Maybe beyond the scope of the video but one important thing not mentioned is that you need stability for the investments to pay off. If a storm destroys the boat, war bombs the factories or a revolution takes the factories from you then there is no incentive to save up. A stable society is crucial for there to be investment.
Ooh ooh! I get to hear my voice soon! Haha. Excited for the video, you guys give great insight. I've learned a lot about economics, and have learned to love Mises (lol), from working with you.
If kids watched your videos, they would get way more educated than the public schools where it takes 30k a year to teach them. And still have hard time reading
How does this system not exist in a contradiction? The investors create a culture of consumption, reducing the amount the average person saves, and then flood money into assets like stocks and housing, which further increase the cost of living, and therefore, the savings of those individuals. It seems like it's set up to favour only the original holders of wealth and the few that gain it under these new conditions. It's like they pull the ladder up just after they finish climbing.
Culture of consumption is a result of many factors, like inflation, political ideas, institutional enviroment and so on. We're talking about the opposite of culture of consumption - thrift.
@@EconClips In other words, the asset-owning class, which has a disproportionate influence on the things you listed, as well as the incentive to promote higher rates of consumption, has pushed a culture that is antithetical to the prosperity of the nation. It's akin to saying that capitalism is killing itself.
@@D4PPZ456 yes, there is some truth in that. But these are the things austrian economists criticize. They point out that its not good for the economy to bail out huge corporations, to print money (causing inflation) or make laws to help particular gropus at the expense of other groups.
Mises was obviously wrong in asserting that all improvement in material well being requires saving, for it can also be done by increasing working hours. That is, if I want more money in my bank account, I can increase my savings (i.e. reduce my consumption), or I can increase the amount of hours that I work. Both methods would work. It just blows my mind that Mises was not able to understand this.
Proper time preference requires people to to deter the consumption, acquisition, & utilization of land, labor, & capital in the present for them to be properly bidded off freely on the open market. Savings are usually lent out as well. Depositors, who aren't specialized in the efficient allocation of funds, tend to lend their money to other lenders. These lenders (banks) lend to productive ventures. They pay interest to the banks, & the banks pay interest to their lenders (the depositers). If they're not lent & instead sit under a mattress, then all they've done is freed up land, labor, & capital onto the market & withdrawn monetary units. Since the ones with the most monetary units are demanded ventures, they accumulate more resources (in direct proportion to how demanded they are). Money is divisible. It's value can be split practically infinitely for ever more people, at a sustainable degree. People must compete for those resources & provide value to others. It's value as a currency is represented by the quality & quantity of the goods/services you can buy, & can buy at a later date. This deflation increases people's purchasing power & encourages savings. It's healthy!
Jeff Bezos may have had a high time preference because initially his parents had to bail Amazon out to the tune of $250,000. Same with Elon Musk. He may have had a huge time preference, but his parents owned an emerald mine in Zambia. You often gotta win the birth lottery to be rich in this day and age.
