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"If BI increases demand for consumption (as most of it's proponents claim it will), then the price of consumption will increase - hence, inflation." Increased
by sheepmullet 12y ago
"If BI increases demand for consumption (as most of it's proponents claim it will), then the price of consumption will increase - hence, inflation."
Increased consumption does not necessarily lead to a long term price increase. Often it results in lower prices due to ability to invest in projects with larger upfront/fixed costs.
The only goods that would necessarily increase in price are ones where the supply is currently at, or close to, capacity, and it is difficult/expensive to increase the supply. This isn't the case for most goods.
- yummyfajitas 12y agoThis makes no sense. If we shift resources from investment to consumption, we will have fewer projects that increase production in the long term.
- sheepmullet 12y agoYou are assuming too much. 1) Many people are currently in jobs producing very low multiples of their cost when they have the ability to produce much higher multiples. E.g. If JK Rowling spent 10 years writing Harry Potter and spent the next 50 years in total consumption mode she would have still produced far more value than if she had worked in a basic office job for 60 years. How many Rowlings are stuck in low value producing roles? 2) Medium-Large companies are incredibly risk averse to the detriment of the overall market. As such the money they tie up gets very low returns. Forcing a shift in this money into either individuals or into automation attempts would provide far greater returns at an increased risk to a few companies but not an increased systematic risk for the economy.