Not to be dismissive, but I’m not going to listen to the video a) because I don’t have time and b) I very much doubt he’s introducing any new fallacies I haven’t already heard.
In general, one of the big fallacies that is pushed by mainstream economists - but only through implication - is this idea that rising prices is the inevitable consequence of this very nebulous thing called “growth”. Nobody ever says what exactly growth is. The fact is that it’s easy to see that if the money supply were constant and we define growth to mean increase in non-monetary goods, then prices should be falling.
But there’s a Malthusian undercurrent to this argument. It partly appeals to the idea that growth isn’t just more stuff, it’s also more people. And more people means “more mouths to feed.” And more mouths to feed (and clothe and house) means greater demand for stuff, especially food and land. Since the planet isn’t getting any bigger, yet human population is continually growing, the fear being promulgated is that we’re going to come under increasing scarcity and, hence, increasing prices, which they are then calling inflation.
Again, this argument is fatally flawed because it fails to take into account that each new human born has a marginal effect on human productivity as well as human consumption. The question is whether the marginal productivity of one more human is greater or lesser than his marginal consumption. If greater, then his being born will increase the available pile of stuff and reduce prices. And vice-versa if the marginal consumption of one more human is greater than his marginal productivity. In this very observation lies the answer to all the hand-wringing about overpopulation.
But there’s no need to worry. As we approach the population level where marginal productivity of the average person born is roughly equal to his marginal consumption, the costs of raising and feeding such children will become prohibitive and human fertility will decline. In some countries right now, human fertility is so far below replacement levels that the government is actually paying mothers per capita to have children - $30,000 in Germany and $19,000 in Russia as of about a year ago.
And, of course, the idea that the Fed doesn’t want to tolerate inflation is laughable. The Fed is basically the sole source of all economy-wide price increases.
Clayton -