metis
aged ecumenical anthropologist
Wrong, and it's your own arrogance that's undoubtedly why you think you know more than actual economists because this is just basic Economics 101. Maybe study.
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What is Capitalism?
- Thread starter an anarchist
- Start date
No, first I explained why my analogy was good by comparing him paying for labor to him paying for materials and everything else used to start a business. Then I asked why you had a problem with this based on your line of questioning appeared that you did have such a problem.
Nobody hoards billions of dollars; they have assets worth billions of dollars; and those assets are tied up in whatever they are being used for.
Then explain to me how digging a hole, just to fill it back up again creates wealth! Forget Economics 101, let's just apply a little common sense here.
mikkel_the_dane
My own religion
Just to be clear, are poor people always in some sense at fault for being poor?
mikkel_the_dane
My own religion
Well, you should know that because you know how an economy works. And no, common sense won't cut it, because it is a bit more complicated.
That's what I said: you shifted the goalposts.
IOW, they own valuable assets that could be sold, but they don't. This is hoarding.
Any billionaire has a revenue stream. Some from dividends or other returns on their wealth; others (e.g. Bezos) by selling off their assets over time. That revenue stream could pay for all sorts of things.
Anybody who gets rich does so with the help of others. We all live with a social contract, and those who have benefited by society the most have the greatest debt to society to repay. Amassing enough wealth to become a billionaire is only possible by neglecting this debt.
... and this is even before considering the ethics of the business decisions that were instrumental in amassing the wealth.
metis
aged ecumenical anthropologist
If one is an educator, (s)he will get paid for that and maybe go buy a car? or hire lawn service? or...?
Either way, money changes hands, and that's what drives the economy and creates growth.
Primary sector activities revolve around raw materials, whereas the secondary sector relates to production and refinery, and the tertiary sector is founded on services. Non-economic activity is the opposing component of economic activity. It is defined by the provision of goods and/or services without the exchange of something in return. [from "Types of Economic Systems"]
Either way, money changes hands, and that's what drives the economy and creates growth.
Primary sector activities revolve around raw materials, whereas the secondary sector relates to production and refinery, and the tertiary sector is founded on services. Non-economic activity is the opposing component of economic activity. It is defined by the provision of goods and/or services without the exchange of something in return. [from "Types of Economic Systems"]
When I was poor, I worked myself out of it. However while I was working myself out of my financially oppressed situation, I was still poor.
As I pointed out before, if you pay me to dig a hole, unless you can do something with that hole to make money, you have simply transfered payment from your account to mine. Creating wealth is when you pay me to do a job, then you take the product I worked on and sell it for more than the job you paid me to do. For me that's common sense; if it doesn't make sense to you perhaps you can explain why
So you measure wealth in terms of currency, not in terms of utility? Interesting.
Shifting the goalposts does not involve responding to your claim. The fact that I chose to ask my own question after responding to yours does not equate shifting the goalposts.
To hoard prevents others from having some. What type of assets do billionaires have that others are prevented from having?
As long as he pays the people who help them the agreed upon wage, there is no dept to repay. Think of it this way; if I said all black people are this, all white people are that, all jewish people are this, all mexicans are that, my words would be considered bigoted even if I could point to specific black, white, Jews, or asians who fit the discriptions I listed. This is exactly what you did. You made a hostile claim about all billionaires based on your knowledge of a few; that;s bigotry.
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How does digging such a hole and covering it up affect utility?
Not the hole; the transfer.
Money's utility varies from person to person. Generally, the utility of, say, $100 will be higher for someone who only has $100 than for someone who already has $1 million.
A transfer that doesn't increase "wealth" measured in currency can still increase wealth measured in utility.
Transferring wealth from a rich man to a poor man only makes the poor man richer, and the rich man poorer it does not increase the size of the economic pie. You seem to be assuming the poor man finds the money more useful than the man who pays him. Even if that were true, wealth is not determined by how much someone values it; the value of $100 is not determined by how much the person holding it values it.
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mikkel_the_dane
My own religion
Google this: How can paying people for digging a hole and filling it up again help the economy?
ImmortalFlame
Woke gremlin
That depends what they do with that money.
There's a concept in economics referred to as "the velocity of money", which is essentially a measure of the rate at which money circulates in a particular economy. Different groups can have a higher overall "velocity" than others. For example, the velocity of the income of a poor family is significantly higher than that of a wealthy one, because a larger proportion of the money they receive tends to be exchanged directly for goods and services.
To use your analogy, the rich man used their $100 to pay the poor man. This money simply went straight to the poor man. The poor man receives the $100 and uses it to pay their rent, which goes to their landlord; to pay for food, which goes to a local supermarket; to pay for a night out with friends, which goes to a local bar; to pay for a new computer, which goes to a PC manufacturer; and so on. And all of these transactions then filter through multiple more hands.
$100 in the hands of a wealthy man tends to have lower "velocity" than $100 in the hands of a poor man, because the poor man necessarily relies on that money being exchanged for goods and services more than a wealthy man, and after being exchanged for those goods and services it will then circulate to their employees, their supplier, etc.. The money tends circulate through the economy quicker once it's in the hands of the poor person than while it is in the hands of the wealthy person. This is kind of how wage-based economic models work. There are lots of examples of employers choosing to pay their workers higher wages and this ultimately resulting in a better overall economy, because the money circulates better.
They do. They are more likely to exchange the money for essential goods and services that then filter back into the economy than, say, to pay for an investment or to take the money abroad.
Actually, in economic terms, the value of someone with $100 who intends to spend it is very different to the value of $100 in the hands of someone who is either going to just hold on to it. The first person's money filters back into the economy, the second person's money doesn't.
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My claim was not about whether it helps the economy or not, my claim was that it does not create wealth. Tell you what; how about YOU google it, get your answer then explain to me how one man giving another man a dollar makes the economy grow.
mikkel_the_dane
My own religion
It is already explained by others in the thread.
Who explained it? Because I've probably already refuted their explanation.
mikkel_the_dane
My own religion
Yeah, I know.