In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up!
NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
On November 03 2014 10:25 oneofthem wrote: so what? pensions are inflation adjusted and that person should have invested in some form of secure asset that also grows.
by the by the government should also hand out inflation stipends to those elderly in your example. but in the larger context of the economy deflation is way way worse than moderate inflation, partly due to increasing inequality.
Inflation is what increases inequality by transferring wealth to politically connected people and by transferring wealth from people who do not have much debt to people who have debt.
Pensions are not inflation adjusted, they are adjusted based on a political calculation of inflation that always understates the true level of inflation.
Why is deflation worse than inflation? Deflation means that purchasing power is increasing relative to the costs of products. This scenario helps everyone as the cost of living is decreasing under deflation.
I don't understand why you think that increasing the cost of living and transferring wealth from savers to debtors is beneficial for an economy or how this scenario is capable of reducing inequality?
deflation is usually a contracting economy, demand and supply side. the money is worth more, but income and consumption go down due to less economic activity.
this produces increasing inequality in several ways, most of which you can already observe in the past half decade.
it also happens that when there's fear of deflation the monetary policy is always to lower interest rates and cheaper capital in a condition of no demand gives you no employment growth but high capital invsetment.
now i must say this here is precious
transferring wealth from people who do not have much debt to people who have debt.
transfers are all evil obviously. have you checked consumer debt level recently?
btw, the comparison here is between deflation and modest inflation.
pps price level change is rarely if ever the first cause of events. for example, deflation can be created by drastic fall in aggregate demand via some sort of mass deleveraging/income shock .
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact?
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
How so? Back then pollution increased with growth. Now it doesn't.
What once happened now doesn't. What isn't happening now is what happened then. The thing that I'm saying doesn't happen, used to happen.
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact? + Show Spoiler +
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
What once happened now doesn't. What isn't happening now is what happened then. The thing that I'm saying doesn't happen, used to happen.
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact? + Show Spoiler +
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
What once happened now doesn't. What isn't happening now is what happened then. The thing that I'm saying doesn't happen, used to happen.
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact? + Show Spoiler +
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
How so? Back then pollution increased with growth. Now it doesn't.
Is only true if you ignore that the pollution was shipped elsewhere, even then it's a stretch.
Did you read what you responded to? Also what 'could' be (wrong or right) is like your bread and butter when talking about others points.
FACTS:
Since the 70's... Per capita gdp is up. Per capita energy use is flat. Air emissions are down, both in aggregate and per capita. Per capita water use is down. Per capita landfill waste generation is down. Per capita CO2 emissions are down. Forest land has increased.
These are all really big, really powerful data points that support my statement.
A story on recyclables going to China to be recycled is extremely weak in comparison. You aren't showing that the story impacts my figures in a meaningful way (if at all). Moreover if China is recycling our waste, that's actually a good thing. Using virgin materiel often requires more energy and results in more pollution than recycling.
'Pollution... shipped elsewhere' .. like what? Net imports are about 3% of GDP. Yes, China does some work for us that results in more pollution there. We also do some work here for China that results in more pollution here. Trade goes both ways. If you want to claim that a 3% net imports figure means a huge change in the overall data you're going to have to work hard to prove it.
As standard of living goes up, people are willing to spend more money on the environment in which they live. This results in people spending more money on things like electric cars, and solar panels, amongst other environmentally friendly products that there is only a market for above a certain level of living standards/income level.
It follows that if you are in favor of the environment you should be in favor of increasing standard of living the fastest which free market capitalism does better than any centrally planned system.
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
What once happened now doesn't. What isn't happening now is what happened then. The thing that I'm saying doesn't happen, used to happen.
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact? + Show Spoiler +
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
Hell, our garbage recycling doesn't even meet Chinese environmental standards any more...But yeah we recycle more so no problem...
Why don't you tell me? If you disagree with me provide counter points, not just speculation on how my information 'could' be wrong.
How so? Back then pollution increased with growth. Now it doesn't.
