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Comment by 1vuio0pswjnm7 | Hacker News Reader

"Money is only as valuable as the amount of stuff in an economy. More money with same amount of stuff is just inflation."

What if the number of people in the country's economy significantly changes, up or down? Nothing? Can one simply ignore this variable or should it be part of the analysis? Perhaps there is a hidden assumption here that it is held (more or less) constant.

NB. "stuff" can be natural resources, or other products not produced by human labour

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A country's "number of people" isn't an independant parameter that you can just slide down so that your GDP/person increases.

If you reduce the "number of people" (i.e. by reducing immigration) you are typically reduce your GDP at a much higher rate, and thus will have a lower GDP/person overall. Your eating into your economy's ability to support the division of labour, specialization and other efficiencies that can only emerge at a large scale. Intuitively, think of it this way, do you think a village of 10 people, or a city of 2 million people will produce more GDP per capita?

Going back to the example of immigration, you're basically reducing a stream of young, educated workers who are consistently net creators of jobs, especially in Western countries with a very high ratio of aging senior citizens (Boomers) to young workers.

> young, educated workers who are consistently net creators of jobs

Yes. If that's the kind of immigrants you're bringing in. But most often I hear this argument used by people who want to justify bringing in a very different type.

The other type of immigrant that you seem to have qualms with is also a pretty damn important part of a developed country's economy. Do you think the average well-educated Brit is going to the fields to pick strawberries? Or going to move manure around a pig farm? Those jobs need people as well, and the local population has a dwindling number of people willing to perform them.

Migrant labour for jobs in construction, farming and others not requiring highly educated people freed up British labour to become more highly specialised. It sucked for Brits trying to live off this labour as immigrants naturally pushed salaries down (no prejudice against that, I'm an immigrant myself and do understand the motivation of accepting lower salaries for better living conditions), on the other hand it freed natives to pursue higher paying jobs.

It's a trade-off for society, with pros and cons, very unfortunate cons that affect the lower strata of society but that allowed others to develop technologies.

If you don't like the "very different type" of immigrants then you gotta accept that a lot of jobs that are fundamental to society will have shortages, push prices of basic needs up, etc. because just a few people in a developed economy are looking forward to go work in the fields, or in a pig farm, or building houses.

I would be willing to take that trade off if income equality weren't at all time highs. Now is not the time to drive down wages at the low end.

Economists keep chiding us about how that will ruin the economy too. They tell us our population must keep growing to keep the economy healthy.

Isn't this just an example of how the economy is a legitimized Ponzi scheme?

Yeah, sort of. We're also counting on increases in productivity. Although these have also not been forthcoming.

Not really, insofar as that early buyers aren't paid out w the entry of new participants with the absence of any real productive usage of capital. It's more that firms invest in production with the expectation for demand to increase, and outside of increased per capita spending, the main contributor to that effect would be simply more participants in the market. The expectation is obviously somewhat self-serving, but there isn't the sort of hollowness as you would get in a Ponzi Scheme. The system itself would still work so long as population growth slowly came to a halt rather than collapsed and firms observed such trends.

Parents support their children, then when the parents are retired the children support them.

Is publicly funded childcare and eldercare a Ponzi scheme?

in most families doing this kind of support, then it is typical for numChildren > numParents. So while this may not be the technical definition of Ponzi, the fact that the next generation needs to be larger to sustain the system just sounds like an unsustainable system.

I’m not just talking about families, but societies.

My parents who are retired are not adding value to the economy. I am.

I’m not caring for them directly, but they are dependents.

Their investments give them paper money that only has value because my generation works.

I have one sister. So two children and two parents is perfectly sustainable.

Until you have kids

That’s played itself out, and there’s only going to be one between my sister and myself.

So 2 grandparents, two kids, and one grandchild.

Definitely not a Ponzi scheme. Not a good one anyway.

right, that's why the system is failing

I don’t think it’s “the system.”

Common sense says: “Having a higher proportion of the population not working reduces economic output.”

And economics is saying: “Modern economies grow so quickly and reliably, we can increase economic output while caring for an increasing number of dependent people.”

For example, we have retirement communities and nursing homes instead of each offspring caring for their own parents. This reduces the downward pull on output. But the pull is still there.

So common sense and economics say that more dependents reduces output.

I can’t imagine a system where a high number of dependents doesn’t create a downward pull on economic output.

Can you describe a system like that?

Any working person in our modern industrialized society can have a productive output that can support many people. Productivity has sky rocketed, as well as population.

Population replacement rate is 2.1 children per woman--meaning, in order for a population's size to remain the same, on average child births have to come out to 2.1 for every woman. All Western countries have been well below replacement level, for many decades at this point.

Taking the example of One brother and one sister, the sister would have to bear 2.1 children, while the brother would have to have 2.1 children with another woman, in order to merely keep the population size level.

The reason for this is obvious: two sets of parents=4 people, the same number as the 2*2.1 children (minus premature deaths, etc.).

Fertility rate is calculated as number of children per woman.

So the sister must have 2.1 children to sustain, but the brother’s “contributions” don’t matter.

Yes, but it's not the economy, it is human society at large. All those little laws, rules and customs are made for old people to exploit younger people. The old people bought in first, just as is the right thing to do when you participate in a Ponzi scheme. So it's only fair that they have have all capital, all entitlements, and all power politically and economically. Play along in the scam and maybe one day also you will get the benefit and pleasure of being old to the game and exploiting young people like suckers. That's what life is all about, and young people only have themselves to blame for not being born when the getting was good.

Well, at least Welfare states look like lifecycle redistribution machines between young and old:

https://population-europe.eu/research/policy-briefs/welfare-...

Economically, it’s best to not have children at all and depend on immigration.

You don’t have to waste resources educating people. Someone else does that, and you just pay them a slightly higher wages.

Much cheaper than a well-funded education system.

That’s assuming there are no externalities whatsoever to immigration and that the immigrants will be able to satisfy the demand in labor and in entrepreneurs as well as the natives.

From my own experience, in France, both of those assumptions are heavily violated. It can vary depending of the type of immigration though, I bet the story is different for California

There are definitely economically bad forms of migration.

I was talking about O-1 visa type migration: highly qualified individuals being admitted based on their credentials.

Hiring the next generation, instead of breeding and raising it.

Wait, were you serious with that post above? I was sure you were making a parody.

I was serious that it’s economically best to recruit the next generation.

But being human isn’t just about economics.

You are right. And from studying the history of slavery you will find that those kind of arguments where made during the same time. Slave traders and politicians would say that slavery was economically necessary in order to make the land productive, as the native people of the colonies had little interest in participating in that kind of economy. Politicians and traders make almost identical arguments right now, saying they need to import immigrants to do the hard work because the natives are not interested. For some reason they still want very strict regulations on immigration between wealthy countries, because they think that poor and desperate people are stupid and more easy to exploit.

Try telling people it is wrong to exploit immigrants or that immigrants are not more stupid than anyone else and won't let themselves be exploited so easily, and you're talking to deaf ears.

Not to go 0 to 100 on this, but a certain someone had a similar idea back in 1939.

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