the capitalism hamster wheel ....prices rise...need more money.....fight for more money...win more money.....prices rise....need more money....fight for more money ....win more money....prices rise .....need more money....and so on for the rest of life....like a dog chasing it's tail and never actually getting anywhere. When I was young a family could get a home and live on £25 a week.
@Vincent Trivigno When I first started work I was 15 and that was 1967 ..£25 a week was a good working class adult wage at that time..although I was an electrical apprentice on £2 a week.
Investors also expect a profit year in and year out which is crazy stupid.
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@@hotumupix yeah Shareholders a real fucking problem too. They REALLY hurt the employees in general, but the ones in the Game Industry. Man, watch some of Sterling's stuff on YT. Board and Shareholders are a prime reason there needs to be more democracy in the workplace
@ "It's the eternal carrot on the stick" - The problem remains people in general being TOO DAMN STUPID to realise they are being continuously conned by a VERY SMALL MINORITY who are building their extravagant lifestyles on the misery of many. They are led astray by a BLOODY MIRAGE...
A good example is from Hawaii, we have a few cell phone providers. My damn phone bill was $170 dollars, they charge me for everything. It cost me $700 for a terrible Sam Sung phone and outrageous bills. In Thailand we have many cell phone providers and use line which is free. My new I phone cost me $300 and my monthly payment is only $7 dollars a month
I think that inflation is one of the most complex phenomena in economics, and because of that, it can't be explained mono-casually. Even in marxist economics there is a full range of causes that could influence prices (that are not the same as labor-values, which tend to decrease on the long run due to increases of productivity): supply and demand, increases in constant capital costs, the rate of profit, the overall performance of capital accumulation, class struggle, monetary system, exchange rates, etc. There is a huge hole regarding inflation in marxist economic theory (mainstream economics doesn't have any idea), but it's great starting a discussion about it!
Yeah, you sure do...of course it's total bullshit which I don't believe is "learning", but hey, whatever works for ya. ( and be sure to avoid trading your US currency for hard assets...after all, your might become a victim of the "scam" artists who are speculating on them, rather than the "scam artists" that created the system in the first place.
@Marlin Williams Hate your country? You mean the tree and the hills? Or the political system? Or the people? Be specific, because Wolff does not hate much of this. In fact, I do not think he hates capitalism, he just finds it interesting that we still put emphasis on an old deprecated system.
@gespilk I totally agree. I grew up in the 70's with a single mom and she worked at Safeway. A grocery store w a union. We lived in a nice townhome and she drove a nice car. We were not rich but we lived middle class. If that were today we would be poor.
46 seconds in and already the good professor has addressed what Mark Fisher called capitalist realism in a simple and concise phrase. This is why I think Professor Wolff should run for office. He is, in my humble opinion, the very definition of Plato's unwilling philosopher-king.
@@jgalt308 this is one of the reasons this country has been enslaved by corporate tyrannies... "free citizens" being unable to understand a 7-minute speech given in 1st-grade English.
@@Perisemiotics Except that it has been enslaved by an "illegitimate, unconstitutional tyranny" whose process began on March 9, 1933 and was completed in Aug of 1971 and is completely "corrupted", so yes, you a partially correct regarding the result, but you are completely ignorant as to the source and cause, as well as the remedy. As for bullshit expressed in simple English...it is still bullshit.
@@jgalt308 such an interesting conspiration you alluded to... it's however so obscure, it isn't even worth being called a "conspiration." If you prefer to run in circles, ellipsis, parables - instead of employing simple logic on historical facts, I wish you all the best.
@@Perisemiotics Except you have refuted none of the facts, and don't have the attention span or the intelligence to even get close... But hey impress me...what is required to actually change the "constitution"? If you manage to answer that correctly, please explain how we managed to transform our "lawful money" system, into a fiat one?
Another point to keep in mind regarding inflation vs. deflation is that inflation favors borrowers while deflation favors lenders. Given that businesses are borrowers by nature (whether they get their capital from from banks or by issuing stocks), one can see how they have an interest in keeping inflation going.
Also, calculate rising material costs from material shortages and increase the cost to obtain material in relation to more difficult processes to get said material.
As nice as Prof Reich is, he’s still loyal to the Democratic party. He never calls them out whereas Prof Wolff has no issue with calling out corruption regardless of political party.
Will you start teaching non credit classes for political economic dummies? I would gladly pay and be most gracious to learn from you. Your the only one who makes sense in all this confusion. Thank you Professor Wolff! Your brilliant!
@@Regi254. Why would you make the "assumption" that criticism of Wolff indicates any approval of Trump or any other political party or "ism"....? So my question to you is, do you think that your statement is a valid argument regarding that "criticism", and if you do...that is precisely why I waste my time posting here..... As for my actual criticism of Wolff for "this video" ( and posted elsewhere here which you obviously didn't' read, here it is, just for you. J GALT 3 days ago Ole Prof Wolff finally explains why the members of his "cult" can't read!!!!! First the "click bait" question: Why do prices rise in capitalism? Then the actual question asked: A patron of Economic Update asks: ""My friend and I have backgrounds in economics -- in fact I took economics back in the late 1980's at the time of Reagan, and I have taken it again recently. What shocked me was that they were teaching the same monetary theory today in the age of infinite creation of the medium of exchange through printing and through credit -- where the size of the money supply is no longer under anything resembling central bank control. No one I have ever met has been able to explain to me why, in light of what I know about economies of scale reducing unit costs and leading to efficiency and the burst of industrial technology in our age -- why do prices of consumer goods continue to increase while quality consistently decreases? Is this just because people have lost hope that things could be any other way? Why do I hear of deflation as a negative thing -- wouldn't this mean more disposable income for everyone, all things being equal?" Now let's examine Wolff's answer ( total time invested 7:55 ) with the first 6+ minutes devoted to the effects of "competition" and the "elimination" of the "inferior producers" of "inferior products" until it gets him where his "constant narrative" needs him to go...the present "oligopolist" effect...after which he finally devotes the remaining minute to "deflation" and the singular aspect of it, that leads to the "lowering of prices" for consumers. So what does Wolff's answer have to do the "the QUESTION ASKED??????" ABSOLUTELY NOTHING!!!!!!! THE ACTUAL QUESTION regards "monetary theory" and the present "fiat money/guaranteed inflation" initiated by FDR in 1933, and "foisted" on the world in 1971, after exiting from Bretton-Woods. ( now the questioner isn't aware of the preceding "facts", and Wolff consistently "ignores" this aspect of "economics" because it doesn't fit his anti-capitalist rant, and avoids the "reality" that what exists NOW, is directly related to the fiat system and the primary role of "government" in initiating and enabling and maintaining it, for the last 87 years. ) In "economics", prices are determined by "supply and demand" and then mediated by the effect of the element of diminishing returns". The next element in this formula is the stability of value of the medium of exchange ( money ) and when this consists of " hard money " ( as required by
the "constitution" ) the normal business cycle oscillates between "inflation and deflation" and the oscillation is minimized by the constraints imposed by the supply of money, itself...which can be verified by looking at the cycle of 1860 thru 1939, and comparing it to that 1939 to the present. Also, when this cycle is "constrained" by hard money the balance between "saving and debt" is maintained because the effects of deflation discourage debt and encourage savings, while inflation has the opposite effect...so as long as this natural cycle exists, the "extremes" of both are limited. Unfortunately, this balance was eliminated in 1939, and constant inflation encouraged debt ( to be paid with cheaper dollars ) and discouraged savings. ( which constantly lost value ). Which is how we got HERE and there is no MYSTERY regarding it. So why can't members of the "cult" read??? Because their leader can't read!!!! And it also calls into question his claim to "authority" based on his "permission slips" in "history" and "economics", for he either ignorant or lying in order to maintain his own mythology regarding "capitalism". ( which is really ignorance of economics, and not the complicated kind, but the simple stuff. ) Finally one must ask, if this is what you get, being an actual ( pay-tree- on) supporter, you are clearly being taken for a ride.
@@jgalt308 thank you for your information. I apologize for my assumption.. your comment about dummies sounded that of a Trump supporter. Common sense tells me that what's going on in politics is off. Doesn't take a fancy degree in economics to know our current administration is not working out. I like listening to professor Wolff and I was complimenting him.
@@Regi254. I understand that and I have no objection to Wolff's goals or his understanding of the conditions that exist. What I do have a problem with is his attempt to "simplify" it, while omitting a lot of evidence and being very selective regarding the history as well as the complicity of government in the present reality...and the fact that the normal reaction to this information, is to disregard it altogether...while the overall message is to ignore it completely, as in don't read it, and don't respond, since it challenges the "narrative" and as such, requires some adjustment regarding the "causes" as well as the "solutions" proposed to deal with them. ( which most here do not seem willing to do. )
And they can now drop the quality and limit what is available because they control the market completely. Example: US "hobby stores." Back in the day, there were many small hobby shops, some of which even specialized in certain hobbies. They carried a wide and varied inventory. While Hobby Lobby and Michaels were driving them out of business, the Big Box stores tended to carry the same things, but when they won and drove all others out of business, the inventory dropped radically and now things that one could buy at the local hobby store, one cannot obtain from the box stores. Then they can also change the nature of the stores totally, so now Michaels sells more T-Shirts and other junk than hobby supplies. But the old stores are gone. Our only option is to go on line and buy things we cannot see clearly in advance, and sometimes wait weeks for delivery from China for things that turn out to be cheap junk.
well... actually, constantly rising prices was a phenomenon most prominently observed during the times when labor was more organized. if wages go up, prices have to go up if companies want to stay profitable. the only way out would be faster automation, which in turn lead to even faster growing wages because unions knew that the workers could only keep their jobs if they had the purchasing power to buy all the additional stuff that came out of automation. in the 19th century, periods of extreme inflation and deflation that dwarf today's boom bust cycles were the norm, and in recent decades, inflation has come down dramatically to the point that the euro zone and japan actually are stuck in permanent deflation (and hence stagnation because there's no automation drive anymore) and the US could only maintain a bit of inflation by living on debt - the first long time inflation where increasing prices are actually a means of stealing from people (while the normal way of doing this is by cutting your wage faster than prices).
I understand the point that the capital class would prefer inflation - but by what process do they ensure that inflation happens? Are they actively working to increase it? Or just actively working to decrease deflation? Both? Neither? What processes do they use to manipulate the value of currency, if any?
Read a good book on monetary economics. I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Old editions cost a few dollars at Amazon.
In A-Level Economics, inflation was portrayed as being healthy in small amounts to keep an economy dynamic and allocating resources efficiently. As people would have to think and act on pricing and not just remain staid
Price is the currency expression of labor materialized in commodities, and it is a stable quantity. But because the market economy under private ownership is in competition with each other and production is anarchic, prices will fluctuate up and down.
