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by emeerson
2217 days ago
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Re. Money in a bank account not contributing to scarcity: I think that logic checks out when you observe money as a resource in isolation. If you think of Money as a proxy for "captured value," then one way to look at it is how much "captured value" is "captured opportunity for wealth creation," which has a certain distribution % chance across the entire population. In that sense, total aggregate money at any point in time can be viewed as zero-sum. |
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Notice how printing a hundred trillion dollars would normally be expected to cause a lot of inflation, but doing the above doesn't do that. It wouldn't have been any different if they had printed monopoly money instead of real money, because it doesn't get spent.
The opportunity for wealth creation is in raw materials and labor force. We measure those things in dollars because dollars are fungible and we want to be able to compare them to each other but the green paper isn't the prize, it's only a token that represents the prize. If some of the money is removed from circulation then the rest of it is worth more. It costs fewer dollars to buy an hour of labor, but there are still the same number of hours of labor available to buy. This is deflation, which is bad for various reasons, but deflation can be countered by printing money.
Not buying stuff with your money doesn't destroy the stuff, it only causes somebody other than you to have the stuff. This is only worse if what you'd have done with it is better than what they do with it.