I wonder, sometimes, what a society would look like without inflation. Is there an economic system that says “this is the price of bread, from now on” and builds off of that?
Of course, my only talents are music and memes, so I doubt that I’d specifically benefit from such a system, but maybe humanity as a whole?
One of the reasons some inflation is ‘good’ is that it drives investment. People are discouraged from saving their money since it will slowly devalue. Rather, those with capital are incentived to invest it in other areas of the economy.
That would only happen if deflation was a thing too. In my (highly idealistic) world, money would not change value at all, so growth in a business would be real, not just projected numbers on a chart no one understands. In a fixed-econony, you invest into businesses that actually grow.
I know this may come off as controversial, but this sort of thinking will be necessary for interstellar trade, if we don’t blow ourselves up first.
Could you elaborate a bit on that? I’m not really sure how a business that “actually grows” would be functional ina fixed economy without becoming confusing graphs or entering some other major problem.
Taxes are the current most frequent form of deflation in any country with a sovereign currency. The government spends/prints money in step one, the currency circulates through the economy in step two, and the last step, taxes, is your anti-inflationary device.
But fine, then my bicycle is worth how many breads? If I offer to how many breads is that worth? I don’t care what kind of leftist you are, these are the real questions we should be asking in a post-capitalist society.
After a while it becomes a pain to lug all that bread around, so what if everyone just agrees to have little bits of paper with “1 bread” written on it in place of actual bread, and we can use that. Someone gives you a bit of bread-paper and later if you need bread, you can just go see them at home, or wherever they keep their bread, and get a loaf or two as agreed.
But of course people will just write “1 bread” without actually having the bread so it’s better if we have some central authority where people can swap their bread for carefully drawn bits of paper that can be verified as real, and if anyone wants bread they can just go to that authority and swap their paper back for bread.
You don’t have to go and actually get the bread of course. Nearly everyone will take the bread-paper as a replacement for actual bread, because hey, if they really need bread they can go to that central authority and get bread. And it’s good bread, high quality stuff, so everyone trusts them to give them bread if they need it, but how many people really need all that actual bread? It’s much easier to swap bits of bread-paper for that motorcycle, or groceries, or whatever, rather than pass actual bread around the place.
But then after a while it becomes a real nuisance to hold all that bread somewhere, so how about we just hold a nominal amount of bread, say, enough to cover people who might want to change their bits of paper for bread today, and for the rest of the bread we’re supposed to have we’ll just keep track of who has how many bread-papers in a journal.
And so on and so forth, until there’s no bread at all and hardly any bread-papers even, and we’re transferring bread-papers electronically using phones and plastic cards with a lot of smarts in them and in the end we’re just mucking around with bread-numbers in a book somewhere.
I can’t tell if you’re being sarcastic, but I love the revolutionary optimism. That has been a question that has been posed in philosophical politics ever since Marx and Engels were alive.
Before even then
Price controls were something people were trying even as far back as the crisis of the third century when Diocletian set the standard prices for several common items bought by the Roman peasantry like bread.
Contrasting against the grain dole, which worked better because it was the state stepping in to directly remove a large cost from the lives of eligible households, allowing them to put that money towards improving their fiscal standing. For ancient Romans it was Bread, but for modern Americans a solid equivalent would be medicine or education, shit you could argue that the post war boom was in part because of the govt. doing this partially with housing, subsidizing the costs of WWII vets to build new homes or buy existing ones, of course because America black vets got shafted and redlined but the general idea is still there.
And in a country with practically infinite money, why don’t we ensure housing? We have infinite money, we could house literally everyone, but we don’t. Why not?
I’d genuinely love to learn more, do you have any readings for pre-marxist ideas about equality in economics?
Not sarcastic at all, I just wonder about the need for “growth”. I know absolutely nothing about the theory, I just wanna know why it seems to be necessary. Why don’t we fix prices, or at least have them justified regionally, based on the need of the region?
There is no need for growth. Sustainability used to be a thing. But the wealthy do what the wealthy do with all their leasure. Turning systems inside out and on their head. Gaming it till the growth pushes everyone else out. And it’s not likely to change till capitalists are regulated from existence.
Currency and markets can exist without capitalism. Sustainably can’t exist with capitalism.
If we fixed prices for one thing, we’d have to do it for everything. In a world where resources aren’t exactly infinite, that creates a huge problem; especially when you have to pay people who’re producing this fixed-value commodity (because you need people for that) and you have to increase their wages to buy stuff that isn’t fixed-value, like housing (since land is a limited, though abundant, resource).
That’s how you end up with either huge government spending to keep the prices of something fixed either by subsidies or by buying surpluses.
Or you end up with shortages and a black market.
