Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?
Try and think of our global system as an engine that's purpose is to make fuel for itself. It needs to keep it's input above the output in order to keep powered on. As soon as the input drops below output the machine starts to slow down and can no longer sustain itself. The engine is not designed to slow down so it very quickly breaks down
Man, if only capitalism hadn't already fucking collapsed on itself, so people would stop repeating some bullshit line they heard, because they think it makes them sound insightful.
Seriously, the stretch from WW1 to the Great Depression showcased the fact that capitalism is a system fundamentally incapable of sustaining itself through a crisis. Pulling yourself by your bootstraps sounds wonderful until there are no boots going around to begin with.
You'd think that after the government having to come to the rescue again and again, maybe people would realize that a system where 12 people are worth more than half the Earth's population combined might have some issues needing addressing. Especially given the fact that the "golden age" of said system happened exactly when social welfare and strong worker's rights were a priority.
But no, it's the best out of all alternatives imaginable, so let's just keep pursuing the fairy tale it's supposed to be instead of working with the reality of what it is.
Considering that every country in the West became more socialist when the ussr was around, and is becoming more fascist now that it's gone, yes. Either we become communist, or we burn in the coming climate catastrophe.
the stretch from WW1 to the Great Depression showcased the fact that capitalism is a system fundamentally incapable of sustaining itself through a crisis
Well-read people have implemented other systems and they failed.
Humans aren't chess pieces you can place on a board and expect to stay in their place. Capitalism is an outlet to channel selfishness away from the most destructive options and to do some good. Pretending that selfishness doesn't exist doesn't make it go away.
Not accounting for human selfishness as an inevitability is the worst thing you can do.
What are you talking about? Even the world bank, a famously liberal institution admitted that standards of living are higher under communism. There has yet to be a communist government that's fallen due to internal instability. Hell, Cuba has a higher life expectancy than the US, and we've been attacking them for like 60 years
Capitalism has failed as well, hence why the majority of wealth is concentrated into a tiny few people. That will always be the end result of unchecked capitalism.
And Socialism has never really been given a true chance to work, as it's been sabotaged by capitalists when it has been tried.
Abso fucking lutely not lol. Capitalism is the only system every person has a chance to make it. Other systems will not give that privilege to you. They will stop you.
You haven't really understood the underlying workings of other systems we've had in mankind's history.
Capitalism only gives every person “a chance to make it” when it’s continuously expanding into new markets.
A saturated global economy with no new frontiers left to open is one which quickly sees consolidation and the birth of a new feudalism. (See also elite overproduction crises, high-level equilibrium traps, etc…)
(Also note that I’m not advocating socialism or any other system, for that matter. Just noting that the reality isn’t so rosie.)
How every every person supposed to make it under capitalism? It's a system that empowers the people at the top to keep gaining more power and wealth until they have all the power and wealth. We're seeing this happen before our own eyes, can you not see the problems with that?
Socialism on the other hand is about distributing the wealth equitably amongst everyone, so while there may not be anyone who's super rich, there's also no one who's homeless and starving. Personally I'm perfectly fine with no rich people if it means every gets a chance to thrive, and their basic rights aren't being exploited for someone else to get rich off of.
It could be argued that capitalism also tries to stop you. The system encourages competition, but societal structures and individual actors can and do create barriers such that they can avoid losing their dominant position. Intervention is typically necessary to ensure a market where small actors aren’t vulnerable to predation by bigger ones.
I still think it’s a better system than other extant ones, but it doesn’t guarantee that everyone gets a chance. Reasonable governments are necessary to ensure equity no matter what economic system.
I agree overall except that part where everyone not getting a chance.
Not everyone gets an equal chance but they have their chances. Why? Because everyone is free to learn about stock market, economy, basics of trading and investing, money and risk management.
It's not gate kept. With good mentorship you can become set for life. Investment is open to everyone. In other systems, even if you have the Knowledge and wisdom to grow your portfolio, you will be stopped.
That's because you're thinking about becoming exit-liquidity.
What I'm talking about isn't equality nor fairness. I'm talking about having a chance to change your financial and social status without being stopped by force. Capitalism gives everyone this chance. Whether they fuck it up, screwed over by market or even make it, is a byproduct of their own decision-making. Not government forcing you to give up your gains just because.
