capital competes with capital to lowers its rates of return. We need more capital.
Wouldn't lowering rates of return on capital disincentivise investment in new capital? If that was the most important dynamic then presumably the greatest amount of aggregate capital would be obtained through capital redistribution?
Yes, lowering rates of return on capital disincentivise capital investment. But that's alright: on the scale of the whole economy the only reason to invest in capital is to consume more.
A scarcity of capital leads to higher rates of return. A glut of capital leads to lower rates of return. There's an equilibrium in the middle. My "We need more capital." was spoken from the point of view of someone selling their labour for a living: for me as a worker, there can't be enough capital.
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Wouldn't lowering rates of return on capital disincentivise investment in new capital? If that was the most important dynamic then presumably the greatest amount of aggregate capital would be obtained through capital redistribution?
Yes, lowering rates of return on capital disincentivise capital investment. But that's alright: on the scale of the whole economy the only reason to invest in capital is to consume more.
A scarcity of capital leads to higher rates of return. A glut of capital leads to lower rates of return. There's an equilibrium in the middle. My "We need more capital." was spoken from the point of view of someone selling their labour for a living: for me as a worker, there can't be enough capital.