This isn't the gotcha that you think it is. Inflation is kept at a positive number on purpose. Deflation causes a self-reinforcing spiral that brings everyone's wealth down. If inflation is too high that's a problem too, but it's less of a problem than deflation.
... With that said, the huge amount that prices have gone up recently is caused by corporate profiteering, which is a serious issue that needs to be addressed.
A sane economic take on lemmy?! Blasphemy.
I'll add this; Stop buying shit. I'm not talking rent and food. I'm talking "consumer confidence" stuff. If you don't need it to live, stop.
Example; Ammo got wildly overpriced. So we stopped buying. Like magic, prices tanked! Ain't that crazy?
Of course that's stupid oversimplified, but the basic idea is sound.
Locally, people were bitching about Taco Bell's quality. OK. Stop buying Taco Bell. They'll either crash (that store) or correct. Win-win.
I would love a legislative way to stop corporations from wildly profiteering off our asses, but I don't know what that looks like.
The corporations are absolutely aware that people have stopped being price conscious.
I understand everyone who can afford a $6 case of coca cola can also afford a $12 case. At some point you have to just choose not to buy it, or the price will just keep rising.
I mean, you are the one making the logical fallacy of assuming they are defending the exact opposite... They're basically just saying, "inflation bad", and you come in and say, "deflation bad, too!".
OK? They weren't defending deflation? You even admit inflation has been out of hand lately...
You spelled "corporate market manipulation" wrong.
Why does deflation bring your wealth down? If I saved miney in a deflationary period my purchasing power would go up. Deflation means the amount of goods you can buy with the same currency increases over time, inflation means the amount of goods you can buy over time goes down. So actually deflation makes your wealth go up it seems to me.
If you already have money, deflation is good for your net financial position, sure. If you work for your money, deflation could mean your boss has to either cut your wages, or fire you. Even if that money can buy more, people are very unwilling to take a pay cut.
That means if there's a sudden (but small) drop in productivity in an industry, inflation can paper over it, and deflation amplifies it, and potentially means the industry collapses.
It's good for you in the very short term, but bad quickly after that. It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less, and businesses bring in less and less money, so they lower prices more to try to entice you to buy, but the dropping prices only make you want to wait to buy even longer, this keeps spiraling downward and businesses keep bringing in less and less money, and so very soon they have to start firing people, and then more and more companies wind up out of business, causing more and more unemployment, and on and on and on, for everyone involved it all goes very bad.
Get your reason outta here and support a centralized economy like the rest of us!
I am not even saying that capitalism is remotely acceptable but prices going up doesn't imply inefficient of the system. Inflation could be a reason and inflation says nothing about efficiency.
Shit on capitalism. Be my guest. Just don't make bad arguments.
I thought they were coming at it from a supply & demand angle.
Inelastic demand on food and housing yet prices still go up.
That might be the case but generalized statement that are wrong, are wrong.
Don't generalize to the point of failure of your point. Especially in public, the in-group might understand you but the out-group will misunderstand and judge you and your ideology based on their misunderstanding.
Ok explain why the prices in my local supermarkets go up every three weeks. Go ahead. Whats the argument.
I'm not an expert in macroeconomics but I'd say some global effects are likely due to the invasion of Ukraine (global exporter of wheat) ABC News and US Gov, the rising price of oil (some fertilizer uses fossil fuels)NBC, and possibly that the world has changed due to Covid and that a lot of things had shifted along with it CNN. A country that once was in the top 5 of grain exporters dropping off the global map is going to shake things quite a bit and oil unfortunately affects so many different markets.
Let's say for the sake of the argument and not remotely because I believe it is the case nor any other reason than for the sake of the argument, your prices go up due to inefficiency, that doesn't change the fact a increase in pricing doesn't prove inefficiency. Just that sometimes it is the reason.
My pet is a dog. Not all pet are dogs. The existence of pets doesn't prove the existence of dogs nor are all pets dogs.
Because it's efficient at transferring wealth upwards.
Normally a strong democracy with multiple parties, checks and balances would help stop this. But the new META in economics is to just buy politicians to do your bidding for you. Kinda hoping the Supreme Court will patch that at some point, but it's not looking likely.
