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Very Hot Topic (More than 25 Replies) Why some welfare is unavoidable (Read 1795 times)
The Opposition
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Re: Why some welfare is unavoidable
Reply #20 - Sep 23rd, 2015 at 5:31am
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Alan Jones wrote on Sep 22nd, 2015 at 6:47pm:
Yes, that's exactly right. It smells fishy because it is fishy. Obviously, from the simple fact that they are alive, the other 99 are creating and consuming wealth. They're just not saving much. The OP refers to how much wealth is owned (saved instead of consumed), not how much was created and consumed.


Well strictly speaking, it's currency, not wealth, as you admit later. But I think it's a reasonable assumption that some of those assets will be diversified into real wealth (real goods).

Alan Jones wrote on Sep 22nd, 2015 at 6:47pm:
Even if everyone had the same income, if 99 people consumed all of theirs, and 1 person saved some (regardless of how much), that one person would end up with 100% of "the money". An easy way to recognize the kind of fraudulent nonsense in the OP is when it uses phrases like "the money".


In this example (and my idea of the ideal) currency represents a surplus of goods or labour given into the system. So it provides a right to take out a little extra, and it seems ingenious that it doesn't even matter where you take it from.

But currency is dangerous. It also provides leverage in and of itself. Having all the money buying power can provide a means of keeping all the buying power while others must still work for you. Trade goods don't work like this. Having all the horses or even all the cars would just make people find alternatives if you wanted too much for them.

Maybe this only works if there's an enforced currency, but I don't think so. The guy with the disproportionate amount can give away however little he likes (just enough to keep the peasants alive) for labour or goods because the peasants can't not have any currency. Bob can't buy Mack's horse. Mack can't buy Sally's plough. Sally can't buy Bob's cauldron. Without currency, they all just sit there and go wanting. This is just icing but in the US (you alerted me of this) you can't trade in this situation (even if they figure out how they can), because nobody has the currency to pay the taxes.

So if you're the rich guy, give the peasants just enough in exchange for all their labour and goods to pay for their most basic needs. And the guy who produces the basic needs? He's still beholden to essentially the rich guy for the currency to pay his taxes.

Having all that power over currency, I think, is a bigger deal than hoarding cheeseburgers. People will find something else to eat.

Alan Jones wrote on Sep 22nd, 2015 at 6:47pm:
Also relevant is that even if those 99 people took that money, it's value relative to goods would plummet to 1% of its previous relative value. Do they think they can buy more stuff without making more stuff? As if stuff would appear by magic because they have more dollars? Someone with a couple of brain cells would at least come up with an example of a guy hoarding cheeseburgers or something.


It depends on whether there's shenanigans or not. If the rich guy was honest, those people won't be better off. If the poor were somehow overproducing and getting a tiny fraction of the value (in a more balanced market) from the rich guy, because he's got all the buying power, and if he says he'll give you a penny for it, you just have to produce a hundred to get a dollar... and if you must use that dollar to buy food... then the goods were already there, and the rich guy was just stockpiling all of it. They get rid of him, and prosperity ensues.
  

This moral relativism of yours is exactly what lets government take this freedom, then that freedom, until we have lost them all.
-SnarkySack
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Jeff
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Re: Why some welfare is unavoidable
Reply #21 - Sep 23rd, 2015 at 9:29am
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The Opposition wrote on Sep 23rd, 2015 at 5:31am:
Well strictly speaking, it's currency, not wealth, as you admit later. But I think it's a reasonable assumption that some of those assets will be diversified into real wealth (real goods).

Strictly speaking, I can use my "currency" to buy actual goods, real and personal property, which means that my "currency" is a part of my total "wealth".
If you can't even get that far along on one of the most basic elements of economics, the rest of what you say will be nonsense, and it usually is.
  
