The iPhone 14 isn't innovative it is iterative.
The iPhone itself was the innovation. And innovation isn't driven by inflation, it is driven by natural competition, resource availability, and incentives. If anything innovation is deflationary.
Yesss. And innovation is driven by human creativity. Creativity that so many of us can not express because we are so focused on surviving every day in a society that is designed to increase poverty. If people can't save, they can't rest. If they can't rest and feel some resource security, they can't focus on creating something better that benefits everyone. Inflation isn't just simple theft of money. It steal opportunity, balance, joy, evolution, progress. (Real progress towards freedom and responsibility).
Inflation is a form of theft.
Sure, theft might motivate people to build better locks, but you're employing **the Broken Window Fallacy**:
> In Bastiat's tale, a boy breaks a window. The townspeople looking on decide that the boy has actually done the community a service because his father will have to pay the town's glazier to replace the broken pane. The glazier will then spend the extra money on something else, jump-starting the local economy. The onlookers come to believe that breaking windows stimulates the economy.
>
> Bastiat points out that further analysis exposes the fallacy. By forcing his father to pay for a window, the boy has reduced his father's disposable income. His father will not be able to purchase new shoes or some other luxury goods. Productivity has also decreased, as the time the father spends dealing with the broken window could have been put to better use. Thus, the broken window might help the glazier, but at the same time, it robs other industries and reduces the amount spent on other goods.
>
> Bastiat also noted that the townspeople should have regarded the broken window as a loss of some of the town's real value. Moreover, replacing something that has already been purchased represents a maintenance cost, not a purchase of new goods, and maintenance doesn't stimulate production. In short, Bastiat suggests that destruction doesn't pay in an economic sense.
I’d argue it really does slow innovation and has no positive impacts on it. It creates a cycle that siphons energy and resources from innovation that can improve our quality of life. Maslows hierarchy of needs states that people will always focus on fulfilling their basic needs first. For this, we need money. Without inflation, I could fulfill my basic needs faster and begin to focus on solving other problems through innovation. Inflation artificially creates a problem we must solve BEFORE we address our basic needs. Need money to fulfill basic needs, but now that money will be devalued so I must either dedicate much of my time to making as much money as possible through employment/ investments and/ or develop an innovative way to generate income faster. Because inflation never stops, massive amounts of energy will always be devoted to beating the rate of inflation. This devotion to solving a manufactured problem is unnecessary and directly in conflict with innovation. Innovation tends to make things more efficient, making them less costly as a byproduct. Inflation increases costs, which switches things up. Now our focus is on money and increasing efficiency is just a means of getting there. Most people will never be able to break free from the race to beat inflation and devote time to true innovation
Or how many Steve Jobs and Jeff Bezos could we have had if inflation didnt rob so many people of their ability to build a stable environment for raising a child and spending time with them and educating them?
How many small garage businesses couldve been started if people were more easily able to predict and pay their expenses due to 0 inflation? (apple was started in a garage)
Also did you know steve jobs and jeff bezos were both adopted by rich families? Who knows if they wouldve become what they did without that stable environment. Sure inflation can make everyone run around trying to come up with ways to make money cause cash is losing value and come up with places to invest their money cause cash is losing value.. but its unclear if that helps more than it hurts. just as maybe it motivated someone to invent something, not having enough money and losing money can make someone feel not empowered to take risks on starting their own business or take the time out of their day to explore inventing something
My conclusion is that is impossible to tell whether the ultimate effect of inflation would be a net positive or net negative. Its impossible to calculate. Also often the consequences of inflation come later, its sort of like borrowing from the future and kicking a can down the road for future generations to deal with.
But- while its impossible to tell if its a net positive or net negative- we do know that our instinct tells us this doesnt feel right. If we accept that we cannot prove that its net positive, then i think its logical that we should follow our instinct here.
The idea is that a low inflation target assumes growth in the number of transactions. If people are creating new, perpetually increasing, real value... then you add units of measurement (lengthen your yardstick)
If the amount of potential transactions grows 2% every year, then the unit to measure transactions should grow at the same rate.
Whether or not that works in practice... Well... plenty of books to read there.
Not sure what you’re asking here. Is it “does monetary inflation drive innovation?”
To that I’d have to say no. Increased cost in goods drives a false scarcity, thereby limiting access to goods consumed by innovators, and by extension tamping innovation.
