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> you'd be far less willing to spend any or invest ... This will reduce consumption and investment in the larger economy Or maybe consumers will stop buying th

> you'd be far less willing to spend any or invest ... This will reduce consumption and investment in the larger economy Or maybe consumers will stop buying the latest and greatest just because advertisers convinced them it will make them happy. Instead, consumers will demand higher quality products, which increases overall spending on R&D instead and decreases spending on marketing. Then we will all have better products and be more productive. I can at least dream, can't I?

darkFunction 12y ago
Agree completely. The argument that mindless consumption is a good thing just because it drives the economy is short-sighted and ridiculous. If money itself is wealth-generating then people are going to be much more mindful about their spending on worthless shit that serves no purpose other than to stall the degradation of their wealth and entertain then temporarily at the cost of our environment.
- Retric 12y ago
  Money is fungible, you can already swap it for something worth more in the future.
  - toomuchtodo 12y ago
    You do know that there's a negative interest rate in the Euro financial zone right? They are charging you to hold on to cash to force you to spend (or "invest") it now. How can the future hold value when technology continues to drive the cost of living down? Can capitalism continue when I have all of the world's information available on my $300-700 smartphone? When I can connect with anyone in the world for pennies?
    - Retric 12y ago
      http://en.m.wikipedia.org/wiki/Amdahl%27s_law http://en.m.wikipedia.org/wiki/Amdahl%27s_law Making one input cheaper has limited benefits. Sure all your digital entertainment might get really cheap, but your still going to want heat, food, and a bed etc. Anyway, 'finance' is more or less a meaningless part of the economy. Print more money and the nominal GDP goes up except that does not build a house etc. MMO's are an interesting way to study a lot of this stuff, and even there deflation does all kinds of bad things. PS: My entertainment budget has been close to zero for a while now spening less on entertainment is not going to effect me much.
Retra 12y ago
I see a lot of non-sequiturs in your reasoning here.
- deweller 12y ago
  Granted. It is really a hope more than a well-thought out argument.
mc32 12y ago
We have a deflationary economy in Japan. It's been going on for two decades now. Let's see how it shapes out. They are the canary. We will all be there one day. The world can't continue growing indefinitely. Most countries have stabilizing populations, so all we have now are 'emerging economies' They are picking up the slack for the time being. At the sane time I dont see distributed production manufacturing of bespoke products or services as the answer. A modern twist on artisanal/guild like system of the past seems like a 'pastoral dream' as it were. Still the neo liberal economic system is reaching its useful life and I don't think it will end up lil Moore's law where they keep finding ways to keep the 'law' viable.
BrainInAJar 12y ago
You're making the mistake here of assuming that the problems of deflationary currency are related to consumer habits. The real problem is related to business habits. If your cash holdings are growing at 10%/year, you would be downright stupid to hire someone unless they can guarantee a greater than 10% return. If you're a capital holder (like a VC) you would be stupid to invest in businesses that can't guarantee that kind of growth either. Lots of the economy shuts down during deflationary periods, it's why we typically try to avoid them.
deleted 12y ago
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darkFunction 12y ago

Agree completely. The argument that mindless consumption is a good thing just because it drives the economy is short-sighted and ridiculous. If money itself is wealth-generating then people are going to be much more mindful about their spending on worthless shit that serves no purpose other than to stall the degradation of their wealth and entertain then temporarily at the cost of our environment.

Retric 12y ago
Money is fungible, you can already swap it for something worth more in the future.
- toomuchtodo 12y ago
  You do know that there's a negative interest rate in the Euro financial zone right? They are charging you to hold on to cash to force you to spend (or "invest") it now. How can the future hold value when technology continues to drive the cost of living down? Can capitalism continue when I have all of the world's information available on my $300-700 smartphone? When I can connect with anyone in the world for pennies?
  - Retric 12y ago
    http://en.m.wikipedia.org/wiki/Amdahl%27s_law http://en.m.wikipedia.org/wiki/Amdahl%27s_law Making one input cheaper has limited benefits. Sure all your digital entertainment might get really cheap, but your still going to want heat, food, and a bed etc. Anyway, 'finance' is more or less a meaningless part of the economy. Print more money and the nominal GDP goes up except that does not build a house etc. MMO's are an interesting way to study a lot of this stuff, and even there deflation does all kinds of bad things. PS: My entertainment budget has been close to zero for a while now spening less on entertainment is not going to effect me much.

Retra 12y ago

I see a lot of non-sequiturs in your reasoning here.

deweller 12y ago
Granted. It is really a hope more than a well-thought out argument.

mc32 12y ago

We have a deflationary economy in Japan. It's been going on for two decades now. Let's see how it shapes out. They are the canary. We will all be there one day. The world can't continue growing indefinitely. Most countries have stabilizing populations, so all we have now are 'emerging economies' They are picking up the slack for the time being. At the sane time I dont see distributed production manufacturing of bespoke products or services as the answer. A modern twist on artisanal/guild like system of the past seems like a 'pastoral dream' as it were. Still the neo liberal economic system is reaching its useful life and I don't think it will end up lil Moore's law where they keep finding ways to keep the 'law' viable.

BrainInAJar 12y ago

You're making the mistake here of assuming that the problems of deflationary currency are related to consumer habits. The real problem is related to business habits. If your cash holdings are growing at 10%/year, you would be downright stupid to hire someone unless they can guarantee a greater than 10% return. If you're a capital holder (like a VC) you would be stupid to invest in businesses that can't guarantee that kind of growth either. Lots of the economy shuts down during deflationary periods, it's why we typically try to avoid them.

deleted 12y ago

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