• ☆ Yσɠƚԋσʂ ☆OPM
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    10 months ago

    They don’t put it under their mattress, but the projects they invest into aren’t resulting into wealth being generated by the working class. When these people create a new business ventures, they still pay subsistence wages. So, you get more employment, but it’s low quality employment. Any actual wealth produced ends up going to the capital owning class.

    So again, people who own capital are the ones who decide the prices and the wages. These are the people in control of what we call inflation.

    • hexi [they/them]@hexbear.net
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      10 months ago

      the projects they invest into aren’t resulting into wealth being generated by the working class.

      Irrelevant, because I never claimed it did. I only said that money ends up competing for labor and other resources.

      If they could just raise prices, they would have done it before. So why didn’t they?

      Because what actually changed was an increase to the money supply.

      • ☆ Yσɠƚԋσʂ ☆OPM
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        10 months ago

        Again, they have raised prices before. Inflation didn’t just start yesterday. I’m really not following the argument you’re trying to make here. You still haven’t actually explained the causal chain between the increase in money supply and inflation, nor have you provided any counter argument to my point which provides a clear and direct explanation of what’s happening.

          • spiderplant@lemm.ee
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            10 months ago

            Ah yes econ101, taking a complex and interconnected system that we don’t fully understand, boiling it down to its simplest and most incorrect model.

            This is a global issue, the fed pumping money shouldn’t have had a big an effect. My best guess would be a mix of covid money from many countries going to the rich increasing the wealth gap, gas and oil companies hiking prices because of Russia even though a lot of them have no link to Russian oil or gas and causing a knock on effect. You’ve also got a number of bubbles around the world such as housing and car loans, these are definitely caused by greed.

              • spiderplant@lemm.ee
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                10 months ago

                My issue was with using econ101 as part of an argument, I’m sure you’ve heard of the saying about economics is that you spend most of the course learning why econ101 doesn’t actually work when applied to most real world scenarios.

                  • Melonius [he/him]@hexbear.net
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                    10 months ago

                    Money supply is a specific term and it will not always result in inflation. You’ve acknowledged that several times but still repeat it. It will depend how that increase in money supply is used, if at all.

                    If I got a trillion dollars printed and did nothing with it, no change in inflation. If I deposit it at banks, there would probably be some knock on effects on interest rates that make their way to the broader system.

                    If I go on a coordinated buying spree of oranges with the explicit goal of owning every last orange and orange producing land possible, inflation in oranges and substitute goods of oranges will occur. Easy conclusion.

                    You can argue that: When the capital owners get free money in bailouts, while workers get crumbs, there is an obvious disparity. Capitalists see less value in currency and will want more of it in exchange for their contributions (leeching) to society. So they raise prices because selling an orange for $1 doesn’t feel as good as before.

                    If workers got more money while capitalists got nothing, that disparity is reversed. Capitalists want to compete for a supply of cash that they didn’t have access to before. Prices will rise in inelastic markets because the opportunity to exploit presents itself, but in competitive markets there is a real drive to entice more purchasing. That’s not to say that prices will go down (they can!) But raising your prices on food because everyone got $1000 could mean missed sales if the price raise isn’t coordinated across the industry.

                    You saying that inflation is driven by money supply is not the direct reason for prices rising.

          • ☆ Yσɠƚԋσʂ ☆OPM
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            10 months ago

            Rapid inflation did start at the same time the money supply was increased.

            There was a brief period when people got direct cash during the pandemic which businesses used as an excuse to hike up prices. However, once again, it was the choice of the business owners to raise the prices.

            If there’s more money circulating, there’s more businesses can ask for.

            Only if that money goes to the working people who can in turn spend it. If the money stays at the top then it does not result in increased spending power. Most of the money that was created did not end up in the hands of the people who are spending it day to day. Bulk of the money went to the oligarchs, you get that right?

            Do you think they weren’t greedy before? Do you think it’s a coincidence this inflation happened the same time the Fed suddenly pumped trillions into the money supply?

            I think they saw an opportunity to jack up prices. In fact, we see this happen any time there’s a disaster, no money printing is needed here. There’s even a term for this: disaster capitalism.

              • ☆ Yσɠƚԋσʂ ☆OPM
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                10 months ago

                You still haven’t explained what your thesis here is exactly. If capitalists aren’t raising wages then people don’t have more spending power no matter how much money is printed. What you still haven’t established here is how there’s more money circulating in the economy when wages have remained stagnant. Nobody is arguing that the oligarchs aren’t benefiting from the QE, but it’s not a direct cause of inflation.

                  • ☆ Yσɠƚԋσʂ ☆OPM
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                    10 months ago

                    Ok, but capitalists aren’t the ones primarily consuming basic goods they raise the prices on. We’re talking about consumer inflation here. An oligarch getting a big cash infusion and buying up land or hiring servers isn’t affecting the prices of consumer goods.

                    Workers, and people selling land, and so on shifted from selling their time and resources to regular people, to serving oligarchs. They do this, because those oligarchs have more money now.

                    That still doesn’t change the formula for inflation which is the relative cost of goods and services to salaries.

                    Then the money supply is inflated, and now $10 is circulating, but there’s still only 5 items for sale.

                    And who decides that it’s now circulating for $10? The business owner decides that, which was my original point all along!

                    Meanwhile, your example is too simplistic because there isn’t $10 circulating since economy isn’t homogeneous. People consuming regular goods who are affected by inflation didn’t get a chunk of the new money printed, so they have exact same spending power they did when there was $5 circulating.

                    If there’s more money, with the same supply of goods, price have to increase.

                    They don’t have to increase, people who own businesses make a conscious decision to increase them. You’re also conflating the amount of money in circulation with purchasing power here.

                    Printing money doesn’t magically let people buy more than exists.

                    We’re in complete agreement here.