Sorry are you saying that prices are pegged to labour costs and not profit motives? I'm afraid that ignores the often 1000% profit margin on some commodities.
I wish he would have mentioned the term monopolistic competition. Some competition is good. An entrepreneur will charge what the market will bear, and will also charge more because their product is too popular for the entrepreneur to keep up with the demand for their product. Oligopolies, monopolies, and duopolies often fix their prices so as to bar new entrepreneurs from entering the market, and take actions to eliminate a competitor if they still somehow manage to gain entry. Governments should pass laws that make these behaviors illegal, but the closest that we've gotten to that in the United States are the anti-trust laws. These laws have been largely neutered since the 70s by some key supreme court decisions and rulings. Price controls can curb inflation, but that can also lead to massive problems. This happened in the USSR, when price controls on food resulted in lower amounts of food production.
Well, I would say that usually corporations and their upper management DON'T actually directly conspire to rise prices, due to the optics and bad press of such behavior. What they have instead, is unaccountable Majority Stake Holders, and organizations for their particular industry which function to set the prices for their goods. To some degree, the stakeholders are part of what drives the price of goods up, because they crave ever greater dividends. And if a company fails they are obviously gobbled up, and that reduces the amount of coordination necessary to engage in price fixing. A lot of people don't realize though, that a lot of the industry organizations which setup industry based conventions for particular professionalized groups also function as a way to skirt the bad optics, the anti-competition, and anti-consumer practices of these corporations. In some cases, it is the same group they founded to "self-regulate". The word to remember about how corporations hide their bad deeds... Plausible Deniability. They depend on the ways they fix prices and manipulate the economy being so murky, that they can gaslight you if you see what is going on but not how exactly they're doing it. It is like a magic trick where they steal your money instead. The mechanisms of Capitalism have been designed to fuel and serve the monopolistic, and drive politics until they can more or less do bad things overtly, or have several layers of defense and denial if bad PR come their way. You can't hold them accountable, you can only dismantle capitalism in its entirety.
Rarely do businesses have such a monopoly that they can raise prices at will. But even when they do they will cause people to find other ways to provide the goods and services at lower cost. The public is always looking for a bargain and will rush to the cheaper provider.
In 1997, a new asphalt roof for my house was $2400. Now it is $7800. Wages haven't tripled. Inflation hasn't tripled. And oil prices have been down for a long time. We have an oligopoly of asphalt roofing manufacturers. Thanks for nothing Owen's Corning.
7:20min He just rejected any relation to economic plans from the left "This is good for everyone" The latter statement is a statement about the preference of organizing relations. Like in a households the standard of living should be equally good for everyone. The same for the community and co-workers. The same applies to nations, and the globe. Such a statement is not neutral it is decisively on the side of equality. Please donate so he can keep on studying.
"why is American central bank federal reserve privately owned?" though unrelated to this topic, I would appreciate anyone with any insight to shed a light. what's its influence and has it anything to do with the dominating status of us dollar? I mean, why does it have to be private? can't a national bank do the job? other countries have that, right? what's the difference?
The Federal Reserve is not privately owned. And there is no difference between FED and other central banks. The FED is the central bank of the United States, just as, for example, the ECB is the central bank of the Eurozone. The differences that might exist are superficial. For example some central banks might be more independent from political guidance than others, but the principles of how they operate are always the same. www.federalreserve.gov/faqs/about_14986.htm
@@jaakkooksa5374 You bought that bullshit????? Apparently, you missed the source of the information.....as in .gov????? You probably think that "social security" is an "entitlement program" with a "trust fund"....and "debt" is something we owe ourselves.
@@jgalt308 If you would like to learn the basics of monetary economics, including how central banks such as the FED work, I recommend Mishkin: The Economics of Money, Banking, and Financial Markets.
@@jaakkooksa5374 You lost any possible "sane" economic system on March 9, 1933....and all current economic theory is based on continued growth...add fiat with guaranteed inflation and you hit the limit very fast, so you can look forward to economic collapse or hope that climate change ends your misery faster, which it may do. ua-cam.com/video/auWX0jXyQaI/v-deo.html Actually most people caught the bullshit here...while you totally missed that Wolf didn't actually answer the question by someone who won the "lottery" and actually got chosen...and PAID for the privilege. A patron of Economic Update asks: ""My friend and I have backgrounds in economics -- in fact I took economics back in the late 1980's at the time of Reagan, and I have taken it again recently. What shocked me was that they were teaching the same monetary theory today in the age of infinite creation of the medium of exchange through printing and through credit -- where the size of the money supply is no longer under anything resembling central bank control. No one I have ever met has been able to explain to me why, in light of what I know about economies of scale reducing unit costs and leading to efficiency and the burst of industrial technology in our age -- why do prices of consumer goods continue to increase while quality consistently decreases? Is this just because people have lost hope that things could be any other way? Why do I hear of deflation as a negative thing -- wouldn't this mean more disposable income for everyone, all things being equal?" And to top it off, Wolff didn't bother to include the most basic of economics supply and demand... So it's not MY understanding that you need be concerned with...
@@jgalt308 Thank you for your diatribe. If you would like to learn the basics of monetary economics, including how central banks such as the FED work, I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Let's return to the subject after you are finished reading it, OK?
Professor Richard Wolff Competition means rate race... There are winners and losers.. Peaceful Coexistence means... Live and let live... You win.... I win...
Monopolies and the fed. Sure there some fluctuations due to supply and demand, but if your asking why does everything become more expensive over time the answer is monopolies and the fed. Great question we should all naturally ask, because we’re told that capitalism increases competition driving prices down, but that’s clearly not what appears to be happening. Can’t wait to hear professor Wolf expound on the subject.
Central banks have inflation targets for very good reasons. If you are interested, read a good book on monetary economics. I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Old editions cost a few dollars at Amazon.
Doesn't the Fed in America (the wold reserve currency) also have something to do with it? Also I feel like Prof. Wolff is over simplifying it, but I'm not saying this trend is not obviously there.
Probably, but I'm guessing that in order to truly understand it you would need a degree in economics. A brief 7 minute overview is also not long enough to explain everything about the topic.
@@DoinkertonGreeble Yeah thats true. He could probably make a whole series about this topic and not cover everything. In any case, there's definitely plenty of examples of what he's saying. Even now the most obvious one is Bezos. Hahaha Talk about a monopoly. The prices are not even less expensive now. No surprise. Microsoft is another one. People must pay stupid prices for an operating system that's a dumpster fire because of a monopoly propped up by unethical business practices. The telecommunications sector is another examples, etc etc.
Sure, but usually anyone who blames the fed entirely is really talking about the jews and the classic "it's not *real* capitalism if I can't pay my 7 year old workers 7 cents a month."
Thank you for this. I wonder if we could go back to where you talk about deflation. You said deflation is good for consumers because it means lower prices, but my understanding is that it's bad largely because people would stop spending. I.e., they believe prices will fall in 3 months, so why should they make major purchases now? On top of it being bad for capitalists who may not recover what they spent to produce the good (meaning fewer goods, which is bad for consumers), we should also recognize that to mean that would result in massive contractions in spending, which means a reduction in investments that people rely on for retirement or that governments relied on to pad the general funds. My understanding was that deflation is bad for everyone in the long term. That being said, maybe deflation is necessary when profit margins are so massive as they are now to bring the market back in to balance.
That's what we've all been lead to believe, I was no different, check out George Gammon, he recently laid that mis truth bare in his video on lies the Fed tells us. In the late 18th century to the early 19th there was a prolonged period of deflation, which still saw employees wages rising and they were able to save and build financial security for later life. But then the Fed was formed with their inflationary ideology, and we've been getting poorer ever since......
Actually deflation would benefit "everyone" since the price of everything would decrease, while the value of "money" would increase and taking on "debt" would be avoided at all costs.
Prices rise thanks to productivity and wage growth! Ideally. As total debt thus money supply grows, businesses will try to charge higher prices. In order to maximize profits. Ideally though, in a free market economy, thanks to fierce competition, net wages should rise more than prices = productivity gains. But requires a bargaining power of labor, which in America is out of order. Only 11% in unions. So in America prices rise to fleece laborers. Very successfully btw... 😱😂😝
With gold and silver money prices fall because technology reduces the number of man hours needed to produce the product. With prices falling wages can stay the same while the worker enjoys a higher standard of living.This is what we Americans had from 1965 to 1913 and lost when the Congress installed the Federal Reserve Bank. End the Fed.
5:14 Are you kiddin' me? I live in Brazil, and I'd be hard-pressed to point somewhere without inflation parading about. Around the '90s, every buck was locked (or whatever the term is) to a dollar, which helped boost the economy, but since then this has been steadily shifting, to the point that a dollar is now worth about five bucks - and this ultimately murders our buying power. Oh, so you wanna purchase the newest PS5 here? Either become a millionaire, or forget it; the impact of foreign markets is also an important variable, that was glossed over here...
It was meant as a simple explanation for those who are not aware of how inflation and deflation work. I suggest that this is why some of the finer points are not mentioned. Entire degrees are involved in a complete examination of the subject and that is not what this video was for
@@dinnerwithfranklin2451 Simple explanations need not be oversimplified. But, be as it may, it's not like we can't point these things out here in this space; thus, just so you know - inflation in this country sucks bollocks...
@@thstroyur I'm afraid the the audience is primarily american so simple explanations cannot be oversimplified. This is a population of whom 40% believe the sun revolves around the earth.
@@dinnerwithfranklin2451 “Tell me,” the great twentieth-century philosopher Ludwig Wittgenstein once asked a friend, “why do people always say it was natural for man to assume that the sun went around the Earth rather than that the Earth was rotating?” His friend replied, “Well, obviously because it just looks as though the Sun is going around the Earth.” Wittgenstein responded, “Well, what would it have looked like if it had looked as though the Earth was rotating?” "Can we formulate physical laws so that they are valid for all CS (=coordinate systems), not only those moving uniformly, but also those moving quite arbitrarily, relative to each other? If this can be done, our difficulties will be over. We shall then be able to apply the laws of nature to any CS. The struggle, so violent in the early days of science, between the views of Ptolemy and Copernicus would then be quite meaningless. Either CS could be used with equal justification. The two sentences, 'the sun is at rest and the Earth moves', or 'the sun moves and the Earth is at rest', would simply mean two different conventions concerning two different CS. Could we build a real relativistic physics valid in all CS; a physics in which there would be no place for absolute, but only for relative, motion? This is indeed possible!" - Einstein & Infeld, 1938, The Evolution of Physics
5:30 The disadvantages of deflation are pretty basic stuff of monetary economics. Deflation is not good for ANYBODY, neither the consumer nor the producer, because it encourages consumers to postpone their purchases, i.e. not consume, which means that producers cannot produce the commodities which would be consumed if there was no deflation, which means that the economy is producing commodities at less than full capacity. Firms then lay off people. Unemployment rises. GDP contracts. This is what we mean by recession or depression.
