Yeah, there's an economist comment on "We can afford everything that we produced".

Like when the Apple is produced it's not because a dollar bill was sowen into the ground. The actual inputs of production are not money but money is the lubricant that allows the goods and services to flow around in the economy. We always run into the situation where goods and services are produced and not demanded and that causes them to no longer be produced but the lack of money didn't cause their existence no more than money produced them in the first place.

Without it, societies had to have informal debts where you knew you helped your neighbor harvest crops so they would later do something for you (or perhaps you helped them harvest their crops because they provided shelter). That whole barter shit is made up.

Eh, that is overly reductive.

There would not be so many orchards or apple farmers growing apples if they could not exchange those apples for goods and services they wanted effectively.

At the level of a large scale apple orchard, money is the only thing that works effectively for that.

If people only grew enough apples that they wanted to eat, most people would be unable to get apples, and most apple lovers would be spending a lot of time they could be doing something else trying to grow apples. Overall edible apples would be dramatically lower, even non-existent at some places/times.

For example, imagine the shitshow if people had to refine their own gas, or barter/trade for it directly. Zero chance 99% of society would be able to do that.

Same with miners and raw materials, machine manufacturers and machines, solar panel manufacturers and solar panels, etc. etc.

Money itself isn’t a good/service, but it makes the act of making/exchanging/selling/etc. easy and possible at scale. Which is valuable on its own. And since it provides a generic ‘value’ proxy for all goods/services within the economy, if anything it is the most consistently valuable thing in a functioning economy - it’s a wildcard for value.

This does have a limit of course - too much money in too short/concentrated an area causes all sorts of crazy things to happen, as the induced effort/incentive to produce something outstrips the realistic ability to do so, causing escalating ‘money fights’ for the same goods, as the value of the goods starts to dwarf the perceived value of the money itself. (Inflation)

Just like too little money in too concentrated an area/time causes crazy things to happen because the perceived value of the money itself starts to outweigh the actual value of the transacted goods, and transactions can start to grind to a halt in an effort to conserve the increasingly valuable money itself. (Deflation)

All you say is true. I never argued for the irrelevance of money. The voting power into the economy is extremely important, and it plays a vital role in the orchestration of the real economy (the part actually producing stuff and services).

But it is not such that billionaires provide some value with their consumption (they can provide value in other ways though). Yes, for the individual Yatch-producer (or farmer) is it nice that they get to sell their product, but for the economy at large all it does is move production-resourced from other things which could otherwise be produced to the production of yatches(or whatever the billionaire wants).

So yes, the billionaire does not take from the farmer. But he does take from the economy at large (in the same way as my consumption does, but to an extremely different degree).

Billionaires don’t generally become billionaires by spending a lot of money on watches or apples or the like.

They become billionaires (generally) by owning things and making those things more valuable in other people’s eyes.

The vast majority of Elon Musks wealth, for instance, is in stock of Tesla, SpaceX, X, etc.

It’s an entirely different kind of situation, because the wealth is generally due to other people’s estimates of the productive output/wealth generation of those assets increasing over time.

In the musk example, it would be like if someone bought and then came in and funded the expansion of a big apple orchard that previously no one had ever heard of, and then made it internationally famous so that everyone wanted to be a part of it - and sold shares in that orchard to people.

Now people are eating more of that orchards apples, everyone values that orchard more, and now what previously he owned but was cheap is now worth a lot.

That is legitimate value creation, as much as you might hate him or the process.

If he did it by burning down other orchards, he would be a criminal. But like in the spacex case (or Tesla case), it’s pretty hard to argue that is what happened. Maybe some light fraud here and there, at most.

It mostly came from a lot of salesmanship and light/moderate gaslighting, but they are legitimately valuable companies - albeit maybe shouldn’t rationally be at the P/Es they are. But he is making the irrational happen.

And that is making a lot of people money that otherwise wouldn’t, and making something happen that otherwise wouldn’t. Those people are very happy he is doing what he is doing.

For the alternative, see the USSR. I’ve known people who lived in that system, and it was terrible.

I dont want the USSR, and I don't see the relevance. For me this is a discussion about the role of money and wealth in our economic system, I am not arguing for plan-economy. The dynamic allocation of resources provided by a market based economy is great. But there are many ways to run a capitalist society, I certainly don't belive we are at the end of history here.

Billionaires certainly CAN get more wealthy by a process as you describe. They can also get more wealthy by just owning stocks and do absolutely nothing. Last 20 years the S&P 500 has increased 8-fold. That means 64 times over 40 years, 512 times over 60, 4096 times over 80 years. With the s&p average since 1926 of 9.8%, the numbers are 42-fold after 40 years, 272 after 60 and 1770 after 80. Salaries has certainly not risen at the same rate.

My views are probably shaped by coming from a place with more old money, where more people are rich from inheritance than their own creation. And their share of the totalt wealth of the society increases even when they are just passive owners. For me this is a reinvention of Feudslism, where the owner class controls the economy because they inherited it.

Now, this is a bit of a tangent to the original discussion though. What I had been trying to say is that independently of the reason for why the billionaire has the money, the spending on that apple is not providing value to the economy. In your original post I read you to mean that, and that the billionaire provided value by buying that apple. Of course he did on the micro scale for the farmer, but not at the macro scale. All he is doing is slightly shaping the economy to provide what he wants, using money as the lube.

So billionaires can be so for a lot of reasons. They can have stolen the money, passively gained them, gained them on the back of others creating value, or they could have created the value themselves. Independently of the source, they now have power over the economic machine. They might use it to improve the machine (good) or they can make it create things the billionaire wants in place of things other people wants (less good).

The original comment I replied too was how a billionaire buying an Apple was destroying/taking things from the system - when the reality is that the billionaire traded a bit of value, and so it’s just changing ‘columns’ in the system, not being destroyed in the process, but rather now the farmers/retailers/middlemen now have some cash instead of too many apples, etc.

What is the better alternative?

Because it’s actually in their interest to buy fewer real goods, and more ownership - assuming the ownership is of productive assets. That’s how they became billionaires in the first place. By using their Capital (literally excess assets/buying power) to acquire more assets/buying power, or grow the value of their assets/buying power. Yes, that includes the orchard example above.

In the USSR, you could only buy things approved by bureaucrats who ensured the ‘right things’ were available for sale, and people didn’t get jealous, and ownership of most classes of assets was restricted to the state.

There were no private billionaires in the USSR, but a lot of administrators that had to play political games - with those on the bottom being stuck with the leftovers.

Notably, for those complaining about the US military industrial complex - military spending in the USSR as a percent of GDP dwarfed even the US. (Albeit much lower in actual value, because the USSR’s economy was relatively tiny)

One could easily argue that the biggest priority of the USSR was in fact military spending - far more so than the US even at its peak, and they happily threw everyone else but the elites under the bus to afford it.

History rhymes for a reason, and people are similar all over.