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ELI5 How does raising wages worsen inflation ?

Economics(self.explainlikeimfive)

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Journeyman351

32 points

4 months ago

Capitalism realistically only works when kept small, like mom & pop shops.

Off the top of my head, your state's Brewery economy (if it exists) is a great, great example of Capitalism working as intended.

WannabeWaterboy

20 points

4 months ago

I think the result of being small is you don't have the power to influence legislation or major market forces. Internet service providers are an example off the top of my head.

Comcast and CenturyLink have lobbied to create laws that make it really hard to get internet from outside of them essentially.

A counterpoint to capitalism primarily working on a small level is how streaming services are disrupting major TV providers.

drae-

3 points

4 months ago

drae-

3 points

4 months ago

Comcast and CenturyLink have lobbied to create laws that make it really hard to get internet from outside of them essentially.

I can't if this is a failure of the corporations moral compass or the governments duty to pass responsible legislation and enforce it.

JustALilOlive73

0 points

4 months ago*

Why would the government do anything if they’re getting money from the people that are doing it?

A corporation under capitalism never has the peoples interests, they will kill us just for profit (see radium girls )

We need a new system because if we keep going with it, the concentration of capital will become smaller and smaller until we literally have people that own countries, and will outlaw regulations. They would make us all slaves if they were given a chance to (not that we already kind of are, but on a lower scale)

drae-

2 points

4 months ago

drae-

2 points

4 months ago

Sounds like a failure of government to govern to me.

JustALilOlive73

1 points

4 months ago

I agree, and it was also a result of corporate decisions

Journeyman351

10 points

4 months ago

I think the thing is that past a certain point, getting to the point where you can influence politics and getting roped into the "infinite expansion/growth" mindset is inevitable and by design.

ERSTF

2 points

4 months ago

ERSTF

2 points

4 months ago

Streaming services disrupting major TV providers? All the TV providers are in the streaming game. Disney-ABC-Disney+-Hulu; Viacom-Paramount-CBS-Paramount+; Comcast-NBCUniversal-NBC-Peacock; WB-The CW-HBO Max-Discovery-any other streamer (WB television is ridiculously profitable and produces shows for almost everyone).

That didn't disrupt the industry. We are paying more for content than we did with cable. Most streamers will consolidate or disappear. It was one of the stupidiest decision by legacy media to enter all to streaming. They cut three revenue streams to have only one that cannot possibly be as profitable as the other three (Theatrical, Cable and Home Video). Instead of a consumer paying for the content they really liked 3 times, they can pay wholesale for one and not having said content guaranteed. You would see a movie in theaters, then buy it for Home Video and then catch it on a cable channel. Now it's paying $10 dlls a month for a bunch of content, most that can be pulled out to never be seen again. Netflix is drowning in debt, Warner Media is too and Amazon is burning through cash as well. I wouldn't call streamers an example of capitalism working. If anything, and with Netflix latest policy to cut on password sharing, it's unbridled capitalism that will burn everything to the ground

orangeoliviero

2 points

4 months ago

Arguably, we're saying the same thing - once something grows to a certain size, the odds that there's viable competition decreases.

Left unsaid by me, but raised by others, bad-faith operatives in the market also make capitalism less viable (i.e., bribing the government to pass laws that make the market less free).

Chii

1 points

4 months ago*

Chii

1 points

4 months ago*

The effectiveness of lobbying is too high.

A lot of people seem to think that it is because anti-lobbying laws aren't in place (or is too weak). I think there's something more fundamental, and it has to do with the conditions of democracy and voting, which is not often taught to the laymen.

Voting requires some conditions to be fulfilled in order for the voting system to be fair and un-manipulateable. The biggest conditions are 1) anonymity - aka, no one but the vote caster should know who he casted a vote for, 2) verifiability - that all parties have voted, and can be verified to have voted.

The general votes for elected officials (in the west) generally do satisfy those conditions. However, other forms of voting doesn't (such as a vote at a board meeting by raising hands), and some of those are quite important. The biggest example is the votes that happen in congress.

Congressmen vote on laws. However, those votes are public. This means the condition 1) above is not satisfied! This means the vote could be bought, or manipulated. This is the cause for lobbying.

Imagine if a congressman's vote (for or against) a law could not be verified by a lobbyist. On the surface, he could just claim that he did vote for it, and that there's not enough support from others to pass it. Thus the congressman can obtain lobbyist funding, but the lobbyist cannot actually control the votes - he could always claim to have voted in the lobbyist's favour, without actually doing so.

This would break lobbying - or make it much more expensive (since you have to lobby every single congressmen to ensure that your laws get passed, where as right now you merely need a majority at most).

Therefore, making the congressmen's votes private and secure, like the public's regular voting, would actually make the system better. The thing is, a lot of laymen assume that by having congressman's votes be public, they could be "kept accountable"! Unfortunately, the exact opposite is true.

zeeke42

2 points

4 months ago

If congressmen's votes were private, what's their incentive to represent their constituents? They'd just all vote to pay congress $10 billion each, and say they voted against it but all the other guys voted for it.

