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Comment by thebigwinning | Hacker News Reader

Can you explain how these are related at all? It seems you think economics is zero sum, so if that if these guys win, others must be losing.

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Well, they do seem to be winning, and look no further than this article we're discussing to see people losing.

So how does one cause the other? The banking industry mostly supplies these people with retirement services.

> It seems you think economics is zero sum, so if that if these guys win, others must be losing.

Yes, this is my primitive understanding of economics. just like first law of thermodynamics, which states: "energy can neither be created nor destroyed, only altered in form".

I do believe economics is not different. There is a limited set of value in the world created by humans (service, knowledge) and Universe (minerals on Earth, energy coming from Sun and so on). We give price for the value using currency. If currency moves to a limited set of people, it should be taken away from others. When bank hands off mortgage, it expects something in return, which is an interest. To pay interest you need to provide service for someone, more scalable your service is, more you can earn, but not all services are scalable, for example teaching at schools, it doesn't scale, because it has physical constraints, like having a teacher who can engage with kids, whose primary concern is not meeting ends in their private life.

in other words, when couple of people get ultra rich, some other people should become poor, e.g. you might still earn 100k/year, but you won't be able to afford 1M$ house, because ultra rich is buying all available land and converting it to estate for business to earn even more.

You might think it should stop at some point, but when you stop cycle of growth, wallstreet punishes you with -25% in your stock price and depending on your business model and situation you will layoff more people, in some cases, even if you are profitable company. which gains another +10% to your stock.

This is called "the fixed pie fallacy". There is not a finite amount of dollars to made. There is more money now in the world than there was in 1990 or 1970, and more total value too, adjusted for population.

Wallstreet also has nothing to do with Australian teachers.

There is a rather fixed amount of land, which seems to be a large part of the problem.

There is plenty of land. There are not enough houses, apartments, condos, etc.

>Yes, this is my primitive understanding of economics. just like first law of thermodynamics, which states: "energy can neither be created nor destroyed, only altered in form".

How do you explain the insane growth in wealth from a few hundred years ago, where we lacked indoor plumbing to today where everyone has a supercomputer in their pocket? Clearly, wealth isn't something that's zero sum, and I'd rather live in a world where I owned 0.0001% of all the wealth and have an iPhone, than one where I owned 0.001% of all the wealth but I'm dying of cholera because I don't have a clean source of water.

To me it looks like we've reached the inflection point. In the past businesses worked to lower costs, so they could reduce the price of their product and sell to more people. Looking at cars, houses, iPhones, nvidia GPUs, etc. everything is getting more expensive. This is likely because businesses must have 10-20% growth every year for infinity (because obviously there are infinite resources and infinite people with infinite money so companies can have infinite growth). However, eventually you'll run out of more people to sell to...so the only way to achieve continued growth for the shareholders is to increase prices.

The problem is that there is now a huge wealth gap. The majority are getting squeezed to death between inflation and insane housing market, childcare, lack of salary increases. So the only way now for these "luxury" companies selling iPhones and cars to achieve their infinite growth for their shareholders is to raise prices to increase margins, targeting the ultra rich faang employees.

We've had iphones in the past, but I wouldn't be surprised if in the near future iPhones become a luxury item that only the rich have.

What this suggests to me is a lack of competition / supply that prevents individual sellers from squeezing all the consumer surplus out of the market.

There also seems to be a lack of competition for labour if productivity can so wildly outpace wage growth.

I expect it mostly has to do with the declining cost of energy. Which, if I remember correctly, has stalled somewhat for a few decades, but may be starting again with solar et al.

I'm pretty sure humanity should be actively targetting / working towards something like "$1 per MWh" if we want to solve most of our current existential crises without forcing things into stasis

Economies are not zero sum in the way that thermodynamics is.

Has a positive amount of wealth been created by humans in the last 50 years? The last 200 years? In the last 2000? It seems obviously true that it has in each of those cases.

Please tell people you believe this anytime you feel like commenting on an economic article. Maybe add a note to your profile.

Most readers are trying to understand the topic from a cause and effect relationships, and those who share your view already made the same conclusion.

If economics were zero sum, wealthy countries would cause a decrease in the standard of living in other countries. Over the last hundred years worldwide basic education and literacy are closing in on practical limits while child mortality has decreased to what’s close to its practical limit. Is that because all countries became economically wealthy or because enough value was added into the world economy that excesses could be used to provide education and sanitation to people regardless of their status in the world?

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