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> greater-than-average scarcity Isn't scarcity infinite? Every argument against increasing labor share of income boils down to "oooooooioooh, inflaaaaaaaaatio

> greater-than-average scarcity Isn't scarcity infinite? Every argument against increasing labor share of income boils down to "oooooooioooh, inflaaaaaaaaation, spoooooooky!"

indigochill 5y ago
> Every argument against increasing labor share of income boils down to "oooooooioooh, inflaaaaaaaaation, spoooooooky!" This doesn't seem to make any sense, considering increasing labor share is not creation of money (inflation) but merely a different method of allocating the existing money. But maybe that's your point or maybe inflation is defined differently than what I learned in high school.
- diordiderot 5y ago
  I believe that most Americans believe that it's an economic law that if wages increase it _will_ result in wage price inflation. Inflation just means you get less stuff per dollar in the store Wage price inflation means the excess labor cost(wages) is added to the price of goods, resulting in increased wages, resulting in increased prices over and over until bread costs 1 billion dollars. This is an absurd proposition when you could just reduce profit margins. The problem is that capitalists don't want to. Why should they! What should happen is that we should allow wage price inflation forcing companies to lower profit margins after a very short recession, then quality of life would increase for the working majority.
- skohan 5y ago
  See this would hold if the money supply is held relatively constant. We are not in that environment.
skohan 5y ago
I am in favor of increasing labor's share of income. My point is, in order to increase labour's share of income, the money supply has to be held relatively constant in order to avoid inflation. In an environment like we have, where capital is basically free, when labor becomes scarce, firms with access to the infinite money supply can just raise wages ad infinitum and this is what creates the problem. The capital supply is not properly controlled by market forces currently. If it were, increasing labor's share of profits would be resolved without inflation. So my overall point is that we are seeing issues with inflation because of the intersection of Quantitative Easing and real-world scarcity. QE hasn't led to inflation before, because most of the new capital created just ended up in paper assets like securities. So if the fed prints 10 trillion dollars, and most of it just ends up on the balance sheet of some investment banks, it's not going to affect the price of a loaf of bread. But if the money supply is increased indiscriminately and it also gets into the hands of people who are competing for the same used car, this is what causes issues with the value of the currency.
- diordiderot 5y ago
  > QE hasn't led to inflation before, because most of the new capital created just ended up in paper assets like securities. Ah, well summarized. > competing for the same used car What happens when labor no longer has the money for non-essentials? Thoughts on how real estate will come into play?

> greater-than-average scarcity Isn't scarcity infinite? Every argument against increasing labor share of income boils down to "oooooooioooh, inflaaaaaaaaation, spoooooooky!"

indigochill 5y ago

> Every argument against increasing labor share of income boils down to "oooooooioooh, inflaaaaaaaaation, spoooooooky!" This doesn't seem to make any sense, considering increasing labor share is not creation of money (inflation) but merely a different method of allocating the existing money. But maybe that's your point or maybe inflation is defined differently than what I learned in high school.

diordiderot 5y ago
I believe that most Americans believe that it's an economic law that if wages increase it _will_ result in wage price inflation. Inflation just means you get less stuff per dollar in the store Wage price inflation means the excess labor cost(wages) is added to the price of goods, resulting in increased wages, resulting in increased prices over and over until bread costs 1 billion dollars. This is an absurd proposition when you could just reduce profit margins. The problem is that capitalists don't want to. Why should they! What should happen is that we should allow wage price inflation forcing companies to lower profit margins after a very short recession, then quality of life would increase for the working majority.
skohan 5y ago
See this would hold if the money supply is held relatively constant. We are not in that environment.

skohan 5y ago

I am in favor of increasing labor's share of income. My point is, in order to increase labour's share of income, the money supply has to be held relatively constant in order to avoid inflation. In an environment like we have, where capital is basically free, when labor becomes scarce, firms with access to the infinite money supply can just raise wages ad infinitum and this is what creates the problem. The capital supply is not properly controlled by market forces currently. If it were, increasing labor's share of profits would be resolved without inflation. So my overall point is that we are seeing issues with inflation because of the intersection of Quantitative Easing and real-world scarcity. QE hasn't led to inflation before, because most of the new capital created just ended up in paper assets like securities. So if the fed prints 10 trillion dollars, and most of it just ends up on the balance sheet of some investment banks, it's not going to affect the price of a loaf of bread. But if the money supply is increased indiscriminately and it also gets into the hands of people who are competing for the same used car, this is what causes issues with the value of the currency.

diordiderot 5y ago
> QE hasn't led to inflation before, because most of the new capital created just ended up in paper assets like securities. Ah, well summarized. > competing for the same used car What happens when labor no longer has the money for non-essentials? Thoughts on how real estate will come into play?