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> [0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more m

> [0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow. You are saying that billionaires do more than consume; they save money. If we wish to be more specific, we could say that billionaires, by and large, invest money, billions of it, in enterprises which will make them more money. Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth. Obviously some billionaires do more to be leeches than others, but that sort of enterprise seldom needs actual net investment. And obviously not all capital comes from billionaires, and not all billionaires deserve as much money as they have — but your premise here is quite backwards. A billionaire consuming all his wealth by building mansions, showy superyachts, private planes, and the like, is much worse for the economy than a typical billionaire investment, because the superyacht is not a productive asset, it is an extravagant waste.

rezistik 5y ago
Economies grow because of growth of demand, not growth of production. Production grows in response to demand not the other way around.
- fennecfoxen 5y ago
  Gross domestic product is a product, not a longing. You can demand all you like; if no one produces it, your economy does nothing. Production is driven by growth in demand because capitalists, realizing the demand exists, expand their production on the premise that they might earn more profit. In turn, capitalists also stop producing things that are not in demand, as this is unprofitable.
majormajor 5y ago
> Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth. Production of something not in demand is a nonsensical way to try to grow an economy. Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. A billionaire spending all their money is an incentive for other people to invest in the production of those things being built, which is important because it creates income for the workers, which creates demand. Investing for the sake of investing in production otherwise is limited since if people aren't buying, less money is circulating, and less actual useful stuff (such as improvement in living standards) can happen as a result. But I suppose that pointless production (a lot of recent VC activity looks somewhat like this) is still better than a billionaire parking money in hedge funds or HFT shops that are just buying/selling stocks that represent past investment, instead of that money going to the productive enterprise itself.
- fennecfoxen 5y ago
  > Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. Which is why billionaires invest. For a profit. We are on the same page. GP post, on the other hand, was making the nonsense argument that our problem is billionaires reducing demand by investing money instead of spending billions on consumption.
- MR4D 5y ago
  > Production of something not in demand is a nonsensical way to try to grow an economy. And yet, oddly, both the Soviets tried it [0], and the Chinese are trying it [1]. [0] - https://www.jstor.org/stable/3131928 https://www.jstor.org/stable/3131928 [1] - https://en.wikipedia.org/wiki/Under-occupied_developments_in_China https://en.wikipedia.org/wiki/Under-occupied_developments_in...
clairity 5y ago
billionaires are unproductive because they don't need the returns to capital their wealth generates, which means we get a gross misallocation at a macroeconomic level. we simply don't need billionaires at all, and would be better served as a society to have 1000 millionaires in place of each billionaire, who could allocate essentially the same capital much more efficiently.

rezistik 5y ago

Economies grow because of growth of demand, not growth of production. Production grows in response to demand not the other way around.

fennecfoxen 5y ago
Gross domestic product is a product, not a longing. You can demand all you like; if no one produces it, your economy does nothing. Production is driven by growth in demand because capitalists, realizing the demand exists, expand their production on the premise that they might earn more profit. In turn, capitalists also stop producing things that are not in demand, as this is unprofitable.

majormajor 5y ago

> Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth. Production of something not in demand is a nonsensical way to try to grow an economy. Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. A billionaire spending all their money is an incentive for other people to invest in the production of those things being built, which is important because it creates income for the workers, which creates demand. Investing for the sake of investing in production otherwise is limited since if people aren't buying, less money is circulating, and less actual useful stuff (such as improvement in living standards) can happen as a result. But I suppose that pointless production (a lot of recent VC activity looks somewhat like this) is still better than a billionaire parking money in hedge funds or HFT shops that are just buying/selling stocks that represent past investment, instead of that money going to the productive enterprise itself.

fennecfoxen 5y ago
> Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. Which is why billionaires invest. For a profit. We are on the same page. GP post, on the other hand, was making the nonsense argument that our problem is billionaires reducing demand by investing money instead of spending billions on consumption.
MR4D 5y ago
> Production of something not in demand is a nonsensical way to try to grow an economy. And yet, oddly, both the Soviets tried it [0], and the Chinese are trying it [1]. [0] - https://www.jstor.org/stable/3131928 https://www.jstor.org/stable/3131928 [1] - https://en.wikipedia.org/wiki/Under-occupied_developments_in_China https://en.wikipedia.org/wiki/Under-occupied_developments_in...

clairity 5y ago

billionaires are unproductive because they don't need the returns to capital their wealth generates, which means we get a gross misallocation at a macroeconomic level. we simply don't need billionaires at all, and would be better served as a society to have 1000 millionaires in place of each billionaire, who could allocate essentially the same capital much more efficiently.