It’s time for Americans to buy less stuff

Yes, that is how wealth works.

Your individual emissions are above the global average? Tough luck. Are they below the global average? Congratulations, your higher purchase price for iphones is more than compensated by the payout everyone worldwide gets every month.

In a capitalist society, the theory goes that the individuals who are better at allocating capital will accumulate more capital, allocate it better, thus accumulating more, etc. in a loop.

I could be convinced that some people are much, much better at allocating capital than most. It makes sense to let them be our societal capital allocators. Obviously, we want limits so that if 1 person makes a serious misjudgment, it doesn’t completely tank society.

But I could see it being the case where, if we were purely optimizing for sum-total societal capital accumulation, it would be optimal 1% of the population to be in charge of 90% of the capital.

There are a few obvious problems with this scheme where it meets reality, though. The most over-arching is that our current system allows the controllers of capital to more or less arbitrarily convert between capital and consumption.

That is, some billionaire can burn some of their capital and buy a $500MM mega-yacht. At the end of the day, this is essentially wasting the labor of 10,000 people for a year (at 50k average salary).

Even if we accept the premise that Jeff Bezos is a better capital allocator than 99.99% of people, I think we could argue that his having a $500MM mega yacht is not going to increase his capital allocation ability.

This is where the progressive consumption tax comes in. Imagine a tax that was quadratic with consumption. For example, you’d pay $1K in tax on $10K of consumption, $100K of tax on $100K of consumption, and $10MM in tax on $1MM in consumption (obviously these are example numbers, any upwardly curved function will do, though). It very quickly becomes prohibitively expensive to consume much more than some societal average. This would significantly decrease consumption inequality.

There are a lot of second-order things affected by this tax:

- becomes much harder for 1 billionaire to burn capital in order to consume marketing and influence elections

- one could use some proceeds of this tax as simple transfer payments, so not only is it quadratically more expensive to consume more, but the revenue from doing so gets send to people lower on the consumption distribution. This enhances the consumption flattening effect.

- reduces conspicuous consumption which is good for climate change

- improves labor productivity by increasing the societal savings rate (driving investment and increasing capital allocation per unit of labor), which further enhances this whole flywheel

- more things that are too long for this comment

There are obvious implementation problems though. On the face of it, it seems more difficult for me to hide consumption than it is to hide wealth, but I’m sure there are schemes to do so. The basic form of this tax would be to demonstrate to the tax agency some accounting of your wealth (savings, investments, etc) at two points in time, and then your consumption is computed based on the net inflows and outflows.

If any kind of market efficiency pricing change actually hurts the poor, it's because the people passing the law wanted it to, but many wouldn't even if done super simply, because rich people buy more stuff, use more carbon etc.

It has nothing to do with accurately pricing externalities. Of course, wealth transfers are extremely politically unpopular.

In the ideal world there would be marginal sales taxes, but that seems infeasible in the near future. Although, not inconceivable if everyone’s purchases were being tracked.

That'd push to fix suburbanisation and make mass transit cool again. Or enforce remote work.

Anyway, there are a variety of wealth redistribution schemes that can target the problem of poverty, including giving the proceeds from a carbon/whatever tax to lower income Americans.

We expect market participants to take advantage of arbitrage opportunities in every other circumstance and buy low and sell high, why would it be different for the billions of people coming online around the world?

> "inflation caused by government policies"

Inflation at present is primarily the result of the global pandemic and government's failure to coordinate their response with regards to shipping, hence the crises in global shipping at the moment. Governments spent the better part of 2020 and the first half of 2021 trying to keep their population safe. They took their eye off the eight ball in understanding how these events would impact global shipping. You could argue the policies affecting inflation were therefore the Covid-19 policies, but that really isn't constructive in resolving the situation we now find ourselves in. We can use it to model a better response the next time. Global pandemics have negative impacts to global supply chains.

> "allowing companies to outsource everything"

You mean allowing companies freedom? Funny how "free societies" do that! Meanwhile, economists of all political persuasions have been arguing for decades that this has been the key factor to America's success and her high standard of living. It has also encouraged investment in America's financial markets from all over the world.

We're currently experiencing constrained supply due to the global shipping crises and constant demand. Econ 101 informs us this will result in price increases. I think the central banks have been pretty transparent about it. They still see inflation as a non-issue because they believe once the supply constraints are resolved prices will go back to normal. Meanwhile...what do you propose we do? With a constrained supply we're going to have to make do with less. This isn't propaganda, it's simple, basic economics.

Bikes, some items of clothing, furniture, DIY/garden tools, pretty much every kitchen utensil and gadget could be handed down after that period of time if it's high quality. A lot of electrical stuff like radios and TVs are still useful after 20 years.

same with clothes. my mother saved a lot our children clothes and gave them no my sister when she had children.

furniture is a huge one. my grandparents and parents own a lot of furniture that could easily last hundreds of years, their current stuff is going on 50 years, and I got my eye on a lot of pieces that look like new still. and a hell of a lot better than anything you can buy today.

art and decor are others. kitchen items, basically any non perishable good in your house that isn't fixed?

My clothing will be worn out, as will shoes and so forth, but if they didn't, they could be handed down.

Basically, everything that is super cheap today could be handed down, that which is expensive (car, laptop) won't be.

that seems absurd..

I run an e-commerce business, and the reality is that a huge chunk of our customer base isn't reluctantly parting with their hard earned cash in order to meet a need but instead genuinely enjoy the anticipation and payoff that come with making a purchase.

I would go so far as to say that for the average consumer, spending money is only really seen as a loss in the few cases where the cost is high enough to cause immediate-term financial stress.

It was $10.99/lb. Which is an increase from $9.99 and felt “expensive”. Then I realized that my $9.99 is paying for the workers at the grocery store, the electricity to power the cooler, the refrigerator, the truck driver, the ice for shipping, the loading dock, the boat, the fishermen, and every other piece of work that went into getting me that fish, in Pittsburgh, in November.

If I wanted to go catch a Salmon in the Atlantic, I could work for the next 5 years of my life and probably not be successful. I’m terrible at building boats, I wouldn’t know what bait to use, or where the fish would even be. I’d probably die at sea.

I write all of that, because at the end of it all, ANY meat or fish for <$10 a pound is an incredible bargain and a testament to our society and specialization in the US. And I think we are living in an incredible time of abundance that is likely unsustainable.

So! What’s the solution? I’m shifting to hobbies with a “buy once” view that may have a high up-front cost, but a low long term recurring cost (e.g. disc golf, guitar (except for string replacement).

And your wages are rising at least as fast as inflation.