I would be a social democrat for just that reason. But with climate change looming, my options have narrowed.
Definitely harder to patch out features then bugs.
It is efficient, in increasing the wealth of the wealthy.
The system is working as intended.
The rich get richer
.... The system is working as intended.
On the contrary, this is the proof that it is efficient. The right question to make is: Efficient for whom?
Optimized for what objective? Whose objective?
I realize this isn't really the place for this discussion but capitalism doesn't know what the word "efficient" means. Is it efficient to have to buy the same thing twice? Is it efficient to only make cheap shitty and yet still overpriced versions of everything for the consuming public, shit that is designed to fail? Is pollution efficient? Is ruining everyone's lives efficient? Pointless jobs? Rich people? These things are efficient the way fucking for virginity is efficient. The way Elon's Twitter has been efficient. The way shitting the bed is efficient. Which is to say, it's really fucking not.
Capitalism is the most efficient way of extracting as much value from one’s employees, and sales from one’s customers as possible.
Efficiency isn’t always a good thing, such as in this case.
It's broader that that: it's the most efficient way of extracting money from everything else in general.
Hence just how common it is to see large companies getting massive subsidies or having laws written to benefit them (notice, for example, the Disney Corporation rigging the system to extract more value from the broader society by getting the Copyright terms extended ahain and again), none of which is sales or employment related.
Capitalism doesn't limit itself to things of a trading nature (which includes employment, which is basically people selling their work to others) and that's the core of the problem with it: it naturally corrupts anything around it which can help provide not just trade advantages but even force the rest of society to give larger entities "free" money even outside trade (subsidies, bailouts) or forcing into being paid for that which would be naturally free (i.e. copyright, water rights, even land).
Some people think Crony Capitalism is not real Capitalism, but is actually real Capitalism in it's purest form: the best ROI in this game of who makes the most money comes from buying the referees and those who make the rules.
What about space travel? Preclaimer: I'm a physics student. Before SpaceX and Indian companies, one ESA launch cost like 500 million dollars, which was impossible to achieve for scientists without direct ESA funding. Now, suddenly physicists can launch small satellites with less than a million.
and do you genuinely attribute that to capitalism or is that a necessary process that comes with developing a new technology and the infrastructure and expertise to operate it
do you genuinely not believe that that would have happened anyway
i'm sure it'd be hard to disentangle all the influences and come up with hard numbers for "how much" "capitalism" "contributed" and how much farther along cheap space flight is than it would have been under some nonexistent alternative system for which we have no real world examples, but to suggest space flight would not have gotten any cheaper than its initial price would be a tough position to defend, let's put it that way.
And then let's put it another way. Do you not think that a focused society, one run properly and without corruption (ie not human), could develop space flight faster, safer, and cheaper, than it could do while burdened with a bunch of greedy thieves who spend more of their resources on bribing politicians, lining their own pockets, and lying to the public about their products through the marketing department than they do on actual technological development?
Capitalism's shit, m8. Just one big lie from start to finish with not a redeeming moment in between. It's a vampire and you're its food. Do you care if your food has opinions?
It's efficient at exploitation
Capitalism isn't concerned with efficiency, merely the most direct route to monopoly.
Wish more understood this.
The free market is an illusion at this point. The monopolies killed it.
The Legal Illegal monopolies.
I think you may be right.
Guys I love you and support most of the changes you want to make regarding the way we govern ourselves.
But sometimes I see some posts that make me wonder. I want to help solve capitalism and it's problems. So I'm studying macroeconomics I'm studying economic theories in general.
Sorry,and with all due respect, sometimes there are some dumbass posts that show a complete lack of understanding of how things work in the world economy.
This is a meme, not meant to be taken seriously. (Although more people seem to be forgetting this)
As far as dumbasses... Welcome to the Internet
Since you didn't explain why, I will. If society has deflation all investments stop because people can hold their money and it will grow. If you have a small amount of inflation then those will large amounts of capital are forced to invest it or lose it over time. Inflation is basically a wealth tax for non investors. Obviously inflation that is too high acts much like a wealth tax that is too high. Inflation effects the rich and poor unless they invest their capital which the rich will often do better. Over all thoigh a small amount of inflation is good for an economy to force people to invest capital in something.
