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> To take the simplest idealized example, if the production of goods and services is unchanging, and people's needs are unchanging, the only possible source of

> To take the simplest idealized example, if the production of goods and services is unchanging, and people's needs are unchanging, the only possible source of price changes is a change in the money supply. There are other possibilities. Suppose that employers gain bargaining power relative to the workers, but people are really resistant to taking a pay cut. The employers all raise prices instead.

pdonis 6y ago
> There are other possibilities. Not in that particular hypothetical. All the things you cite are only relevant in a world where things do change. So if you want to talk about that world, it's pointless to respond to a hypothetical of mine where that kind of change is ruled out to make a particular point. > Suppose that employers gain bargaining power relative to the workers, but people are really resistant to taking a pay cut. The employers all raise prices instead. In the real world, where things do change and everyone knows and expects that, how do employers magically "gain bargaining power relative to the workers"? The only way that can happen, if the government is not messing with things (the money supply, but also other things, like the laws and regulations that govern employment), is for some technological change or some exogenous factor to favor employers over workers. And if that happens, and you're a worker, yes, you just got blindsided by change, and if you're an employer, you just got an unearned benefit (assuming you're not the one who actually invented the technological change). Welcome to the real world. Of course, in the real real world, where the government does mess with things, there are plenty of ways for employers, particularly large corporations that have lots of cash, to gain bargaining power over workers without having to do anything to earn it. And yes, workers would probably be resistant to taking a pay cut, since they know that the bargaining power the employers are trying to use against them was not earned. And yes, employers would probably raise prices instead. And the best way to prevent all that is for the government to stop messing with the economy, so employers can't buy their way out of bad business practices.

pdonis 6y ago

> There are other possibilities. Not in that particular hypothetical. All the things you cite are only relevant in a world where things do change. So if you want to talk about that world, it's pointless to respond to a hypothetical of mine where that kind of change is ruled out to make a particular point. > Suppose that employers gain bargaining power relative to the workers, but people are really resistant to taking a pay cut. The employers all raise prices instead. In the real world, where things do change and everyone knows and expects that, how do employers magically "gain bargaining power relative to the workers"? The only way that can happen, if the government is not messing with things (the money supply, but also other things, like the laws and regulations that govern employment), is for some technological change or some exogenous factor to favor employers over workers. And if that happens, and you're a worker, yes, you just got blindsided by change, and if you're an employer, you just got an unearned benefit (assuming you're not the one who actually invented the technological change). Welcome to the real world. Of course, in the real real world, where the government does mess with things, there are plenty of ways for employers, particularly large corporations that have lots of cash, to gain bargaining power over workers without having to do anything to earn it. And yes, workers would probably be resistant to taking a pay cut, since they know that the bargaining power the employers are trying to use against them was not earned. And yes, employers would probably raise prices instead. And the best way to prevent all that is for the government to stop messing with the economy, so employers can't buy their way out of bad business practices.