Comment by btilly | Hacker News Reader

Comment by btilly | Hacker News Reader

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Here is what it actually means.

When the economy is growing, investment makes sense. Why put your money under the mattress when it could be out there, working for you?

When the reverse happens, investment stops making sense. Why risk your money when it becomes worth more while it is sitting under your mattress?

But stopping investment does not just mean stopping speculative investment. It means stopping investment in other things as well. Like maintenance. This guarantees that things are going to become worse over time. Which is a feedback loop that makes investment even less worthwhile.

This has happened in the USA before. The last time is called the Great Depression. Read through accounts of what it was like. Would you like to go through that now?

History also teaches that the longer it is between economic setbacks, the worse the next one tends to be. We've gone far longer since a depression than at any point in history. Our next one is likely to be correspondingly more terrible.

> When the economy is growing, investment makes sense. Why put your money under the mattress when it could be out there, working for you?

> When the reverse happens, investment stops making sense. Why risk your money when it becomes worth more while it is sitting under your mattress?

Is it necessary to have a growing population in order to have a growing economy?

For much of human history I'd guess the answer was yes, because the size of the economy was based almost entirely on how much physical work people did, but the modern economy is very different from historical economies.

> Is it necessary to have a growing population in order to have a growing economy?

Soon we will discover. I suspect the answer will be no, at least not for long. Markets are made of people. Can the economy grow despite a shrinking market losing economies of scale everywhere? I hope, but I don't count on it.

You've given a good explanation of how it works -- under a mode of production concerned primarily with the exchange value of goods, not their use value. If what you want to do is to provide adequate/growing use value, you can do that instead and allocate resources based on need rather than on investment value.

Use value and exchange value are highly correlated for basically all goods other than collectibles and luxury items, and even then their "use" often is providing an emotional boost to their owner.

It seems like you're recommending socialism without coming out and saying it?

I think I read several economic metrics are now worse than in the Great Depression, but I can't remember which ones. Probably something to do with energy prices.

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