• sylver_dragon@lemmy.world
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    1 year ago

    Because of competition. Let’s say Company A makes widgets and, owing to people having more money, tries to raise prices. Along comes Company B, which also makes widgets, who recognizes that they can out-compete Company A on price. So, they either don’t raise their prices as much or they keep them the same. Company A is now stuck either accepting lower sales, or lowering prices to compete. Once Company A reduces prices (because they want to survive), they put Company B in the same situation until prices stabilize at some smaller profit margin.
    So basically, the exact same supply and demand curves which keep prices stable now. It’s not like businesses aren’t already doing everything they can to separate you from your money.

    In the end, it such a system would likely lead to some inflation. With more money in the economy, there is likely to be more demand for goods. If supply doesn’t expand to match the new demand, prices will go up. At the same time, increased consumer spending is often a good thing, so long as it doesn’t expand so fast that it creates shortages. It may also push up wages for unskilled workers, and those positions may now be harder to fill, commanding higher wages. It may also drive even more automation of unskilled jobs, which isn’t necessarily a bad thing. Those jobs are almost certainly headed for automation anyways; so, it’s better for society if we get out in front of that trend and avoid having a large pool of young, unemployed and disgruntled people running amok in society. Much better to have higher taxes which are used to keep the unemployed youth at least mostly gruntled instead. But, that’s bad for rich, greedy assholes who would rather walk a tight-rope of just enough bread and circuses and full on civil unrest.