Deflation - mercantile versus consumer interests

[dilberto]

Arguably deflation, falling prices, at a time of austerity is in the interests of consumers and yet it is seen as a problem for modern economies because it is not seen as conducive to economic growth and the interests of producers.

Is the fundamental problem with economic growth that it pits mercantile interests against the interests of the general population?

 

[8ball]

Deflation is not great if it means you lose your job - then your finances tend to fall by a lot more than the drop in prices.

 

[ViolentPanda]

Arguably deflation, falling prices, at a time of austerity is in the interests of consumers and yet it is seen as a problem for modern economies because it is not seen as conducive to economic growth and the interests of producers.

Is the fundamental problem with economic growth that it pits mercantile interests against the interests of the general population?

The fundamental problem for modern economies is the conviction that growth is necessary to the economy, when it's actually only necessary for capitalism.

 

[8ball]

The fundamental problem for modern economies is the conviction that growth is necessary to the economy, when it's actually only necessary for capitalism.

The fundamental problem you're going to have is separating the terms 'capitalism' and economy in the minds of 98% of people.

 

[ViolentPanda]

The fundamental problem you're going to have is separating the terms 'capitalism' and economy in the minds of 98% of people.

Oh, I absolutely agree that for too many people (especially those who who pursue The Dismal [pseudo-]Science) the two are interchangeable, and that the two would need to be separated before you could make any meaningful inroads into showing why growth isn't necessary for a functioning economy!
That doesn't mean that the point shouldn't be made, if only to flush out those who take their verities from the Austrian School, rather than from models that have had any success in the real world.

 

[8ball]

I don't think growth is necessarily a problem, mind (though a system that cannot function without endless growth has clear issues).

 

[camouflage]

Arguably deflation, falling prices, at a time of austerity is in the interests of consumers and yet it is seen as a problem for modern economies because it is not seen as conducive to economic growth and the interests of producers.

Is the fundamental problem with economic growth that it pits mercantile interests against the interests of the general population?

Deflation in an economy that consists of moving debt around is bad for everyone because it makes it harder to move debt around. Wouldn't be bad at all if the economy was made of the production, distribution and consumption of goods and services instead.

 

[revol68]

Deflation in an economy that consists of moving debt around is bad for everyone because it makes it harder to move debt around. Wouldn't be bad at all if the economy was made of the production, distribution and consumption of goods and services instead.

Yeah, if only we didn't have finance capital... fucking yawn.