4 ms·

That is the main thesis of https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce.... I

That is the main thesis of https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce.... IIRC, most societies don't tolerate such inequality and there are two options to reduce them greatly (besides taxes): - wars (in the end, massive destruction tends to make all _surviving_ men more equal) - and hyperinflation (the poor suffer but since most wealth is held by the rich, inflation affects them most).

roenxi 5y ago
Hyperinflation doesn't directly hurt people who have wealth, the valuation of the wealth in cash terms is the part of the system going up. Hyperinflation directly hurts income earners and anyone who holds a significant part of their wealth in cash.
- pydry 5y ago
  It hurts creditors more than anybody else. It certainly helps hit the reset button on aggregate debt levels.
  - Sebb767 5y ago
    Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. If push comes to shove, the state might even force you to mortage your home to finance itself after crisis [0]. It surely helps debtors a bit, but you can't just go to your bank with a single note and be done. [0] https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte (unfortunately only in German)
    - pydry 5y ago
      >have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? I have heard of this sort of thing happening to some people when hyperinflation kicked in - effectively getting a free house/car/etc.
      - Sebb767 5y ago
        > That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option. The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too. [0] A bit less if you start paying sooner or agree to pay fees. [1] https://www.berliner-sparkasse.de/de/home/privatkunden/immobilien/ratgeber/sondertilgung.html https://www.berliner-sparkasse.de/de/home/privatkunden/immob...
asah 5y ago
Don't hyperinflation events lead to civil unrest ?
- ajsnigrutin 5y ago
  Hyperinflation usually leads to not-having-stuff, eventually being hungry, and hunger leads to unrest. Source: Been in the balkans in the 1990s
- sokoloff 5y ago
  Hyperinflation events basically don’t happen in a healthy economy, so it’s hard to say whether they’re just a waypoint on the road to unrest or the cause. (I tend to think they’re the former, that they’re the agonal breathing of a society: often associated with imminent death but not the cause of it.)
- rcMgD2BwE72F 5y ago
  How many _major_ civil unrests end up being a bad thing for the many? I know a few that started revolution that changed our societies for the best.
  - sokoloff 5y ago
    It seems crucially important to ask this of people who lived through them (or from reading their first person accounts) rather than asking people who read about them in history books or watched them on TV. What’s going on in the Gaza Strip for example does not evoke a sense of “wow, that doesn’t look bad at all” in me.
    - p_l 5y ago
      I wouldn't call what happens in occupied territory to be internal civil unrest though.
TheGigaChad 5y ago
Hyperinflation affecting the rich the most...only braindamaged retards can think this. FFS. IDIOT.
madmax96 5y ago
>but since most wealth is held by the rich, inflation affects them most But not much of that wealth is liquid. Hyperinflation hurts savers.
lifty 5y ago
Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in assets that keep up with inflation, or even outpace it, which exacerbates the inequality issue even more. The only thing that inflation is good at is reducing debt levels, both for individuals and organisations.
- rcMgD2BwE72F 5y ago
  >Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. Not really. If I owe some money, every increase in prices (and wages) make it easier for me to reimburse my loan. The rich lending money will be losing, big time. Now, do rich people lend their money? I'm sure they do. They may own stocks, real estate and commodities in addition to currencies and obligations but their value will drop hard if they stop lending money. The rich, as a class, can't protect themselves from inflation even if they start buying stuff that appreciate by selling the rest. A few may find a hedge against this, but the exception proves the rule.
  - lifty 5y ago
    If the value of assets drops you get a deflation and central banks hate that, so in practice what happens is that asset values get propped up on an ongoing basis. This is the situation we are finding ourselves now.
ekianjo 5y ago
> - wars (in the end, massive destruction tends to make all _surviving_ men more equal) You mean equally homeless and poor?
pjc50 5y ago
Hyperinflation is usually a forex problem: the country needs to buy imports in hard currency, especially oil and food, but the export industry has collapsed, so it can't find dollars to pay for it. Which is why I find Americans worrying about hyperinflation in the present day very odd: you have oil AND food AND dollars all domestically produced in adequate quantities, what are you expecting to happen?
- rcMgD2BwE72F 5y ago
  They don't have the factories anymore, do they?
  - ac29 5y ago
    Its complicated. Manufacturing output has been relatively flat for 20 years or so: https://fred.stlouisfed.org/series/OUTMS https://fred.stlouisfed.org/series/OUTMS But, manufacturing employment is down: https://fred.stlouisfed.org/series/PRS30006013 https://fred.stlouisfed.org/series/PRS30006013 The latter is why people sometimes claim manufacturing is disappearing from the US. Its not, but employment levels are down as productivity goes up, and as labor intensive but low value industries move elsewhere (like clothing manufacturing).
    - AnimalMuppet 5y ago
      But in that 20 years, the population has grown, and per-capita consumption has grown. So flat manufacturing output means that domestic manufacturing serves less of our consumption.
throwaway81523 5y ago
Or more on point, this book: https://press.princeton.edu/books/paperback/9780691183251/the-great-leveler https://press.princeton.edu/books/paperback/9780691183251/th... " Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. "

roenxi 5y ago

Hyperinflation doesn't directly hurt people who have wealth, the valuation of the wealth in cash terms is the part of the system going up. Hyperinflation directly hurts income earners and anyone who holds a significant part of their wealth in cash.

