Quote:
Originally Posted by spence
And about pie. I don't buy the infinite pie thing. The one physics class I had in college taught me there was a finite amount of energy in the universe.
Is that an absolute? 
Sorry, couldn't resist.
Sure economic growth can lift all boats (not equally mind you) but the reality is that there's organic growth and the transfer of wealth. A lot of our economy, increasingly in fact, is based on transfer where wealth is not created as much as siphoned off. This is indeed a more finite equation, relative to the economic conditions at the moment.
The point being, that if resources were unlimited you could potentially sustain organic growth and eliminate the pie construct. But in the real world there are constraints. If you don't have growth, or if the benefits from growth aren't shared you have an exploding pie.
-spence |
Is Quantitative Easing organic growth? Is redistribution of wealth (money) organic growth? If money is wealth, and it can be printed at will, then, indeed, wealth is infinite.
If wealth is material commodity with intrinsic value, and if there is absolutely a finite amount of material commodity, then wealth is not infinite.
If the top 1% have an unequally high percent of income (money), do they actually have that percent of "wealth," or just that much more ability to buy "wealth"? And if they actually did buy that amount of "wealth," what would, or could, they do with it? They could not possibly consume or use it. Unless they could rent it, or sell it, it would go to waste and do them no good. If they were to rent or sell it, they would have to demand enough return, or they would lose monetary value. In order to get a "fair" or profitable return, the buyers would have to have adequate income to pay. In a market "economy" that would resolve itself to the advantage of both parties.
In an "economy" that is more controlled than free, those who manipulate the levers of control can reap advantage over the disadvantage of others. For that to happen, there has to be a crony partnership between government and those in bed with it.
When government usurps power by diminishing either partner in a market trade to the advantage of the other, whether toward oligarchic or egalitarian goals, it distorts the market and can do so to the point that it is destroyed.
Manipulating (regulating) markets by favoring winners over losers, legislating pay scales creating "equality" or "inequality" will create failures which eventually must be "fixed."