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> That is also a kind of growth! Yes, but not one that benefits from investment, which is how rich people get paid for being rich. Rich people want very, very,

> That is also a kind of growth! Yes, but not one that benefits from investment, which is how rich people get paid for being rich. Rich people want very, very, very much to be paid for being rich. Since a dollar is a vote, this concern completely dominates our political and cultural thought processes. The tricky part is that retirement funds use exactly the same mechanism, so those of us with retirement accounts have incentives to keep quiet. The wheels won't come off the cart to Ponzi town until a minority of people are net asset holders, but that's well on its way to happening. Exciting times!

chii 4y ago
> ... not one that benefits from investment, which is how rich people get paid for being rich. riches or wealth, is merely stored up work that could be expended, instead of consumed. They aren't being paid just for being rich - they are making decisions on how to expend that stored up work to produce _even more_ stored up work for the future. By making that decision wisely, they earn the rewards of the stored up work!
- deleted 4y ago
  [deleted]
- jjoonathan 4y ago
  That's the theory. It's different in practice. Ok, suppose a new frontier has opened up. Maybe it's geographic, maybe a gold rush, maybe a technological revolution -- but in any case, there are lots of opportunities to forego consumption today in order to create greater value tomorrow. Stuff has to be built! Investment has value. We should want to encourage it and reward it, because everybody wins. Great! So what's the problem? Well, what happens at the top of the growth sigmoid? The stuff has been built. Foregoing consumption today... just doesn't help in the way that it used to. Investment just doesn't have much value (gasp). Returns drop. In fact, they plummet, because now instead of having a lot of growth service a little capital you have a little growth service a lot of capital. Double whammy. Ok, markets contract, so what's the problem? There isn't one, if you let it happen -- but if you are a rich person, this is an existential threat. You can't get paid for being rich anymore. Unless... wealth is power, and power can be used to change the rules. So you change the rules. You invent other ways of getting payed for being rich. Because that's what you really care about. That's the fundamental reason why our economic narrative pretends that everything is exponential, not sigmoid: the dirty deeds happen at the top of the sigmoid.
  - chii 4y ago
    > You invent other ways of getting payed for being rich. so what's this other way that's been implied, but never actually explicitly explained? Lots of investors accept low returns now - that's _why_ prices are expensive. Unless you're talking about the corruption in countries like russia, where resources and power are usurped, rather than created.
    - ElevenLathe 4y ago
      Presumably grandparent means QE, ZIRP and the whole range of other easy money policies that inflate the money supply but give investment banks, and the financial industry generally, first crack at the new money. This is definitely a way in which "just being rich" gets you access to policy-defined ways of making money basically risklessly.

chii 4y ago

> ... not one that benefits from investment, which is how rich people get paid for being rich. riches or wealth, is merely stored up work that could be expended, instead of consumed. They aren't being paid just for being rich - they are making decisions on how to expend that stored up work to produce _even more_ stored up work for the future. By making that decision wisely, they earn the rewards of the stored up work!

deleted 4y ago
[deleted]
jjoonathan 4y ago
That's the theory. It's different in practice. Ok, suppose a new frontier has opened up. Maybe it's geographic, maybe a gold rush, maybe a technological revolution -- but in any case, there are lots of opportunities to forego consumption today in order to create greater value tomorrow. Stuff has to be built! Investment has value. We should want to encourage it and reward it, because everybody wins. Great! So what's the problem? Well, what happens at the top of the growth sigmoid? The stuff has been built. Foregoing consumption today... just doesn't help in the way that it used to. Investment just doesn't have much value (gasp). Returns drop. In fact, they plummet, because now instead of having a lot of growth service a little capital you have a little growth service a lot of capital. Double whammy. Ok, markets contract, so what's the problem? There isn't one, if you let it happen -- but if you are a rich person, this is an existential threat. You can't get paid for being rich anymore. Unless... wealth is power, and power can be used to change the rules. So you change the rules. You invent other ways of getting payed for being rich. Because that's what you really care about. That's the fundamental reason why our economic narrative pretends that everything is exponential, not sigmoid: the dirty deeds happen at the top of the sigmoid.
- chii 4y ago
  > You invent other ways of getting payed for being rich. so what's this other way that's been implied, but never actually explicitly explained? Lots of investors accept low returns now - that's _why_ prices are expensive. Unless you're talking about the corruption in countries like russia, where resources and power are usurped, rather than created.
  - ElevenLathe 4y ago
    Presumably grandparent means QE, ZIRP and the whole range of other easy money policies that inflate the money supply but give investment banks, and the financial industry generally, first crack at the new money. This is definitely a way in which "just being rich" gets you access to policy-defined ways of making money basically risklessly.