Comment by WalterBright
1 year ago
> will continue until people's ability to afford rent and children improves.
Historically that's never been a requirement for people to make children. Poor people have tended to be pretty prolific.
> hoarding more and more of the wealth
In a free market society, wealth is created, it is not "concentrated".
Nice assertions, but where’s the content of your post? What’s your opinion here based on those two things? Those are just two statements, but do you believe things are different now than historically or are you arguing it’s the same as it ever was, or something else?
I’m probably not old enough yet to share my opinion on societal change across generations, I was a kid until recently.
Do you think the population of the US is all from immigration and rich people?
(A relative worked out our family tree. Lots of families with 8 kids in them.)
What amuses me is that once you’ve worked out the function to have a kid, it’s easy to have another.
In theory there should be tons of childless people and some balancing number of 10+ kid families. Then the average numbers work out, everyone is from a large family, but the means of production are centralized and efficient.
> In a free market society, wealth is created, it is not "concentrated"
That is incorrect
In a free market wealth has a definite tendency to clump together, to concentrate.
A moment's thought will make clear why.
> A moment's thought will make clear why.
Take a moment and elaborate, please.
I have a comment above about access to capital, which is much easier if you already have it, so the rich have more access than the poor to the main tool of capitalism.
But another example, equity: If I am raising money for my startup, and I have no traack record (I'm poor in this context) and Sam is doing the same after Sam made a successful exit from their last startup, who would you invest in, all else equal, Sam or me? Sam if you are rational
Thus the rich have more access to equity than the poor
This is a pattern that repeats over and over in free markets
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'In a free market society, wealth is created, it is not "concentrated".'
That's a theory from economists. Economists have a lot of theories.
It's a fact, not a theory. The wealth in the economy did not exist 100 years ago. Therefore it must have been created.
And where did Musk's money come from? Who did he transfer it from?
Some wealth is created. People build new things and sell them. Video Games or Programming Languages for example.
Some wealth is just transferred, like rent or interest.
It would be nice if everybody had somewhere to live for free, unfortunately, most people have to pay rent or interest on a mortgage to those that came before them.
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If I cut down trees to build a house, then I may have created "wealth" but I've also destroyed trees. Now the net affect may be that wealth has increased, but it may also have an effect which actually destroys wealth like for instance if those trees existed on a hill, and the roots were holding the soil in place, the act of cutting down
"Free market" economics does not capture this destruction of value. It only cares that some value was extracted out of the trees in the form of a new home sale, etc.
I'm sure all those slaves brought over to the New World created tremendous wealth, but I'm also pretty sure they would have rather preferred to stay in Africa.
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Come on. Sometimes wealth gets created. Sometimes wealth just gets moved around. That is a fact.
Musk's wealth is mostly notional. Most of it is based on people's guesses about the future of electric cars and so forth. It's not clear yet whether that is creation or transfer or what.
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> And where did Musk's money come from?
No body (?) is contending that in a free market wealth is not created.
The contention is that when wealth is created it tends to head to other wealth.
When a bank lends capital and has a choice of lending to, say, Elon Musk or me, I think the bank will make that rational choice and lend to Elon. Thus once you have some wealth attracting more wealth is less difficult than from before you had wealth
This pattern is repeated over a d over.
See Captain Grimes' boot theory of economics: https://en.wikipedia.org/wiki/Boots_theory
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Is there an upper bound to the creation of wealth? Is it infinite? Are there any limits to its creation? Is there any inherent value to it without being able to "transfer"?
> Is there an upper bound to the creation of wealth?
No
> Is it infinite?
Yes
> Are there any limits to its creation?
Government trying to crush it.
> Is there any inherent value to it without being able to "transfer"?
The only value it has is what someone else is freely willing to pay for it. There is no such thing as "inherent" value.
I find the belief that government is the only limit to wealth creation very intriguing. I also find it interesting that the talking points usually contrast "free markets", which I assume represents the best case, with just "government". Markets can be limited or impacted by forces outside of government (price fixing, monopolies, manipulation). Is there an equivalent best-case scenario for "governments" that we can use as a reference when discussing how they impact free markets?
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> In a free market society, wealth is created, it is not "concentrated".
The free market hasn't figured out how to create more land. Especially arable land.
It has figured out how to make better use of the land.
How do you define "free market"?
Transactions based on free negotiations, not force or fraud.