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If we are assuming nothing changes, comparing now to 400 years ago is unproductive, and there is no point hypothesizing if this person was Napoleon-esque. In a

If we are assuming nothing changes, comparing now to 400 years ago is unproductive, and there is no point hypothesizing if this person was Napoleon-esque. In a more realistic, modern interpretation, Rockefeller sold his assets and buried his wealth circa 1900. Rockefeller did, undoubtedly, push forward industry a huge amount. While he is considered a monopolist, it was never the detriment of consumers. Kerosene prices fell dramatically over Standard Oil's tenure. If he hid 1% of the money supply in a trust after paying all inheritance taxes and fees, to be opened today (let's say 1% of real GDP in his time), his wealth today would be about 0.02% of real GDP. His heir experienced tremendous inflation, in terms of their influence on the economy, whereas their buying power stayed roughly the same, in this hypothetical non-inflationary world.

notahacker 5y ago
Sure, in this different hypothetical world with no deflation or inflation the Rockefeller heirs preserve rather than increase the buying power of their capital by refusing to allow it contribute to growth for several decades. That doesn't necessarily sound deserved either. Especially when we consider that zero inflation is achieved by higher interest rates, generating higher compounding returns for the wealthy who do invest, imposing higher borrowing costs on everyone else, and leading to slightly lower growth compared with a modest, predictable rate of inflation. Probably more recessions too, since struggling companies can't cancel pay rises they never award and probably go straight for redundancies. These aren't upsides for people who don't have piles of cash they're uninterested in doing anything with
- lend000 5y ago
  They buried it, remember, they didn't invest it into CD's with high interest rates. If they did put it in a bank, then your whole point is moot, because any bank that pays interest is actually lending your money to generate that interest, so the capital was actively involved in the economy the whole time. An aside: pre-central banking, that isn't how interest rates really worked. Inherently, interest rates increase with inflation. The opposite exists only at far below-market interest rates as an artificial byproduct of the way central banks typically inject money into the economy (by buying cheap/low interest government bonds), which paradoxically contributes to inflation.
  - notahacker 5y ago
    The Rockefellers (and anyone else burying their money) don't earn the high interest rates, but higher interest rates for everyone else are necessary to push inflation down to zero. Other generally wealthier savers will benefit from that compound interest, but anyone who borrows money will be worse off. That's a lot of productive poorer people's purchasing power reduced to preserve that of people who choose not to participate in the economy
    - arcticbull 5y ago
      Anyone who borrows money is better off in an inflationary environment because your loans are denominated in the dollars over the year of issue, but you repay them in inflated dollars. This means anyone with a mortgage, a credit card, or any other kind of loan debt.

notahacker 5y ago

Sure, in this different hypothetical world with no deflation or inflation the Rockefeller heirs preserve rather than increase the buying power of their capital by refusing to allow it contribute to growth for several decades. That doesn't necessarily sound deserved either. Especially when we consider that zero inflation is achieved by higher interest rates, generating higher compounding returns for the wealthy who do invest, imposing higher borrowing costs on everyone else, and leading to slightly lower growth compared with a modest, predictable rate of inflation. Probably more recessions too, since struggling companies can't cancel pay rises they never award and probably go straight for redundancies. These aren't upsides for people who don't have piles of cash they're uninterested in doing anything with

lend000 5y ago
They buried it, remember, they didn't invest it into CD's with high interest rates. If they did put it in a bank, then your whole point is moot, because any bank that pays interest is actually lending your money to generate that interest, so the capital was actively involved in the economy the whole time. An aside: pre-central banking, that isn't how interest rates really worked. Inherently, interest rates increase with inflation. The opposite exists only at far below-market interest rates as an artificial byproduct of the way central banks typically inject money into the economy (by buying cheap/low interest government bonds), which paradoxically contributes to inflation.
- notahacker 5y ago
  The Rockefellers (and anyone else burying their money) don't earn the high interest rates, but higher interest rates for everyone else are necessary to push inflation down to zero. Other generally wealthier savers will benefit from that compound interest, but anyone who borrows money will be worse off. That's a lot of productive poorer people's purchasing power reduced to preserve that of people who choose not to participate in the economy
  - arcticbull 5y ago
    Anyone who borrows money is better off in an inflationary environment because your loans are denominated in the dollars over the year of issue, but you repay them in inflated dollars. This means anyone with a mortgage, a credit card, or any other kind of loan debt.