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Comment by cryoshon | Hacker News Reader

Staggeringly unequal benefits distribution makes for an unhealthy economy. We don't describe the economy of Mexico or Brazil to be healthy even when they are at high employment and growing GDP mostly because the burgeoning economy doesn't produce a similar ripple in their societies.

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>Basket case economies are reflected in bond yields. The US pays little to borrow money because it is a safe haven.

Or because it uses its huge military might to make sure it is so.

The market doesn't distinguish the root cause of safe-havenism. There's a reason people think military-industrial is a sensible use of financial resources.

>The market doesn't distinguish the root cause of safe-havenism.

Of course. The market only cares for the bottom end.

I'm saying it though for those pretending the market is some victimless activity, that's not about power at all, etc, and "hard working people" (and countries) prevail.

and don't forget about the petrodollar that's financing this military superpower.

The USD enjoys an unfair competitive advantage over its peers and this distorts the financial markets immensely and more importantly the balance of power in international relations esp. in times of political crises and military conflicts.

There's no real reason a 'staggeringly unequal benefits distribution' should lead to an economic crisis, unless you believe in proletarian revolution or something.

Let's say all the wealth in the world, minus a few percent, belonged to 400 people. Can you think of some ways that would wreak havoc on the economy, even without triggering a "proletarian revolution?"

No, because an economic crisis is a fall in economic output.

The point is that "undesirable wealth distribution" is not what an economic crisis is. If 400 people controlled everything, the world wouldn't be a great place to live, but the economy would probably be more stable.

I don't recall high Gini coefficients being associated with economic stability. The massive reduction in marginal utility from most people focusing only on immediate consumption, coupled with the massive oligopolism and centralization leading to price distortions -- those alone don't imply economic stability to me. An extreme oligopoly would likely imply civil unrest, so all else would suffer.

Can you think of some ways that an economy where virtually all the demand for goods theoretically possible is coming from 400 people, would see a substantial drop in economic output? Assume everyone's participation in the economy aside from that 400 is limited to getting enough shelter that they don't die of exposure and enough food that they don't starve to death.

> There's no real reason a 'staggeringly unequal benefits distribution' should lead to an economic crisis, unless you believe in proletarian revolution or something.

There's plenty of reason to believe in proletarian revolution [0] as a thing that happens, whether or not one believes in it as a thing which is an ideologically desirable response to certain conditions.

[0] At least, revolution in which the lower classes are actively involved and where their dissatisfaction is a key lever used by the revolutionary leadership, even if the leadership itself is often from disaffected factions of the elites, either in government, military, academia, or private wealth.

Basket case economies are reflected in bond yields. The US pays little to borrow money because it is a safe haven. That may not jive with your world view but people that invest on their ideological dogma are quickly separated from their money.

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