It's money, stupid.

[digitaldiscipline]

Economic Irrationality is, apparently, intrinsic.

Sorry, ikilled007, Mises is tilting at windmills, and not many folks are capable of overcoming millions of years' worth of evolved altruism.

[courtesy of jaylake's daily linkfest]

Comments

[razerwolfe.livejournal.com]

But it would not 'stay the same' and people are savvy enough to know that. If I'm the only one getting 50k and everyone else is going to get 25k then prices will fall to reflect the worldwide buying power of only 25k, leaving me still having 2x the buying power over everyone else. If I'm making 100k and everyone else is making 250k, then prices will rise to accomodate the new norm and my buying power is even less. People see the intrinsic fault in the question itself versus their real world response and answer correctly to increase their own buying power.

[fenixinthedark.livejournal.com]

I must beg to disagree...

Many times, the economy does not accurately reflect the actual buying power of the public. The housing market being in the mess it is in now is one example. Banks.. well, "banked" on the real estate bubble being permanent (when will they ever learn from history??), and now there are fewer people considered for loans which means that those who wish to sell cannot find a buyer, and many of those who wish to buy cannot purchase because they cannot get the loans they need even when they are capable of paying them back, and have no real problems on their credit history. The market has not adjusted to accomodate the reality of peoples earning power. It, in fact, fucked itself (and all of us) very hard up the ass on that score.

So, given that scenario... which scenario would you choose? I'd choose the one where I earn the greater amount total... not as compared with my peers.

[the_axel]

That assumes that the amount of goods & services available for purchase per capita is static.

But for the requirement "prices of goods and services will stay the same" to be true, there must be more goods & services to be purchased per capita.

Look at it these ways - would you prefer to be earning double the average income in 1850 or 40% of average income today?
Or earn 40% of the average income in the US or double the average income in India?