Re:Pioneering economist says our obsession with growth must end
by chii on Tuesday July 19, 2022 @01:38AM
(#32147917)
> You invent other ways of getting payed for being rich.
so what's this other way that's been implied, but never actually explicitly explained?
Lots of investors accept low returns now - that's _why_ prices are expensive. Unless you're talking about the corruption in countries like russia, where resources and power are usurped, rather than created.
Re:Pioneering economist says our obsession with growth must end
by ElevenLathe on Tuesday July 19, 2022 @08:52AM
(#32150751)
Presumably grandparent means QE, ZIRP and the whole range of other easy money policies that inflate the money supply but give investment banks, and the financial industry generally, first crack at the new money. This is definitely a way in which "just being rich" gets you access to policy-defined ways of making money basically risklessly.
Ok, suppose a new frontier has opened up. Maybe it's geographic, maybe a gold rush, maybe a technological revolution -- but in any case, there are lots of opportunities to forego consumption today in order to create greater value tomorrow. Stuff has to be built! Investment has value. We should want to encourage it and reward it, because everybody wins. Great! So what's the problem?
Well, what happens at the top of the growth sigmoid? The stuff has been built. Foregoing consumption today... just doesn't help in the way that it used to. Investment just doesn't have much value (gasp). Returns drop. In fact, they plummet, because now instead of having a lot of growth service a little capital you have a little growth service a lot of capital. Double whammy. Ok, markets contract, so what's the problem? There isn't one, if you let it happen -- but if you are a rich person, this is an existential threat. You can't get paid for being rich anymore. Unless... wealth is power, and power can be used to change the rules. So you change the rules. You invent other ways of getting payed for being rich. Because that's what you really care about.
That's the fundamental reason why our economic narrative pretends that everything is exponential, not sigmoid: the dirty deeds happen at the top of the sigmoid.