4 ms·
Even if you made it up, your comment is basically describing the diminishing marginal utility of wealth. https://www.economicshelp.org/blog/12309/concepts/dimi
by danans 6y ago
Even if you made it up, your comment is basically describing the diminishing marginal utility of wealth.
https://www.economicshelp.org/blog/12309/concepts/diminishing-marginal-utility-of-income-and-wealth/#:~:text=Diminishing%20marginal%20utility%20of%20income%20and%20wealth%20suggests%20that%20as,may%20not%20make%20you%20happy%E2%80%9D https://www.economicshelp.org/blog/12309/concepts/diminishin...
https://www.investopedia.com/ask/answers/072815/what-marginal-utility-income.asp https://www.investopedia.com/ask/answers/072815/what-margina...
The net effect is that consumption (and associated demand) is suppressed at the lower to middle end of the income scale, where individuals' income isn't enough to sustain their needs + wants. When these individuals spend, the demand for labor + raw materials per $ spent is high, because they are often buying consumables or durables (food, washing machines, etc).
At the high end of the income/wealth distribution, there are few needs that aren't met or exceeded, so their wealth ends up chasing assets and investments that induce far less demand for labor per $ invested. A the extreme end of this are private equity funds (billions managed by a small number of people).