Savings. Frugality.
Only consuming what we can actually afford.
Investment with real skin in the game. If you have to take on much higher risk to get returns we will find ourselves being more careful about those returns actually happening.
Only consuming what we can actually afford.
Investment with real skin in the game. If you have to take on much higher risk to get returns we will find ourselves being more careful about those returns actually happening.
some people on this website literally live on a different planet or don't actually have any understanding of...anything and just say things because it sounds smart
I'm not in a position to elaborate how their loans work but they do exist and I'm also pretty sure two million of our not-USD currency is not a prohibitive amount to loan to start a farm. It's a realistic investment people in rural areas can do.
Those savings are gonna grow at a pretty slow rate if you can't lend with interest.
So you're looking at this in terms of how you interact with money in the existing system. But all else being equal there would still be the same amount of value created & we can imagine ways that the value is distributed without the weirdness of banks & how we currently create money.
If I want returns I should seek an investment.
In tons of countries compound interest is a fairy tale found only in "Economy 101" books...
one of the things in the house is a nearly complete collection of national geographic magazines, going back before he was born; a treasury of knowledge about how people lived all over the world during that century-plus, as well as how they were seen from the point of view of the usa, ready to be perused and enjoyed at any moment without tracking cookies, broken links, images scanned at the wrong settings, or javascript incompatibilities. the images are mostly "retina display" resolution and famous for their beauty. preserving them for this century-plus has consumed very little resources
right now i'm listening to a song by rush recorded 40 years ago; every year there is a wider variety of recorded music available for me to listen to and compositions for me to sing, as long as we don't start losing it faster than it is recorded
last night i washed a shirt i got as a gift 17 years ago; if i can keep it from getting eaten by moths or sour sweat, it will surely last another 13 years
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but these are mostly consumer goods, not capital goods like lathes and motorcycles; having more shirts, national geographics, or rush songs won't increase my economic productivity, which is what is needed for such savings to grow rather than shrink more slowly (though plausibly you can be more economically productive if you have a house big enough to set aside a space for sewing or grinding telescope mirrors or enlarging negatives). and for that it isn't necessary for the actual material good itself to survive for decades; it is only necessary for it to augment economic production by more than its own value during its lifetime, however short that lifetime may be
a car may have a lifetime of 10 years and, by enabling an uber driver to provide higher-value services than they otherwise could have, produce twice as much value as its inflation-adjusted cost of manufacture over that lifetime, 20% of the cost of manufacturing it every year. multiply that by the number of uber drivers in a society, and you have savings growing, in real terms, on a societal scale. and there are a thousand kinds of capital goods like this which continue to produce real value over a period of time once savings have been invested in them: house insulation, refrigerators, washing machines, olive trees, engine lathes, kitchen knives, electric drills, laptops, and so on. even factors of production that are consumed within a few months or a year can qualify, like knitting yarn
(however, a drill you buy, use once, and then leave in the garage and never use again does not; it may not be decaying very fast but it's not growing)
this is how a society can grow its savings in real terms on a societal scale, through accumulating capital goods and knowledge so that its productivity can increase over time
but money is not really a bottleneck or a resource; it's just a way to keep score
There are other ways. Like buying one brick at a time. It's a real thing in places where access to lending is less common.
I know guys who are literally growing the timber for their dream home while they live in a singlewide. Lifestyle inflation in the USA is caused in large part by access to this easy debt, and it routinely ruins people in the bottom half of the income distribution.
There's a reason that people don't save up the purchase price of a home in order to buy it. They are willing to pay a serious premium in terms of Interest so that they can have a home today instead of waiting 15 years for 30 years in order to purchase a property.
If you want a car to get to a job and make money, you want it now, and are willing to pay more later. Without the car, you wont be able to work and save.
congratulations, you've taken us back to Feudalism
Loans are just move the money around and create “business cycles” of booms and busts. Which in my opinion exacerbate wealth inequality as opposed to reduce it.
Access to inexpensive capital is a key driver of technological progress.
Robust capital markets allow for more efficient allocation of savings into business ventures, driving productivity forward