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Its kind of sad how many people dont get this. Its like the first thing you learn when you study economics at any level.
@freemo Uh. Correct me if I am wrong, but isn’t the whole point of currency that it is based on something that is scarce, and thus, by extension, valuable? This was essentially how the gold standard functioned in the US previously.
This obviously does not directly apply to fiat currencies commonly seen today, however even in that case there are penalties for producing unending amounts of cash, so in practice there is a finite cap on circulating cash.
As well, then there are the accelerating returns of capital ownership in modern property-oriented society. People with capital will always make better returns on their wealth than those who do not, and more capital generates more returns. This is one of the mechanisms underlying the growing wealth gap in the US and of course in many other places.
So I guess you’ll have to explain what I am missing here. 🤔
@freemo
Are you referring to Pareto improvements? Because, otherwise, how is it not pie?
I am not.
I think it is best understood with an example. You have to understand going in that money is not wealth, and that money is only a small portion of what determines wealth. a person can have no money (a room full of gold bars) and still be extremely wealthy.
With that understanding in mind it is important to realize that wealth is constantly being generated and destroyed. If I buy a shovel for 5$ and go dig up 10,000$ worth of gold in my back yard with it, I have just generated 9,995$ in wealth that didnt exist before. I did not need to take wealth from anyone else to do it.
This is a simple counter example but the idea of wealth generation is in every venture we do, sometimes it is more obvious than others however.
@freemo @gioypi I agree that wealth can be “created” from outside of the existing financial system in that basic sense, but in practice, I think it is fair to say that most of what we see today is the shuttling of wealth from one person (or persons) to another within what is fundamentally a finite pool which slowly expands.
I also agree that wealth is not money, but frankly that is somewhat beside the point when money exists solely to act as a means of making wealth liquid/transforms led into other kinds of wealth. This is why we left the bartering system behind.
As well, wealth creation becomes far easier the more wealth you have to begin with. Anyone, hypothetically, can mine asteroids for untold billions, but it’s a lot more accessible when you have the resources to build an asteroid mining company with rockets and mining equipment and staff rather than starting with a few sticks and a rock, metaphorically speaking.
So I find your statements somewhat practically misleading. 😗
I would say your initial posit that most of wealth today is through theft rather than generation isnt really true. Not to say it isnt a significant factor, but I'd say there is a mix of both and much of the wealth that is moved rather than generated is not always the fault of the wealthy person either, it is nuanced.
generally speaking if two people involved in a trade are both acting within their best interests, and are responsible, then wealth is generated through that trasaction. For example if I buy a shovel off a shovel conglomerate, and I use that shovel to go build things with it, then the person who sold me the shovel helped me facilitate the generation of wealth. so the big company selling shovels is helping the world generate wealth more so than stealing it.
On the other hand if I go buy a video game and spend all day playing that video game, and pretty much waste my life away buying and selling video games, then no wealth will be generated by the big company trying to sell video games. But is that the fault of the video game salesman or the person buying it and using it to waste their own time? After all if you just play video games occasionally, as a way to relax, they may ultimately cause you to work harder and better when you are on the clock as you are well rested and energized.
Long story short, as long as people are making responsible choices in their purchases and invest, mostly, in buying things that enable them to generate wealth, then the big companies selling the goods that enable that are themselves generating significant wealth in their communities.
As for the "wealth is not money" argument, you seemed to mis the point... Money is wealth, wealth is not money. Money is a small subset of wealth.
I do agree that as you generate wealth it becomes easier to generate more wealth as well. but thats a good thing because as I stated above the wealth large companies generate is not solely their own, when people are buying responsibly they are also enabling that wealth generation for others. that says nothing of the share holders, of which any one can be one with only a few dollars to their name. So that wealth generation is something we all benefit from and have access to usually.
