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"Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. [...]
The rise in income inequality over the past 30 years has to a significant extent been the product of monetary policies fueling a series of asset price bubbles. Whenever the market booms, the share of income going to those at the very top increases.[...]
[F]inancial institutions benefit disproportionately from money creation, since they can purchase more goods, services, and assets for still relatively low prices. This conclusion is backed by numerous empirical illustrations. For instance, the financial sector contributed massively to the growth of billionaire's wealth"
Source: https://mises.org/library/how-central-banking-increased-inequality
I'll leave my comments as comments, but note that The Mises Institute is proudly, one might say almost by definition, Austrian School. Both the Institute and the School have had their fair share of criticism. Which of course doesn't mean that individual author is wrong on this particular matter. -- Ed.(FP)
(Score: 5, Insightful) by jelizondo on Tuesday August 22 2017, @03:45PM (14 children)
Capitalism operates on the principle of maximizing profits by means of buying low and selling high; whether they are buying raw materials or labor, capitalists will seek to pay the least amount possible.
Nowhere in their tenets is community building or ameliorating society’s ills. The world has bought into Hayek’s postulate that all human activity is economic activity and that everything therefore has a price in the market.
A great symphony, painting or sculpture has no inherent value as an object of beauty; it simply has a price. Thus we have fallen into the trap of thinking that moral values, not having a market price, are worthless.
IMHO, we need to rethink ourselves as something greater than economic agents to create a better community; one that conserves its national parks, for example, for the enjoyment of future generations and not one that seeks to exploit them for short-term economic gains.
(Score: 2) by Non Sequor on Tuesday August 22 2017, @03:59PM (3 children)
Google "cost disease" for an interesting tangent related to this notion.
Write your congressman. Tell him he sucks.
(Score: 2) by Immerman on Tuesday August 22 2017, @05:21PM (2 children)
Seems to me "cost disease" is a capitalist's sob-story about not being able to squeeze the little guy as hard as they like. Clearly the wages wouldn't go up if the value delivered by the workers wasn't at least equal to the new wage - so either:
1) The work was initially under-payed thanks to an overabundance of labor (using "appropriately payed" = "payed the actual economic value of their labor" = no excess profits to be pocketed).
or
2) The market value for the product has increased even though productivity has not - i.e. even though each worker is producing the same amount of good, the value of that good has increased. Meaning *economic* productivity has in fact increased.
(Score: 2) by Non Sequor on Tuesday August 22 2017, @06:57PM
I think it's something of a Rorschach test. I think economists' read on it is particularly poor. Economists want to believe compensates related to quantity and quality of output.
As a mathematician I'll note that the examples of "cost disease" are jobs without a linear notion of quality or quantity. Assigning compensation to them has to project them onto a linear basis and that requires making arbitrary decisions. People don't actually make conscious decisions on how much to compensate orchestra musicians or artists, but at least some subset of these groups benefits from arbitrary comparisons against luxury goods. The budget for new paintings and donations to the orchestra is weighed against what the same money could purchase in terms of high end eel estate or other goods with materials costs or other costs that experience inflation. To some extent the price allocated in this manner has to be sufficient to convince musicians and artists not to pursue alternate careers, but it's not clear what the sensitivity is and what role money plays in these decisions.
I see no evidence that you can pick an "optimal" outcome in cultural goods and services, regardless of how you define your optimum. Implicitly there are arbitrary decisions to make about how much of these things should be produced and how dearly their makers should be compensated.
These same kinds of arguments may also apply to jobs like teachers and managers. The value added to society is difficult to measure and different assumptions, methods, and priorities generate different answers. That's why I say it's a Rorschach test.
Write your congressman. Tell him he sucks.
(Score: 0) by Anonymous Coward on Wednesday August 23 2017, @10:07AM
I think everyone (including Baumol) is getting a myopic view of what is going on: it is a reversed "broken window fallacy".
Simply, productivity increase makes whole society better of, but in that enhancement, large groups, especially the ones which became more productive, are left behind - in richer society, they can be compensated less and still get by, or, in other words, their lagging behind is essentially the way increased productivity manifests itself, and those whose productivity stayed the same (e.g. performers of classical music) are actually fixed points and they have only seemingly advanced (an effect of inflation).
