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posted by FatPhil on Tuesday August 22 2017, @01:23PM   Printer-friendly
from the Philosophers-Stone dept.

"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)


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  • (Score: 2) by urza9814 on Wednesday August 23 2017, @12:13PM (5 children)

    by urza9814 (3954) on Wednesday August 23 2017, @12:13PM (#557934) Journal

    Wow, that's pretty clueless. The automobile industry was not the bicycle or wagon industry repurposed to make cars. It came from nothing. The modern computer and high tech industries came from almost as little.

    That's just outright bullshit. It wasn't the *same* industry, but it certainly replaced most of it. There were a hell of a lot more wagons being sold before the automobile was invented. There were a hell of a lot more jobs as secretaries or computers before the digital computing industry took off. Displacing one industry with another does not magically create a larger employment pool.

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  • (Score: 1) by khallow on Wednesday August 23 2017, @01:24PM (4 children)

    by khallow (3766) Subscriber Badge on Wednesday August 23 2017, @01:24PM (#557981) Journal

    It wasn't the *same* industry, but it certainly replaced most of it.

    Bootstrapping isn't about creating multiple independent industries that don't compete with each other, though that can happen as with the case of some of the web services created in the past two decades (though these do often compete with existence services). It's about creating iteratively more and more complex systems and infrastructure from what came before. Automobiles in the beginning did rely on technology knowledge and infrastructure derived from the construction of wagons and bicycles and it eventually replaced much of these older technologies as a mode of transportation.

    But the bootstrapping effect is in the creation of infrastructure capable of building tens of millions of cars per year today from a collection of workshops in specific locations (such as Detroit or the Ruhr) capable of building thousands of wagons per year in the distant past not in the non-replacement of older technologies.

    There were a hell of a lot more jobs as secretaries or computers before the digital computing industry took off.

    It's worth noting here that secretaries and human computers simply couldn't be anything resembling a modern website. They can't iteratively design better secretaries and such. They can't react fast enough.

    Displacing one industry with another does not magically create a larger employment pool.

    I agree. Creation of more and better jobs is the end result even in a lot of places with high regulation of labor, but it doesn't have to be that way. There are a number of countries, such as Greece, Venezuela, and North Korea, that are finding out that you need more.

    My take is that somewhere around half the world's population is currently engaged in labor that is directly connected to our global trade network. That wouldn't have happened without massive job creation from technology development. But some countries are faring much better at this process than others. China, for example, fares better than India, even though the latter has a natural advantage with the widespread use of English, the current lingua franca, not being in economic isolation till 1989, and a head start back in the 1950s and 60s on wealth, technology, and infrastructure from being in peace for a long time before independence. Yet now, China is the powerhouse and India is playing catch up.

    As a final note, in this thread, one side spins vague fairy tales about how bad things are, while the other side points out real life counterexamples. Sure, maybe some day all this technology will replace us. But it hasn't happened yet. And I can't take seriously people who don't even know what's going on in the world like the AC I replied to earlier. How can that AC make any useful observations when they get basic principles so wrong?

    • (Score: 2) by urza9814 on Wednesday August 23 2017, @04:41PM (3 children)

      by urza9814 (3954) on Wednesday August 23 2017, @04:41PM (#558068) Journal

      I'm not arguing that these advances don't create jobs; I'm merely saying that, as the AC said, there IS a limited number of high paying jobs. And that's provable with nothing more than basic logic -- if *everyone* has a high paying job, then it's not high paying anymore, because "high paying" is a relative measure. No amount of hard work and intelligence can change that. Nor can creating new industries. Nor can technological advances and automation. Not everyone can "pull themselves up by their bootstraps" -- even the ones lucky enough to have boots can't all do it unless we're going to break the laws of mathematics.

      • (Score: 1) by khallow on Thursday August 24 2017, @12:13AM (2 children)

        by khallow (3766) Subscriber Badge on Thursday August 24 2017, @12:13AM (#558231) Journal

        And that's provable with nothing more than basic logic -- if *everyone* has a high paying job, then it's not high paying anymore, because "high paying" is a relative measure.

        Then what's the point of the argument? It's just circular reasoning.

        Not everyone can "pull themselves up by their bootstraps" -- even the ones lucky enough to have boots can't all do it unless we're going to break the laws of mathematics.

        Bootstrapping doesn't mean high paying (in the relative sense) jobs. A serious hole in your argument is that you don't give a reason why "high paying" jobs are at all relevant. It's certainly not relevant to bootstrapping.

        No offense, but it sounds to me like the argument is a) circularly arguing that not everyone can have a "high paying" job with the implicit connotative assumption that "low paying" jobs are bad, b) then leaping to the assumption that having a "high paying" job is necessary for economic bootstrapping. This leads to conclusion c) that there's a lot of people who can't bootstrap because being on the lower end of the wage scale (no matter how high that low end turns out to be) somehow precludes that. I think that is all bunk.

        • (Score: 2) by urza9814 on Thursday August 24 2017, @01:39PM (1 child)

          by urza9814 (3954) on Thursday August 24 2017, @01:39PM (#558438) Journal

          Huh? This conversation started with you asserting that the claim that there's a limited number of high paying jobs is "pretty clueless", that's what I was responding to...

          • (Score: 1) by khallow on Thursday August 24 2017, @09:36PM

            by khallow (3766) Subscriber Badge on Thursday August 24 2017, @09:36PM (#558619) Journal

            Huh? This conversation started with you asserting that the claim that there's a limited number of high paying jobs is "pretty clueless", that's what I was responding to...

            Well, that's because I think "high paying job" should mean something useful, like say a job that pays well in excess of what you need to get by. Using that definition, it is quite possible for most or all jobs to be high paying and similarly, it possible for most or all jobs to not be high paying. Thus, you have a distinction of relevance.