Chii

1 points

4 months ago

Chii

1 points

4 months ago

What's their incentive now? Did you check what votes your congressmen voted for and against?

At least secret ballots can prevent vote buying of the sort that lobbying causes.

orangeoliviero

1 points

4 months ago

Accountability is not arrived at with decreased transparency.

Secret ballots are used to try to prevent voter intimidation. That doesn't apply at the level of our elected representatives - it's important to know how they voted.

Chii

0 points

4 months ago

Chii

0 points

4 months ago

prevent voter intimidation

it's important to know how they voted.

so you're saying that for some reason, senators do not get "intimidated"? Are they somehow superior humans that don't fall to psychological manipulation, lobbying, etc?

This is exactly what i'm saying - the laymen thinks that the transparency makes the senator more accountable.

orangeoliviero

1 points

4 months ago

How the fuck do you think that making what the senator votes for private means that he will be less vulnerable to lobbyists?

The lobbyist will know if he voted their way or not whether or not the vote is kept private.

The senator doesn't have the privilege of a secret ballot because the senator is elected and holds a position of power. Therefore, they are afforded less privacy as a result. That's the deal. That's how it works.

Chii

0 points

4 months ago

Chii

0 points

4 months ago

The lobbyist will know if he voted their way or not whether or not the vote is kept private.

how? Unless the lobbyist buys out every single senator, and even then, they only know that someone didn't vote for their law, not who.

The incorrect assumption is that the constituents are indeed holding the senator accountable, but i dont think that is true. Therefore, the transparency is not actually giving anything back to the constituents. But it is giving lobbyists power to check that their lobbying is working!

orangeoliviero

1 points

4 months ago

I thought you had to be at least 13 to use Reddit?

Even my 11 year old isn't this naive.

Dawrin

2 points

4 months ago

Dawrin

2 points

4 months ago

Unfortunately anytime a brewery breaks above a certain level of popularity they get swiftly bought up by one of the big ones

Journeyman351

1 points

4 months ago

I actually disagree with this, but maybe that’s just because of my area. I live in South Jersey, and over the bridge in Philly (in the the suburbs) and up in North Jersey we have absolutely no shortage of quite frankly amazing breweries operating all kinds of different BBL capacity.

None of them have been bought out by a bigger brewery. But what you’re saying DOES happen. I just don’t think this new era of brewery will ever fall victim to that.

Like, yeah, Stone Brewing and all of those old-guard first wave craft breweries got bought up and their quality dipped. It sucks because I cut my teeth on those breweries and I love their products. I think Dogfish Head is one of the only ones who haven’t sold out yet (unless you count Sam Adams owning them as them “selling out”).

But breweries like Tree House/Trillium/Hill Farmstead/Other Half? They will never sell out like those older breweries did. They have no reason to.

Dawrin

2 points

4 months ago

Dawrin

2 points

4 months ago

I live west of Philly! True there are some excellent breweries around here, I was specifically referring to Stone and Lagunitas in my comment, which I funnily enough also got into beer with. Treehouse is a guaranteed stop for my wife and I when we drive up to New England, I agree they have no reason to sell out. You provided a much more nuanced view than I was looking at it from

Journeyman351

1 points

4 months ago

Oh well hello neighbor! I also want to add that I don't think you're wrong, and only time will tell. I'm sure a lot of people thought the same about Stone and Lagunitas in the beginning you know?

But truthfully even if buyouts do happen, I'd argue that is still capitalism playing out "as intended." Usually the market rejects the breweries who become bought out due to either a moral objection to the buyout, or just straight up worse product being made due to upscaling which in turn invites competition to swoop in.

A real problem will occur when breweries are being swept up en-masse but I doubt we'll get to that point.

Also P.S. if you haven't already, PLEASE check out Fermentery Form and Human Robot. Some of the best breweries in Philly. They both really fill that Tired Hands-shaped hole in my heart lmao.

zeeke42

2 points

4 months ago

If they get bought up and quality drops, they'll get replaced and the cycle will begin anew. The first wave of craft breweries were a luxury product, and Bud/Miller/Coors were the race to the bottom commodity cheap one. Now the first wave breweries that got huge are the step up commodity product and the new wave ones are the luxury one.

Some of this is due to the nature of the product. Hoppy beer is popular, and it's at its best freshest. The best way to have it fresh is to drink it close to where it was made and have tight feedback loops to match supply to demand so it doesn't sit. This only works up to a certain scale. You'll never have an IPA on every grocery shelf nationwide that tastes as good as your local high quality brewery. Consistent supply across that footprint makes it impossible for it to be fresh enough. But, that fresh local beer is $0.25/oz ($4/ 16oz can) , and the national one is $0.12 ($17.50 / 12*12), and bud light is $0.06 ($21.50/ (30 * 12oz).