Is only true if you ignore that the pollution was shipped elsewhere, even then it's a stretch.
Did you read what you responded to? Also what 'could' be (wrong or right) is like your bread and butter when talking about others points.
FACTS:
Since the 70's... Per capita gdp is up. Per capita energy use is flat. Air emissions are down, both in aggregate and per capita. Per capita water use is down. Per capita landfill waste generation is down. Per capita CO2 emissions are down. Forest land has increased.
These are all really big, really powerful data points that support my statement.
A story on recyclables going to China to be recycled is extremely weak in comparison. You aren't showing that the story impacts my figures in a meaningful way (if at all). Moreover if China is recycling our waste, that's actually a good thing. Using virgin materiel often requires more energy and results in more pollution than recycling.
'Pollution... shipped elsewhere' .. like what? Net imports are about 3% of GDP. Yes, China does some work for us that results in more pollution there. We also do some work here for China that results in more pollution here. Trade goes both ways. If you want to claim that a 3% net imports figure means a huge change in the overall data you're going to have to work hard to prove it.
Lol your logic is always weird. The energy efficiency is going but the energy use per capita is not going down because the gdp (consumption) is going up... That energy use is more efficient does not make it sustainable.
On November 03 2014 16:19 Vegetarian wrote: As standard of living goes up, people are willing to spend more money on the environment in which they live. This results in people spending more money on things like electric cars, and solar panels, amongst other environmentally friendly products that there is only a market for above a certain level of living standards/income level.
It follows that if you are in favor of the environment you should be in favor of increasing standard of living the fastest which free market capitalism does better than any centrally planned system.
Or it's the legislation on environment that have been passed since 1970 that change market equilibriums towards more energy efficient choices.
On November 03 2014 10:25 oneofthem wrote: so what? pensions are inflation adjusted and that person should have invested in some form of secure asset that also grows.
by the by the government should also hand out inflation stipends to those elderly in your example. but in the larger context of the economy deflation is way way worse than moderate inflation, partly due to increasing inequality.
Inflation is what increases inequality by transferring wealth to politically connected people and by transferring wealth from people who do not have much debt to people who have debt.
Pensions are not inflation adjusted, they are adjusted based on a political calculation of inflation that always understates the true level of inflation.
Why is deflation worse than inflation? Deflation means that purchasing power is increasing relative to the costs of products. This scenario helps everyone as the cost of living is decreasing under deflation.
I don't understand why you think that increasing the cost of living and transferring wealth from savers to debtors is beneficial for an economy or how this scenario is capable of reducing inequality?
Here's how it works in the real world, outside of "perfect models." The more wealth you have, the harder it is to put all of it into highly appreciating assets. Yes, that $2 million in safe stocks and federal bonds will certainly grow with inflation, but only just that because "safe" assets are also highly valued and money is cheap. Those safe assets offer almost no real growth potential. You have to stick your money in higher risk ventures in order to get a growing return, and the clock is always ticking because if you don't put it somewhere, you're losing money relatively quickly. In a no inflation or deflation economy, there is no ticking clock, and those "safe" assets actually have to compete with holding currency, which lowers their price and potential for growth, which lowers ACTUAL investments.
For lower income individuals, this isn't as much of a problem. Their increased income comes from increased wages. When money is cheap, it becomes easier to give workers raises, especially when those with excess cash (those from the paragraph before) need somewhere to put it so it doesn't just "rot," and it also improves worker morale and performance, even if it's not a "real" wage gain. Giving it to somebody in exchange for goods or services becomes a much better use of it than sitting on it, and it has a greater potential for return than the overpriced "safe" assets.
There is no more virtue in saving your money than spending it. The virtue comes from not being a leech on society and the economy, which requires people to save and spend in different amounts based on their needs throughout life. If you are wealthy and living off of rent payments while having the capacity to work, you are just as much of a leech as somebody retiring at 65 that doesn't have some sort of retirement plan, probably even more so.