False deflation is good. Technology by definition is deflationary and makes things more efficient and cheaper which is the point of capitalism. The fed convinced you inflation is good which it isn’t
It's more complicated than that. Deflation is also a benefit to everybody because it reduces the burden of debt. Neither inflation nor deflation are inherently bad, they can be good or bad depending on the situation, depending on the person or institution, depending on the economic climate, etc. The economy is extremely complex and we need to stop thinking about everything in terms of black and white.
dmike3507 inflation is bad in every way. Increases prices on food and living expenses which negatively impacts poor and middle class exponentially more
@@CalCaliente Not if wages are increasing at the same or faster rate. Also reducing the value of the dollar makes US goods cheaper relative to other countries, thus increasing demand for US goods & creating jobs. If economies were as simple as you seem to think the world's top economists would not be debating about anything. Economies are extremely complex and nobody has them all figured out. You have to look at evidence instead of theory. Do countries with little or no inflation, or even deflation, ALWAYS perform better economically than those with high inflation? Have you asked this question and actually looked at the evidence for it?
Increase of prices doesn't just come from the monopilization of economies. Oligopolopy only increases the inflation rate. But iIt is the inherent nature of capitalism to increase prices because for capitalism to be successful each transaction must increase the value of the capital asset subject to the transaction. The capitalist can sell the product at the amount it cost to produce, otherwise he can't steal the fruit of the labor to make his profit.
As you know this is not an economic problem as opposed to a human problem. It doesn't seem to matter whether it is communist or capitalism the people at the top always get more than the people at the bottom.
Majority of resources are renewable. Exception for fossil fuels and minerals. However, we can more than easily power the world with the available clean energies we have now: solar, wind, geothermal, tidal, etc. (Oil is really only needed for mining and certain types of construction). The illogical market prefers to waste resources if it can make better short-term profit. Cyclical consumption / endless growth / blind profit drive doesn't care so much for sustainable or healthy approaches should they hurt the bottom-line. So, in a paradoxical manner, we are slowly destroying the very things we need for survival because outdated economics deems them "scarce". *economics comes in part from Greek, meaning the management of a household. Hence, we live in an anti-economy.
@@glowingunknown5625 sure... but my point is prices rise because of supply... Lately there will be those that say space mining will help... earth is doomed and will be really really expensive.
uhh, deflation is bad for the workers too. if profits are falling and consumers are delaying purchases (why buy something today when it'll be cheaper tomorrow), then capitalists will invest less. that means layoffs.
@@Synerco Blythe is okay, but you have to listen to him carefully regarding MMT and I don't agree with him on this anyway...but he is matter of fact, although not radical enough to jeopardize his career and he took the same anti-economic approach as Steve Keen, so I like both of them, but they can't save us from what this is.
@@Synerco nope! If capitalism increases labor productivity while lowering prices, then wages are worth more, as is the value of the labor, since more production would be needed, as well as more consumption, since the profit/unit would be decreasing. In that scenario, wages, as they are now, would not be chasing rising prices....as they have been since 1939. The surplus in wages no longer needed for consumption could then be invested in the technology to replace "labor"...and they would eventually have "enough" and no longer be required to labor, and this would continue until all labor was replaced. And each cycle of this deflationary model would allow those required to "labor" to repeat the process. So the ideal model which removes income inequality over time is to manage the rate of deflation so that it is slow enough to achieve this result on a consistent time frame for each new person entering the labor force. ( say 20 to 30 years ) The present fiat/inflation model works in precisely the opposite direction... The above is a response to another poster who manages to get everything wrong...and Wolff didn't answer the question that was asked, and his understanding of deflation is only one aspect of it...while he omits everything else.
Well everything is cheaper now... supermarkets are full of luxury foods from all over the world, that is being bought and replaced constantly. The roads are full of BMW’s Mercs etc. Living standards are vastly better than they’ve ever been. Amazon stocks are through the roof because everyone’s buying so much stuff. I know this is all destroying the planet; but everything is so cheap now. Especially thanks to how things are financed. There is an under employed class that have been left behind, but everyone’ else’s standard of living is way up compared to 40 years ago.
@@dinnerwithfranklin2451 I watched it all. However making everything a coop( mr. Wolffs repeating theme), monopoly and inflation will still exist then.
@@mickymtl Who knows. The oligarchy will be gone. And working people will have a long term prospective for themselves their families and their communities naturally as they live there. And not a freaking quarter to quarter stock market options view.
@@mickymtl Perhaps I missed something in the video. Did Professor Wolff say it would? If he didn't then I believe you are attempting a strawman argument.
What are Prof Wolffs thoughts on the Movement for a peoples party (MPP)? I truly think it could be a mayor step in the right direction and socialists and communists should join it collectively, not giveing up true anticapitalism but using this popular front to spread class conscious! Here is a link to their convention-video: ua-cam.com/video/t6u5xPJaW2s/v-deo.html
Capitalism increases labor productivity. This reduces the value of individual goods - they are produced with less labor - and in general the prices of goods decrease. However, this leads to lower wages because employees produce their livelihoods with less labor than before. In other words, it is possible for employers to reduce wages to such an extent that employees, with reduced wages, can buy the same amount of consumer products or "use value" as before because prices have fallen. All this leads to an increase in the time during which employees produce "surplus value" - if before they worked 4 hours to reproduce their livelihood and 4 hours for employers, now they work 2 hours for themselves and 6 hours for employers. In fact, as labor productivity increases, wages tend to decline in value. And if wages fall more slowly than the value of goods, it is possible with these reduced wages to buy even a little more quantity of products or "use value" than before. But in general, the ratio between the "surplus value" and wages is constantly growing. With the increasing of labor productivity in Capitalism employees work less and less for themselves and more and more for employers.
You just contradicted yourself, several times. If capitalism increase labor productivity while lowering prices, then wages are worth more, as is the value of the labor, since more production would be needed, as well as more consumption, since the profit/unit would be decreasing. In that scenario, wages, as they are now, would not be chasing rising prices....as they have been since 1939. The surplus in wages no longer needed for consumption could then be invested in the technology to replace "labor"...and they would eventually have "enough" and no longer be required to labor, and this would continue until all labor was replaced. And each cycle of this deflationary model would allow those required to "labor" to repeat the process. So the ideal model which removes income inequality over time is to manage the rate of deflation so that it is slow enough to achieve this result on a consistent time frame for each new person entering the labor force. ( say 20 to 30 years ) The present fiat/inflation model works in precisely the opposite direction...so all you have managed to do is get everything WRONG!!!!!
What happens when currency is printed by the trillions and put in the world system as debt? And said debt is extracted from the world economy by greedy people making huge profits and they buy gold and silver. I guess we are all about to find out.
Not True. The inflation of the currency supply must take place when currency is borrowed into existence so that the banks can be paid their interest and principle. End the Fed.
Examples? I can give you two: the Iraq war reduced the supply of oil in the world increasing its pirce making people who owned existing oil rich, the rising and rising prices of housing in the developed world beyond inflation.
@@aoeu256 Quite correct. Events can cause scarcity which will cause prices to rise. But Patricks point was that capitalists do this as a matter of normal activity and that has not been my experience while working in and running many businesses. Capitalists work to produce their products for a lower price so as to get more sales.
@@goldassayer93555 an easy example is companies throwing away and burning excess yield of certain products to keep the supply scare . A textbook example is the diamond industry , and the food industry .
@@seankelly378 But is this a common thing? Do you see places where business go to burn their excess inventory. And why would they produce the excess only to burn it if they could just not produce the products in the first place?
Inflation and monopolies are both primarily a result of governments. Monopolies naturally fall with government backing them and bailing them out because they are too big to fail. Inflation is a result of the government printing money too quickly. It is almost like the solution to both of these problems is to reduce the size and scope of the government
Totally unfair systems, even if incomes increased it's not enough to buy a new car . I don't know how we can manage Without Chinese cheap price products.
I am seriously shocked at Dr. Wolff's ignorance of a subject he should have mastered long ago. From 1835 to 1913 the United States had no central bank and we had gold and silver money. over that 90 year period prices of basic items like food, clothing, houses etc fell by half as the efficiencies of scale in manufacture and the improvements in technology like fertilizer, steam engine tractors and railroads and finally gasoline engine powered industry reduced the man hours required to produce products. All during that time the increasing population of the United States was fully employed working in the new industries. It was in 1913 that the Federal Reserve Bank was licensed by Congress and began counterfeiting currency. The increase in the quantity of currency without an increase in quantity of goods to purchase caused prices to be bid up. So you see that INFLATING the currency supply caused prices to rise. This is always the case. When Spain exploited the gold in South America and shipped back tons of the metal to Spain the price of labor and goods went up in Spain even though everyone was paying with gold. Inflation is entirely a quantity of money problem.
Partially correct...the following link tracks "inflation" from 1860 to present...in terms of purchasing power... www.in2013dollars.com/us/inflation/1860?amount=1#:~:text=In%20other%20words%2C%20%241%20in,power%20to%20%241.01%20next%20year. The FED didn't actually start counterfeiting money ( fiat ) until 1933, and this is only "technically true" because the notes were "supposedly" redeemable in "lawful money" except that for U.S. persons, this was not possible. ( the project of discarding the constitution required a bit of time and several incremental steps ) So actual inflation was fairly stable between 1860 and 1939, with the highest rate being slightly over 100% in the late 20's...but it had fallen to 67% by 1939....but after that it took off, and hasn't stopped, and even while the "money" was still "redeemable", the rate was 300% thru 1972.
@@jgalt308 Actually then president Roosevelt was asked to confiscate the gold of the American Citizens BECAUSE there was not enough gold in the banks to continue redeeming paper with gold. The printing of unbacked paper had alread progressed to the point where it was about to become obvious to the people.
@@jgalt308 The graph for inflation is scaled to shoe the rise in inflation from 1971 on which dwarf the action before then. But you can see that from 1865 ( the end of the civil war) to 1915 we had DEFLATION and on a properly scaled chart prices fell by 50% during that period. it just looks tiny on the chart because of what happened after 1971.
