The fundamental flaw in the Western business system

a reply to: Phage

With a fluid system more production of goods (and services) allows the existence of more money. That is what allows an economy to expand.

I think I see what you're saying now. The money supply can essentially be increased as the economy grows without risking price inflation. This makes sense but I also don't have any realm problem with allowing deflation to occur instead of increasing the money supply. But when it comes to hoarding I think it's a different story, clearly it must be a problem is we need trillions of dollars to be injected into the economy through QE schemes in order to keep it flowing. Also, if the majority of all the profits generated by businesses is being hoarded by a small percentage of people, they will keep sucking up the extra money which gets injected into the economy.

Regardless of how much money you throw at the economy, it will keep getting sucked up and hoarded by these people. Until eventually the level of inequality is totally off the scales. At least with a finite money supply the level of inequality is limited. If the mega rich try to hoard too much of the money supply it leads to their own doom, they are forced to leave a certain amount of money in circulation to keep the economy flowing. It seems to me that infinite inflation is a way for them to totally side step that limitation and continue hoarding beyond the realms of sanity.

a reply to: ChaoticOrder

If the mega rich try to hoard too much of the money supply it leads to their own doom, they are forced to leave a certain amount of money in circulation to keep the economy flowing.

No. Hoarding cash accomplishes nothing. Money is not the same thing as wealth, though the two do go hand in hand.

It seems to me that infinite inflation is a way for them to totally side step that limitation and continue hoarding beyond the realms of sanity.

Well, that would be a bit insane since "infinite inflation" would continually devalue all that cash they're hoarding.

a reply to: Phage

Well, that would be a bit insane since "infinite inflation" would continually devalue all that cash they're hoarding.

Well technically infinite inflation is what we have now, because every year it has a small effect on the value of the dollar and over many years the effect is rather large. It's why we always have to adjust prices for inflation and things like that. They don't just create enough new money to do what you said and prevent deflation, they print enough to weaken the dollar even in the face of economic growth. If they don't plan to end that any time in the future then I don't see why we can't just say it infinite inflation.

But your main about that inflation would devalue the money they are hoarding is true, the question is, would that lost value be any where near the amount they manage to hoard in the amount of time their money depreciated? I don't think it would be close because 1) the overall inflationary effect of piling on money to an already massive pile is tiny and gets smaller as time goes on and 2) they seem to use many sneaky tricks to minimize the inflationary effects caused by QE schemes and the such.

What I really want to do one day is build a simulation of how money flows through society and where it ends up. Obviously it would be extremely hard but if I create a broad overview of how it flows between consumers and corporations and how the money supply can be expanded through QE and fractional reserve banking via loans, it may be possible to draw some very significant insights into what is actually happening with the economy and how its health can be improved.

originally posted by: ChaoticOrder
Making people work as much as possible for the lowest wages possible will produce a booming economy

That's a uniquely U.S. (and communist!) element of business philosophy, not a Western one per se.