| We have an appearance of abundance of capital, but not an actual abundance. An actual abundance of capital will mean people can consume their capital instead of participating in the labor market. But they cannot, as you said, because they're poor, which means they lack capital. You can see this in the hockey stick graphs of all sorts of debt in the global economic system. A lot of that debt, is counted as "capital". There's so much debt, so central banks and government think we have an abundance of capital. But, a lot of that debt is never going to be paid back. That debt is only an appearance of abundance capital. An analogy would be the Venezuelan government giving out tons and tons of food coupons that can be redeemed next year. It appears there's an abundance of food, so the price of food initially drops. And then people realise the coupons are never going to be redeemed, the price of food will skyrocket. Once there's a Minsky moment where everyone realises this, it will be a lot easier for people to generate money via real capital - for now the returns on capital are price controlled by the central bank, which exacerbates shortfall in real capital. When people realise there's a shortage of real capital, the price control mechanism will collapse. And then, people will learn to invest again. I'm not saying everyone can live off capital income, I'm saying there's potential for more people to do so. |