On November 03 2014 11:12 GreenHorizons wrote: If you think:
Growing standards of living isn't harming the environment though.The increased environmental toll comes from population growth
and:
per capita growth and how pollution generation isn't tied to it as it once was.
don't mean different things, then we are done.
They don't.
Sorry, but... what about them do you think is different? Per capita economic growth and pollution were tied in that increasing one meant increasing the other. That is not true anymore, so if you grow standards of living you do not add to pollution. So growth isn't harming the environment. What don't you understand (other than English)?
Saying it isn't happening is different than saying it doesn't happen the same as it once did. Simple enough?
What once happened now doesn't. What isn't happening now is what happened then. The thing that I'm saying doesn't happen, used to happen.
I mean you are pretty much ignoring the externalities that are being shipped to those countries that do see the increases in pollution.
To stick with the garbage example, how much of the garbage that was shipped to China was accounted for in your environmental impact assessment, when you suggest that it's increase (independent of population growth) has no negative environmental impact? + Show Spoiler +
Have you ever wondered what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China- like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.
Those imports have been skyrocketing in recent years. Scrap was America's top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)
Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.
As China's government seeks to raise environmental standards, he says, "I understand China's need to take a hard look" at its imports.
That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.
"If the US border were closed, most of the scrap that is exported today would go to landfill," says Robin Wiener, president of ISRI. "We don't have the capacity to absorb it all."
Hell, our garbage recycling doesn't even meet Chinese environmental standards any more...But yeah we recycle more so no problem...
Why don't you tell me? If you disagree with me provide counter points, not just speculation on how my information 'could' be wrong.
How so? Back then pollution increased with growth. Now it doesn't.
Is only true if you ignore that the pollution was shipped elsewhere, even then it's a stretch.
Did you read what you responded to? Also what 'could' be (wrong or right) is like your bread and butter when talking about others points.
FACTS:
Since the 70's... Per capita gdp is up. Per capita energy use is flat. Air emissions are down, both in aggregate and per capita. Per capita water use is down. Per capita landfill waste generation is down. Per capita CO2 emissions are down. Forest land has increased.
These are all really big, really powerful data points that support my statement.
A story on recyclables going to China to be recycled is extremely weak in comparison. You aren't showing that the story impacts my figures in a meaningful way (if at all). Moreover if China is recycling our waste, that's actually a good thing. Using virgin materiel often requires more energy and results in more pollution than recycling.
'Pollution... shipped elsewhere' .. like what? Net imports are about 3% of GDP. Yes, China does some work for us that results in more pollution there. We also do some work here for China that results in more pollution here. Trade goes both ways. If you want to claim that a 3% net imports figure means a huge change in the overall data you're going to have to work hard to prove it.
Lol your logic is always weird. The energy efficiency is going but the energy use per capita is not going down because the gdp (consumption) is going up... That energy use is more efficient does not make it sustainable.
Eh? I didn't make any comments on sustainability, and of course things like energy efficiency play a role. I don't think you understand what point I was trying to make, or the context it was made in.
jonny your per capita numbers are surely not world wide. also the exporting of waste to recycle is not disconcerting because of the material recycled, but becasue of the many toxic heavy metals and chemicals in that process.
it's not a simple utility calculus because some rights are beyond mere utility, such as not having cadmium in your soil. it's a plain transgression of basic human rights perpetuated by these governments and directly carried out by rich world companies taking advantage.
What is the per capita pollution of China and how does it compare with the per capita pollution of the US during the 60s and 70s? Somebody is going to need to prove that the US is simply exporting it's pollution since the data so far states that the US is reducing it (per capita).
china certainly has toxic pollution but the u.s. isn't the main contributor there at least in recent years. even though the u.s. still export scrap for recycle to china http://www.gltaac.org/US-China-scrap-top-export. and we know the recycling standards there are not so good. mexico is the dumpster of choice for u.s.. there's also smuggling of toxic waste.