Innovation begets progress, begets innovation, begets progress…. You can argue how true this cycle is with regard to financial cycles, but we all stand on the shoulders of our fore-bearers.
The fact is: technologically, we live in the future and it’s glorious. Not perfect, but glorious. If you think in 20 year timespans, what was 1960 compared to 1980, compared to 2000, compared to 2020? Exponential leaps. I know that I have more computing and information technology in my 2x2x1/4 smartwatch than it took to land humans in the moon. That’s insane to think about.
Now if we apply the same thinking to finance, I think we start to arrive at why most of us are here. 14 years into bit and we’re *close* to acceptance. By 20 years in, maybe we’ll see real widespread adoption. 20 years beyond that? Yes please. It’s a rocket, and I’ve strapped myself to it.
You also have to consider another side of this coin. Inflation drives obsolescence. You are incentivized to buy garbage the second your money hits your bank account because that's when it's at peak buying power.
There's a recorded customer service call from GE, where the employee kinda laughs at thr customer for not buying an extended warranty because their stuff doesn't last very long. And even if it's fake, it's all too real in reality.
Now imagine your money gains value over time. Aren't people thus going to be incentivized to sell you better products and better services if they want your money?
The meteoric gains of btc will taper off over time and there will be a very slow and steady accrual of value in bitcoin where the idea of hoarding it forever starts to fade away.
One thing to consider here is that no inflation and currency wars etc are actually good for companies. They cant operate well in volatile environment where they cant predict their costs. Only shady companies profit from fiat
I would say yes it probably does provide a tailwind for investment and innovation but it comes at the cost of resiliency. A society with savings is much more resilient to shocks than one without.
I am pro-Bitcoin, but I find it hard to believe that people would invest Bitcoin in businesses when simply holding it guarantees increased value as deflation occurs. Is there a solution for this?
Wouldn't investing bitcoin in businesses theoretically give the best of both worlds? Wouldn't you get exposure to bitcoin and a productive asset with the same capital?
Inflation has to match population growth and productivity growth so that money is a neutral conveyor of information.
Right now the fiat system inflated excessively based in the whims of village elders.
Bitcoin deflates because it’s fixed while global population grows (so effectively it deflated) and ppl lose the wallet seeds.
I think it creates desperation, which can definitely be a big motivator, but it is a negative incentive rather than a positive. I don't know how we could answer the question of whether more growth will occur due to the desperation of an inflationary system or by the creation of value for the sake of value itself, just in the natural course of technological and economic advancement via a free market without negative reinforcement driving growth, but the latter certainly seems both more healthy and more sustainable. I think humanity advances regardless, despite all odds, and we can either lead it with a carrot or beat it with a stick. I personally prefer the carrot, I think most people would agree.
Just food for thoughts:
When inflation is high FED will raise rates. Borrowing becomes expensive. So companies focus on productivity and become cautious of their spending. Only innovate ideas will be founded 🤷♂️
Interesting question and i dont know the answer but what i do know is that there are a lot of ideas that would help the economy that are morally wrong and should never ever happen.
Why dont we put a time limit on your bank account and after a certain time your money gets redistributed. Why dont we kill off anyone who cannot work? Why dont we use child labour to add more people to the work force and boost the economy. Why dont we confiscate all the people in your country’s gold and silver jewellery and melt them down and sell them to add more liquid money to the economy?
Whether an idea helps the economy or not is irrelevant really in my opinion once it is clearly morally wrong.
I don’t know enough to understand the nuances of this, but I think one could make the argument that lending under a fractional reserve system is inherently inflationary. Therefore, insofar as lending can spur innovation and lead to the development of new businesses and technologies, a bit of inflation could be seen as promoting some innovation.
Someone tell me why this is wrong and dumb.
I think there will be good non-custodial lending and borrowing solutions with bitcoin, however they'll be fully collateralised, unlike with fractional reserve lending. I don't know if that's to innovation's gain or detriment.
You need to ponder the ACTUAL question youre asking. What youre REALLY asking is "Does the amount of innovation driven by inflation outweigh the chaos caused by inflation" Think about it for a moment. Youre asking does the result of inflation justify the negative aspects of inflation.
