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Comment by PaulHoule | Hacker News Reader

I dunno.

The New York Times regularly posts hand-wringing debates between "the usual suspects" on this issues.

Everybody in these debates seems to take it for granted that taxing the rich will hurt economic growth, but maybe just maybe there are some benefits to equality that will make up for that.

Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops.

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Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops.

Huh? I'm having a really hard time imagining how this could possibly happen. Does that person not ever need to buy anything? If they don't buy things they're taking that money out of circulation, and if you have a central bank targeting anything (or free banking, or most banking systems humans have tried) the people who can make more money will make more money in order to hit their targets. I'm pretty sure that nobody mentions that because the idea is, well, pretty ridiculous.

It's not as ridiculous as you think. Yes that person needs to buy stuff, but not enough stuff to support an entire economy.

The single person owns robots who perform every task he desires at a cost lower than human subsistence wages.

Of course, even at that point the remaining humans can just form an economy among themselves which the rich man doesn't participate in...

Someone having money doesn't preclude someone else in the economy from CREATING VALUE. Hacker News is a site filled with people who understand that it's possible to create value out of nothing. Your scenario is impossible, but assuming someone acquired all of X currency and refused to let anyone else have any, that currency is effectively nonexistent - currencies are only worth what they can be exchanged for. People would trade using something else.

People would, but that wouldn't alleviate the overarching economic failure of excess concentration. Look at places like North Korea; there's an underground economy, but virtually all economic power is vested in the state, with dreadful effects for the population at large. Well, you say, that's not a free society in political terms; but preservation of ownership is essentially a political good. Indeed, it's one with a high cost for the American economy: http://tuvalu.santafe.edu/~bowles/GarrisonAmerica2007.pdf

"Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops."

Stunning level of ignorance.

I don't think the point is to offer this literally as a likely outcome.

If I interpret the parent correctly, the point is more to argue that there has to exist some level of inequality which even the most hardened libertarian would agree is sufficiently bad for the economy to justify an intervention. Hence reducing it to a question of degrees, a trade-off rather than a pure matter of principle.

If one person has all the money, wouldn't the government just got an (literally) print more money?

The pre-existing money would be massively devalued, sure, but it's only one guy affected so who would care?

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