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0 pointswhatshisface8y ago0 comments

A repair job still involves a purchase, but from a parts dealer or repair man.

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This is true, but should still result in lower TCO. Lower TCO means lower velocity of money.

OK, but why should we consider the economic concept of money changing hands more rapidly to be an inherently good thing?

There are both environmental and quality of life issues with the way our culture has evolved recently, particularly around advancing consumer technologies, which aren't (directly) financial in nature but are definitely things we could change for the better. Meanwhile, the increases in money moving around on paper are mostly in the direction of manufacturers taking advantage of consumers one way or another, and I don't have a problem with damaging that effect in favour of the others.

pizzetta8y ago

I think they have to be considered with respect to people's relative purchasing power. Ensure that if the velocity of money goes down that people's relative purchasing power remains equivalent.

In other words, if making things more durable results in people working fewer hours, then we need to know whether that results in negative income repercussions for workers.

A rudimentary example:

1x disposable widget took .5hrs to mfg. market price =$10 and lasts 1yr. CO = $10/yr

1x durable widget takes .6 hrs to mfg. market price =$50 and lasts 10 yrs. CO = $5/yr

And you extrapolate that...

So, yes, your costs go down over time, but so do your wages, so the deflation has to be measured so that earnings don't go down quicker than cost of living/cost of goods and services. Commensurate.

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pizzetta8y ago

This is true, but should still result in lower TCO. Lower TCO means lower velocity of money.

Silhouette8y ago

OK, but why should we consider the economic concept of money changing hands more rapidly to be an inherently good thing?

pizzetta8y ago

I think they have to be considered with respect to people's relative purchasing power. Ensure that if the velocity of money goes down that people's relative purchasing power remains equivalent.

In other words, if making things more durable results in people working fewer hours, then we need to know whether that results in negative income repercussions for workers.

A rudimentary example:

1x disposable widget took .5hrs to mfg. market price =$10 and lasts 1yr. CO = $10/yr

1x durable widget takes .6 hrs to mfg. market price =$50 and lasts 10 yrs. CO = $5/yr

And you extrapolate that...

So, yes, your costs go down over time, but so do your wages, so the deflation has to be measured so that earnings don't go down quicker than cost of living/cost of goods and services. Commensurate.

1 more reply

j / k navigate · click thread line to collapse