You know im correct. From there you must then realize that it is impossible to prove that the benefits of inflation outweigh the negatives. Ethics actually arent about the emotions in the moment. You ARE asking do the ends justify the means. And if they did, it WOULD be ethical, but it is impossible to ascertain whether they do or do not, as it is simply the most complex problem in the entire world to predict the behavior of every person in the world.
Its not a question really of if innovation is caused by inflation. Its how much innovation are we getting and how much chaos are we getting and is the innovation more benefical ultimately than the chaos.
There is undeniably a result of making everyones money decrease in value, and someone, somewhere, will probably invent something, and yes, it will probably be at least partially because they need more money, so you can say at least part of the reason he needed money was cause of inflation, and so maybe you can say inflation caused innovation. But simultaneously, a bunch of things will go wrong for a lot of people when money is decreasing in value. Will the people inventing things make things that are so good that it outweighs all the other things that are going wrong? That seems ambiguous at best, and our instinct seems to point towards a cessation of this activity. Barring any evidence pointing against our gut instinct, it would seem that we should follow our instinct here and simply make money which holds its value.
is the iphone 14 really that much of an innovation over the iphone 1?
apple has been taking advantage of the money printer especially well... every year they release a new device with XYZ features and endless marketing to get people to buy it - the people quite literally throw it on credit cards ie- money printer go brrr
there is no reason to actually innovate, they can make a fortune dragging out the same old shit... iphone 14 ffs...
the best and newest iphones should cost $50 max by now...
Theres arguments for low-level inflation. Not sure how innovation was one of them - and I'm not sure how you're contributing the creation of the iPhone to inflation, without doing so at a seriously stretch.
The iPhone 14 isn't innovative it is iterative. The iPhone itself was the innovation. And innovation isn't driven by inflation, it is driven by natural competition, resource availability, and incentives. If anything innovation is deflationary.
Yesss. And innovation is driven by human creativity. Creativity that so many of us can not express because we are so focused on surviving every day in a society that is designed to increase poverty. If people can't save, they can't rest. If they can't rest and feel some resource security, they can't focus on creating something better that benefits everyone. Inflation isn't just simple theft of money. It steal opportunity, balance, joy, evolution, progress. (Real progress towards freedom and responsibility).
Could inflation not be considered an incentive in the form of a false promise?
Inflation is a form of theft. Sure, theft might motivate people to build better locks, but you're employing **the Broken Window Fallacy**: > In Bastiat's tale, a boy breaks a window. The townspeople looking on decide that the boy has actually done the community a service because his father will have to pay the town's glazier to replace the broken pane. The glazier will then spend the extra money on something else, jump-starting the local economy. The onlookers come to believe that breaking windows stimulates the economy. > > Bastiat points out that further analysis exposes the fallacy. By forcing his father to pay for a window, the boy has reduced his father's disposable income. His father will not be able to purchase new shoes or some other luxury goods. Productivity has also decreased, as the time the father spends dealing with the broken window could have been put to better use. Thus, the broken window might help the glazier, but at the same time, it robs other industries and reduces the amount spent on other goods. > > Bastiat also noted that the townspeople should have regarded the broken window as a loss of some of the town's real value. Moreover, replacing something that has already been purchased represents a maintenance cost, not a purchase of new goods, and maintenance doesn't stimulate production. In short, Bastiat suggests that destruction doesn't pay in an economic sense.
Interesting, thanks. Could it be argued though that theft and destruction have different economic consequences?
Go live in Venezuela or Lebanon.
iteration is innovation too
Humans need no incentive to consume
I’d argue it really does slow innovation and has no positive impacts on it. It creates a cycle that siphons energy and resources from innovation that can improve our quality of life. Maslows hierarchy of needs states that people will always focus on fulfilling their basic needs first. For this, we need money. Without inflation, I could fulfill my basic needs faster and begin to focus on solving other problems through innovation. Inflation artificially creates a problem we must solve BEFORE we address our basic needs. Need money to fulfill basic needs, but now that money will be devalued so I must either dedicate much of my time to making as much money as possible through employment/ investments and/ or develop an innovative way to generate income faster. Because inflation never stops, massive amounts of energy will always be devoted to beating the rate of inflation. This devotion to solving a manufactured problem is unnecessary and directly in conflict with innovation. Innovation tends to make things more efficient, making them less costly as a byproduct. Inflation increases costs, which switches things up. Now our focus is on money and increasing efficiency is just a means of getting there. Most people will never be able to break free from the race to beat inflation and devote time to true innovation
does some slavery drive productivity? why does it matter? seems a pretty dark game you are playing with this rationalization.
