9 ms·

I am aware of today's inequality (e.g., I read Piketty back when he was making a splash). But the critique is that Greenspan argued gold standard = less inequal

I am aware of today's inequality (e.g., I read Piketty back when he was making a splash). But the critique is that Greenspan argued gold standard = less inequality and that fails on the historical record. If we want to talk about the causes of the 'New Gilded Age' that's something else. As a general starting point I'd begin with: * https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine * https://en.wikipedia.org/wiki/Reaganomics https://en.wikipedia.org/wiki/Reaganomics * https://en.wikipedia.org/wiki/Thatcherism https://en.wikipedia.org/wiki/Thatcherism

4er_transform 4mo ago
Gold Standard is probably a force that acts against inequality but the forces pushing inequality today are just much stronger. Technology that creates winner take all markets and incredible leverage with few people being one.
- throw0101d 4mo ago
  > Gold Standard is probably a force that acts against inequality […] Is there evidence for this? During the Gold Standard era there were many periods of deflation, which is bad for people with debt: back in the day this was often farmers, nowadays it'd be anyone with student loans or a mortgage.
  - clates 4mo ago
    > Is there evidence for this? A simple and logical pattern. 1) Unconstrained spending without commensurate taxation leads to a required inflation of the money supply 2) An inflation of the money supply with increase the price of assets relative to the value of the currency. 3) Asset owners thus become "more valuable" by measure of currency. 4) Renters / non-asset-owners have to eat the costs of inflation while benefiting by none of the inflationary pressure on assets. ergo - a gold standard is just a proxy for "constraints on debt" is a force that acts against inequality between asset owners and non-asset owners.
    - mctaylor 4mo ago
      Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem. You know what would fix a distributionary problem? A (re)distributionary solution. The most obvious one is progressive/wealth taxation (a ceiling) and UBI (a floor). Keep competitive market dynamics, narrow the window in which they're allowed to operate and add some hard constraints.
      - saalweachter 4mo ago
        Or, if you're scared of UBI: government work programs, like the good old Works Progress Administration. Tax, and hire millions of people for a good living wage to do things that either need to be done and aren't (infrastructure repairs and improvements, inspections of all flavors, etc), or that don't really need to be done but make some fraction of the population happy (unnecessarily beautiful post offices).
      - clates 4mo ago
        > Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem. Well, that's good because that's not what limiting the money supply does. It _acts as a force against inequality_. It doesn't _fix_ or _prevent_ inequality that already exists and doesn't claim to stop organic inequalities from arising - but it does put a limit on inequality resulting from an inflation of the money supply.
        notahacker 4mo ago
        It doesn't act as a force against inequality though. It literally acts as a force to force the have nots to work harder and pay more to convince the haves to offer them any money for anything (whilst maintaining the purchasing power of any cash rich people that don't want to risk investing in anything that might create any wealth for anyone else)
    - throw0101d 4mo ago
  - somenameforme 4mo ago
    Two points I'd hit on: 1) Deflation causes debt to become more expensive. Inflation causes your money to become worth less. There's a simple solution to debt becoming more expensive, but no practical solution to you getting a pay-cut every year, especially when a sizable chunk of people don't even realize they're getting a pay-cut and don't want to be unthankful for a "raise." That issue alone already causally explains much of the rise in inequality. Cut people's wages in a stable or deflationary system and there will be hell to pay. Cut them in an inflationary system and they say thank you. 2) Changes in the past are exaggerated. The Fed did a study some time back estimating CPI levels since 1800. [1] They found that from 1800 to 1950 the CPI never shifted more than 25 points from the starting base of 51, so it always stayed within +/- ~50% of that baseline. That's through the Civil War, both World Wars, Spanish Flu, and much more. It's even more interesting to contrast this from 1971 onward. 1971 is when Bretton Woods ended and the government was given a free hand to start 'printing money' so to speak, and inflation became the new policy. Since then the CPI has increased by more than 800 points, 1600% more than our baseline. So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades? [1] - https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1800- https://www.minneapolisfed.org/about-us/monetary-policy/infl...