Genuine question: does that mean deflation is never a good thing? Like, right now prices are skyrocketing (tbf, not just due to inflation, but it's not like they'll ever go down again). It would take ages for wages to catch up properly, if it ever will (since it could be argued that we were still catching up from before), so wouldn't deflation be helpful here?
so when do minimum wages start going up?
Yeah, would've been better if it said, "then why do profits keep going up," because a theoretical efficient market should eventually result in zero profits.
If you assume that wealth is only created when it has a dollar value attached to it, that the only means of promoting enterprise is through private equity, and that people are too stupid to realize investing in a business when their currency is growing in value is both agnostic towards true value and, hopefully, allows them to gain more of those dollars that are increasing in value, sure.
If you ignore all that, yes, you should always try to inflate the currency, a system proven to benefit the rich over the poor as it innately decreases wages while preserving the value of non-liquid assets.
Also, never mind that the majority of human enterprise was pursued just fine under systems that used non-fiat currencies.
Among other uses, yes it would work
Nice shitpost lol
Companies that are structured to maximize short term shareholder value need to make extra profits at all costs.
Supply lines were strained during the pandemic, which led to drastic price increases. Supply lines stabilized and the pandemic subsidized. Prices didn’t go down? Why?
Because the companies that set prices need to make more money this quarter to make the shareholders happy. And they bribe the politicians and the judges and the regulators to control the system at every level.
These rich assholes doomed our world to destruction and our “leaders” were too greedy and small minded to stop them.
Enjoy the ride down
Because "number go up" is all the system cares about. Damn you living creatures for opposing it. The system shall prevail.
Isn't inflation good for consumers? Deflation means what you already have becomes more valuable -- so the rich would gain a significant boost to their finances since they already have so much. Inflation though would mean they lose a significant amount, and it becomes easier for the working class to break into the rich people bubble.
Only if salary go up
No, it just means everybody can buy less with the same amount of money. If you're broke, you're still going to be broke at high inflation, and it'll hurt a lot worse.
It's very efficient at extracting wealth from the lower classes.
Prices go up because wages go up, and wages go up because prices go up. Which seems like it can't possibly be the explanation, and while it is of course a simplification, it really is surprisingly accurate.
Inflation is mostly there so that people can keep getting raises and doing better than they did yesterday, without actually moving forward. It's kind of like the Shepard tone. Always infinitely seeming to rise in pitch, but never actually doing so. Or if you are unfamiliar with that reference, it's like a stairmaster. Those stair based exercise machines. You constantly go up a set of stairs that is constantly moving down at the same speed.
Each step feels meaningful, but by the time you are ready to take your next step, you are relatively exactly where you were before. You constantly have more and more money over the course of your life, and to a small degree by the end of a long career you should actually be a little bit ahead if everything went well for you, just in time for you to retire and remove your higher than average salary from the pool to offset someone else gaining a raise that is slightly ahead of inflation.
This is of course all a gross oversimplification. But it's the "slightly accurate model" first step, that leads to learning all the rest in actual depth that changes some of the specifics by a tiny bit if you look closely enough.
Do you take cash or cards for your Macroeconomics courses? /s
And for extra credit can someone explain why the Laffer curve isn’t funny? /s
I'm guessing aliens
Could it be true?
Because regulations
The idiot right
Because unregulated capitalism gets wiley the more rope you let out.
that's what it's efficient at!
Aliens.
Because money printer go BRRRRRR
It's built in. Have you not been paying attention?
Cause they found the exploit bug, and the admin is afk
Sorry, the "free market" option doesn't support admins. To enable admins you need to run "sudo society --revolution --force && sudo society --economy=planned --rule=democracy && shutdown -r now"
They go up in communist countries too but with the added benefit of shortages and rationing to keep prices relatively in check.
And small inflation is not bad. As long as it is stable and predictable, it does not matter much since people know roughly what price to expect. Theoretically it should be the same for deflation but workers tend to not also accept lower wages when prices drop. It also leads to banks not lending out so you can really only start a business or buy something big if you already have the money. While that is easy enough for people who are rich, it limits social mobility of those who would have to borrow to do the same since finding a lender is more difficult.