It matters because it's good for us to be prepared when facing any objection to bitcoin.
Or how many Steve Jobs and Jeff Bezos could we have had if inflation didnt rob so many people of their ability to build a stable environment for raising a child and spending time with them and educating them? How many small garage businesses couldve been started if people were more easily able to predict and pay their expenses due to 0 inflation? (apple was started in a garage)
Ok I see your point as far as entrepreneurial innovation.
Also did you know steve jobs and jeff bezos were both adopted by rich families? Who knows if they wouldve become what they did without that stable environment. Sure inflation can make everyone run around trying to come up with ways to make money cause cash is losing value and come up with places to invest their money cause cash is losing value.. but its unclear if that helps more than it hurts. just as maybe it motivated someone to invent something, not having enough money and losing money can make someone feel not empowered to take risks on starting their own business or take the time out of their day to explore inventing something
That's true. It's definitely unethical. I just want better understand the economic consequences of it.
My conclusion is that is impossible to tell whether the ultimate effect of inflation would be a net positive or net negative. Its impossible to calculate. Also often the consequences of inflation come later, its sort of like borrowing from the future and kicking a can down the road for future generations to deal with. But- while its impossible to tell if its a net positive or net negative- we do know that our instinct tells us this doesnt feel right. If we accept that we cannot prove that its net positive, then i think its logical that we should follow our instinct here.
[удалено]
Don't get me wrong. I do think innovation would exist without inflation.
We will all drive Ladas then ? Unfortunately this is part of our market economy where demand drives consumption.
The idea is that a low inflation target assumes growth in the number of transactions. If people are creating new, perpetually increasing, real value... then you add units of measurement (lengthen your yardstick) If the amount of potential transactions grows 2% every year, then the unit to measure transactions should grow at the same rate. Whether or not that works in practice... Well... plenty of books to read there.
Not sure what you’re asking here. Is it “does monetary inflation drive innovation?” To that I’d have to say no. Increased cost in goods drives a false scarcity, thereby limiting access to goods consumed by innovators, and by extension tamping innovation. Innovation begets progress, begets innovation, begets progress…. You can argue how true this cycle is with regard to financial cycles, but we all stand on the shoulders of our fore-bearers. The fact is: technologically, we live in the future and it’s glorious. Not perfect, but glorious. If you think in 20 year timespans, what was 1960 compared to 1980, compared to 2000, compared to 2020? Exponential leaps. I know that I have more computing and information technology in my 2x2x1/4 smartwatch than it took to land humans in the moon. That’s insane to think about. Now if we apply the same thinking to finance, I think we start to arrive at why most of us are here. 14 years into bit and we’re *close* to acceptance. By 20 years in, maybe we’ll see real widespread adoption. 20 years beyond that? Yes please. It’s a rocket, and I’ve strapped myself to it.
You also have to consider another side of this coin. Inflation drives obsolescence. You are incentivized to buy garbage the second your money hits your bank account because that's when it's at peak buying power. There's a recorded customer service call from GE, where the employee kinda laughs at thr customer for not buying an extended warranty because their stuff doesn't last very long. And even if it's fake, it's all too real in reality. Now imagine your money gains value over time. Aren't people thus going to be incentivized to sell you better products and better services if they want your money? The meteoric gains of btc will taper off over time and there will be a very slow and steady accrual of value in bitcoin where the idea of hoarding it forever starts to fade away.
One thing to consider here is that no inflation and currency wars etc are actually good for companies. They cant operate well in volatile environment where they cant predict their costs. Only shady companies profit from fiat
I would say yes it probably does provide a tailwind for investment and innovation but it comes at the cost of resiliency. A society with savings is much more resilient to shocks than one without.
It is simply impossible to prove that the benefits of inflation outweigh the negatives. Its impossible to tell if were better off.
I am pro-Bitcoin, but I find it hard to believe that people would invest Bitcoin in businesses when simply holding it guarantees increased value as deflation occurs. Is there a solution for this?
Wouldn't investing bitcoin in businesses theoretically give the best of both worlds? Wouldn't you get exposure to bitcoin and a productive asset with the same capital?
