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Except according to (neoclassical) economic theory, real economy is not like Monopoly. In real economy, you can have capital investment (or lack of it), which c

by js8 5y ago

Except according to (neoclassical) economic theory, real economy is not like Monopoly. In real economy, you can have capital investment (or lack of it), which changes how much real production you have (in Monopoly, this is fixed by the amount of houses available). So whether increase in money supply causes inflation depends on whether you can increase the production. If it is possible to increase production, the inflation should happen only temporarily, as the extra money from the demand will get reinvested. This should cause the supply to catch up and prices to fall back again. However, I think the current social inequality complicates the situation a bit. If the investors know that the increase in money supply is only temporary, and the money from the demand will again very quickly end up in the hands of the few (in increase of asset prices), there is no real incentive to invest and increase production, because who will consume, if the extra demand is only temporary? This seems to me like a marxian trap of too low rate of profit (at least for the typical consumer goods). The general problem with the broad macroeconomic indicators (such as inflation) is that they completely ignore the different classes in society. Unfortunately, the mode american economy is in now (where 50% of it is owned by only a small number of people), this becomes much more relevant.

ethanbond 5y ago
Land is finite in both Monopoly and in real life. This is actually what Monopoly was designed to communicate to players. It pisses players off and turns them against each other because it was designed to.
- candiodari 5y ago
  Land might be finite but we're nowhere near its limits. I once read that you could easily fit every human building ever built in a 10km stretch of the Grand Canyon. So let's carefully say we can have 1e9 times the number of buildings we have now.
  - BirdieNZ 5y ago
    Desirable locations are finite, though. People want to live near jobs, infrastructure, amenities, their friends and family. There is limited supply of locations that are near to those things, so land functions as a monopoly.
  - ethanbond 5y ago
    You don’t need to be anywhere near a resource’s exhaustion for its finitude to affect how people value it. Look at any valuable natural resource. That’s especially true of land where, as the other commenter says, all land is decidedly not created equal. There are very good reasons more people want to live in Manhattan than in Death Valley.

by js8 5y ago

ethanbond 5y ago

Land is finite in both Monopoly and in real life. This is actually what Monopoly was designed to communicate to players. It pisses players off and turns them against each other because it was designed to.

candiodari 5y ago
Land might be finite but we're nowhere near its limits. I once read that you could easily fit every human building ever built in a 10km stretch of the Grand Canyon. So let's carefully say we can have 1e9 times the number of buildings we have now.
- BirdieNZ 5y ago
  Desirable locations are finite, though. People want to live near jobs, infrastructure, amenities, their friends and family. There is limited supply of locations that are near to those things, so land functions as a monopoly.
- ethanbond 5y ago
  You don’t need to be anywhere near a resource’s exhaustion for its finitude to affect how people value it. Look at any valuable natural resource. That’s especially true of land where, as the other commenter says, all land is decidedly not created equal. There are very good reasons more people want to live in Manhattan than in Death Valley.