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Comment by hcurtiss | Hacker News Reader

By increasing everybody's salaries, it seems likely to me the cost of goods and services would go up by virtue of inflation. There is no free lunch. At the same time, prosperity is not a zero sum game. The rise of China has coincided with increased living standards in nearly every country. I'm not sure who would be "stealing" your wages. If I were to say, it's French labor policies that are stifling innovation and productivity, and it's manifesting in a decrease in living standards. I once met a couple French businessmen in a bar, both in the tech space. They bemoaned how difficult it was to fire anybody in France, meaning they worked very hard to not hire people to begin with. They were also in the US specifically to look for investment opportunities. This is the kind of thing that's choking France.

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> By increasing everybody's salaries, it seems likely to me the cost of goods and services would go up by virtue of inflation.

But then everybody's salary stagnating hasn't made the cost of goods stagnate. There's no such simple and direct link between the two.

Maybe the cost of imported goods has gone up

It has, partly. But a part of the inflation at least in France/Europe is also due to big corp choosing to increase prices because they can (since "there is inflation"). For example Unilever has distributed very high dividends (€19B, for a total turnover of €80B, that's almost a quarter of their total revenue going directly towards to their shareholders while their workers and consumers see nothing), while the numerous products the company sells (which are mostly daily usage food and sanitary products) have seen their prices skyrocket "because of the inflation".

Then France should not have allowed Unilever to merge so much, or at least guaranteed competition in France. If this works, they must have had either state support or a monopoly position.

Why? Why is this an axiom?

Example: supermarkets where I live co-ordinate their prices. There are 5 big chains and they all increased prices in tandem (and margins, so nothing to do with increased costs). They get slapped with a 100 miliion euro fine every year or two, but what do they care? It's a drop compared to the amount they profit from the cartelisation.

>But then everybody's salary stagnating hasn't made the cost of goods stagnate

Because Apple, Tesla and the international market for fungible goods like gas or grain, doesn't care about the stagnating salary in your country. They'll still want X USD for their products.

Time and time again it’s the same bullshit argument. I’ve grown tired of it. The price of goods and services has decoupled from the cost for a while now, and prices are rising at a staggering rate without salary increases.

Has demand risen faster than supply?

No. It‘s greed.

In case that's not sarcasm, I'm in the lumber business. Lumber prices have collapsed in the last six months with massive losses and curtailments throughout the industry. I assure you there is no less greed today than there was a year ago when the market was at the top -- and no more greed then than now. We always at all times charge precisely as much as the market will bear. We do that by always selling to the highest bidder, and I have no idea how else we'd do it.

>The price of goods and services has decoupled from the cost for a while now, and prices are rising at a staggering rate without salary increases.

Almost as if there's multiple supply chain disruptions (from pandemic to ukraine) causing goods to be more scarce, causing consumers to bid up the prices for the goods that remain.

yeah, that’s not why this is happening

> the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices.

https://scholarworks.umass.edu/econ_workingpaper/343/

No. This has been the stated reason, but profits are at a record level. Inflation may be the reason for an initial rising of prices, but they do not return to old levels when costs go back down.

Sounds like an excellent opportunity to start selling goods and services.

Where is an average person going to get the capital to start telling goods and services?

Average business loans in the euro area are around 4% as of December 2022, though governments are still raising rates. As long as these unreasonable profit margins are higher, it would make sense to get one, and I'm not sure anything under 15% profit (much higher than current govt bond rates) could be considered unreasonable. I started manufacturing candles during the pandemic with only a few thousand dollars up front and those things can get 50% margins which is insane.

I understand that monopolies and barriers to entry can exist. The government should be much more focused on eliminating those rather than central planning through things like pensions that are shockingly complex and have a penchant for unintended consequences. I believe in a social safety net but markets with a little guidance can do most of the government's work for it and avoid be better at avoiding a ton of pitfalls like runaway inflation.

yeah most of our goods and food are now imported so it is not even local salaries that will increase the price of goods. container shipping price however…

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