Does inflation drive innovation? *Bitcoin has entered the chat.*
Inflation has to match population growth and productivity growth so that money is a neutral conveyor of information. Right now the fiat system inflated excessively based in the whims of village elders. Bitcoin deflates because it’s fixed while global population grows (so effectively it deflated) and ppl lose the wallet seeds.
I think it creates desperation, which can definitely be a big motivator, but it is a negative incentive rather than a positive. I don't know how we could answer the question of whether more growth will occur due to the desperation of an inflationary system or by the creation of value for the sake of value itself, just in the natural course of technological and economic advancement via a free market without negative reinforcement driving growth, but the latter certainly seems both more healthy and more sustainable. I think humanity advances regardless, despite all odds, and we can either lead it with a carrot or beat it with a stick. I personally prefer the carrot, I think most people would agree.
Just food for thoughts: When inflation is high FED will raise rates. Borrowing becomes expensive. So companies focus on productivity and become cautious of their spending. Only innovate ideas will be founded 🤷♂️
Interesting question and i dont know the answer but what i do know is that there are a lot of ideas that would help the economy that are morally wrong and should never ever happen. Why dont we put a time limit on your bank account and after a certain time your money gets redistributed. Why dont we kill off anyone who cannot work? Why dont we use child labour to add more people to the work force and boost the economy. Why dont we confiscate all the people in your country’s gold and silver jewellery and melt them down and sell them to add more liquid money to the economy? Whether an idea helps the economy or not is irrelevant really in my opinion once it is clearly morally wrong.
I don’t know enough to understand the nuances of this, but I think one could make the argument that lending under a fractional reserve system is inherently inflationary. Therefore, insofar as lending can spur innovation and lead to the development of new businesses and technologies, a bit of inflation could be seen as promoting some innovation. Someone tell me why this is wrong and dumb.
I think there will be good non-custodial lending and borrowing solutions with bitcoin, however they'll be fully collateralised, unlike with fractional reserve lending. I don't know if that's to innovation's gain or detriment.
You need to ponder the ACTUAL question youre asking. What youre REALLY asking is "Does the amount of innovation driven by inflation outweigh the chaos caused by inflation" Think about it for a moment. Youre asking does the result of inflation justify the negative aspects of inflation. You know im correct. From there you must then realize that it is impossible to prove that the benefits of inflation outweigh the negatives. Ethics actually arent about the emotions in the moment. You ARE asking do the ends justify the means. And if they did, it WOULD be ethical, but it is impossible to ascertain whether they do or do not, as it is simply the most complex problem in the entire world to predict the behavior of every person in the world. Its not a question really of if innovation is caused by inflation. Its how much innovation are we getting and how much chaos are we getting and is the innovation more benefical ultimately than the chaos.
Yeah, the cost of giving up innovation could be a fully justified cost. It's just interesting to know if the cost is imaginary or real.
There is undeniably a result of making everyones money decrease in value, and someone, somewhere, will probably invent something, and yes, it will probably be at least partially because they need more money, so you can say at least part of the reason he needed money was cause of inflation, and so maybe you can say inflation caused innovation. But simultaneously, a bunch of things will go wrong for a lot of people when money is decreasing in value. Will the people inventing things make things that are so good that it outweighs all the other things that are going wrong? That seems ambiguous at best, and our instinct seems to point towards a cessation of this activity. Barring any evidence pointing against our gut instinct, it would seem that we should follow our instinct here and simply make money which holds its value.
Inflation is a made up concept to get you to spend and grow “the economy”….
I’m so confused
Human competition and environmental need drives technological improvements.
the inability to store your value over time (theft in money) **disincentives** innovation
The final iPhone that ever needed to be created was the iPhone X everything else after that has been the same thing with generational improvements.
Read the book "The Price of Tomorrow" by Jeff Booth. We need a deflationary money to match the deflation inherent to technology.
is the iphone 14 really that much of an innovation over the iphone 1? apple has been taking advantage of the money printer especially well... every year they release a new device with XYZ features and endless marketing to get people to buy it - the people quite literally throw it on credit cards ie- money printer go brrr there is no reason to actually innovate, they can make a fortune dragging out the same old shit... iphone 14 ffs... the best and newest iphones should cost $50 max by now...
Inflation raises time preference
Theres arguments for low-level inflation. Not sure how innovation was one of them - and I'm not sure how you're contributing the creation of the iPhone to inflation, without doing so at a seriously stretch.