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It's quite true that wealth creation is not guaranteed, and that there are many ways of messing it up. That does not change the fact that wealth is created; th

by pdonis 3y ago

It's quite true that wealth creation is not guaranteed, and that there are many ways of messing it up. That does not change the fact that wealth is created; there is not a fixed pool of wealth on the planet that will never change. There is nothing impossible about creating enough wealth to give everyone on the planet a first world standard of living. That doesn't mean it is guaranteed to happen; but it does mean it can happen.

pixl97 3y ago
I mean, I can click a button on a computer, and boom, you're a billionaire. But if I do it for everyone, without the corresponding increase in production of things that are wanted then inflation explodes. Some things like software don't have to follow these inflationary paradigms, but things like land definitely do. This is what I'm warning about that we're running on borrowed time with cheap labor unless we replace it with automation. All your 'wealth' will quickly disappear in inflation.
- pdonis 3y ago
  > I can click a button on a computer, and boom, you're a billionaire. So you work for the Federal Reserve? They're the ones who are allowed to print money. (Which, as you note, will cause inflation if we don't increase the production of goods and services. But even if we do, it is still a transfer of buying power from those who don't get the newly printed money to those who do. Which means from everyone who isn't a financial institution, to financial institutions. Which is why the financial institutions lobbied to get the Federal Reserve created in the first place.) > things like land definitely do I'm not sure what you mean by "inflationary paradigm". Land is one of the few things of economic interest that (a) actually does have a finite, limited supply, and (b) can't be replaced by other substitutes for important uses. But that has nothing to do with inflation. It would be the same if the money supply were fixed forever. > we're running on borrowed time with cheap labor unless we replace it with automation Which will happen (in fact it has already been happening for decades now) due to natural economic incentives as labor becomes more expensive (which I agree will happen over time as more people gain access to a higher standard of living). The biggest obstacle to it continuing to happen is, as I said, misgovernment.
TeMPOraL 3y ago
Shmaybe, but if you look into it, it sure looks like the "wealth creation" in the West falls primarily into one of the following categories: - Accounting tricks - e.g. most software-created wealth is here, and it's increasingly apparent that it doesn't improve productivity, but rather diffuse the work so it's hard to track, resulting only in "mysterious", "unexplained" drop of productivity overall; - Use of natural resource - that one has always been a source of wealth, because it's an actual input to the economy; - Population growth - i.e. the other fundamental input to the economy; - Outsourcing approximately all manufacturing to countries with cheap labor and low safety and environmental standards. I'm sure there's plenty of honest-to-$deity pie growing, but can't think of a single example right now. Agricultural efficiency improvement maybe?
- pdonis 3y ago
  > I'm sure there's plenty of honest-to-$deity pie growing, but can't think of a single example right now. You must be joking. The US produces a huge quantity of genuine goods and services every year. You buy groceries, right? That's wealth creation. You have electricity in your home, right? (Otherwise how would you be able to post here?) That's wealth creation. You buy clothes, household goods, etc.? I could go on and on. And since we're here on HN, how about all of the software that is created and updated by US programmers? All of that is wealth creation too. Of course none of this vast amount of wealth creation makes the news, because it's all "dog bites man" so the media isn't interested in it. They'd rather talk about the crooks and the parasites because that's what captures eyeballs. But that doesn't mean wealth creation isn't happening.
  - ben_w 3y ago
    Groceries definitely get counted in the same bucket as "natural resources" — the term "primary sector" is the usual term to encompass all extraction & production of raw materials, including farming, logging, fishing, forestry and mining. Electricity overall isn't much of a "growth" sector, as the total hasn't changed much in developed nations in recent decades, only the sources: * USA: https://www.statista.com/statistics/220174/total-us-electricity-net-generation-by-fuel/ https://www.statista.com/statistics/220174/total-us-electric... * Germany: https://en.wikipedia.org/wiki/File:Germany_electricity_production.svg https://en.wikipedia.org/wiki/File:Germany_electricity_produ... * Poland: https://en.wikipedia.org/wiki/File:Poland-electricity-sources.svg https://en.wikipedia.org/wiki/File:Poland-electricity-source... And even then: if the new stuff is PV imported from China, it's not really western nations doing the wealth creation. > You buy clothes, household goods, etc.? I think their point was these are increasingly outsourced… > how about all of the software that is created and updated by US programmers? …while these are accounting tricks. (I don't actually agree with this claim, but that is how I read the comment you are replying to).