@@goldassayer93555 Rather than rely on the graph simply expand the year by year tracking where you can follow the increase and decrease of "purchasing power" using the $1. bench mark of 1860. This shows that from 1860, the highest level of inflation ( due to war costs ) is 96% in 1865, followed by consistent deflation thru 1897/1899 when the dollar recovered it's value, and this is followed by consistent inflation thru 1920, hitting a high of 141%, and then a consistent deflation thru 1939, to 67%. ( and as noted, money became effectively fiat in 1933 domestically since no redemption was possible. ) From this point the rate of inflation tracking is simple using the same method... 1939 $1.67---1972 $5.04 Inflation rate = 301% 1972 $5.04---1982 $11.63............= 234%......Cumulative Inflation Rate = 696% 1982 $11.63 ---1990 $15.75...........= 35%........CIR = 943% 1990 $15.75--- 2020 $31.22...........= 98%...........CIR = 1869% It should be noted that the actual inflation rate from 2002 to the present, includes the adjustments involving the chained CPI, so they so the actual rate is underestimated. One also cannot hope to compare the maximum inflation rate of 141% under the gold standard to the 301% of the 1939 thru 1972. ( and the even more ridiculous rates which followed under a fiat system. ) Now my reason for posting this analysis is not to argue with your general claim, but to emphasize the inflationary effect of the fiat/inflationary model as compared to that of the normal inflationary/deflationary cycle as experienced under the hard money constraints of gold/silver standard...and of the normal business cycle and the effects of fractional reserve banking of the various "independent" banks. ( this final aspect was a logical purpose for the Federal Reserve, which could provide "liquidity" to these banks, since the only way independent banks could deal with a "bank run" was to call in outstanding loans...which was the very purpose of their "existence" in the first place...and the 'treasury" had not evolved to the point of dealing with this aspect of "banking" and "money".....as for the "real" point of the FED, that was not achieved until 1933, when they gained 'control" of the banking system. ) As for Wolff and his "cult", it is not possible for any acknowledgement of this to be admitted or included in his "anti-capitalist" narrative...first because it challenges his claims of FDR being a "progressive" and secondly because it allows him to totally ignore both "governments" role in the "initiation" of the fiat money system, as well as the total corruption of it by the "corporations" he cites as being the "capitalists" responsible, yet neglecting the fact that everything has been legislatively enabled and upheld by the courts. ( which is to say that any evidence you post will be ignored accurate or otherwise and if you post here consistently you will be labeled a troll which I am surprised hasn't already occurred, and would have most certainly have, had you posted in response to something said by a cult member. ) As far as your other point and "redeem-ability" since the gold and silver were in actual circulation until 1933 and the coinage was still being minted, that seems a bit of a stretch, but I would appreciate any sources you might have regarding it.
Economics explains and predicts (or tries to) the mechanics of price change, inflation and other observable economic phenomena, but the fundamental reason for constantly rising prices in modern economies is the insatiable desire for greater and greater profits. In other words, GREED.
Inflation does not mean that prices rise. It means that the price of a basket of commodities rises, but some commodities in the basket might easily become cheaper, due to technological progress, economies of scale or some other reason.
As you can see from the comments on this Video the Federal Reserve Bank has set the conversation on inflation to be all about Justifications for more inflation. This serves their purpose as inflation is the source of their profits. The reality that Deflation is good for the people is missing from the conversation.
Prices rise due to supply and demand, interest rates, and regulations interfering within the market. Cannot blame capitalism on the latter. In fact, deflations (falling prices/lower cost of living) are usually the norm in a true free market.
Most of this is pathetic economic nonsense, even by Wolff's standards. True monopolies are very rare in the modern world, and therefore play only a minor role in rising prices. Rising prices (correctly referred to as price inflation) are almost always the result of either of two factors. First and foremost in today's world is currency inflation (an unwarranted expansion of the money supply by the government) or secondly, the interplay of the law of supply and demand, meaning either an increase in demand, or a decrease in the supply of goods. Wolff's answer to the reader's question merits his claim to be an 'economist' to be brought into serious question!
Clare Stucki - Please forgive me for questioning your credentials and feel free to set me straight, but given the lack of content on your UA-cam channel that began only 2018, I ask for the source of your assertions and disdain for Prof Wolf. I too have no credentials as an economist, but the information given in this video is consistent with my college classes of fifty years ago, and by observation still seems true. I feel compelled to add my observations of tariffs that under the Presidents of my lifetime have possibly helped capitalists by reducing competition, but have increased consumer prices by that decrease in competition, and more noticably profits of those capitalists as greed sets in along with the need to recoup their investment in the politician(s) that sold the idea of jobs creation through the miracle of those tariffs. Such greed and salesmanship can backfire when a disruption as America is currently experiencing causes reevaluation of needs and priorities, and indeed such reevaluating can have long term repercussions as people realise that they can live simpler and more fulfilling lives without the extras, then bye-bye jobs. While I am an Independent and moderate because of my observations of political extremes, I am continually perplexed by the Republican greed that requires Democrat corrections to keep America from such short-sighted ruin.
@@douglas_drew I suppose my "credentials" are a B.S. Degree in Economics, with a scary-high GPA. I never worked in the profession, I am an 85 yr-old retired entrepreneur. Wolff's problem, and likely yours and that of all Lefties, is that you allow your political ideology to inform your interpretation and understanding of the principles of Economics.
@@hazadus3 Taken that the US gold reserves, which are the largest in the world, are worth about $0.5 trillion at today's record-breaking price of gold, and FED's monetary base, which they would have to back up with gold if there was a gold standard, is worth $3-$4 trillion, how exactly would you implement this? :-)
@@jaakkooksa5374 The goal would be to value each currency in terms of current money supplies against available gold. So US dollar wouldn't be reserve, gold would take its place. The gold prices would have to be revalued much higher than current if any currency is to be convertible into physical gold. At current prices there is not enough gold and would cause deflation, so the price has to rise. If you think todays price is high, look at how much just the US dollar money supply has increased since golds previous high in 2011. Close to 300 percent rise in the money supply since then and no signs of this slowing any time soon.
I worked at a small cheese plant. One day plant manager told my group of 6 that the whey powder produced paid all cost and benefits paid out. We were selected for our quick math skills. Walking away I turn to my coworker saying are you doing the same math I am doing can it be true. He said the number he got was crazy. I said minimum 200 million annually take home after paying out all costs. He said yeah maybe higher. We worked for an international conglomerate and our tiny plant made much of the cheese sold in western north america. Over 80,000 lbs a day. Each day. The company is not good at making cheese rather they are good at buying out competition and using thier brand names to market the company's cheese. We were the junk yard. Purchased companies are dismantled and equipment dumped in our back 40 . This is done to prevent startups from buying cheaper used equipment. Our plant was pieced together with this used equipment as well but it was interesting to walk through old equipment and see whats around. Now part that you missed about how it works in north America. Regulation. Our business model included using regulators to endlessly harrass small competitors. Health inspections and code infractions. The company bribes politicians to set policies to hit small manufactures. Small manufactures produce a superior product compared to our mechanizations. Once all small competitors were forced out the government opted to let the big companies regulate themselves. The government actually shut down offices that oversee violations. This works for now but its easy to see the folly of to big. One cheese plant can have any number of things happen and its shut down. In the past the others pick up the business to fill the gap. Today our plant was shut down and a replacement plant producing 400,000lbs of cheese daily. There is no backup if the plant fails and the milk goes to the sewers. As you may have guessed milk now travels a great deal. If your local dairy produces milk it travels 1000+ miles to be made into cheese than 500 miles to a packaging plant and finally the round trip back to your grocery. All this inefficiency due to back room deals for political favors. When I was a teen I was into business. Reading book after book. One incredibly poorly written book had only one piece of clarity. This author exposed the greatest secret of capitalism with these words of advise "never underestimate government intervention. You go by a set of rules and forces in the economy. Government can step in at any moment and destroy all future profits. This must be manage". I doubt the author foresaw my company's idea to exploit inspectors but its how big business is done.
the capitalism hamster wheel ....prices rise...need more money.....fight for more money...win more money.....prices rise....need more money....fight for more money ....win more money....prices rise .....need more money....and so on for the rest of life....like a dog chasing it's tail and never actually getting anywhere. When I was young a family could get a home and live on £25 a week.
It's the eternal carrot on the stick
@Vincent Trivigno When I first started work I was 15 and that was 1967 ..£25 a week was a good working class adult wage at that time..although I was an electrical apprentice on £2 a week.
Investors also expect a profit year in and year out which is crazy stupid.
@@hotumupix yeah Shareholders a real fucking problem too. They REALLY hurt the employees in general, but the ones in the Game Industry. Man, watch some of Sterling's stuff on YT. Board and Shareholders are a prime reason there needs to be more democracy in the workplace
@ "It's the eternal carrot on the stick" - The problem remains people in general being TOO DAMN STUPID to realise they are being continuously conned by a VERY SMALL MINORITY who are building their extravagant lifestyles on the misery of many. They are led astray by a BLOODY MIRAGE...
A good example is from Hawaii, we have a few cell phone providers. My damn phone bill was $170 dollars, they charge me for everything. It cost me $700 for a terrible Sam Sung phone and outrageous bills. In Thailand we have many cell phone providers and use line which is free. My new I phone cost me $300 and my monthly payment is only $7 dollars a month
I'm guessing that has a lot to do with distance of phone signals. Being located in the middle of the ocean isn't an optimal location for service.
Everything is more expensive in Hawaii. they only thing you don't have to import is sunshine and rain.
I think that inflation is one of the most complex phenomena in economics, and because of that, it can't be explained mono-casually. Even in marxist economics there is a full range of causes that could influence prices (that are not the same as labor-values, which tend to decrease on the long run due to increases of productivity): supply and demand, increases in constant capital costs, the rate of profit, the overall performance of capital accumulation, class struggle, monetary system, exchange rates, etc. There is a huge hole regarding inflation in marxist economic theory (mainstream economics doesn't have any idea), but it's great starting a discussion about it!
Did you really viewed some other RDW and democracy at work posts?
Professor every time I listen to you i learn something ! Thank you !!!
Yeah, you sure do...of course it's total bullshit which I don't believe is "learning",
but hey, whatever works for ya. ( and be sure to avoid trading your US currency
for hard assets...after all, your might become a victim of the "scam" artists who
are speculating on them, rather than the "scam artists" that created the system
in the first place.
@Marlin Williams Hate your country? You mean the tree and the hills? Or the political system? Or the people? Be specific, because Wolff does not hate much of this. In fact, I do not think he hates capitalism, he just finds it interesting that we still put emphasis on an old deprecated system.
big capital has big adantage over prices. widening gap of inequality.
when I was young worked like a Donkey Now I am retired Donkey trying to survive
Have a couple of carrots while you listen
Kirk Afshar I totally get it! I was a school bus driver/substitute teacher 25 years....
hopefully a much more experienced donkey who saved for retirement.
@@goldassayer93555 unfortunately most ppl don't make enough to save. They live paycheck to paycheck.
