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Great set of simulations! Can someone explain why in Simulation 16, 4 producing workers can support 3 non-producing workers consuming just as much as them with
by logicallee 3y ago
Great set of simulations!
Can someone explain why in Simulation 16, 4 producing workers can support 3 non-producing workers consuming just as much as them with just 10% taxation and yet they have similar QOL? It doesn't make sense to me intuitively.
If we ignore money and just look at goods this implies 3 people can do "nothing" (the government workers don't buy from anyone in this simulation) and yet consume as much as 4 people who do produce, and the 4 taxed people only have to pay 10% taxes while everyone enjoys similar quality of life as 60% taxation.
It would be like imagine you have four cartons of ten eggs and you tax 10% of each one. How can you end up with 3 whole cartons just from that taxes, it would only be four eggs, less than half of one carton rather than three extra cartons of the same size as the new reduced carton size of 9.
- Ruddle 3y agoAuthor here, simulation 16 shows that money printing, and tax have common effects. The state can replace one with another. Here the 65% tax is replaced with 10% tax plus inflation, i.e., giving new money to public servants. The new money creation decreases the value of money owned by producing workers. We could even remove the tax entirely, and still support the 3 public servants. To be convinced you can look at each unit transaction and see that all resource are accounted for. Another way to look at it, is that the QoL of producing workers is lower than if there was no public servants. Every resource a public servant has, is bought from a worker at some point, whether the money for the purchase comes from taxation or inflation.
- logicallee 3y agoInteresting, thank you so much! I didn’t realize that inflation (where money is created and given to government to spend) is exactly the same as taxation.