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Comment by SuoDuanDao | Hacker News Reader

Your logic seems to require labour to be the primary creator of value. Returning to your desert island analogy, both castaways could spend their youth planting coconut trees close to their shelter, thereby reducing the amount of work needed to gather coconuts as their mobility decreases. It seems to me that any economic system which invests in productivity and automation could similarly replace the labour required to subsidize the 'retired' population by investing in labour replacement technologies.

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Right, but money sitting in a bank account isn't necessarily being invested in a meaningful way. A lot of "investment" these days is in financial instruments, which don't generate value in the way that would be realise these benefits.

Ah, I understand the criticism now. I was thinking of these investments as buying shares in companies that make automated nurses etc.

Wrong. Money sitting in a bank account is loaned out by the bank to people who will use that money profitably. The only place that money can sit without contributing to the economy is in a piggy bank or under a mattress.

False. Trillions of dollars are simply re-invested in financial activities (many of which are risky and borderline illegal as well as insured by your taxes) that serve only to generate more numbers with 0 physical contribution to the world. At least you can lift your mattress up with money underneath it or use your piggy bank as a paper weight.

Do explain where they get the interest they pay the depositor of the cash.

Interest rate has nothing to do with profitability - it's just a price that balances the supply and demand of funds and on the short end, it's heavily influenced by monetary policy and on the long end, it's heavily influenced by the inflation and growth expectations. Lots of consumers borrow at very high rates and it's not because they expect to be profitable with the money they borrow.

Whether you put your money in a piggy bank or a bank account doesn't impact the productive capacity of an economy. Keep in mind that money can be created out of thin air and that's effectively what would happen if enough people cashed out - it would reduce the supply of money and the central bank would make up for it until the desired level as measured by inflation would be reached. Other than some volatility this would create if it was coordinated, it would have little impact on the real economy.

> both castaways could spend their youth planting coconut trees close to their shelter,

Addressed by graeme as "build infrastructure and tools while young."

The services that elderly need are labour dominated. Japan is working hard on eldercare robots, but I'm skeptical.

This is true. That's why it's alarming that most people's energy today is wasted on useless zero-sum activities like social media, finance, marketing, bureaucracy... The problem is actually quite simple, the people who control capital today are not intelligent enough and so they don't have the confidence to take the measured risks that are necessary to really innovate.

If you look at the generations who were working between 1980 and 2000 (spanning 20 years), they delivered mind-blowing innovations: personal computers, graphics cards, databases, the internet, countless vaccines... It's impossible to list everything. What did the newer generations do in the last 20 years? Facebook, Twitter, Snap, Youtube, Netflix, Uber, Bitcoin... The only genuinely impressive thing that we achieved was the successful commercialization of the electric car. Our generation sucks. We are stupid and unwise. We can't allocate capital.

not sure that we cannot allocate capital, the previous generation harvested most of the low hanging fruits, it can be argued that most modern progress needs more and more energy, and we are on a path of diminishing returns.

See the various options under :

https://en.wikipedia.org/wiki/Secular_stagnation

and

https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve...

the world is not infinite, and economic growth can not be infinite.

I have no proof if we are effectivelly at "the limits to growth" or not. It sure starts to feel like it.

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