Capitalism might've been a necessary step along the way, but it's extremely flawed. I mean if it's so great, why do so many companies need to get bailed out by the government? That's socialism, not capitalism, a true capitalist system would just let those companies die.
No need to task a random redditor with devising a new economic paradigm, turns out one or two discerning experts spotted the trouble with the whole "the economy can grow forever!" concept. They spotted it pretty early, in fact. Adam Smith literally wrote about this problem.
I was unfamiliar with it, so I took a look on Wikipedia (hardly the most reliable or in-depth source, but it’s a fine beginning for most things) and I’m certainly no expert, but there is a glaring flaw in the base concept (just like capitalism/supply & demand break down with a very simple thought experiment, ie - the monopoly). In a stable state economy, it hinges on a “constant population size” which might seem ok on paper, but it’s something that goes against human nature. I’m unaware of any successful state-mandated population control, but I have heard of the One Child Policy and that wasn’t pretty.
EDIT: Some pointed out that population is trending towards a “constant size”, and it’s a fair point. And it’s true that in some developed nations, population rates can & have fallen below replacement levels.
My point stands that it’s no trivial thing to maintain a “constant population size”.
My comment wasn’t meant as a sweeping condemnation of “steady state economy” any more than monopolies are a sweeping condemnation of capitalism. Just because it’s a flaw, it doesn’t mean there is no solution.
Also your assumption to fully understand human nature and that stable population size goes against it is just bonkers. I feel like you're just looking back historically and saying that's the way it's always supposed to be now and forever and ignoring the reasons why we had so many more children in the past. Like your brain is trying to think, but it's just stopping halfway through on every thought and regurgitating things like "One Child Policy = bad" "Wikipedia = unreliable" with no attempt to understand the mechanisms behind why.
Imagine reading "hardly the most reliable or in-depth source, but it’s a fine beginning for most things" and stopping halfway through that to just get "Wikipedia = unreliable".
Imagine reading "hardly the most reliable" and not understanding that the tone is not positive and the implication is that Wikipedia is...not very reliable.
It's clear you're hardly the most astute reader, but this is a fine beginner level interpretation of basic English and probably your level best.
Now, if you feel insulted by that statement you should bear in mind the implications that feeling carries for the truth of your past comment.
Population sizes tend to stabilize. If you look at many developed nations, they're actually struggling with the opposite - people aren't having enough children to support aging older generations.
No "might" about it: it's already underway. Almost all countries with well-developed economies either have shrinking populations (anti-immigration policies) or populations increasing only through the addition of immigrants.
I appreciate the additional context you edited into this comment (the pre-edit stand-alone comment, maybe less so).
I never said that “infinite reproduction is human nature”. I used the phrase “human nature”* as shorthand for “humans are chaotic” and (in the US at least) tend to resent regulations on what are general considered deeply personal choices. And we’re looking at birth rates over a huge population. Using the current US birth rate of 1.6, you can extrapolate that for every couple with 10 kids, you have ~12 other people with no children (and all the shades of grey in between). That points to a lot of complexity in human behavior to try to regulate.
I added a bit more to my original comment, but I still stand by my attitude of ’good luck with that’ when it comes to maintaining a “constant population size” as a prerequisite for this economic system.
You're not wrong, humans are chaotic, but the birth rate in most developed nations is literally below replacement rate. The human population is forecasted to stabilize without any real need for regulation that, I agree, would be deeply unpopular wherever it was implemented.
Honestly all this talk about alternative economic paradigms are just hypothetical waffling as far as I'm concerned, I said in another comment that our exact form of growth capitalism will not die unless external factors kill it.
I don't think we're smart or forward-thinking enough to preempt our own destruction when the price we'd have to pay is giving up some comfort, indulgence, and the promise of "more" that we operate under today (i.e. individuals' economic goals/dreams).
The alternative to adopting some kind of a more steady-state sustainable economic model is quite literally to continue to reproduce and consume the planet's resources until we cause our own deaths via damage to our host caused by the accumulation of our waste. Which is the path we currently seem to be on (renewables investments notwithstanding). Coincidentally, it's the way a lot of more primitive organisms operate - lots of bacteria, fungi, viruses, etc do this exact same thing.
