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Yesterday's Economics Class Banger (lemmygrad.ml)

submitted 2 days ago by knfrmity@lemmygrad.ml to c/comradeship@lemmygrad.ml

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Billionaires are necessary because they take money out of circulation, providing some deflationary pressure to the monetary system. If we were to distribute all their wealth, we'd have such high inflation that the entire economy would collapse.

A Reddit brained economics teacher

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[–] darkernations@lemmygrad.ml 4 points 13 hours ago* (last edited 13 hours ago) (1 children)

Wages in China have increased by 500% from 1994 to 2024, by far the highest rate of increase of any country

https://lemmygrad.ml/post/7854832

Yet no/minimal inflation in China (as you know); whenever someone says inflation = “too much money chasing too few goods” one could use this as an example to highlight the contrast between a whole people’s democracy and the liberal political theatre of electoralism, and how mainstream understanding of inflation is a load of nonsense.

Deflation (obviously a negative potrayal by CNBC): https://www.cnbc.com/2025/10/15/china-cpi-ppi-deflation-september-trade-worries.html

Furthermore, asset-price inflation is a thing.

(The economics professor may respond that there has been a corresponding increase in billionaires in China for which the retort is that here has not been a proportionate increase in billionaires' wealth as a whole compared to the wealth of the masses and its representative as the state)

[–] GreatSquare@lemmygrad.ml 1 points 12 hours ago* (last edited 12 hours ago) (1 children)

We can safely say that the productive capacity of China has risen as well. Hence the amount of goods has matched the amount of wages in the system. Goods remain cheap relative to wages because Chinese supply chains can meet the demands.

This is completely unlike examples of hyperinflation where government has injected cash into an economy that does not have the capacity to ramp up production. E.g. printing more money to give to starving welfare recipients doesn't increase the production of food. Hence inflation.

What's hilarious about knfrmity's teacher is the idea that the billionaires are sitting on piles of cash. They own assets. Those aren't that liquid. Distribution of their wealth would put more assets onto the market, not more cash. Hence it's not going to be a cause of inflation.

[–] darkernations@lemmygrad.ml 3 points 10 hours ago* (last edited 10 hours ago)

This is completely unlike examples of hyperinflation where government has injected cash into an economy that does not have the capacity to ramp up production. E.g. printing more money to give to starving welfare recipients doesn’t increase the production of food. Hence inflation.

The determinant being productive capacity rather than money supply here. It is those who ultimately control the means of production that help set the prices.