(Score: 0) by Anonymous Coward on Tuesday August 22 2017, @04:21PM (1 child)
Filthy Communist.
(Score: 0) by Anonymous Coward on Tuesday August 22 2017, @04:58PM
Capitalist pigdog.
(Score: 0) by Anonymous Coward on Tuesday August 22 2017, @06:27PM
(Score: 1) by khallow on Wednesday August 23 2017, @12:53AM (2 children)
So what? If the mere act of wanting something is enough to get it, then clearly you don't want to change this situation hard enough. I find it interesting how so much criticism of capitalism comes to the motives rather than the consequences. Show me the society where people with such base motives help their societies better than they do in a capitalist society.
Yet another indication that you've never figured out that intent != outcome. There's a reason for the saying, "The road to Hell is paved with good intentions."
I quite disagree. That's not a trap since moral values can have profoundly negative value even as morals. For example, the Communists of the 20th century thought that forcing people into their scheme was a moral positive. But you have to have a pretty twisted view of reality to think that creating a billion slaves is a good idea.
Further, capitalist societies have never had trouble creating objects of beauty. They have by far been the best at it.
(Score: 2) by jelizondo on Wednesday August 23 2017, @03:26AM (1 child)
Most European countries, because they do not practice crony capitalism (as in Russia) or savage capitalism (as in the US).
So intent is irrelevant? Google mens rea and educate yourself a bit
You mean like British, American, Spanish and Portuguese created millions of slaves for profit? Or do you mean like Christians imposing their faith on millions of Native Americans against their will or Western countries imposing ‘statehood’ on tribal lands in Africa and the Middle East? Or do you mean like selling opium at gun-point in China?
Your economic education is lacking. Michelangelo, Da Vinci (Renaissance), Bach (Baroque) and many others belong to a feudal economic system, not capitalism. In your mind anything other than socialism/communism is capitalism, sorry but no, capitalism is fairly recent invention.
(Score: 1) by khallow on Wednesday August 23 2017, @05:09AM
Huh, contrary to your assertion most European countries practice some degree of crony capitalism, for example, UK, Germany, France, the PIGS, and the former Eastern Bloc, to name a few.
We're not speaking of crime, so yes, intent is irrelevant.
Why yes. It's almost like you get it. The only difference is the Communism did it on a bigger scale and collapsed before it could harm people for centuries rather than a few generations.
And Pink Floyd, Van Gogh, and Frank Lloyd Wright "belonged" to a capitalist system. Capitalism is just private ownership of capital and the necessarily systems (such as markets to trade said capital and laws to protect private ownership of capital) which support the concept. Sure, there were good artists before there was capitalism, but there's been vastly more good artists since.
For example, there's probably tens of thousands of people in the world who can do amazing things with guitars. They didn't happen just because some political/economic elite decided to support a handful of performing artists for the prestige. The distributed nature of capitalism means that one doesn't have to be connected to political or economic elites in order to learn to play the guitar at a world-class level or to make a living from playing the guitar. And capitalism has helped in other ways. A remarkable thing about such music is that there is an immense variety of music as compared to older systems of musical expression which tend to follow various traditions and formulas. Capitalism isn't the sole cause of this - democracy has played a huge part - but the ability to fund unusual forms of music with unusual business models or funding sources means that art can be expressed today which would have never existed in the past, even discounting the advanced technology available to us today.
(Score: 2) by JoeMerchant on Wednesday August 23 2017, @01:39AM (3 children)
Seems like moral values should be given a price - and weighed in economic calculus accordingly.
🌻🌻 [google.com]
(Score: 2) by The Mighty Buzzard on Wednesday August 23 2017, @12:34PM (2 children)
They are. Morality is an individual trait though. No two people's is going to be identical outside a cult.
My rights don't end where your fear begins.
(Score: 2) by JoeMerchant on Thursday August 24 2017, @01:06AM (1 child)
Can't remember the last time I was paid cash money for moral values - nor anyone I know for that matter. I have often seen exercise of "high moral standards" being expensive to the practitioner.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Monday August 28 2017, @06:13PM
So, you've never worked in sales then?