I was never under the impression we were going to get to 2030 and everyone was going to be like, "welp, let's flip the switch on the new economic system!"
Rather that we'll be forced, by the reality of the planet quite literally dying as a result of our current system, to adopt some other way of transacting with one another.
Definitely a very complicated subject, and probably not the best venue to have such a discussion, so I’ll leave it be, heh
But regarding your “waffling” comment, I’ll bastardize an Eisenhower quote: “plans are useless, but planning is essential”. That is to say these mental exercises do serve a purpose, and bring us closer to a more complete solution (even if they aren’t a solution themselves)
If the economy is constant then, for example, a 2% productivity increase means you need to decrease total labor hours by roughly 2%. Total wealth is basically zero-sum, so for anyone to become rich someone else must become poor (or several people become slightly poorer).
This does not sound compatible with the way the world is now, at least not for countries like American.
It's a bit more nuanced even in that system - it's zero sum for resource extraction & our ecological impact, but not for knowledge/service/non-extractive forms of economic development & participation. But sure, as far as monetary supply goes you're right. I should've read your comment more carefully - although "money" is arguably not the only thing that constitutes wealth.
Anyway I'm not really a fan of debating any kind of economic theories as it's not like I subscribe to this idea, really, but it's clear that if we want to continue to exist on this planet then SOMETHING has to change. We cannot predicate our economic system on the idea of infinite growth while living on a planet with finite resources.
Truthfully, I think we're going to run this planet into the ground as people only begrudgingly and out of overwhelming necessity accept any encroachment on capitalism. I think the necessary adjustments to our current system will be forced upon us by the planet through large-scale disasters and destabilization, but by the point that people accept the need to change it'll be too late for the changes to actually fix the issues we've created.
Not really, no - western nations aren't growing. Most have birth rates below replacement rates. If populations are increasing in those countries it's often through immigration.
The human population will stabilize and won't continue growing forever.
That we WILL transition to a steady-state economy is a foregone conclusion, reality has already made that the only possible outcome that works in a future where humans would like society to continue existing in a manner similar to today (let's ignore the possible future where we choose total biospheric and economic collapse instead, however much more likely that seems from our current vantage point).
What's not a foregone conclusion is the timeline. This isn't going to be a switch that flips overnight, but rather a slow transition - the reality of living on a finite planet means that infinite population growth and infinite economic expansion just doesn't work. We will simply destroy ourselves if we keep pretending that's an option.
I'm not sure if we'll adopt this steady-state system in time for it to save us from ourselves or if the world is ready for a full-bore implementation of it, I was just pointing out that a solution does exist and it's not infeasible.
Pretty sure president Jefferson called the up n coming debt based economy neo slavery and reluctantly agreed to put into effect. It really is a shame production is not focused on permanent viability instead of this plastic rat hell we have conjured up.
And worse that so many people will ardently defend it just...because?
Like, look around - even if you're well-off and comfortable, which honestly, my wife and I are, surely you can see that this is not sustainable nor working well in many ways.
People get so wrapped up in defending today's EXACT flavor capitalism because of the technological innovations that they think it's solely responsible for giving us that they truly freak out at the suggestion that we can improve our economic system and...make life better for everyone? Stave off our impending ecological doom?
Simply because they don't like even the whiff of the idea that they might have to contribute, that people who they think are "lesser" might become more economically equal to them, or because they literally can't stop believing that "any threat to capitalism" == "slippery slope to totalitarianism".
Yeah the ideology seems to be a relic of the 50s barely clinging to life in the form of nationalism. A lot of things in life don’t make sense to me but this one takes the cake.
It quite literally works for 1-5% of people and that number is shrinking with the worst seemingly on the horizon.
The real shame being how adequate technology has become, there’s no reason to continue this nonsense unless you’re winning already.
We're currently on the brink of population stagnation and decline globally as access to medical care and wage/resource inequality cause young people to make a decision.
All existence is an engine that creates its own fuel. Food isn't going to magically appear in front of you.
Even if we had a different economic system from the one we do, it would need to be self-sustaining, and by definition an engine that makes its own fuel.
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u/StuartMcNight 8h ago
Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?