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If you are planning your life around putting money into assets tied to the imperial core e.g. housing and retirement how do you feel abt the entire financial system being a giant bubble (lemmy.ml)

submitted 1 day ago by mistermodal@lemmy.ml to c/asklemmy@lemmy.ml

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If you think this started with Silicon Valley that's a mistake

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[–] jaycifer@lemmy.world 1 points 1 day ago (1 children)

Right, but I’m having some trouble connecting that summation of supply and demand to your implied disconnect between productivity increases and supply. Were you specifically talking about scenarios where there is no space for output to grow, only input to shrink?

For instance, four people extract 1 ton of raw material in a day. A new machine means it only takes two people to extract that same 1 ton, but the size of the material patch stays the same so you can still only operate the one machine rather than using all four people to operate two machines. Thus increasing productivity without increasing “supply?”

[–] Cowbee@lemmy.ml 1 points 1 day ago

Kinda, not quite. Supply and demand naturally cover each other in societies at certain levels. Price is primarily determined by the cumulative labor that goes into it, including the previous labor for machinery, raw materials, etc. If the composition of said commodity raised in constant capital (machinery, raw materials, etc) while lowering by ratio in variable capital (labor), price generally lowers. The supply can increase or decrease, what impacted the value was the change in total labor time.

In other words, supply and demand are best seen as averages that push and pull price above and below value. Productivity changes that value, which sets new supply and demand.