The economy as a game of Monopoly |
28 August 2019 (last update: 8 Ocober 2020)
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The capitalist economy is like a game of monopoly.
First everyone is doing great as capital is being built in the form of housing and hotels.
But at some point some people can't pay their bills anymore.
To keep the game going, the winners can lend money to the losers.
But at some point the losers can't pay the interest anymore.
So then, to keep the game going, interest rates must go down.
So that they can borrow more.
But at some point some people can't pay the interest again.
In a game of Monopoly we can start all over again.
That would mean destroying houses and closing factories.
But the real economy is not a game for most of us at least.
So the economy must continue.
An that requires negative interest rates.