Re:Survey shows people no longer believe working hard will l...
by imtringued on Tuesday June 15, 2021 @05:02PM
(#27521452)
This might be what happens when inflation is too low. You can get away with a lot of money shuffling games and end up ahead without doing anything productive. If there was 5% inflation you would actually have to make sure that you are doing something useful, otherwise inflation would eat away at your wealth but workers can just switch jobs to get a raise.
Low interest rates are an indicator that something is going wrong. Companies stopped hiring people and they already have done all the investments they could possibly do. The quick hack is to just let the government "steal" all the low interest money and spend it to generate inflation.
What we are seeing during this pandemic is that businesses are waking up. They are realizing that they actually have to work or else their paper wealth is going to disappear into nothing.
Fundamentally the problem is that cash is a low risk asset and the risk of actually doing work is too high compared to risk free money.
This isn't to say that starting position doesn't matter, I'm sure most of the vanderbuilts are still doing reasonably well.
When interest rates and returns on labor are low it becomes difficult to get ahead by either working smart or hard for the majority of individuals.
Even in the tech sector, the most lucrative approach is to simply work with a dominant firm. Founders/Employees give up too much equity and have too little cash flow to compete.
Taken to the extreme this economy looks more like a feudal economy of court jesters, peasants, and lords then the proto-industrial economies Adam Smith wrote about.