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> But if it becomes cheaper to use a machine to make, say, a pair of shoes, then the shoes are cheaper, more people can buy shoes and they have more money to sp

> But if it becomes cheaper to use a machine to make, say, a pair of shoes, then the shoes are cheaper, more people can buy shoes and they have more money to spend on other things besides, and we discover new things we need or want, and new jobs. This sounds really similar to trickle down economics.

msla 3y ago
No, because what he described actually works. Clothing used to be hugely expensive: https://www.bookandsword.com/2017/12/09/how-much-did-a-shirt-really-cost-in-the-middle-ages/ https://www.bookandsword.com/2017/12/09/how-much-did-a-shirt... > So the shirts of humble servants at Henry VIII’s court cost between 3 and 10 days’ income. That would be similar to someone who earns 10 dollars or Euros an hour spending 240 to 800 dollars or Euros on an item today. (Of course, in the 15th and 16th century, people spent much more of their incomes on food, fuel, and clothing than they do in Europe or European settler societies today, and much less on rent, transportation, and medical care … but it seems that most people could make or obtain one or two new shirts every year or so). https://www.bookandsword.com/2021/05/08/how-much-did-a-tunic-cost-in-the-roman-empire/ https://www.bookandsword.com/2021/05/08/how-much-did-a-tunic... > In the Edict, the simplest linen tunic could be sold for up to 500 denarii, whereas a linen weaver was to be paid 20 or 40 denarii per day plus maintenance. Fine linen tunics could be sold for up to 7,000 denarii. Elsewhere in the Edict, workers without maintenance (food and possibly fuel and shelter) earn about twice as much as those with. So a linen weaver would need to work for (500 / 2×40 to 500 / 2×20) 6 to 12 days to earn the price of the simplest linen tunic. That is not so different from the 3 to 10 days’ income for a worker to buy a shirt at the court of Henry VIII of England, considering that the ancients did not have spinning wheels. The linen tunics in 301 CE were probably woven as one rectangular or cross-shaped piece and sewed up the sides and under the arms, whereas the English shirts were cut and sewed from long pieces of cloth, but that is another story. These days, you can buy a shirt for a much smaller amount of money, so you have more money to spend on other things, and the economy can grow. This isn't a new concept; in fact, it's so old, we tend to forget how things were before it took hold with the birth of industrialization and automation.
- calderwoodra 3y ago
  I agree with you that innovation "works". But whether it's through innovation or tax cuts, the result is that the business has more capital to work with. So I'm really wondering why tax cuts don't work.
  - sanderjd 3y ago
    Because of businesses vs individuals. Tax cuts for businesses are indeed generally beneficial (in my opinion; I know this is not an uncontroversial objective truth or anything) for this reason, but there is a far more tenuous connection between wealthy individuals having more cash and technological progress. The issue is that the lines between businesses and individuals for the purposes of taxation are fiendishly hazy.
- mdale 3y ago
  And yet the wealthy still spend 3 to 10 days of low wage income on designer clothing. It's interesting that in some domains there is not diferencial there is no 10k iphone and you can get a massive TV fairly cheaply. And yes commodity clothing is cheep. If it was not already obvious we create new forms of value that shift as commodity product become common place or mas market items. That shift to new forms of value inherently depends on scarcity and that scarcity can only exist as a sum of non-commodity goods, creating new opportunities to fill that pursuit of diferencial value and experience.
sanderjd 3y ago
I think this is a straightforward circle to square: technological advances do indeed "trickle down", but the financial benefit from them doesn't, necessarily.
tuatoru 3y ago
The claim of "trickle down" was that giving money to rich people, specifically, would somehow have the same effect as making the average household better off. It turns out that rich people buy things that don't employ many people, and they buy them from other rich people: high-priced art works, famous jewellery, and other collectibles, existing mansions or apartments at exclusive addresses, and so on. So the prices of those things go up, but no-one else has any more money.

msla 3y ago

No, because what he described actually works. Clothing used to be hugely expensive: https://www.bookandsword.com/2017/12/09/how-much-did-a-shirt-really-cost-in-the-middle-ages/ https://www.bookandsword.com/2017/12/09/how-much-did-a-shirt... > So the shirts of humble servants at Henry VIII’s court cost between 3 and 10 days’ income. That would be similar to someone who earns 10 dollars or Euros an hour spending 240 to 800 dollars or Euros on an item today. (Of course, in the 15th and 16th century, people spent much more of their incomes on food, fuel, and clothing than they do in Europe or European settler societies today, and much less on rent, transportation, and medical care … but it seems that most people could make or obtain one or two new shirts every year or so). https://www.bookandsword.com/2021/05/08/how-much-did-a-tunic-cost-in-the-roman-empire/ https://www.bookandsword.com/2021/05/08/how-much-did-a-tunic... > In the Edict, the simplest linen tunic could be sold for up to 500 denarii, whereas a linen weaver was to be paid 20 or 40 denarii per day plus maintenance. Fine linen tunics could be sold for up to 7,000 denarii. Elsewhere in the Edict, workers without maintenance (food and possibly fuel and shelter) earn about twice as much as those with. So a linen weaver would need to work for (500 / 2×40 to 500 / 2×20) 6 to 12 days to earn the price of the simplest linen tunic. That is not so different from the 3 to 10 days’ income for a worker to buy a shirt at the court of Henry VIII of England, considering that the ancients did not have spinning wheels. The linen tunics in 301 CE were probably woven as one rectangular or cross-shaped piece and sewed up the sides and under the arms, whereas the English shirts were cut and sewed from long pieces of cloth, but that is another story. These days, you can buy a shirt for a much smaller amount of money, so you have more money to spend on other things, and the economy can grow. This isn't a new concept; in fact, it's so old, we tend to forget how things were before it took hold with the birth of industrialization and automation.

calderwoodra 3y ago
I agree with you that innovation "works". But whether it's through innovation or tax cuts, the result is that the business has more capital to work with. So I'm really wondering why tax cuts don't work.
- sanderjd 3y ago
  Because of businesses vs individuals. Tax cuts for businesses are indeed generally beneficial (in my opinion; I know this is not an uncontroversial objective truth or anything) for this reason, but there is a far more tenuous connection between wealthy individuals having more cash and technological progress. The issue is that the lines between businesses and individuals for the purposes of taxation are fiendishly hazy.
mdale 3y ago
And yet the wealthy still spend 3 to 10 days of low wage income on designer clothing. It's interesting that in some domains there is not diferencial there is no 10k iphone and you can get a massive TV fairly cheaply. And yes commodity clothing is cheep. If it was not already obvious we create new forms of value that shift as commodity product become common place or mas market items. That shift to new forms of value inherently depends on scarcity and that scarcity can only exist as a sum of non-commodity goods, creating new opportunities to fill that pursuit of diferencial value and experience.

sanderjd 3y ago

I think this is a straightforward circle to square: technological advances do indeed "trickle down", but the financial benefit from them doesn't, necessarily.

tuatoru 3y ago

The claim of "trickle down" was that giving money to rich people, specifically, would somehow have the same effect as making the average household better off. It turns out that rich people buy things that don't employ many people, and they buy them from other rich people: high-priced art works, famous jewellery, and other collectibles, existing mansions or apartments at exclusive addresses, and so on. So the prices of those things go up, but no-one else has any more money.