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For the economists here, could someone explain why wealth hoarding is a bad thing? It seems to me that it would just cause the hoarded currency to deflate in va

by sudhirj 13y ago

For the economists here, could someone explain why wealth hoarding is a bad thing? It seems to me that it would just cause the hoarded currency to deflate in value. We understand this and accept this as normal in bitcoin for instance - if I burn a disk with lots of BTC on it, I've lost value, but the market will shed no tears. Why is hoarding wealth different from just removing it from the system?

digz 13y ago
No such thing as wealth hoarding in practical terms. You'd have to keep cash under your mattress to actually be wealth hoarding. What is popularly perceived to be wealth hoarding (people worth millions/billions) are really doing no such thing. Virtually all of that wealth is invested in one way or another. Stocks, bonds and even savings accounts result in economic value being moved to those who can use it most effectively (i.e., VCs, cities building bridges, companies expanding, etc.).
- PythonicAlpha 13y ago
  Only partly true. Buy "investing" the wealth increases -- and thus the inequality in the world. Of course in the brochures of Capitalism you see only the positives. But more and more the negatives are available too. VC companies roaming the world for land to buy and press out for investments. Local farmers can not anymore afford the prices for land and thus have to surrender -- and become paid employees. Many people become slaves of these VC companies -- they by companies for profit and when the profit is gone, they dump the companies. It is happening all over the world. The profit margin has to increase ever more to appease the investors. This profit sensation has brought us thus far, that wealth gets more and more unequal divided and many people are exploited in sweat-shops in poor companies but more and more also in rich countries as in Germany. Please don't tell us about the high-colored brochure Capitalism!
PythonicAlpha 13y ago
Because wealth that someone possesses can not be possessed by another person. If one person has 99% of all money in the world, everybody else will have to less to live on. The one person will be able to buy anything else on the world -- thus depleting the others. Or another scenario: Because money is hoarded in few hands, the value of the money goes down ... thus everybody else will loose their wealth. Things are of course more complicated. But it is a fact, that the resources of the world are limited. Thus if few people hoard things, the others have less ... this effect might come sooner or later, but it will come.

by sudhirj 13y ago

digz 13y ago

No such thing as wealth hoarding in practical terms. You'd have to keep cash under your mattress to actually be wealth hoarding. What is popularly perceived to be wealth hoarding (people worth millions/billions) are really doing no such thing. Virtually all of that wealth is invested in one way or another. Stocks, bonds and even savings accounts result in economic value being moved to those who can use it most effectively (i.e., VCs, cities building bridges, companies expanding, etc.).

PythonicAlpha 13y ago
Only partly true. Buy "investing" the wealth increases -- and thus the inequality in the world. Of course in the brochures of Capitalism you see only the positives. But more and more the negatives are available too. VC companies roaming the world for land to buy and press out for investments. Local farmers can not anymore afford the prices for land and thus have to surrender -- and become paid employees. Many people become slaves of these VC companies -- they by companies for profit and when the profit is gone, they dump the companies. It is happening all over the world. The profit margin has to increase ever more to appease the investors. This profit sensation has brought us thus far, that wealth gets more and more unequal divided and many people are exploited in sweat-shops in poor companies but more and more also in rich countries as in Germany. Please don't tell us about the high-colored brochure Capitalism!

PythonicAlpha 13y ago

Because wealth that someone possesses can not be possessed by another person. If one person has 99% of all money in the world, everybody else will have to less to live on. The one person will be able to buy anything else on the world -- thus depleting the others. Or another scenario: Because money is hoarded in few hands, the value of the money goes down ... thus everybody else will loose their wealth. Things are of course more complicated. But it is a fact, that the resources of the world are limited. Thus if few people hoard things, the others have less ... this effect might come sooner or later, but it will come.