On November 03 2014 10:25 oneofthem wrote: so what? pensions are inflation adjusted and that person should have invested in some form of secure asset that also grows.
by the by the government should also hand out inflation stipends to those elderly in your example. but in the larger context of the economy deflation is way way worse than moderate inflation, partly due to increasing inequality.
Inflation is what increases inequality by transferring wealth to politically connected people and by transferring wealth from people who do not have much debt to people who have debt.
Pensions are not inflation adjusted, they are adjusted based on a political calculation of inflation that always understates the true level of inflation.
Why is deflation worse than inflation? Deflation means that purchasing power is increasing relative to the costs of products. This scenario helps everyone as the cost of living is decreasing under deflation.
I don't understand why you think that increasing the cost of living and transferring wealth from savers to debtors is beneficial for an economy or how this scenario is capable of reducing inequality?
Here's how it works in the real world, outside of "perfect models." The more wealth you have, the harder it is to put all of it into highly appreciating assets. Yes, that $2 million in safe stocks and federal bonds will certainly grow with inflation, but only just that because "safe" assets are also highly valued and money is cheap.
In the real world the super rich guy doesn't care if he loses a few hundred thousand bucks, but the guy who has saved up 50k his whole life is going to care even if he loses half of it. Even inflation as low as 2% that nearly halves the purchasing power over twenty years.
Also take a look at social transfers all over the industrialized world, they have not risen with inflation. If you're interested in talking about the "real world" then it simply false to state that wages,pensions and social services rise with inflation. In France they did, in Germany and the US they haven't for over a decade already.
inflation buffer is mainly to prevent bad distribution of investment. inflation adjustment in pensions is a thing to look into, but the severity of the hit largely depends on the housing situation. elderly who own their own houses are doing fairly ok.
On November 03 2014 10:25 oneofthem wrote: so what? pensions are inflation adjusted and that person should have invested in some form of secure asset that also grows.
by the by the government should also hand out inflation stipends to those elderly in your example. but in the larger context of the economy deflation is way way worse than moderate inflation, partly due to increasing inequality.
Inflation is what increases inequality by transferring wealth to politically connected people and by transferring wealth from people who do not have much debt to people who have debt.
Pensions are not inflation adjusted, they are adjusted based on a political calculation of inflation that always understates the true level of inflation.
Why is deflation worse than inflation? Deflation means that purchasing power is increasing relative to the costs of products. This scenario helps everyone as the cost of living is decreasing under deflation.
I don't understand why you think that increasing the cost of living and transferring wealth from savers to debtors is beneficial for an economy or how this scenario is capable of reducing inequality?
Here's how it works in the real world, outside of "perfect models." The more wealth you have, the harder it is to put all of it into highly appreciating assets. Yes, that $2 million in safe stocks and federal bonds will certainly grow with inflation, but only just that because "safe" assets are also highly valued and money is cheap.
In the real world the super rich guy doesn't care if he loses a few hundred thousand bucks, but the guy who has saved up 50k his whole life is going to care even if he loses half of it. Even inflation as low as 2% that nearly halves the purchasing power over twenty years.
you really should go read The Long Twentieth Century. Your version of "historically" is not actually historical, it's limited to a very specific time period which you can't extrapolate from
edit: while we're talking about books, the one that sub40 recommended to me that I liked the most was _A Free Nation Deep in Debt_ by James MacDonald. Really a great book. Highly recommended to everybody interested in debt, state finance, and monetary issues in general.
How could you read MacDonald and still cite Arrighi positively? Did you not catch how MacDonald's explanation of debt as a democratic-technocratic device fundamentally undermines Arrighi's claims about finance as the final stage of the economy?