@gespilk I totally agree. I grew up in the 70's with a single mom and she worked at Safeway. A grocery store w a union. We lived in a nice townhome and she drove a nice car. We were not rich but we lived middle class. If that were today we would be poor.
46 seconds in and already the good professor has addressed what Mark Fisher called capitalist realism in a simple and concise phrase. This is why I think Professor Wolff should run for office. He is, in my humble opinion, the very definition of Plato's unwilling philosopher-king.
Too bad he never answered the actual question so the only thing he is the definition
of is "Liar, Liar, pants on fire."!!!!!
@@jgalt308 this is one of the reasons this country has been enslaved by corporate tyrannies... "free citizens" being unable to understand a 7-minute speech given in 1st-grade English.
@@Perisemiotics Except that it has been enslaved by an "illegitimate, unconstitutional tyranny" whose
process began on March 9, 1933 and was completed in Aug of 1971 and is completely "corrupted",
so yes, you a partially correct regarding the result, but you are completely ignorant as to the source
and cause, as well as the remedy.
As for bullshit expressed in simple English...it is still bullshit.
@@jgalt308 such an interesting conspiration you alluded to... it's however so obscure, it isn't even worth being called a "conspiration."
If you prefer to run in circles, ellipsis, parables - instead of employing simple logic on historical facts, I wish you all the best.
@@Perisemiotics Except you have refuted none of the facts, and don't have the attention
span or the intelligence to even get close...
But hey impress me...what is required to actually change the "constitution"?
If you manage to answer that correctly, please explain how we managed to transform
our "lawful money" system, into a fiat one?
Another point to keep in mind regarding inflation vs. deflation is that inflation favors borrowers while deflation favors lenders. Given that businesses are borrowers by nature (whether they get their capital from from banks or by issuing stocks), one can see how they have an interest in keeping inflation going.
Thank you Professor
Thank you PRof Wolff.
Also, calculate rising material costs from material shortages and increase the cost to obtain material in relation to more difficult processes to get said material.
Learning so much! thank you
Thank you that you exist.
Great explanations, thanks a lot
Great
Why don’t you and Robert Reich do a show together? “With your powers combined” you could change the world.
앤서니 야 right!!! They kind of remind me of each other. President Wolff/Reich 2024🇺🇸🇺🇸💯💯
As nice as Prof Reich is, he’s still loyal to the Democratic party. He never calls them out whereas Prof Wolff has no issue with calling out corruption regardless of political party.
@@joyg2526 yea, I became interested in all this when Bernie ran this last time so I'm still learning. But I sort of thought the same. Totally agree.
Will you start teaching non credit classes for political economic dummies? I would gladly pay and be most gracious to learn from you. Your the only one who makes sense in all this confusion. Thank you Professor Wolff! Your brilliant!
He is already teaching you to be a dummy...why would you want him to make you stupider faster???
@@jgalt308 why are you here if you think its stupid? Go watch trumps brilliant plan that appears to be working out so well.
@@Regi254. Why would you make the "assumption" that criticism of Wolff indicates any approval of
Trump or any other political party or "ism"....?
So my question to you is, do you think that your statement is a valid argument regarding that "criticism",
and if you do...that is precisely why I waste my time posting here.....
As for my actual criticism of Wolff for "this video" ( and posted elsewhere here which you obviously didn't' read,
here it is, just for you.
J GALT
3 days ago
Ole Prof Wolff finally explains why the members of his "cult" can't read!!!!!
First the "click bait" question: Why do prices rise in capitalism?
Then the actual question asked: A patron of Economic Update asks: ""My friend and I have backgrounds in economics -- in fact I took economics back in the late 1980's at the time of Reagan, and I have taken it again recently. What shocked me was that they were teaching the same monetary theory today in the age of infinite creation of the medium of exchange through printing and through credit -- where the size of the money supply is no longer under anything resembling central bank control. No one I have ever met has been able to explain to me why, in light of what I know about economies of scale reducing unit costs and leading to efficiency and the burst of industrial technology in our age -- why do prices of consumer goods continue to increase while quality consistently decreases? Is this just because people have lost hope that things could be any other way? Why do I hear of deflation as a negative thing -- wouldn't this mean more disposable income for everyone, all things being equal?"
Now let's examine Wolff's answer ( total time invested 7:55 ) with the first 6+ minutes devoted to the effects of "competition"
and the "elimination" of the "inferior producers" of "inferior products" until it gets him where his "constant narrative" needs
him to go...the present "oligopolist" effect...after which he finally devotes the remaining minute to "deflation" and the
singular aspect of it, that leads to the "lowering of prices" for consumers.
So what does Wolff's answer have to do the "the QUESTION ASKED??????" ABSOLUTELY NOTHING!!!!!!!
THE ACTUAL QUESTION regards "monetary theory" and the present "fiat money/guaranteed inflation"
initiated by FDR in 1933, and "foisted" on the world in 1971, after exiting from Bretton-Woods. ( now the
questioner isn't aware of the preceding "facts", and Wolff consistently "ignores" this aspect of "economics"
because it doesn't fit his anti-capitalist rant, and avoids the "reality" that what exists NOW, is directly
related to the fiat system and the primary role of "government" in initiating and enabling and maintaining
it, for the last 87 years. )
In "economics", prices are determined by "supply and demand" and then mediated by the effect of
the element of diminishing returns". The next element in this formula is the stability of value of
the medium of exchange ( money ) and when this consists of " hard money " ( as required by
the "constitution" ) the normal business cycle oscillates between "inflation and deflation" and the
oscillation is minimized by the constraints imposed by the supply of money, itself...which can be
verified by looking at the cycle of 1860 thru 1939, and comparing it to that 1939 to the present.
Also, when this cycle is "constrained" by hard money the balance between "saving and debt" is
maintained because the effects of deflation discourage debt and encourage savings, while
inflation has the opposite effect...so as long as this natural cycle exists, the "extremes" of
both are limited. Unfortunately, this balance was eliminated in 1939, and constant inflation
encouraged debt ( to be paid with cheaper dollars ) and discouraged savings. ( which constantly
lost value ). Which is how we got HERE and there is no MYSTERY regarding it.
So why can't members of the "cult" read??? Because their leader can't read!!!! And it also calls into
question his claim to "authority" based on his "permission slips" in "history" and "economics", for
he either ignorant or lying in order to maintain his own mythology regarding "capitalism". ( which
is really ignorance of economics, and not the complicated kind, but the simple stuff. )
Finally one must ask, if this is what you get, being an actual ( pay-tree- on) supporter, you are clearly
being taken for a ride.
@@jgalt308 thank you for your information. I apologize for my assumption.. your comment about dummies sounded that of a Trump supporter.
Common sense tells me that what's going on in politics is off. Doesn't take a fancy degree in economics to know our current administration is not working out. I like listening to professor Wolff and I was complimenting him.
@@Regi254. I understand that and I have no objection to Wolff's goals or his understanding
of the conditions that exist.
What I do have a problem with is his attempt to "simplify" it, while omitting a lot of evidence
and being very selective regarding the history as well as the complicity of government in
the present reality...and the fact that the normal reaction to this information, is to disregard
it altogether...while the overall message is to ignore it completely, as in don't read it, and don't
respond, since it challenges the "narrative" and as such, requires some adjustment regarding
the "causes" as well as the "solutions" proposed to deal with them. ( which most here do
not seem willing to do. )
And they can now drop the quality and limit what is available because they control the market completely. Example: US "hobby stores." Back in the day, there were many small hobby shops, some of which even specialized in certain hobbies. They carried a wide and varied inventory. While Hobby Lobby and Michaels were driving them out of business, the Big Box stores tended to carry the same things, but when they won and drove all others out of business, the inventory dropped radically and now things that one could buy at the local hobby store, one cannot obtain from the box stores. Then they can also change the nature of the stores totally, so now Michaels sells more T-Shirts and other junk than hobby supplies. But the old stores are gone. Our only option is to go on line and buy things we cannot see clearly in advance, and sometimes wait weeks for delivery from China for things that turn out to be cheap junk.
widening inequality. artificial scarcity.
well... actually, constantly rising prices was a phenomenon most prominently observed during the times when labor was more organized. if wages go up, prices have to go up if companies want to stay profitable. the only way out would be faster automation, which in turn lead to even faster growing wages because unions knew that the workers could only keep their jobs if they had the purchasing power to buy all the additional stuff that came out of automation. in the 19th century, periods of extreme inflation and deflation that dwarf today's boom bust cycles were the norm, and in recent decades, inflation has come down dramatically to the point that the euro zone and japan actually are stuck in permanent deflation (and hence stagnation because there's no automation drive anymore) and the US could only maintain a bit of inflation by living on debt - the first long time inflation where increasing prices are actually a means of stealing from people (while the normal way of doing this is by cutting your wage faster than prices).
I understand the point that the capital class would prefer inflation - but by what process do they ensure that inflation happens? Are they actively working to increase it? Or just actively working to decrease deflation? Both? Neither? What processes do they use to manipulate the value of currency, if any?
Read a good book on monetary economics. I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Old editions cost a few dollars at Amazon.
Is there any way you could discuss monopsony’s ?
Hell yeah, that's how it works.
Pueden colocar los títulos en español?. Gracias.
where are the subtitles?
In A-Level Economics, inflation was portrayed as being healthy in small amounts to keep an economy dynamic and allocating resources efficiently. As people would have to think and act on pricing and not just remain staid
Deflation is the best way to redistribute wealth.
Price is the currency expression of labor materialized in commodities, and it is a stable quantity. But because the market economy under private ownership is in competition with each other and production is anarchic, prices will fluctuate up and down.
Sorry are you saying that prices are pegged to labour costs and not profit motives? I'm afraid that ignores the often 1000% profit margin on some commodities.
@@dinnerwithfranklin2451 the government added taxes to the price idiot . Turnover not net profit
I wish he would have mentioned the term monopolistic competition. Some competition is good. An entrepreneur will charge what the market will bear, and will also charge more because their product is too popular for the entrepreneur to keep up with the demand for their product. Oligopolies, monopolies, and duopolies often fix their prices so as to bar new entrepreneurs from entering the market, and take actions to eliminate a competitor if they still somehow manage to gain entry. Governments should pass laws that make these behaviors illegal, but the closest that we've gotten to that in the United States are the anti-trust laws. These laws have been largely neutered since the 70s by some key supreme court decisions and rulings. Price controls can curb inflation, but that can also lead to massive problems. This happened in the USSR, when price controls on food resulted in lower amounts of food production.
Well, I would say that usually corporations and their upper management DON'T actually directly conspire to rise prices, due to the optics and bad press of such behavior. What they have instead, is unaccountable Majority Stake Holders, and organizations for their particular industry which function to set the prices for their goods.
