To avoid ecological disaster, we need to slam on the brakes, not merely pump them.
> Once the marginal productivity of physical capital is below the real interest rate people will abandon production even if there is a shortage of products and people are starving on the street.
Given the profit margin on farming is something like 10%, and assuming the average annual purchasing power appreciation of our hypothetical global currency of fixed supply equals the Fed’s inflation target of 2% plus 0.25% GDP growth, how do we arrive at people “starving on the street”?
> If you want to discourage consumption you should introduce consumption taxes for natural resources, co2 and other forms of pollution
Surely the level of taxation necessary to curb industrial and retail usage of fossil fuels to the same extent of global deflationary economics would make the taxation measures politically infeasible. The tax policy would need to result in unthinkably high prices to create the drastic changes necessary. Deflation OTOH would lead to a decline in capital investment, employment, and spending without requiring any level of forcible compulsion.
A global currency of fixed supply would realistically deliver a sufficiently powerful financial incentive to galvanize widespread, voluntary adoption of ecologically sustainable consumer behaviour and business practices.
> by maintaining full employment
Particularly with the rise of automation and AI, is maintaining full employment really an achievable goal? We desperately need a way for the majority of humans to subsist without working bullshit jobs [1].
> hence the need to force ever greater quantities of money into the economy to keep it alive
We’re facing ecological collapse precisely because humanity has chased infinite growth.
> Once the marginal productivity of physical capital is below the real interest rate people will abandon production even if there is a shortage of products and people are starving on the street.
Given the profit margin on farming is something like 10%, and assuming the average annual purchasing power appreciation of our hypothetical global currency of fixed supply equals the Fed’s inflation target of 2% plus 0.25% GDP growth, how do we arrive at people “starving on the street”?
> If you want to discourage consumption you should introduce consumption taxes for natural resources, co2 and other forms of pollution
Surely the level of taxation necessary to curb industrial and retail usage of fossil fuels to the same extent of global deflationary economics would make the taxation measures politically infeasible. The tax policy would need to result in unthinkably high prices to create the drastic changes necessary. Deflation OTOH would lead to a decline in capital investment, employment, and spending without requiring any level of forcible compulsion.
A global currency of fixed supply would realistically deliver a sufficiently powerful financial incentive to galvanize widespread, voluntary adoption of ecologically sustainable consumer behaviour and business practices.
> by maintaining full employment
Particularly with the rise of automation and AI, is maintaining full employment really an achievable goal? We desperately need a way for the majority of humans to subsist without working bullshit jobs [1].
> hence the need to force ever greater quantities of money into the economy to keep it alive
We’re facing ecological collapse precisely because humanity has chased infinite growth.
[1]: https://www.strike.coop/bullshit-jobs/