    - rustcleaner 4mo ago
      >So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades? The 'Gelded Age' where the average man had his balls cut off by inflation?
    - notahacker 4mo ago
      > 1) Deflation causes debt to become more expensive. Inflation causes your money to become worth less. There's a simple solution to debt becoming more expensive, but no practical solution to you getting a pay-cut every year, especially when a sizable chunk of people don't even realize they're getting a pay-cut and don't want to be unthankful for a "raise." That issue alone already causally explains much of the rise in inequality. Cut people's wages in a stable or deflationary system and there will be hell to pay. Cut them in an inflationary system and they say thank you. You don't cut people's wages in a deflationary system, you just cut people. That's true even in the short term, but if the deflation is expected to be sustained, you might as well cut all of them, because if you turn all your assets into hard currency your purchasing power increases every year, whereas if you take the risk of actually hiring people to make stuff during a period of sustained deflation then it might not and on average you have to get them to make more stuff for less money simply to maintain the amount of money you started off with... There is a simple solution to debt being expensive, but that simple solution involves paying wealthier people a greater proportion of their income to have somewhere to live. Remarkable how people can act like this is favourable to workers and yet pay rises (an inflationary phenomenon!) are bad for them....
  - bluegatty 4mo ago
    "Gold Standard era there were many periods of deflation" - yes but that's not so much about inequality. I think there's a lot merit to Gold is a bit better for equality - but it probably holds us all back in the aggregate. Elon Musk could not be a Trillionaire in the highly speculative cash-flush situation we have today. The 2008 crash and the current boom are happening only because of alot of extrea money in the system, and it's going to one group, not the others. The 2008 bailout was to the 'open secret upper class' aka home owners. If we 'let the cards fall' in 2008 the banking system would have crashed but it's home prices that would have crashed harder. A 'stricture monetary system' would have forced people to pay the price. Though it would have had devastating consequences as well - it's possible that with stricter lending, the 2008 crisis would have never happened. FED sets rates that generally favour the GDP, the growth of which is mostly captured by people with more equity. The more loose money for equity etc the more likely it is to be concentraed. This is all 100% solvable. There is no ideological debate needed. A 'relatively strict' Fed, with rules that favour consumer surplus and that is not fully oriented around equities or some 'outside cause' - that's really truly like 'Gold but with some expansion' ... aka a very small-c conservative approach would be a solution that should be acceptable by pretty much everyone except for the MMT people. I think it would bode better for 'equality' because money means something known, and large enterprise, financiers can't leverage their influence and scale into making it mean something more for them.
- red-iron-pine 4mo ago
  > probably bro your argument hinges on "probably" and then completely ignores it
- cyberax 4mo ago
  Historically, I'm not aware of a single major case of the Gold Standard helping with inequality. In all cases where inequality went down, it was helped by inflationary spending. Yet Gold Standard (and its intellectual descendants) directly led to several examples of stagnation. The most recent one was in Europe, it lost a decade of growth after 2008 by insisting on austerity.
- evanb 4mo ago
  The gilded age’s wealthy were also the winners of winner-take-all technologies such as the railroad and oil.