To some degree, the stakeholders are part of what drives the price of goods up, because they crave ever greater dividends. And if a company fails they are obviously gobbled up, and that reduces the amount of coordination necessary to engage in price fixing.
A lot of people don't realize though, that a lot of the industry organizations which setup industry based conventions for particular professionalized groups also function as a way to skirt the bad optics, the anti-competition, and anti-consumer practices of these corporations. In some cases, it is the same group they founded to "self-regulate".
The word to remember about how corporations hide their bad deeds... Plausible Deniability. They depend on the ways they fix prices and manipulate the economy being so murky, that they can gaslight you if you see what is going on but not how exactly they're doing it.
It is like a magic trick where they steal your money instead. The mechanisms of Capitalism have been designed to fuel and serve the monopolistic, and drive politics until they can more or less do bad things overtly, or have several layers of defense and denial if bad PR come their way.
You can't hold them accountable, you can only dismantle capitalism in its entirety.
Rarely do businesses have such a monopoly that they can raise prices at will. But even when they do they will cause people to find other ways to provide the goods and services at lower cost. The public is always looking for a bargain and will rush to the cheaper provider.
Demand pull or cost push, or both?
6:44 probably the biggest takeaway
You mean when he actually answers a small piece of the "actual question",
and his answer only covers a fraction of what deflation is?
In 1997, a new asphalt roof for my house was $2400. Now it is $7800. Wages haven't tripled. Inflation hasn't tripled. And oil prices have been down for a long time. We have an oligopoly of asphalt roofing manufacturers. Thanks for nothing Owen's Corning.
Capitalism + Time = Monopoly
7:20min He just rejected any relation to economic plans from the left "This is good for everyone" The latter statement is a statement about the preference of organizing relations. Like in a households the standard of living should be equally good for everyone. The same for the community and co-workers. The same applies to nations, and the globe. Such a statement is not neutral it is decisively on the side of equality. Please donate so he can keep on studying.
"why is American central bank federal reserve privately owned?" though unrelated to this topic, I would appreciate anyone with any insight to shed a light. what's its influence and has it anything to do with the dominating status of us dollar? I mean, why does it have to be private? can't a national bank do the job? other countries have that, right? what's the difference?
The Federal Reserve is not privately owned. And there is no difference between FED and other central banks. The FED is the central bank of the United States, just as, for example, the ECB is the central bank of the Eurozone. The differences that might exist are superficial. For example some central banks might be more independent from political guidance than others, but the principles of how they operate are always the same.
www.federalreserve.gov/faqs/about_14986.htm
@@jaakkooksa5374 You bought that bullshit????? Apparently, you missed the source of the information.....as in .gov?????
You probably think that "social security" is an "entitlement program" with a "trust fund"....and "debt" is something
we owe ourselves.
@@jgalt308 If you would like to learn the basics of monetary economics, including how central banks such as the FED work, I recommend Mishkin: The Economics of Money, Banking, and Financial Markets.
@@jaakkooksa5374 You lost any possible "sane" economic system on March 9, 1933....and
all current economic theory is based on continued growth...add fiat with guaranteed inflation
and you hit the limit very fast, so you can look forward to economic collapse or hope that
climate change ends your misery faster, which it may do.
ua-cam.com/video/auWX0jXyQaI/v-deo.html
Actually most people caught the bullshit here...while you totally missed that Wolf didn't actually answer
the question by someone who won the "lottery" and actually got chosen...and PAID for the privilege.
A patron of Economic Update asks: ""My friend and I have backgrounds in economics -- in fact I took economics back in the late 1980's at the time of Reagan, and I have taken it again recently. What shocked me was that they were teaching the same monetary theory today in the age of infinite creation of the medium of exchange through printing and through credit -- where the size of the money supply is no longer under anything resembling central bank control. No one I have ever met has been able to explain to me why, in light of what I know about economies of scale reducing unit costs and leading to efficiency and the burst of industrial technology in our age -- why do prices of consumer goods continue to increase while quality consistently decreases? Is this just because people have lost hope that things could be any other way? Why do I hear of deflation as a negative thing -- wouldn't this mean more disposable income for everyone, all things being equal?"
And to top it off, Wolff didn't bother to include the most basic of economics supply and demand...
So it's not MY understanding that you need be concerned with...
@@jgalt308 Thank you for your diatribe. If you would like to learn the basics of monetary economics, including how central banks such as the FED work, I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Let's return to the subject after you are finished reading it, OK?
Professor Richard Wolff
Competition means rate race...
There are winners and losers..
Peaceful Coexistence means...
Live and let live...
You win.... I win...
Monopolies and the fed. Sure there some fluctuations due to supply and demand, but if your asking why does everything become more expensive over time the answer is monopolies and the fed. Great question we should all naturally ask, because we’re told that capitalism increases competition driving prices down, but that’s clearly not what appears to be happening. Can’t wait to hear professor Wolf expound on the subject.
Central banks have inflation targets for very good reasons. If you are interested, read a good book on monetary economics. I recommend Mishkin: The Economics of Money, Banking, and Financial Markets. Old editions cost a few dollars at Amazon.
Doesn't the Fed in America (the wold reserve currency) also have something to do with it?
Also I feel like Prof. Wolff is over simplifying it, but I'm not saying this trend is not obviously there.
Probably, but I'm guessing that in order to truly understand it you would need a degree in economics. A brief 7 minute overview is also not long enough to explain everything about the topic.
@@DoinkertonGreeble Yeah thats true. He could probably make a whole series about this topic and not cover everything.
In any case, there's definitely plenty of examples of what he's saying. Even now the most obvious one is Bezos. Hahaha Talk about a monopoly. The prices are not even less expensive now. No surprise.
Microsoft is another one. People must pay stupid prices for an operating system that's a dumpster fire because of a monopoly propped up by unethical business practices.
The telecommunications sector is another examples, etc etc.
Sure, but usually anyone who blames the fed entirely is really talking about the jews and the classic "it's not *real* capitalism if I can't pay my 7 year old workers 7 cents a month."
@@user-fg8ux8zo6w I understand that it's multifaceted. I meant "is that also" a component? There was boom and bust before the Fed existed after all.
How many people in capitalism deputized how much money in capitalism on prices more or less conflict.
Thank you for this.
I wonder if we could go back to where you talk about deflation. You said deflation is good for consumers because it means lower prices, but my understanding is that it's bad largely because people would stop spending. I.e., they believe prices will fall in 3 months, so why should they make major purchases now?
On top of it being bad for capitalists who may not recover what they spent to produce the good (meaning fewer goods, which is bad for consumers), we should also recognize that to mean that would result in massive contractions in spending, which means a reduction in investments that people rely on for retirement or that governments relied on to pad the general funds.
My understanding was that deflation is bad for everyone in the long term.
That being said, maybe deflation is necessary when profit margins are so massive as they are now to bring the market back in to balance.
That's what we've all been lead to believe, I was no different, check out George Gammon, he recently laid that mis truth bare in his video on lies the Fed tells us. In the late 18th century to the early 19th there was a prolonged period of deflation, which still saw employees wages rising and they were able to save and build financial security for later life. But then the Fed was formed with their inflationary ideology, and we've been getting poorer ever since......
Actually deflation would benefit "everyone" since the price of everything would decrease,
while the value of "money" would increase and taking on "debt" would be avoided at all costs.
Nice
Prices rise thanks to productivity and wage growth! Ideally.
As total debt thus money supply grows, businesses will try to charge higher prices. In order to maximize profits.
Ideally though, in a free market economy, thanks to fierce competition, net wages should rise more than prices = productivity gains.
But requires a bargaining power of labor, which in America is out of order. Only 11% in unions.
So in America prices rise to fleece laborers. Very successfully btw... 😱😂😝
With gold and silver money prices fall because technology reduces the number of man hours needed to produce the product. With prices falling wages can stay the same while the worker enjoys a higher standard of living.This is what we Americans had from 1965 to 1913 and lost when the Congress installed the Federal Reserve Bank. End the Fed.
Prices been rising for 40+ years here in America. Little to no wage growth. Ton's of inflation in that same time.
5:14 Are you kiddin' me? I live in Brazil, and I'd be hard-pressed to point somewhere without inflation parading about. Around the '90s, every buck was locked (or whatever the term is) to a dollar, which helped boost the economy, but since then this has been steadily shifting, to the point that a dollar is now worth about five bucks - and this ultimately murders our buying power. Oh, so you wanna purchase the newest PS5 here? Either become a millionaire, or forget it; the impact of foreign markets is also an important variable, that was glossed over here...
It was meant as a simple explanation for those who are not aware of how inflation and deflation work. I suggest that this is why some of the finer points are not mentioned. Entire degrees are involved in a complete examination of the subject and that is not what this video was for
@@dinnerwithfranklin2451 Simple explanations need not be oversimplified. But, be as it may, it's not like we can't point these things out here in this space; thus, just so you know - inflation in this country sucks bollocks...
@@thstroyur I'm afraid the the audience is primarily american so simple explanations cannot be oversimplified. This is a population of whom 40% believe the sun revolves around the earth.
@@dinnerwithfranklin2451 “Tell me,” the great twentieth-century philosopher Ludwig Wittgenstein once asked a friend, “why do people always say it was natural for man to assume that the sun went around the Earth rather than that the Earth was rotating?” His friend replied, “Well, obviously because it just looks as though the Sun is going around the Earth.” Wittgenstein responded, “Well, what would it have looked like if it had looked as though the Earth was rotating?”
"Can we formulate physical laws so that they are valid for all CS (=coordinate systems), not only those moving uniformly, but also those moving quite arbitrarily, relative to each other? If this can be done, our difficulties will be over. We shall then be able to apply the laws of nature to any CS. The struggle, so violent in the early days of science, between the views of Ptolemy and Copernicus would then be quite meaningless. Either CS could be used with equal justification. The two sentences, 'the sun is at rest and the Earth moves', or 'the sun moves and the Earth is at rest', would simply mean two different conventions concerning two different CS. Could we build a real relativistic physics valid in all CS; a physics in which there would be no place for absolute, but only for relative, motion? This is indeed possible!" - Einstein & Infeld, 1938, The Evolution of Physics
@@thstroyur And this relates to the Professor's need to talk to his audience how? Obviously it doesn't. Thank you for your time, and I wish you well
So the working class can never rub elbows with the rich.
The system divides us. Often those in cobtrol divide other people so they
1) become angry with each other
2)becone easier to control.
Look at it this way. By the time were burning and hanging the rich at least none of us will even know them any more.
5:30 The disadvantages of deflation are pretty basic stuff of monetary economics. Deflation is not good for ANYBODY, neither the consumer nor the producer, because it encourages consumers to postpone their purchases, i.e. not consume, which means that producers cannot produce the commodities which would be consumed if there was no deflation, which means that the economy is producing commodities at less than full capacity. Firms then lay off people. Unemployment rises. GDP contracts. This is what we mean by recession or depression.
