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It's fallacious to assume the contrary. You can transfer billions of dollars of capital in an instant by signing on the dotted line, but it takes decades to cr
by fhrjfjc 10y ago
It's fallacious to assume the contrary. You can transfer billions of dollars of capital in an instant by signing on the dotted line, but it takes decades to create that kind of value. The lumped sum analysis assumption for capital is valid in this case because the rate of capital transfer is many orders of magnitude greater than the rate of capital generation.
- djschnei 10y agoWow, haha... While you are able to spell "capital transfer" and "capital generation", you've proven your grasp on the ideas to be... suspect. I've never seen the relationship between arbitrary capital transfer rates and anecdotally slow CGRs as an argument trying to prove the existence of a fixed pie, so I guess that's inventive.
- fhrjfjc 10y agoLucky for both of us economics is a philosophy instead of a science, and condescending attitudes can go both ways. :^) Suppose as you say, all capital grows uniformly (which it doesn't, but that's another issue) at +x% annually. Now suppose that certain demographics experience -(x+n)% of capital transfer, in the form of housing, healthcare, and other expenses. It doesn't matter how fast the "pie" grows as along as capital transfer away from the middle class outstrips the rate of capital growth. You're cherrypicking hypotheticals here.
- djschnei 10y agoUuuuh... When did I insinuate aggregate capital grows uniformly? That's absurd. You're insinuating (I think) that if left unchecked, a market economy will perpetually syphon value/capital away from "the have nots" (as if that would be fiscally prudent). What I wish people like you would realize is that the only variable that can allow such backwards logic to work (in the short to medium term) is central planning/control which ignores market forces. In other words, you're barking up the wrong tree.