Re: Growth, Interest and Wage Inequality - To the austrian economists here
maybe I got it now. in contrast to barter, money is slightly "overvalued" because it is more flexible than say a goat. WIth money I can buy anything, with a goat I can only buy products that are offered by a guy acceting goats. I agree. Lets consider the case where I sell one month of work for a certain wage and buy stuff with that money, spending everything. Would you agree, that in this case the "money-premium" is irrelevant? I think the problem you are talking about arises when people are hording money, right? So they need an incentive to spend it (e.g. freigeld).
Lets see what happends in a village of ten people with a fixed amount of money:
10 people
different goods, a,b c, fix production!!
using money they agreed upon, say shells
fixed amount of shells: 1000 shells
There is constant demand and supply of a,b and c giving prices p_a, p_b and p_c.
Now I claim the following: If 500 shells are destroyed (and no new shells can be found), all three prices will double. this implies that you have to pay double and that you earn double when selling a good.
Now consider there is one rich guy who achieved to own 590 shells, but he saves/hordes the money and only uses 90 for his daily business. There is one thing happening that is in my opionion not considered by Gesell: With hording of half the shells (forever) the prices and wages double as in the above example. The richdom of richguy is theoretically double but he does not use it so everyday life of the 10 people is unchanged. Actually the other 9 had a profit "P" because the prices decreased due to richguys savings. Now lets say richguy wants to use the money before he dies and buys more goods than usual. If he spends all his money, the prices will go up depending on how many "productionperiod" he needs to spend everything. In an extreme case, he buys almost all of the goods but the few that are needed for the other 9 to survive. But independet of the strategy of spending (one period all money vs. 10 periods 10% of the money), he does not get the goods for the halfed price and is in sum always paying a Premium "B". To understand that, keep in mind, that the production is fixed! I claim "P" equals "B". So richguy gets his well-deserved amount of goods that costed 500 shells in the beginning and nothing more.
So I claim, that hording is irrelevant, moneypremium is irrelevant and Gesell is irrelevant
We could of course discuss, what happens on a larger scale, when we also consider that inflation and deflation takes some time to take place. Nowadays this gives central banks, banks and companies an advantage because we life in an inflationary world. This discriminates the ones farthest from the tap, e.g. pensioners and workers. I think yours and Gesells problem disappears when this problem disappears, which is when we life in a world with a fix amount of money which implies, that this money deflationates with the rate of economic growth. If your wage is constant but money deflationates, you can buy x% more goods, x being the rate of growth. So everybody participates in the growth with the same rate. In the real world, you at first don't participate in growth and also your wage is devaluated by the inflationrate i, so if you (as an worker or pensioner) can claim your fair wage/pension after say a year, then you where "taxed" (1+x)(1+i). Nowadays this is something between 5 and 8 percent. Its of course lower, if wages are adjusted faster. So actually I would say the third solution is a fixed amount of money.
Lets see what happends in a village of ten people with a fixed amount of money:
10 people
different goods, a,b c, fix production!!
using money they agreed upon, say shells
fixed amount of shells: 1000 shells
There is constant demand and supply of a,b and c giving prices p_a, p_b and p_c.
Now I claim the following: If 500 shells are destroyed (and no new shells can be found), all three prices will double. this implies that you have to pay double and that you earn double when selling a good.
Now consider there is one rich guy who achieved to own 590 shells, but he saves/hordes the money and only uses 90 for his daily business. There is one thing happening that is in my opionion not considered by Gesell: With hording of half the shells (forever) the prices and wages double as in the above example. The richdom of richguy is theoretically double but he does not use it so everyday life of the 10 people is unchanged. Actually the other 9 had a profit "P" because the prices decreased due to richguys savings. Now lets say richguy wants to use the money before he dies and buys more goods than usual. If he spends all his money, the prices will go up depending on how many "productionperiod" he needs to spend everything. In an extreme case, he buys almost all of the goods but the few that are needed for the other 9 to survive. But independet of the strategy of spending (one period all money vs. 10 periods 10% of the money), he does not get the goods for the halfed price and is in sum always paying a Premium "B". To understand that, keep in mind, that the production is fixed! I claim "P" equals "B". So richguy gets his well-deserved amount of goods that costed 500 shells in the beginning and nothing more.
So I claim, that hording is irrelevant, moneypremium is irrelevant and Gesell is irrelevant
We could of course discuss, what happens on a larger scale, when we also consider that inflation and deflation takes some time to take place. Nowadays this gives central banks, banks and companies an advantage because we life in an inflationary world. This discriminates the ones farthest from the tap, e.g. pensioners and workers. I think yours and Gesells problem disappears when this problem disappears, which is when we life in a world with a fix amount of money which implies, that this money deflationates with the rate of economic growth. If your wage is constant but money deflationates, you can buy x% more goods, x being the rate of growth. So everybody participates in the growth with the same rate. In the real world, you at first don't participate in growth and also your wage is devaluated by the inflationrate i, so if you (as an worker or pensioner) can claim your fair wage/pension after say a year, then you where "taxed" (1+x)(1+i). Nowadays this is something between 5 and 8 percent. Its of course lower, if wages are adjusted faster. So actually I would say the third solution is a fixed amount of money.