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I didn’t see it addressed in the article so I’ll slip on my tinfoil hat for a moment... Could this be related to growing income and wealth inequality? Poor pe

I didn’t see it addressed in the article so I’ll slip on my tinfoil hat for a moment... Could this be related to growing income and wealth inequality? Poor people buy less stuff, and presumably rich people get rich by not buying more stuff commensurate with their incomes. Even the falling fertilizer consumption might be explained if poorer people are shifting to more processed junk food. The article notes 1970 as the critical turning point, which is the same year Piketty identifies in his book Capital as the inequality turning point in the U.S. and Europe

chvid 7y ago
In the 1970es the usd is also delinked from the price of gold. This allows for rampant inflation which should be filtered out from the growth figures but maybe it is not quite the case ...
bilbo0s 7y ago
This is actually what I was thinking, but I live in opioid infested flyover country, so my mind always goes there. Not many people out here buying new cars, or washers and dryers, or even homes right now. And then in the other world I live in, tech, people not only do all that, but they also fly to Greek Islands for vacations. It's really kind of bi-polar right now. At least around here it is.
mempko 7y ago
There is nothing "tinfoil" hat about what you said. This is a known outcome of growing inequality.
cpursley 7y ago
The raw ingredients required for junk food require massive amounts of fertilizer (soy, corn, wheat, sugarcane).
h3throw 7y ago
This reminds me of the phrase "if you only have a hammer, every problem is a nail". > Poor people buy less stuff, and presumably rich people get rich by not buying more stuff commensurate with their incomes One implication of the above statement would be that everyone is now buying less and yet somehow the economy is growing? Those two ideas aren't strictly necessarily opposed to one another but it certainly doesn't seem like a good place to start. The economy could only be growing through investment if this were the case. > Even the falling fertilizer consumption might be explained if poorer people are shifting to more processed junk food. Is there any junk food that isn't composed of organic matter primarily? Most "junk" food in the US that I can think of is corn based which would of course still require fertilizer...
SllX 7y ago
I don’t know enough about economics, nearly enough, in fact I’ve decided after listening to an economics podcast for the past month (still working through the backlog) that I’m essentially a know-nothing today. That said, I have some questions if there’s an economics know-something around here, because there might be an alternative explanation than just a rise in inequality. For one thing, to maintain the standard of equality/inequality that exists today, I would think even the richest would need something to dump their money into. Right now that seems to be the United States economy, mostly, and a few fairly solid foreign markets, Japan, the EU, Hong Kong, Britain, and for the less risk averse, there’s also the PRC and various developing economies. Mostly the US is where you get your safest ROI. So a massive growth in investment, would seem to also suggest a massive growth in the financial services market. Not to mention the massive amounts of money sloshing around throughout the Bay Area. At the end of the day, you still need bankers handling all the transactions. And that’s just it, the United States today, near as I can tell and certainly this is what I was taught and the dogma of today, is a services-based economy. Banking, health care, government, etc, not to mention the usual suspects among tech: Google, Facebook, Amazon, Apple, Uber, Lyft, Doordash, Microsoft, Netflix, etc. Now between them, there’s a lot of products getting designed, and built, and shipped, and sold. Computers, phones, and I’m sure even the cars drivers use for fares and deliveries are consuming a fair amount more resources than your average car. In providing their services, they are charging a premium, and in return you get convenience. If you use AWS or Azure, you’re still using something tangible and real, you just don’t own the infrastructure. But the people that do are benefitting from economies of scale large enough that there are ultimately fewer servers and data center than there otherwise would be if all of their customers bought their own. So in a real sense, it really does seem like more value is being created with less resources that way. So now that whoever is reading this knows where I’m coming from, here is my question to economics know-somethings (fair warning, my jargon might even be off or used incorrectly): does our economic shift away from agriculture and manufacturing towards a service and information-centric economy have a possible causal effect on our ability to grow the economy with seemingly fewer resources? If so, is there one part of the services sector which seemingly has an outsized influence in decreasing our resource use while growing the economy, be it financial or tech or something else? Seriously, thanks in advance.
- 7y ago

chvid 7y ago

In the 1970es the usd is also delinked from the price of gold. This allows for rampant inflation which should be filtered out from the growth figures but maybe it is not quite the case ...

bilbo0s 7y ago

This is actually what I was thinking, but I live in opioid infested flyover country, so my mind always goes there. Not many people out here buying new cars, or washers and dryers, or even homes right now. And then in the other world I live in, tech, people not only do all that, but they also fly to Greek Islands for vacations. It's really kind of bi-polar right now. At least around here it is.

mempko 7y ago

There is nothing "tinfoil" hat about what you said. This is a known outcome of growing inequality.

cpursley 7y ago

The raw ingredients required for junk food require massive amounts of fertilizer (soy, corn, wheat, sugarcane).

h3throw 7y ago

This reminds me of the phrase "if you only have a hammer, every problem is a nail". > Poor people buy less stuff, and presumably rich people get rich by not buying more stuff commensurate with their incomes One implication of the above statement would be that everyone is now buying less and yet somehow the economy is growing? Those two ideas aren't strictly necessarily opposed to one another but it certainly doesn't seem like a good place to start. The economy could only be growing through investment if this were the case. > Even the falling fertilizer consumption might be explained if poorer people are shifting to more processed junk food. Is there any junk food that isn't composed of organic matter primarily? Most "junk" food in the US that I can think of is corn based which would of course still require fertilizer...

SllX 7y ago

I don’t know enough about economics, nearly enough, in fact I’ve decided after listening to an economics podcast for the past month (still working through the backlog) that I’m essentially a know-nothing today. That said, I have some questions if there’s an economics know-something around here, because there might be an alternative explanation than just a rise in inequality. For one thing, to maintain the standard of equality/inequality that exists today, I would think even the richest would need something to dump their money into. Right now that seems to be the United States economy, mostly, and a few fairly solid foreign markets, Japan, the EU, Hong Kong, Britain, and for the less risk averse, there’s also the PRC and various developing economies. Mostly the US is where you get your safest ROI. So a massive growth in investment, would seem to also suggest a massive growth in the financial services market. Not to mention the massive amounts of money sloshing around throughout the Bay Area. At the end of the day, you still need bankers handling all the transactions. And that’s just it, the United States today, near as I can tell and certainly this is what I was taught and the dogma of today, is a services-based economy. Banking, health care, government, etc, not to mention the usual suspects among tech: Google, Facebook, Amazon, Apple, Uber, Lyft, Doordash, Microsoft, Netflix, etc. Now between them, there’s a lot of products getting designed, and built, and shipped, and sold. Computers, phones, and I’m sure even the cars drivers use for fares and deliveries are consuming a fair amount more resources than your average car. In providing their services, they are charging a premium, and in return you get convenience. If you use AWS or Azure, you’re still using something tangible and real, you just don’t own the infrastructure. But the people that do are benefitting from economies of scale large enough that there are ultimately fewer servers and data center than there otherwise would be if all of their customers bought their own. So in a real sense, it really does seem like more value is being created with less resources that way. So now that whoever is reading this knows where I’m coming from, here is my question to economics know-somethings (fair warning, my jargon might even be off or used incorrectly): does our economic shift away from agriculture and manufacturing towards a service and information-centric economy have a possible causal effect on our ability to grow the economy with seemingly fewer resources? If so, is there one part of the services sector which seemingly has an outsized influence in decreasing our resource use while growing the economy, be it financial or tech or something else? Seriously, thanks in advance.

7y ago