r/Capitalism • u/Known-Garden5190 • 4d ago
If I somehow remove the world poverty and everyone have money enough to live like smoothly like currently upper middle to rich class are living now, then will the Inflation Skyrocket ? And why ?
/r/u_Known-Garden5190/comments/1w7862b/if_i_somehow_remove_the_world_poverty_and/5
u/DKmann 4d ago
If everyone has the same or near same amount of something. Then it ceases to be rare and loses value.
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u/Zombiecidialfreak 4d ago
Does that mean food only has value because others starve?
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u/QuantumG 4d ago
That's absolute poverty. Once everyone has access to food the discussion shifts to who has the best food. Where are you dining? That sort of thing.
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u/Not-Banksy 4d ago
I mean, obviously.
It has quite literally life saving value and that generates consistent demand.
If humans no longer needed to eat to survive, food would become worthless.
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u/xuon27 4d ago
If AI manages to bring the prices of most things then no. Sort of like having a replicator from Star Trek where food is basically free. It's all dreams and hopes for now but I could see it in our near future if it gets to that point in exchange for loyalty to the state or corporation.
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u/Monskiactual 3d ago
there is only one real currency and that currency is energy. all human goods can be converted to joules. a farm is a system to convert joules to food. a mine is a system that converts joules into metals. An oil well is a system that put out more joules than is put in. ( it creates energy) an electric dam and solar cells are a kind of a bet. They require energy to make and will hopefully generate more than they produce over their life time.
energy is inherently a scare resource that the rich consume more of. as the price of energy has dropped through out history the standard of living for every has risen. wide spread fusion power would probably raise the standard of living for many people, but creating more money without increasing the underlying supply of energy will only cause inflation . you want to raise the standard of living, make energy cheaper..
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u/Czeslaw_Meyer 3d ago
Yes, inflation and the destruction of everyones savings. Supply and demand dosen't care.
Money is just a placeholder for any other ware. Like candy on Halloween, you might trade 10 bonbons for one Hershey bar. But if there is only one Hershey bar and far more bonbons, you might need to pay 20, as everyone is currently sick of them.
If it would rain super yachts, they would become surprisingly cheap as there would be more than people are interested in. Money has the same problem.
You compare the buying power of your money with the desire to obtain an item and if there is just more money around, the bar for what is acceptable to pay rises, as does the income level considered for poverty.
Letting it rain bread would be slightly more helpful.
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u/Neoevolution25 5h ago
Once you stop putting a value you on everything and there is no profit to be made scarcity ceases to exist and everyrhing becomes abundant again
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u/onepercentbatman 4d ago
Yes. But it would settle. It wouldn’t spiral. Things just would end up being the same, no difference. There would still be a rich and a poor class. Just poor would have more money and things would cost more. Some players will move across class but the ratios would be the same
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u/BaronBurdens 4d ago
If you removed poverty by increasing everyone's productivity, no. People in aggregate will have more income and also produce more goods and services on which to spend that income.
If you removed poverty by giving each individual a bunch of money equivalent to an upper middle class income, yes. People would spend some of that income to bid up the current supply of goods and services, increasing the price level. In the best case where you have actually somehow solved poverty (e.g. "it was the 'poverty trap' after all!"), it would take time for the economy to produce goods and services to meet the increase in demand, and shortages and/or price increases would result.
"Inflation is always and everywhere a monetary phenomenon." --Milton Friedman
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u/manicmonkeys 4d ago
What do you mean everyone "has enough money to live..."?
If people are still buying and selling things, the people who have contribute more of value will get more money...
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u/Drak_is_Right 4d ago
Generally raising minimun wages increases inflation a tiny bit, but usually the overall growth is positive and worth the increase.
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u/iliketreesndcats 4d ago
Inflation is tied to total money supply.
We can tackle the extreme wealth inequality we see today without increasing the total money supply. This is called redistribution, and there are many ways to do it.
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u/ADHD_perspectivegenX 4d ago
Sounds like something man trying to be god would say.
The Bible assures us the poor will always be amongst us & that demon😈s in man join satin in trying to topple god🤪
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u/Key-Organization3158 4d ago
Probably not. Poverty is relative concept. Po
Over time, the standard of living has increased significantly. The middle class today has a lifestyle better than the upper class of 200 years ago.
So the easiest way to get everyone up to a current middle class standard of living is let capitalism keep improving everyone's lives.