No, I didn't. Please explain. I don't see any contradiction between these two things, in fact they seem quite complimentary. Also, it's important to note that MacDonald is talking about republicanism, NOT democracy. Democracy is a threat to his notion of republicanism as "rule by the creditor classes"
The Dutch Republic was able to achieve its successes versus is royalist, lower debt-per-capita royal opponents because of its financial innovation. It wasnt the final stage of anything, it was the very device that allowed a Republic 1/10th the size of its enemies to more than hold its own. Arrighi fundamentally does not understand Dutch history -- or even the histories of the Italian Republics he cites. Venetian success as a merchant was grounded in both its location but also in its power -- the time period he carves out for Italian dominance also coincides with the greatest extent of Venetian military successes.
Nor will any honest historian of Europe submit that the arbitrary time period of 1610-1710 is a period of Dutch "hegemonic cycle." Dutch conquest of Indonesia -- a cause Arrighi cites as the reason for the Dutch initial success -- occurs after this date. Amsterdam became a financial center of Europe because (a) the Spanish Netherlands/Belgium were ruined by warfare (b) Dutch innovation in public finance. East Asian trade, by comparison, was a smaller section of the fiscal power of the Dutch state. He then traces the decline of the Dutch to overdebtedness without realizing this wasnt caused by arbitrary end of accumulation phase driven by lower real returns but by the reality that the Dutch were perpetually at war on both sea and land and despite being the smallest -- by a large margin of power -- state engaged in near total warfare managed to hang on for another 80 years before finally Napoleon literally overwhelmed the Republic.
The experience of England in the 17th and 18th centuries -- prior to the rise of England as THE dominant power, although not in Arrighi's imagination -- also strongly differs from his theory that debt accumulation is the last phase of a state. After absorbing Dutch financial technology, the debt to gdp of england jumps significant -- as England marshals its citizens savings to the state -- going from almost no debt prior to the "Glorious Revolution" to something like 250% of the GDP at the end of the Napoleonic wars - before declining for the remainder of the 19th century and skyrocketing again following the two World Wars.
Interesting thanks. But I don't know if what you're saying really contradicts his thesis. First of all, it's not about state debt at all, but about the relative preponderance of capital seeking return through financial devices vs direct productive investment, due to the fact that local opportunities for return experience falling rate of profits and drives financialization as a way to make capital more liquid over geography, which in turn is what causes the rise of the next center of the new cycle of accumulation. Similarly, his claim doesn't entail that "financial innovation" would only happen at the end of a cycle of accumulation, since financial innovation used to finance productive investments and the "financialization of the economy" are different things. For example, trading wheat futures on the Chicago exchange is financial innovation; trading futures on the S&P500 is financialization of the economy.
Some of your other points just seem like different glosses on the same thing. Saying "it's not about overindebtedness, it's because they were at war" to me is just two different ways of saying exactly the same thing. So I don't see your point. You seem to want to reduce things to single causal relationships rather than thinking conjuncturally... In fact, it seems quite intuitive to me that saturation of trade routes and continual warfare are things that go together, since those conditions make competition over trade a zero-sum game.
So I guess it seems reasonable that the things you say are true, but I'm not so sure that it "disproves" anything about what Arrighi is saying. You seem to treat geopolitical strife as an entirely exogenous thing from financial dynamics, as if wars "just happen"... I'm not so sure that's true.
Similarly with the thing about the Dutch conquests in SE Asia. I would have to go look at what he says, but his theory would seem to suggest that the new cycle of accumulation would begin BEFORE any such conquests, as it would require capital inflows into the new financial center to finance that conquest in the first place... so it seems very consistent. It would go against the entire logic of his thought to say that the conquest happens as an undetermined, contingent event which then was the first cause of the cycle of accumulation... that's totally foreign to the argument. So I don't think that point is actually a critique. Treating things like conquests as primary causal factors is totally foreign to the longue duree way of thinking, so why would you ever interpret Arrighi as thinking that Dutch conquest would be the CAUSE of their rise to hegemony?
inflationary economics encourages the polarization of society into the ultra-wealthy and debt serfs
Inflation decreases the cost of debt. Deflation increases the cost of debt.
