The world is built on the backs of low income workers. There's just not enough money in the world to pay everyone high wages - when you increase wages, you increases costs, and then those wages don't help: AKA inflation.
Either we continue to subsidize the world with low income workers, or we massively increase automation.
It's crazy - there were times we were predicting that people would not need to work, and we'd need to give people basic income, and now it's clear there's just not enough people to do all the work that needs doing.
Why is this argument never in the other direction? There’s just not enough money to make people into millionaires and billionaires. It’s always trouncing on the lower classes.
Am I going crazy or are we collectively witnessing the birth of a neo feudal class? I wasn’t around during the aftermath of WW2 but people believed in democracy and liberal values without stuffing the coffers of the rich right?
This is a crucial point missing in the debates about redistribution of wealth. Redistributing money will only change prices to match the new levels. It doesn’t actually change anyones living standards.
The only way to make our living standards rise is increasing efficiency - doing more with less materials, less time or less people. One path to that is automation. Another is simply focusing on efficiency. There is a ton of room here with how grossly inefficient most organizations and institutions are. For example when a company hires 5x the people it needs, dealing with projects that will be cancelled or work that is ultimately thrown away.
>when you increase wages, you increases costs, and then those wages don't help: AKA inflation
The problem you are addressing is the income share of capital vs labor. Thomas Piketty has this theory called r < g meaning the return on capital is greater than the growth rate of the economy. This means the income share of capital is too high, there isn't enough money left to pay labor so you either get paid less, get fired or the business must raise prices which results in inflation at full employment.
As interest rates fell this problem has diminished but the interest rates on loans are still positive. Another problem is that during full employment people can afford to spend more on limited housing which drives its price up in popular locations. The problem isn't necessarily that housing is too expensive, the problem is that supply doesn't catch up to demand and that plots of land are kept empty, abandoned or underutilized (single family zoning).
It is more like the president is jealous of the Eurozone and thought he can do the same by lowering the interest rate. The obvious problem is that he didn't pursue any austerity policy to lower the interest rate, no, instead he messed with the central bank and just set the interest lower by decree. One of the reasons why interest rates are so low in Germany and Switzerland is because of their tendency to conduct austerity. Germany insisted on a debt brake after 2011. That is how you get lower interest rates.
Getting inflation in check merely requires that the Turkish government raises taxes and does not borrow any additional money whatsoever. The risk of deflation is so far away it won't hurt the economy.
I believe the monetary policy of Erdoğan is somewhat Unique. Türkiye has dropped / resisted raising interest rates, and pretty much done the opposite to what few things economists agree on. This has caused the Lira to drop in value increasing the cost of imports.
They are importers of Energy unlike most of their neighbours and is a net food importer having been especially hit hard by the Ukraine conflict.
[+] [-] ars|3 years ago|reply
Either we continue to subsidize the world with low income workers, or we massively increase automation.
It's crazy - there were times we were predicting that people would not need to work, and we'd need to give people basic income, and now it's clear there's just not enough people to do all the work that needs doing.
[+] [-] azemetre|3 years ago|reply
Am I going crazy or are we collectively witnessing the birth of a neo feudal class? I wasn’t around during the aftermath of WW2 but people believed in democracy and liberal values without stuffing the coffers of the rich right?
[+] [-] zaptheimpaler|3 years ago|reply
This is a crucial point missing in the debates about redistribution of wealth. Redistributing money will only change prices to match the new levels. It doesn’t actually change anyones living standards.
The only way to make our living standards rise is increasing efficiency - doing more with less materials, less time or less people. One path to that is automation. Another is simply focusing on efficiency. There is a ton of room here with how grossly inefficient most organizations and institutions are. For example when a company hires 5x the people it needs, dealing with projects that will be cancelled or work that is ultimately thrown away.
[+] [-] imtringued|3 years ago|reply
The problem you are addressing is the income share of capital vs labor. Thomas Piketty has this theory called r < g meaning the return on capital is greater than the growth rate of the economy. This means the income share of capital is too high, there isn't enough money left to pay labor so you either get paid less, get fired or the business must raise prices which results in inflation at full employment.
As interest rates fell this problem has diminished but the interest rates on loans are still positive. Another problem is that during full employment people can afford to spend more on limited housing which drives its price up in popular locations. The problem isn't necessarily that housing is too expensive, the problem is that supply doesn't catch up to demand and that plots of land are kept empty, abandoned or underutilized (single family zoning).
[+] [-] bergenty|3 years ago|reply
[+] [-] givemeethekeys|3 years ago|reply
[+] [-] imtringued|3 years ago|reply
Getting inflation in check merely requires that the Turkish government raises taxes and does not borrow any additional money whatsoever. The risk of deflation is so far away it won't hurt the economy.
[+] [-] gbN025tt2Z1E2E4|3 years ago|reply
[+] [-] zniturah|3 years ago|reply
[+] [-] bsaul|3 years ago|reply
[+] [-] jlawer|3 years ago|reply
They are importers of Energy unlike most of their neighbours and is a net food importer having been especially hit hard by the Ukraine conflict.
[+] [-] brad0|3 years ago|reply
https://www.npr.org/2022/04/06/1091287991/turkeys-runaway-in...
Basically, the president doesn’t trust interest rates because it means some people can’t pay back loans.
[+] [-] joshsyn|3 years ago|reply
[+] [-] imtringued|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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[+] [-] help_quanted|3 years ago|reply
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