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Alan Jones
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Re: Why some welfare is unavoidable
Reply #22 - Sep 23rd, 2015 at 4:01pm
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The Opposition wrote on Sep 23rd, 2015 at 5:31am:
Maybe this only works if there's an enforced currency, but I don't think so. The guy with the disproportionate amount can give away however little he likes (just enough to keep the peasants alive) for labour or goods because the peasants can't not have any currency.

I'm too lazy to address the rest of your post, but I'll address this, again. Currency just doesn't work the way you suggest. Its buying power is determined by its scarcity. Saying "enough currency to keep peasants alive" is like saying you're going to slice a pizza into enough pieces to keep them alive. It's just illogical nonsense.

That logic would only work if an inherently valuable good is used as currency. Like cheeseburgers. Even then, the value of each cheeseburger as currency would decrease as the number of cheeseburgers increased, and vise versa. But that would render the issue in the OP moot, anyway. No matter how you slice it, the issue in the OP is not an actual issue, it's a pretend issue used to fool economic illiterates.
« Last Edit: Sep 24th, 2015 at 12:08am by Alan Jones »  
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The Opposition
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Re: Why some welfare is unavoidable
Reply #23 - Sep 24th, 2015 at 2:21am
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Alan Jones wrote on Sep 23rd, 2015 at 4:01pm:
I'm too lazy to address the rest of your post, but I'll address this, again. Currency just doesn't work the way you suggest. Its buying power is determined by its scarcity.


I get this 100%. I imagine it as a balance scale of all the real wealth on one side, and all the currency on the other. It remains eternally balanced even if more is added to one side.

Alan Jones wrote on Sep 23rd, 2015 at 4:01pm:
Saying "enough currency to keep peasants alive" is like saying you're going to slice a pizza into enough pieces to keep them alive. It's just illogical nonsense.

That logic would only work if an inherently valuable good is used as currency. Like cheeseburgers. Even then, the value of each cheeseburger as currency would decrease as the number of cheeseburgers increased, and vise versa. But that would render the issue in the OP moot, anyway. No matter how you slice it, the issue in the OP is not an actual issue, it's a pretend issue used to fool economic illiterates.


I think you're suggesting that in a "keep 'em poor" scenario, the poor wouldn't really be poor, because whatever little currency they had between them would increase in value so they could buy each other's goods more efficiently.

I don't think this would always happen. Fixed costs like taxes (if they're fixed) can stop it from happening. I'm not going to assume there aren't other ways to stop it from happening.
  

This moral relativism of yours is exactly what lets government take this freedom, then that freedom, until we have lost them all.
-SnarkySack
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Alan Jones
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Re: Why some welfare is unavoidable
Reply #24 - Sep 24th, 2015 at 3:38am
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The Opposition wrote on Sep 24th, 2015 at 2:21am:
I get this 100%. I imagine it as a balance scale of all the real wealth on one side, and all the currency on the other. It remains eternally balanced even if more is added to one side.

I think you're suggesting that in a "keep 'em poor" scenario, the poor wouldn't really be poor, because whatever little currency they had between them would increase in value so they could buy each other's goods more efficiently.

I don't think this would always happen. Fixed costs like taxes (if they're fixed) can stop it from happening. I'm not going to assume there aren't other ways to stop it from happening.

Other factors might counteract the effect, but they wouldn't stop it from happening. It will always be the case for currency that greater supply = lower value per unit.
  
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Jeff
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Re: Why some welfare is unavoidable
Reply #25 - Sep 24th, 2015 at 8:11am
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The Opposition wrote on Sep 24th, 2015 at 2:21am:
I think you're suggesting that in a "keep 'em poor" scenario, the poor wouldn't really be poor, because whatever little currency they had between them would increase in value so they could buy each other's goods more efficiently.

I don't think this would always happen. Fixed costs like taxes (if they're fixed) can stop it from happening. I'm not going to assume there aren't other ways to stop it from happening.

What allows poor people to climb out of poverty is opportunity and work, something that happens if people are allowed to be free and to keep the products of their work to use as they see fit.
Taxes on the products of the labor of working people help to keep them poor.
  
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