Communism economics

Who knew?

If everyone has more money, money is worth less. Who knew?

Let’s say that I gave every single person in the world a million dollars. We would all be rich, right? Of course not. How would I buy a sandwich? No one would be willing to sell me one for $5, because they don’t need $5. They have a million. Money would be so commonplace, it would be worthless.

This concept seems to escape those who push for a higher minimum wage, who are all now surprised that the massive government money giveaways and higher wages have reduced their purchasing power. What they don’t understand is that higher wages aren’t reduced by inflation, higher wages CAUSE inflation.

There will always be some who have more than others, because some are smarter, some work harder, some are just more fortunate. You can’t change that by handing out money, because money isn’t wealth.

4 replies on “Who knew?”

Do you disagree with the Austrian idea that inflation is purely a monetary phonomena? Money supply increase causes price increase as sectors that get money first begin to spend, wages increasing first because beneficiaries of printing have more money and can bid higher. Wages at lower levels only can increase to compensate when they can increase their prices.

Keynes and his BS money multiplier concept was forced upon us in school in the 1980s. Pure trash thinking and I don’t know anyone who bought into it. We all said ‘wtf is this?’.

Responsible, moral, sane ppl like Milton Friedman, Sowell and Rothbard, etc., tried hard to stop gov’t spending insanity but it still persists. This is why we are where we are now.

I refer to Modern Monetary Theory as Carboniferous Monetary Theory, after Kipling:
“But, though we had plenty of money, there was nothing our money could buy”
Funny how the Gods of the Copybook Headings seem to be reawakening.

In one of the Back To The Future movies, Marty in the future buys a Coke with a $50 and gets no change. That is what happens in your scenario.

Look at foreign countries (Japan, Turkey, Mongolia off the top of my head), whose currency was 5 or 10 to the dollar in/ before WWII and is now hundreds to thousands per dollar.
We’re heading in that direction…

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