Deflation also disincentivises giving out loans and making investments. Loans and investments are of the utmost importance in our capitalistic system.
False deflation is good. Technology by definition is deflationary and makes things more efficient and cheaper which is the point of capitalism. The fed convinced you inflation is good which it isn’t
It's more complicated than that. Deflation is also a benefit to everybody because it reduces the burden of debt. Neither inflation nor deflation are inherently bad, they can be good or bad depending on the situation, depending on the person or institution, depending on the economic climate, etc. The economy is extremely complex and we need to stop thinking about everything in terms of black and white.
dmike3507 inflation is bad in every way. Increases prices on food and living expenses which negatively impacts poor and middle class exponentially more
@@CalCaliente Not if wages are increasing at the same or faster rate. Also reducing the value of the dollar makes US goods cheaper relative to other countries, thus increasing demand for US goods & creating jobs. If economies were as simple as you seem to think the world's top economists would not be debating about anything. Economies are extremely complex and nobody has them all figured out.
You have to look at evidence instead of theory. Do countries with little or no inflation, or even deflation, ALWAYS perform better economically than those with high inflation? Have you asked this question and actually looked at the evidence for it?
What's the impact of Russia and China buying and selling oil using the Euro as the currency?
Increase of prices doesn't just come from the monopilization of economies. Oligopolopy only increases the inflation rate. But iIt is the inherent nature of capitalism to increase prices because for capitalism to be successful each transaction must increase the value of the capital asset subject to the transaction. The capitalist can sell the product at the amount it cost to produce, otherwise he can't steal the fruit of the labor to make his profit.
An economy keeps chasing its tail. Until it find cheap labor to exploit.
As you know this is not an economic problem as opposed to a human problem. It doesn't seem to matter whether it is communist or capitalism the people at the top always get more than the people at the bottom.
There has never been a communist society
@@maximthefox south America dummy communism
finite supply of resources.
Majority of resources are renewable. Exception for fossil fuels and minerals. However, we can more than easily power the world with the available clean energies we have now: solar, wind, geothermal, tidal, etc. (Oil is really only needed for mining and certain types of construction).
The illogical market prefers to waste resources if it can make better short-term profit. Cyclical consumption / endless growth / blind profit drive doesn't care so much for sustainable or healthy approaches should they hurt the bottom-line. So, in a paradoxical manner, we are slowly destroying the very things we need for survival because outdated economics deems them "scarce".
*economics comes in part from Greek, meaning the management of a household. Hence, we live in an anti-economy.
@@glowingunknown5625 sure... but my point is prices rise because of supply...
Lately there will be those that say space mining will help...
earth is doomed and will be really really expensive.
uhh, deflation is bad for the workers too. if profits are falling and consumers are delaying purchases (why buy something today when it'll be cheaper tomorrow), then capitalists will invest less. that means layoffs.
nope!!!!
@@jgalt308 you like the watson institute, right? maybe listen to what mark blyth has to say on the subject.
@@Synerco Blythe is okay, but you have to listen to him carefully regarding
MMT and I don't agree with him on this anyway...but he is matter of fact, although not radical enough to
jeopardize his career and he took the same anti-economic approach as Steve Keen, so I like both of them,
but they can't save us from what this is.
@@jgalt308 no, but he's right about deflation.
@@Synerco nope!
If capitalism increases labor productivity while lowering prices,
then wages are worth more, as is the value of the labor, since more production would be needed, as well
as more consumption, since the profit/unit would be decreasing.
In that scenario, wages, as they are now, would not be chasing rising prices....as they have been since 1939.
The surplus in wages no longer needed for consumption could then be invested in the technology to
replace "labor"...and they would eventually have "enough" and no longer be required to labor, and this would continue until
all labor was replaced. And each cycle of this deflationary model would allow those required to "labor" to
repeat the process.
So the ideal model which removes income inequality over time is to manage the rate of deflation
so that it is slow enough to achieve this result on a consistent time frame for each new person entering
the labor force. ( say 20 to 30 years )
The present fiat/inflation model works in precisely the opposite direction...
The above is a response to another poster who manages to get everything wrong...and Wolff
didn't answer the question that was asked, and his understanding of deflation is only one
aspect of it...while he omits everything else.
Capitalist state/state capitalist
Well everything is cheaper now... supermarkets are full of luxury foods from all over the world, that is being bought and replaced constantly. The roads are full of BMW’s Mercs etc. Living standards are vastly better than they’ve ever been. Amazon stocks are through the roof because everyone’s buying so much stuff. I know this is all destroying the planet; but everything is so cheap now. Especially thanks to how things are financed. There is an under employed class that have been left behind, but everyone’ else’s standard of living is way up compared to 40 years ago.
Hold on, you never mentioned once the that fed printing money devalues the dollar. Look at some history, like the Zimbabwe dollar.
That can cause deflation but this video was about what deflation is and not the many many reasons for deflation. Did you watch it at all?
@@dinnerwithfranklin2451 I watched it all. However making everything a coop( mr. Wolffs repeating theme), monopoly and inflation will still exist then.
@@mickymtl Who knows. The oligarchy will be gone. And working people will have a long term prospective for themselves their families and their communities naturally as they live there. And not a freaking quarter to quarter stock market options view.
@@mickymtl Perhaps I missed something in the video. Did Professor Wolff say it would? If he didn't then I believe you are attempting a strawman argument.
@@alexpodolsky8980 oligarchy will still exist in the government. Once that is also removed then we can pave a way to a prosperous future.
What are Prof Wolffs thoughts on the Movement for a peoples party (MPP)? I truly think it could be a mayor step in the right direction and socialists and communists should join it collectively, not giveing up true anticapitalism but using this popular front to spread class conscious! Here is a link to their convention-video: ua-cam.com/video/t6u5xPJaW2s/v-deo.html
Capitalism increases labor productivity. This reduces the value of individual goods - they are produced with less labor - and in general the prices of goods decrease. However, this leads to lower wages because employees produce their livelihoods with less labor than before. In other words, it is possible for employers to reduce wages to such an extent that employees, with reduced wages, can buy the same amount of consumer products or "use value" as before because prices have fallen. All this leads to an increase in the time during which employees produce "surplus value" - if before they worked 4 hours to reproduce their livelihood and 4 hours for employers, now they work 2 hours for themselves and 6 hours for employers. In fact, as labor productivity increases, wages tend to decline in value. And if wages fall more slowly than the value of goods, it is possible with these reduced wages to buy even a little more quantity of products or "use value" than before. But in general, the ratio between the "surplus value" and wages is constantly growing. With the increasing of labor productivity in Capitalism employees work less and less for themselves and more and more for employers.
You just contradicted yourself, several times. If capitalism increase labor productivity while lowering prices,
then wages are worth more, as is the value of the labor, since more production would be needed, as well
as more consumption, since the profit/unit would be decreasing.
In that scenario, wages, as they are now, would not be chasing rising prices....as they have been since 1939.
The surplus in wages no longer needed for consumption could then be invested in the technology to
replace "labor"...and they would eventually have "enough" and no longer be required to labor, and this would continue until
all labor was replaced. And each cycle of this deflationary model would allow those required to "labor" to
repeat the process.
So the ideal model which removes income inequality over time is to manage the rate of deflation
so that it is slow enough to achieve this result on a consistent time frame for each new person entering
the labor force. ( say 20 to 30 years )
The present fiat/inflation model works in precisely the opposite direction...so all you have managed
to do is get everything WRONG!!!!!
What happens when currency is printed by the trillions and put in the world system as debt? And said debt is extracted from the world economy by greedy people making huge profits and they buy gold and silver. I guess we are all about to find out.
Inflation is due to money printing and expanding money supply capitalism and technology by definition is deflationary.
"Inflation is due to money printing and expanding money supply"
Cost push and demand pull inflation occur regardless of changes in money supply.
We all pay the monopoly rent
but even monopolies are better then markets
Capitalism needs to artificially create scarcity to keep prices high and henceforth maximizing profits.
Not True. The inflation of the currency supply must take place when currency is borrowed into existence so that the banks can be paid their interest and principle. End the Fed.
Examples?
I can give you two: the Iraq war reduced the supply of oil in the world increasing its pirce making people who owned existing oil rich, the rising and rising prices of housing in the developed world beyond inflation.
@@aoeu256 Quite correct. Events can cause scarcity which will cause prices to rise. But Patricks point was that capitalists do this as a matter of normal activity and that has not been my experience while working in and running many businesses. Capitalists work to produce their products for a lower price so as to get more sales.
@@goldassayer93555 an easy example is companies throwing away and burning excess yield of certain products to keep the supply scare . A textbook example is the diamond industry , and the food industry .
@@seankelly378 But is this a common thing? Do you see places where business go to burn their excess inventory. And why would they produce the excess only to burn it if they could just not produce the products in the first place?
Awesome, meaning Stalin was right on yearly salary increases and prices decreases
Inflation and monopolies are both primarily a result of governments. Monopolies naturally fall with government backing them and bailing them out because they are too big to fail. Inflation is a result of the government printing money too quickly. It is almost like the solution to both of these problems is to reduce the size and scope of the government
nobody is an economist who ignores the skyrocketing federal debt
Totally unfair systems, even if incomes increased it's not enough to buy a new car .
I don't know how we can manage Without Chinese cheap price products.
Talk about North Korea compare with south Korea
That will never happens because it doesn't help to spread his Marxist propaganda!
@@juniorgod321 Right. Of course.
And then compare China to India. Then Nicaragua to Honduras, Guatemala and El Salvador. Then Belarus to Lithuania.
@@juniorgod321 why is a Samsung TV cheaper than Sony , because it not built in Japan
Richard debate Vladmiir Jaffe he loves him some Capitalism.
Just like a pimp or a drug dealer that enslaves his prostitutes and his clients gets them hooked.Then jacks up the prices . Controls the value .
Profit is what dictates how the people get the screw is done!
I am seriously shocked at Dr. Wolff's ignorance of a subject he should have mastered long ago.
From 1835 to 1913 the United States had no central bank and we had gold and silver money. over that 90 year period prices of basic items like food, clothing, houses etc fell by half as the efficiencies of scale in manufacture and the improvements in technology like fertilizer, steam engine tractors and railroads and finally gasoline engine powered industry reduced the man hours required to produce products. All during that time the increasing population of the United States was fully employed working in the new industries.
It was in 1913 that the Federal Reserve Bank was licensed by Congress and began counterfeiting currency. The increase in the quantity of currency without an increase in quantity of goods to purchase caused prices to be bid up. So you see that INFLATING the currency supply caused prices to rise.