pydry 5y ago
It hurts creditors more than anybody else. It certainly helps hit the reset button on aggregate debt levels.
- Sebb767 5y ago
  Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. If push comes to shove, the state might even force you to mortage your home to finance itself after crisis [0]. It surely helps debtors a bit, but you can't just go to your bank with a single note and be done. [0] https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte (unfortunately only in German)
  - pydry 5y ago
    >have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? I have heard of this sort of thing happening to some people when hyperinflation kicked in - effectively getting a free house/car/etc.
    - Sebb767 5y ago
      > That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option. The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too. [0] A bit less if you start paying sooner or agree to pay fees. [1] https://www.berliner-sparkasse.de/de/home/privatkunden/immobilien/ratgeber/sondertilgung.html https://www.berliner-sparkasse.de/de/home/privatkunden/immob...

asah 5y ago

Don't hyperinflation events lead to civil unrest ?

ajsnigrutin 5y ago
Hyperinflation usually leads to not-having-stuff, eventually being hungry, and hunger leads to unrest. Source: Been in the balkans in the 1990s
sokoloff 5y ago
Hyperinflation events basically don’t happen in a healthy economy, so it’s hard to say whether they’re just a waypoint on the road to unrest or the cause. (I tend to think they’re the former, that they’re the agonal breathing of a society: often associated with imminent death but not the cause of it.)
rcMgD2BwE72F 5y ago
How many _major_ civil unrests end up being a bad thing for the many? I know a few that started revolution that changed our societies for the best.
- sokoloff 5y ago
  It seems crucially important to ask this of people who lived through them (or from reading their first person accounts) rather than asking people who read about them in history books or watched them on TV. What’s going on in the Gaza Strip for example does not evoke a sense of “wow, that doesn’t look bad at all” in me.
  - p_l 5y ago
    I wouldn't call what happens in occupied territory to be internal civil unrest though.

TheGigaChad 5y ago

Hyperinflation affecting the rich the most...only braindamaged retards can think this. FFS. IDIOT.

madmax96 5y ago

>but since most wealth is held by the rich, inflation affects them most But not much of that wealth is liquid. Hyperinflation hurts savers.

lifty 5y ago

Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in assets that keep up with inflation, or even outpace it, which exacerbates the inequality issue even more. The only thing that inflation is good at is reducing debt levels, both for individuals and organisations.

rcMgD2BwE72F 5y ago
>Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. Not really. If I owe some money, every increase in prices (and wages) make it easier for me to reimburse my loan. The rich lending money will be losing, big time. Now, do rich people lend their money? I'm sure they do. They may own stocks, real estate and commodities in addition to currencies and obligations but their value will drop hard if they stop lending money. The rich, as a class, can't protect themselves from inflation even if they start buying stuff that appreciate by selling the rest. A few may find a hedge against this, but the exception proves the rule.
- lifty 5y ago
  If the value of assets drops you get a deflation and central banks hate that, so in practice what happens is that asset values get propped up on an ongoing basis. This is the situation we are finding ourselves now.

ekianjo 5y ago

> - wars (in the end, massive destruction tends to make all _surviving_ men more equal) You mean equally homeless and poor?

pjc50 5y ago

Hyperinflation is usually a forex problem: the country needs to buy imports in hard currency, especially oil and food, but the export industry has collapsed, so it can't find dollars to pay for it. Which is why I find Americans worrying about hyperinflation in the present day very odd: you have oil AND food AND dollars all domestically produced in adequate quantities, what are you expecting to happen?

rcMgD2BwE72F 5y ago
They don't have the factories anymore, do they?
- ac29 5y ago
  Its complicated. Manufacturing output has been relatively flat for 20 years or so: https://fred.stlouisfed.org/series/OUTMS https://fred.stlouisfed.org/series/OUTMS But, manufacturing employment is down: https://fred.stlouisfed.org/series/PRS30006013 https://fred.stlouisfed.org/series/PRS30006013 The latter is why people sometimes claim manufacturing is disappearing from the US. Its not, but employment levels are down as productivity goes up, and as labor intensive but low value industries move elsewhere (like clothing manufacturing).
  - AnimalMuppet 5y ago
    But in that 20 years, the population has grown, and per-capita consumption has grown. So flat manufacturing output means that domestic manufacturing serves less of our consumption.

throwaway81523 5y ago

Or more on point, this book: https://press.princeton.edu/books/paperback/9780691183251/the-great-leveler https://press.princeton.edu/books/paperback/9780691183251/th... " Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. "