Comment by mrsilencedogood

Expensive private schools, luxurious ski vacations, and exclusive neighborhoods existed long before the ascendance of software engineers. These had been the purview of investment bankers, high-powered, lawyers, realtors, etc..

For a brief time with big tech, it seemed like intellectual prowess could allow you to jump the social strata. But that arrangement need not exist. It’s perfectly possible, indeed likely that we will revert to the old aristocratic ways. The old boys’s network ways.

The economy in the 21st century developed world is mostly about acquiring positional goods. Positional goods as "products and services valued primarily for their ability to convey status, prestige, or relative social standing rather than their absolute utility".

We have so much wealth that wealth accumulation itself has become a type of positional good as opposed to the utility of the wealth.

When people in the developed world talk about the economy they are largely talking about their prestige and social standing as opposed to their level of warmth and hunger. Unfortunately, we haven't separated these ideas philosophically so it leads to all kinds of nonsense thinking when it comes to "the economy".

Money is an IOU; debt. People trade things of value for money because you can, later, call the debt and get the exchanged value that was promised in return (food, shelter, yacht, whatever) I'm sure this is obvious.

I am sure it is equally obvious that if I take your promise to give back in kind later when I give you my sandwich, but never collect on it, that I ultimately gave you my sandwich for free.

If you keep collecting more and more IOUs from the people you trade your goods with, realistically you are never going to be able to convert those IOUs into something real. Which is something that the capitalists already contend with. Apple, for example, has umpteen billions of dollars worth of promises that they have no idea how to collect on. In theory they can, but in practice it is never going to happen. What don't they already have? Like when I offered you my sandwich, that is many billions of dollars worth of value that they have given away for free.

Given that Apple, to continue to use it as an example, have been quite happy effectively giving away many billions of dollars worth of value, why not trillions? Is it really going to matter? Money seems like something that matters to peons like us because we need to clear the debt to make sure we are well fed and kept warm, but for capitalists operating at scales that are hard for us to fathom, they are already giving stuff away for free. If they no longer have the cost of labor, they can give even more stuff away for free. Who — from their perspective — cares?

It's really simple: if you crash the market and you are liquid you can buy up all of the assets for pennies. That's pretty much the playbook right now in one part of the world, just the same happened in the former Soviet Union in the 90's.