This is always the case.
When Spain exploited the gold in South America and shipped back tons of the metal to Spain the price of labor and goods went up in Spain even though everyone was paying with gold. Inflation is entirely a quantity of money problem.
Partially correct...the following link tracks "inflation" from 1860 to present...in terms of purchasing
power...
www.in2013dollars.com/us/inflation/1860?amount=1#:~:text=In%20other%20words%2C%20%241%20in,power%20to%20%241.01%20next%20year.
The FED didn't actually start counterfeiting money ( fiat ) until 1933, and this is only
"technically true" because the notes were "supposedly" redeemable in "lawful money"
except that for U.S. persons, this was not possible. ( the project of discarding the constitution
required a bit of time and several incremental steps )
So actual inflation was fairly stable between 1860 and 1939, with the highest rate being
slightly over 100% in the late 20's...but it had fallen to 67% by 1939....but after that it took off,
and hasn't stopped, and even while the "money" was still "redeemable", the rate was 300%
thru 1972.
@@jgalt308 Actually then president Roosevelt was asked to confiscate the gold of the American Citizens BECAUSE there was not enough gold in the banks to continue redeeming paper with gold. The printing of unbacked paper had alread progressed to the point where it was about to become obvious to the people.
@@jgalt308 The graph for inflation is scaled to shoe the rise in inflation from 1971 on which dwarf the action before then. But you can see that from 1865 ( the end of the civil war) to 1915 we had DEFLATION and on a properly scaled chart prices fell by 50% during that period. it just looks tiny on the chart because of what happened after 1971.
@@goldassayer93555 Rather than rely on the graph simply expand the year by year tracking where you
can follow the increase and decrease of "purchasing power" using the $1. bench mark of 1860.
This shows that from 1860, the highest level of inflation ( due to war costs ) is 96% in 1865, followed
by consistent deflation thru 1897/1899 when the dollar recovered it's value, and this is followed by
consistent inflation thru 1920, hitting a high of 141%, and then a consistent deflation thru 1939,
to 67%. ( and as noted, money became effectively fiat in 1933 domestically since no redemption was possible. )
From this point the rate of inflation tracking is simple using the same method...
1939 $1.67---1972 $5.04 Inflation rate = 301%
1972 $5.04---1982 $11.63............= 234%......Cumulative Inflation Rate = 696%
1982 $11.63 ---1990 $15.75...........= 35%........CIR = 943%
1990 $15.75--- 2020 $31.22...........= 98%...........CIR = 1869%
It should be noted that the actual inflation rate from 2002 to the present,
includes the adjustments involving the chained CPI, so they so the actual rate
is underestimated.
One also cannot hope to compare the maximum inflation rate of 141% under the
gold standard to the 301% of the 1939 thru 1972. ( and the even more ridiculous
rates which followed under a fiat system. )
Now my reason for posting this analysis is not to argue with your general claim, but to
emphasize the inflationary effect of the fiat/inflationary model as compared to that
of the normal inflationary/deflationary cycle as experienced under the hard money constraints
of gold/silver standard...and of the normal business cycle and the effects of fractional reserve
banking of the various "independent" banks. ( this final aspect was a logical purpose for
the Federal Reserve, which could provide "liquidity" to these banks, since the only way
independent banks could deal with a "bank run" was to call in outstanding loans...which was the
very purpose of their "existence" in the first place...and the 'treasury" had not evolved to the point
of dealing with this aspect of "banking" and "money".....as for the "real" point of the FED,
that was not achieved until 1933, when they gained 'control" of the banking system. )
As for Wolff and his "cult", it is not possible for any acknowledgement of this to be admitted
or included in his "anti-capitalist" narrative...first because it challenges his claims of FDR being
a "progressive" and secondly because it allows him to totally ignore both "governments" role
in the "initiation" of the fiat money system, as well as the total corruption of it by the "corporations"
he cites as being the "capitalists" responsible, yet neglecting the fact that everything has been
legislatively enabled and upheld by the courts. ( which is to say that any evidence you post
will be ignored accurate or otherwise and if you post here consistently you will be labeled a
troll which I am surprised hasn't already occurred, and would have most certainly have, had you
posted in response to something said by a cult member. )
As far as your other point and "redeem-ability" since the gold and silver were in actual circulation
until 1933 and the coinage was still being minted, that seems a bit of a stretch, but I would appreciate
any sources you might have regarding it.
Economics explains and predicts (or tries to) the mechanics of price change, inflation and other observable economic phenomena, but the fundamental reason for constantly rising prices in modern economies is the insatiable desire for greater and greater profits. In other words, GREED.
Inflation does not mean that prices rise. It means that the price of a basket of commodities rises, but some commodities in the basket might easily become cheaper, due to technological progress, economies of scale or some other reason.
I was thinking the same thing too,
without a balance equivalent,it's like you are always ask to pay more while working for less.
AMAZON!
But let’s raise the minimum wage.
As you can see from the comments on this Video the Federal Reserve Bank has set the conversation on inflation to be all about Justifications for more inflation. This serves their purpose as inflation is the source of their profits.
The reality that Deflation is good for the people is missing from the conversation.
Prices rise due to supply and demand, interest rates, and regulations interfering within the market. Cannot blame capitalism on the latter. In fact, deflations (falling prices/lower cost of living) are usually the norm in a true free market.
It socialism policy... live in Australia & Northern Europe you will see government ripping you off a consumer
Love from Australia ❤️ it is expensive to be poor like a hamster wheel can never jump off Greed is abuse
Government crooks on franchise owner and consumers in Australia. QLD & VIC worse state to live
I.E.: Walmart
would you PLEASE FIX YOUR GLASSES!
Greed
Most of this is pathetic economic nonsense, even by Wolff's standards. True monopolies are very rare in the modern world, and therefore play only a minor role in rising prices. Rising prices (correctly referred to as price inflation) are almost always the result of either of two factors. First and foremost in today's world is currency inflation (an unwarranted expansion of the money supply by the government) or secondly, the interplay of the law of supply and demand, meaning either an increase in demand, or a decrease in the supply of goods.
Wolff's answer to the reader's question merits his claim to be an 'economist' to be brought into serious question!
Clare Stucki - Please forgive me for questioning your credentials and feel free to set me straight, but given the lack of content on your UA-cam channel that began only 2018, I ask for the source of your assertions and disdain for Prof Wolf. I too have no credentials as an economist, but the information given in this video is consistent with my college classes of fifty years ago, and by observation still seems true.
I feel compelled to add my observations of tariffs that under the Presidents of my lifetime have possibly helped capitalists by reducing competition, but have increased consumer prices by that decrease in competition, and more noticably profits of those capitalists as greed sets in along with the need to recoup their investment in the politician(s) that sold the idea of jobs creation through the miracle of those tariffs. Such greed and salesmanship can backfire when a disruption as America is currently experiencing causes reevaluation of needs and priorities, and indeed such reevaluating can have long term repercussions as people realise that they can live simpler and more fulfilling lives without the extras, then bye-bye jobs. While I am an Independent and moderate because of my observations of political extremes, I am continually perplexed by the Republican greed that requires Democrat corrections to keep America from such short-sighted ruin.
@@douglas_drew I suppose my "credentials" are a B.S. Degree in Economics, with a scary-high GPA. I never worked in the profession, I am an 85 yr-old retired entrepreneur.
Wolff's problem, and likely yours and that of all Lefties, is that you allow your political ideology to inform your interpretation and understanding of the principles of Economics.
@@clarestucki5151 Thanks for the reply and your honesty. I rest my case.
Capitalism chose gold as money, stable prices no inflation no deflation. Mr Wolff unfortunately left this out of his propaganda.
"the best way to destroy the capitalist system is to debauch the currency." Vladamir Lenin
Do you believe that the United States should change to gold standard? Can you think of any reasons why it might be impossible?
@@jaakkooksa5374 I think they will have no choice but to remonetize gold, looks like were in the last stage of the fiat money experiment.
@@hazadus3 Taken that the US gold reserves, which are the largest in the world, are worth about $0.5 trillion at today's record-breaking price of gold, and FED's monetary base, which they would have to back up with gold if there was a gold standard, is worth $3-$4 trillion, how exactly would you implement this? :-)
@@jaakkooksa5374 The goal would be to value each currency in terms of current money supplies against available gold. So US dollar wouldn't be reserve, gold would take its place. The gold prices would have to be revalued much higher than current if any currency is to be convertible into physical gold. At current prices there is not enough gold and would cause deflation, so the price has to rise.
If you think todays price is high, look at how much just the US dollar money supply has increased since golds previous high in 2011. Close to 300 percent rise in the money supply since then and no signs of this slowing any time soon.
In layman's terms, it's called GREED.
O Nomj de k l NCC kmk km
Rhode
Monopoly socialism liar
I worked at a small cheese plant. One day plant manager told my group of 6 that the whey powder produced paid all cost and benefits paid out. We were selected for our quick math skills. Walking away I turn to my coworker saying are you doing the same math I am doing can it be true. He said the number he got was crazy. I said minimum 200 million annually take home after paying out all costs. He said yeah maybe higher.
We worked for an international conglomerate and our tiny plant made much of the cheese sold in western north america. Over 80,000 lbs a day. Each day.
The company is not good at making cheese rather they are good at buying out competition and using thier brand names to market the company's cheese. We were the junk yard. Purchased companies are dismantled and equipment dumped in our back 40 . This is done to prevent startups from buying cheaper used equipment. Our plant was pieced together with this used equipment as well but it was interesting to walk through old equipment and see whats around.
Now part that you missed about how it works in north America. Regulation. Our business model included using regulators to endlessly harrass small competitors. Health inspections and code infractions. The company bribes politicians to set policies to hit small manufactures. Small manufactures produce a superior product compared to our mechanizations.
Once all small competitors were forced out the government opted to let the big companies regulate themselves. The government actually shut down offices that oversee violations.
This works for now but its easy to see the folly of to big. One cheese plant can have any number of things happen and its shut down. In the past the others pick up the business to fill the gap. Today our plant was shut down and a replacement plant producing 400,000lbs of cheese daily. There is no backup if the plant fails and the milk goes to the sewers.
As you may have guessed milk now travels a great deal. If your local dairy produces milk it travels 1000+ miles to be made into cheese than 500 miles to a packaging plant and finally the round trip back to your grocery. All this inefficiency due to back room deals for political favors.
When I was a teen I was into business. Reading book after book. One incredibly poorly written book had only one piece of clarity. This author exposed the greatest secret of capitalism with these words of advise "never underestimate government intervention. You go by a set of rules and forces in the economy. Government can step in at any moment and destroy all future profits. This must be manage". I doubt the author foresaw my company's idea to exploit inspectors but its how big business is done.