[cmdkeen]

Even if we buy into that (and I fully agree with ddebernardy) you're assuming that those 42 people's accrual of wealthy will continue to stimulate the German electrical and machinery based sectors. I'd cast doubt on that, they probably already have Miele appliances in every one of their homes, all the BMWs and Mercedes they need for when the supercar is inconvenient. Unless they are in the market for a submarine there isn't really much more they can do to drive demand. It is likely the middle classes, and the newly rich middle classes abroad who are driving German exports.

What matters far more is that the unions are essentially asking for a temporary 20% pay increase (plus a 6% permanent one) for two years every so often. Making the, not unreasonable, assumption that pay is a major component of manufacturing costs that would suggest that if the world economy falters (consider Brexit, Trump, southern Eurozone issues, a war on the Korean Peninsula, Iranian protests) German manufacturers might suddenly find themselves very uncompetitive.

[majewsky]

I think you're missing the point, and you actually agree with grandparent. When people point to extreme wealth inequality, they usually argue that redistribution of wealth will give said money to people who actually use it to consume, thereby getting it back into circulation and benefitting their local economy.

[kermitfrog]

Hi, I'm Rich Factory Owner. If you take my profits and redistribute it among the people to consume, that's a great opportunity for me and my buddies to raise prices to make up for the difference!

[dane-pgp]

Is your argument that governments should do more to stop illegal price-setting cartels? If so, I agree with you.

[zhjansbnas]

You just increased demand and took away the capital that I could have used to meet that demand. I don’t need a cartel to tell me to raise prices.

[wavefunction]

Or you could just get some 0% loans from FatCat Banker and satisfy the demand that way.

I get it though, your Rich Factory Owner can only conceive of screwing someone over rather than taking advantage of all the social benefits they have access to as Rich Factory Owner.

[wahern]

That depends on the price elasticity of yourself and of your consumers. In a society with extreme inequality it's not a bad presumption that consumers have high price elasticity and producers low price elasticity, at least for non-essential goods.