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Why is inflation desirable? (lemmy.world)
submitted 11 hours ago by to c/asklemmy@lemmy.world
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I've been wondering this question for a while. Ignoring current events, why is a little bit of inflation desirable?

I do understand that it's done to "stimulate" the economy so people don't let their cash rot in a checking account, but isn't it a zero-sum game? Everybody says that money is not meant to stay where it is, rather, should flow through the economy. But if the economy always needs injections of liquidity because otherwise it fails, isn't the economy broken?

I feel like there's something I can't comprehend about that.

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[–] 18 points 11 hours ago (4 children)

Let me add: I'm an engineer. By reason of existence, my work involves improving how we do stuff. My work involves helping people work more efficiently, use fewer resources, cost less etc. We should be doing more, with less because the tools and methods get better. So why do things keep getting more expensive? I don't grok inflation. Not a bit of it.

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  • [–] 4 points 11 hours ago*

    The right way to look at how expensive things are is to normalize prices to other things that also change with time, for example wages and expectations.

    A car may be more expensive now than in 1960, but the car is faster, safer, more comfortable, and more people have one now.

    Same with many improvements- an iPhone today is more expensive than a Nokia 3210 was in 2000, but it has more features and more people have one.

    It is against human nature to stay where we are and just use improvements to reduce the amount of work we need to do. We want to have more. That may be a bad thing for sustainability, but we typically expect our governments to support that kind of progress, hence the dual mandate of the central bank to maintain economic growth with a high level of employment and a low level of inflation.

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  • [–] 1 point 8 hours ago (1 child)

    But lots of things do get cheaper. You can buy a fucking miracle device like a smartphone for a weeks work. Everything you want gets cheaper, everything you need gets more expensive.

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  • [–] 1 point 6 hours ago*

    yes, because that's how we have organized things.

    we could make housing a commodity, but we have chosen not to do so. we have made it an investment. not every economy in the world works this way, or has, historically.

    and generally we rampantly resist the idea of commodifying housing, education, healthcare, and other resources. but we're OK doing it in other areas. these are largely political and social choices about what we perceive as having value and how that value should function and how those goods should be distributed.

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  • [–] 1 point 9 hours ago

    I'm also an engineer, and in my experience a reduction of blue collar workers gives only a temporary reduction of the work force; soon enough there will be more cost controllers, HR business partners and officers for all kinds of non value adding stuff. In my country we're at the point where the people with bizarre job descriptions on LinkedIn are always posting about how to effectively employ the work force.

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