing in value, sure.
If you ignore all that, yes, you should always try to inflate the currency, a system proven to benefit the rich over the poor as it innately decreases wages while preserving the value of non-liquid assets.
Also, never mind that the majority of human enterprise was pursued just fine under systems that used non-fiat currencies.
If I can expect my dollars to grow more safely in my bank account than in the market which has risk then I will leave it in the bank account. Non fiat currencies have uncontrolled inflation and deflation and caused many issues that became apparent several times in history.
In regards to wages, if deflation became normal than businesses would just start reducing salaries. The true issue of wages is unequal negotiating power of the worker and employer. Instead of trying to fix this with currency value manipulation which does not work, you should look into unionization which has a far better results.
Yes, short sighted people might choose to treat their savings accounts like how saving accounts used to work, and reap a yearly 3% or whatever net gain from allowing banks to loan it out to people trying to buy homes or start businesses.
A business already reduces your salary automatically under inflation.
Yes, the inequal negotiating power will always exist under a capitalist system.
Not sure why you think that’s a point worth bringing up for this discussion, but on that topic maybe consider who controls the people who have assured you that the system that provably primarily benefits the oligarch class is necessary to make line go up and think more critically about exactly how necessary inflation is to an economy.
And yes, I am aware that economists have extensively looked at, for example, Japan’s deflationary periods and wrung their hands over their continued economic growth and rising standard of living despite growing competition and an aging population.
It was all that damn deflation’s fault that their numbers didn’t skyrocket indefinitely, surely. .
People with large amounts of capital are focused on capital retention and not growth, so it is not short sighted for them to leave there capital in a deflationary currency. It is a low risk investment that will beat inflation by default. It is actually a great investment for them. Normally the rich would use treasury bonds that will beat inflation instead. Lowering the interest rate of treasury bonds forces the rich to risk their capital in the market where they could lose it. They reduce this risk by diversification of stocks, but it is still riskier than a treasury bond or deflationary currency which they would prefer.
I bring up the unequal negotiating power because wages not keeping up with inflation is the core complaint you had. Regardless of inflation or deflation the business owners will try to reduce costs and will often screw over the working class. If the currency inflates than they don’t give you a large enough raise. If the currency deflates than they will have to reduce your wage and will find a way to justify it. In both situations the business owner will screw over the working class because of unequal negotiating power.
Basically using deflation to fix worker compensation is like using a hammer on a screw. A screw looks like a nail, but a hammer is not the right tool for this problem. Unions are the drill that fix unequal negotiating power and the US has been undermining them for decades at this point. Inflation is a tool to force the rich to invest and risk their capital while deflation benefits the rich and their ability to maintain their status. If you want to imagine a society without capital then fine, but no such society has ever replaced currency which is just an abstraction for work done, but payment not yet redeemed. Gold, coupons, and dollars can all be currency. It is bad for a society if individuals can horde a currency and deflation makes it extremely easy to do so. As long as currency exists it is better to force the wealthy to risk their capital in the open market where they will lose some or all of it.
Among other uses, yes it would work
Nice shitpost lol
Companies that are structured to maximize short term shareholder value need to make extra profits at all costs.
Supply lines were strained during the pandemic, which led to drastic price increases. Supply lines stabilized and the pandemic subsidized. Prices didn’t go down? Why?
Because the companies that set prices need to make more money this quarter to make the shareholders happy. And they bribe the politicians and the judges and the regulators to control the system at every level.
These rich assholes doomed our world to destruction and our “leaders” were too greedy and small minded to stop them.
Enjoy the ride down
Because “number go up” is all the system cares about. Damn you living creatures for opposing it. The system shall prevail.
Isn’t inflation good for consumers? Deflation means what you already have becomes more valuable – so the rich would gain a significant boost to their finances since they already have so much. Inflation though would mean they lose a significant amount, and it becomes easier for the working class to break into the rich people bubble.
Only if salary go up
No, it just means everybody can buy less with the same amount of money. If you’re broke, you’re still going to be broke at high inflation, and it’ll hurt a lot worse.