by pdonis 3y ago

pixl97 3y ago

I mean, I can click a button on a computer, and boom, you're a billionaire. But if I do it for everyone, without the corresponding increase in production of things that are wanted then inflation explodes. Some things like software don't have to follow these inflationary paradigms, but things like land definitely do. This is what I'm warning about that we're running on borrowed time with cheap labor unless we replace it with automation. All your 'wealth' will quickly disappear in inflation.

pdonis 3y ago
> I can click a button on a computer, and boom, you're a billionaire. So you work for the Federal Reserve? They're the ones who are allowed to print money. (Which, as you note, will cause inflation if we don't increase the production of goods and services. But even if we do, it is still a transfer of buying power from those who don't get the newly printed money to those who do. Which means from everyone who isn't a financial institution, to financial institutions. Which is why the financial institutions lobbied to get the Federal Reserve created in the first place.) > things like land definitely do I'm not sure what you mean by "inflationary paradigm". Land is one of the few things of economic interest that (a) actually does have a finite, limited supply, and (b) can't be replaced by other substitutes for important uses. But that has nothing to do with inflation. It would be the same if the money supply were fixed forever. > we're running on borrowed time with cheap labor unless we replace it with automation Which will happen (in fact it has already been happening for decades now) due to natural economic incentives as labor becomes more expensive (which I agree will happen over time as more people gain access to a higher standard of living). The biggest obstacle to it continuing to happen is, as I said, misgovernment.

TeMPOraL 3y ago

Shmaybe, but if you look into it, it sure looks like the "wealth creation" in the West falls primarily into one of the following categories: - Accounting tricks - e.g. most software-created wealth is here, and it's increasingly apparent that it doesn't improve productivity, but rather diffuse the work so it's hard to track, resulting only in "mysterious", "unexplained" drop of productivity overall; - Use of natural resource - that one has always been a source of wealth, because it's an actual input to the economy; - Population growth - i.e. the other fundamental input to the economy; - Outsourcing approximately all manufacturing to countries with cheap labor and low safety and environmental standards. I'm sure there's plenty of honest-to-$deity pie growing, but can't think of a single example right now. Agricultural efficiency improvement maybe?

pdonis 3y ago
> I'm sure there's plenty of honest-to-$deity pie growing, but can't think of a single example right now. You must be joking. The US produces a huge quantity of genuine goods and services every year. You buy groceries, right? That's wealth creation. You have electricity in your home, right? (Otherwise how would you be able to post here?) That's wealth creation. You buy clothes, household goods, etc.? I could go on and on. And since we're here on HN, how about all of the software that is created and updated by US programmers? All of that is wealth creation too. Of course none of this vast amount of wealth creation makes the news, because it's all "dog bites man" so the media isn't interested in it. They'd rather talk about the crooks and the parasites because that's what captures eyeballs. But that doesn't mean wealth creation isn't happening.
- ben_w 3y ago
  Groceries definitely get counted in the same bucket as "natural resources" — the term "primary sector" is the usual term to encompass all extraction & production of raw materials, including farming, logging, fishing, forestry and mining. Electricity overall isn't much of a "growth" sector, as the total hasn't changed much in developed nations in recent decades, only the sources: * USA: https://www.statista.com/statistics/220174/total-us-electricity-net-generation-by-fuel/ https://www.statista.com/statistics/220174/total-us-electric... * Germany: https://en.wikipedia.org/wiki/File:Germany_electricity_production.svg https://en.wikipedia.org/wiki/File:Germany_electricity_produ... * Poland: https://en.wikipedia.org/wiki/File:Poland-electricity-sources.svg https://en.wikipedia.org/wiki/File:Poland-electricity-source... And even then: if the new stuff is PV imported from China, it's not really western nations doing the wealth creation. > You buy clothes, household goods, etc.? I think their point was these are increasingly outsourced… > how about all of the software that is created and updated by US programmers? …while these are accounting tricks. (I don't actually agree with this claim, but that is how I read the comment you are replying to).