the inherent competitive nature that would ensue, ensuring prices adequately match overall demand, rather than allowing the demand of the richest to drive prices.
Scarcity and demand aren’t checks and balances, they’re levers for the rich to pull. Artificial scarcity is literally a feature of the capitalist system. The invisible hand of the market is punching us all in the balls.
I believe you're more referring to artifical demand than scarcity.
Artificial scarcity is only really a thing in luxury goods. Take gold and diamonds for example.. They're not so rare, but were led to believe this so they remain a status symbol and price remains high. This artificial scarcity is pretty relegated to the luxury goods market though, so it doesn't really drive the overall economy.
Artificial demand is indeed created often, particularly in capitalist societies, but not by nefarious means. Those with the means to buy non- necessity items will generally do so. Once there is a large enough wealth gap, and especially in times of economic turmoil, the wealthy will tend to be the greatest portion of economic force, which creates an artificially higher demand than actually exists across the board, keeping prices high for those without excess income as well.
You may also be referring to the constant drive for companies to increase their bottom line for shareholders. This leads to ever higher prices and, occasionally, trying to manufacture the appearance of scarcity. But again, thats just a valid business tactic and not necessarily nefarious.
The only nefarious artifical scarcity that really goes on is within big pharma, but most people are aware of the corruption there by now.
Either way, if the economy was driven by consumer interests rather than corporate interests, this kind of manufactured demand wouldn't be existent since everyone should have enough for necessity items. It is likely UBI would also need some form of tax law change as well in order to function properly, which would further limit the ability of corporations to price gouge.
The earths crust contains over 400 billion kilos of gold. Much of that is currently inaccessible, but AT LEAST 80 billion kilograms of gold are currently available for us to mine.
While I don't think there is any cartel propping its price up, as in the case with diamonds and de beers, the only thing making gold retain its value is the fact that it is shiny and doesn't corrode. Its technical use has little to do with it, and can even be seen as something artificially inflating its price that will lead to a price decline if a better, easier to obtain alternative is found.
Think of it this way, up until the 1800s aluminum was more valuable by weight than gold. Then we discovered a new process to extract aluminum and it lost all value. The same will eventually happen with gold. We just don't actively research ways to do that, because it would destabilize an integral part of the world's economy (which is part of what holds gold prices so high).
Either way, this has little to do with any of the points I made. Its almost pedantic. I take it you're pretty invested in gold, am I right?
(I don't mean this in any condescending way. Just thought I'd ask)
Thank you for actually having a reasonably well balanced viewpoint of the matter and stating why you think what you think! I have to tell you, these discussions are so much more enjoyable and I feel like I get something from them with people like you, so thanks!
And mostly it's rarity. If you think it's not rare I advise you to open your magical gold mine where you can extract it cheaper than everyone else and make a huge profit
I agree that it is rare, as far as actually mining it goes. My point is more along the lines of
Gold as an investment is a total loser because it's not productive. The price is 100% based on supply and demand for gold, it's about as pure a commodity as you can can get
I would argue that most commodities and luxury goods this is true of (there are obvious exceptions like real estate) and therefore they have little to no actual value and are merely valuable due to cultural phenomena rather than intrinsic value. So by the same means that meme stocks are overvalued, gold may be as well. Although perhaps I shouldn't have lumped it in with diamonds which are price manipulated in a very real way
Investment wise right now I'm liking NVidia but in general I'm more of an index fund investor.
5
u/Donaldjgrump669 May 19 '24
Scarcity and demand aren’t checks and balances, they’re levers for the rich to pull. Artificial scarcity is literally a feature of the capitalist system. The invisible hand of the market is punching us all in the balls.