4er_transform 4mo ago

Gold Standard is probably a force that acts against inequality but the forces pushing inequality today are just much stronger. Technology that creates winner take all markets and incredible leverage with few people being one.

throw0101d 4mo ago
> Gold Standard is probably a force that acts against inequality […] Is there evidence for this? During the Gold Standard era there were many periods of deflation, which is bad for people with debt: back in the day this was often farmers, nowadays it'd be anyone with student loans or a mortgage.
- clates 4mo ago
  > Is there evidence for this? A simple and logical pattern. 1) Unconstrained spending without commensurate taxation leads to a required inflation of the money supply 2) An inflation of the money supply with increase the price of assets relative to the value of the currency. 3) Asset owners thus become "more valuable" by measure of currency. 4) Renters / non-asset-owners have to eat the costs of inflation while benefiting by none of the inflationary pressure on assets. ergo - a gold standard is just a proxy for "constraints on debt" is a force that acts against inequality between asset owners and non-asset owners.
  - mctaylor 4mo ago
    Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem. You know what would fix a distributionary problem? A (re)distributionary solution. The most obvious one is progressive/wealth taxation (a ceiling) and UBI (a floor). Keep competitive market dynamics, narrow the window in which they're allowed to operate and add some hard constraints.
    - saalweachter 4mo ago
      Or, if you're scared of UBI: government work programs, like the good old Works Progress Administration. Tax, and hire millions of people for a good living wage to do things that either need to be done and aren't (infrastructure repairs and improvements, inspections of all flavors, etc), or that don't really need to be done but make some fraction of the population happy (unnecessarily beautiful post offices).
    - clates 4mo ago
      > Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem. Well, that's good because that's not what limiting the money supply does. It _acts as a force against inequality_. It doesn't _fix_ or _prevent_ inequality that already exists and doesn't claim to stop organic inequalities from arising - but it does put a limit on inequality resulting from an inflation of the money supply.
      - notahacker 4mo ago
        It doesn't act as a force against inequality though. It literally acts as a force to force the have nots to work harder and pay more to convince the haves to offer them any money for anything (whilst maintaining the purchasing power of any cash rich people that don't want to risk investing in anything that might create any wealth for anyone else)
  - throw0101d 4mo ago
- somenameforme 4mo ago
  Two points I'd hit on: 1) Deflation causes debt to become more expensive. Inflation causes your money to become worth less. There's a simple solution to debt becoming more expensive, but no practical solution to you getting a pay-cut every year, especially when a sizable chunk of people don't even realize they're getting a pay-cut and don't want to be unthankful for a "raise." That issue alone already causally explains much of the rise in inequality. Cut people's wages in a stable or deflationary system and there will be hell to pay. Cut them in an inflationary system and they say thank you. 2) Changes in the past are exaggerated. The Fed did a study some time back estimating CPI levels since 1800. [1] They found that from 1800 to 1950 the CPI never shifted more than 25 points from the starting base of 51, so it always stayed within +/- ~50% of that baseline. That's through the Civil War, both World Wars, Spanish Flu, and much more. It's even more interesting to contrast this from 1971 onward. 1971 is when Bretton Woods ended and the government was given a free hand to start 'printing money' so to speak, and inflation became the new policy. Since then the CPI has increased by more than 800 points, 1600% more than our baseline. So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades? [1] - https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1800- https://www.minneapolisfed.org/about-us/monetary-policy/infl...
  - rustcleaner 4mo ago
    >So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades? The 'Gelded Age' where the average man had his balls cut off by inflation?
  - notahacker 4mo ago
    > 1) Deflation causes debt to become more expensive. Inflation causes your money to become worth less. There's a simple solution to debt becoming more expensive, but no practical solution to you getting a pay-cut every year, especially when a sizable chunk of people don't even realize they're getting a pay-cut and don't want to be unthankful for a "raise." That issue alone already causally explains much of the rise in inequality. Cut people's wages in a stable or deflationary system and there will be hell to pay. Cut them in an inflationary system and they say thank you. You don't cut people's wages in a deflationary system, you just cut people. That's true even in the short term, but if the deflation is expected to be sustained, you might as well cut all of them, because if you turn all your assets into hard currency your purchasing power increases every year, whereas if you take the risk of actually hiring people to make stuff during a period of sustained deflation then it might not and on average you have to get them to make more stuff for less money simply to maintain the amount of money you started off with... There is a simple solution to debt being expensive, but that simple solution involves paying wealthier people a greater proportion of their income to have somewhere to live. Remarkable how people can act like this is favourable to workers and yet pay rises (an inflationary phenomenon!) are bad for them....
- bluegatty 4mo ago
  "Gold Standard era there were many periods of deflation" - yes but that's not so much about inequality. I think there's a lot merit to Gold is a bit better for equality - but it probably holds us all back in the aggregate. Elon Musk could not be a Trillionaire in the highly speculative cash-flush situation we have today. The 2008 crash and the current boom are happening only because of alot of extrea money in the system, and it's going to one group, not the others. The 2008 bailout was to the 'open secret upper class' aka home owners. If we 'let the cards fall' in 2008 the banking system would have crashed but it's home prices that would have crashed harder. A 'stricture monetary system' would have forced people to pay the price. Though it would have had devastating consequences as well - it's possible that with stricter lending, the 2008 crisis would have never happened. FED sets rates that generally favour the GDP, the growth of which is mostly captured by people with more equity. The more loose money for equity etc the more likely it is to be concentraed. This is all 100% solvable. There is no ideological debate needed. A 'relatively strict' Fed, with rules that favour consumer surplus and that is not fully oriented around equities or some 'outside cause' - that's really truly like 'Gold but with some expansion' ... aka a very small-c conservative approach would be a solution that should be acceptable by pretty much everyone except for the MMT people. I think it would bode better for 'equality' because money means something known, and large enterprise, financiers can't leverage their influence and scale into making it mean something more for them.
red-iron-pine 4mo ago
> probably bro your argument hinges on "probably" and then completely ignores it
cyberax 4mo ago
Historically, I'm not aware of a single major case of the Gold Standard helping with inequality. In all cases where inequality went down, it was helped by inflationary spending. Yet Gold Standard (and its intellectual descendants) directly led to several examples of stagnation. The most recent one was in Europe, it lost a decade of growth after 2008 by insisting on austerity.
evanb 4mo ago
The gilded age’s wealthy were also the winners of winner-take-all technologies such as the railroad and oil.