Yes, I understand this. So inflation transfers wealth from the middle class who lack financial savvy to keep them ahead of inflation, both to the upper classes and to the lower classes as a way to keep the system of debt-serfdom from reaching a crisis point. If you have a debt-serf society you have to have inflation, otherwise there is going to be a revolution.
an argument which is of course straight out of arrighi. falling rate of profits due to diminishing returns for productive investment drives the financialization of the economy, depressing yields and driving capital into increasingly speculative attempts to find return. you're literally describing exactly what he says will happen at the end of a cycle of accumulation
Except that (a) there has not been any decline in profits of most businesses (b) push towards deflation is caused by a massive recession brought about by the export of savings of Germans/Chinese/Japanese/Koreans onto the rest of the world.
But isn't a) due in large part to the fact that companies are using free money to finance massive stock buybacks in order to push up earnings per share? i.e. the capitalist system self-cannibalizing.
I do appreciate your newfound willingness to engage in a real conversation.
On November 03 2014 10:25 oneofthem wrote: so what? pensions are inflation adjusted and that person should have invested in some form of secure asset that also grows.
by the by the government should also hand out inflation stipends to those elderly in your example. but in the larger context of the economy deflation is way way worse than moderate inflation, partly due to increasing inequality.
Inflation is what increases inequality by transferring wealth to politically connected people and by transferring wealth from people who do not have much debt to people who have debt.
Pensions are not inflation adjusted, they are adjusted based on a political calculation of inflation that always understates the true level of inflation.
Why is deflation worse than inflation? Deflation means that purchasing power is increasing relative to the costs of products. This scenario helps everyone as the cost of living is decreasing under deflation.
I don't understand why you think that increasing the cost of living and transferring wealth from savers to debtors is beneficial for an economy or how this scenario is capable of reducing inequality?
Here's how it works in the real world, outside of "perfect models." The more wealth you have, the harder it is to put all of it into highly appreciating assets. Yes, that $2 million in safe stocks and federal bonds will certainly grow with inflation, but only just that because "safe" assets are also highly valued and money is cheap.
In the real world the super rich guy doesn't care if he loses a few hundred thousand bucks, but the guy who has saved up 50k his whole life is going to care even if he loses half of it. Even inflation as low as 2% that nearly halves the purchasing power over twenty years.
Also take a look at social transfers all over the industrialized world, they have not risen with inflation. If you're interested in talking about the "real world" then it simply false to state that wages,pensions and social services rise with inflation. In France they did, in Germany and the US they haven't for over a decade already.
Because inflation has been too low in Germany for decades (and Germany used that low inflation as an indirect tool to kill its competition in the euro zone, while benefitting from others' inflation) and it's absolutly false for the US, average wage have been going up, but since inequalities has risen too the effect is quite low on median wage (and real income has been decreasing for the lowest decile).
Lowflation is actually heavily discussed right now (for its effect in the economy), and yeah it does says a lot about how economists thought about inflation until now (that always assumed that any level of inflation would always lead to wage increase, as seen during the Phillips' curve debate). But an inflation that would be between 2 and 4 % (closer to 4 even, not targetted at 2, and below 2, like most of the stupid BCE technocrats wants) seems to be more efficient in terms of wage / unemployment (as known by various studies, such as Akerlof, Dickens & Perry's Near-Rational Wage and Price Setting and the Optimal Rates of Inflation and Unemployment).
The choice of the optimal rate of inflation is a political choice : every level favor specific people. Something closer to 4% favor labor against savings, it's true. That's the reason why Germany force a low inflation target (below 2%) on the entire euro zone : because it needs it considering its population's age. The US is not in the same demographic situation, and could easily vote for some kind of fiscal transfert to help the few poor retired people who would suffer from a higher inflation target.
Would the conformist economists here tend to agree that, in general, our society is overleveraged and that this is a problem? Or is this only a thing that stupid marxists who don't understand supply and demand and the genius of Paul Krugman think?
EPT![[image loading]](http://www.ssa.gov/oact/cola/avg_median.gif)
