There is no absolute Right supply of either fiat money or karma. If every dollar bill in everyone's wallet magically turned into two, the price of everything would double and nobody would be materially affected. Similarly, doubling everyone's karma and causing the up arrow to give two points rather than one would have no material effect.
Inflation matters when you factor in time. Inflation encourages risk. It makes your current savings become less valuable in the future, encouraging you to try to increase your wealth to compensate. Too much inflation encourages too much risk, and you get a bubble.
Money is valuable because it can be exchanged for scarce resources. Karma is valuable because it gets you attention, which is a scarce resource. There are two kinds of attention: visibility of articles and visibility on the leader board. Karma is the cause of the latter, but only a byproduct of the former. There are a fixed number of articles on the front page and a fixed number of spots on the leader board, but both become more valuable as the community grows, because more eyeballs means more attention.
At this point, the money analogy breaks down. Money is both a unit of accounting and a medium of exchange. Karma is only a unit of accounting. It tells us how wealthy we are, but we can't exchange it for other wealth. Attention doesn't behave like a commodity either. If we give and receive the same amount of attention, that's not the same as simply doing nothing.
So, news.yc really doesn't behave anything like a conventional economy. If any analogy can be drawn at all, I'd say that we're in a state of deflation. As long as the community continues to grow, producing articles now is less profitable than producing articles later.
Inflation matters when you factor in time. Inflation encourages risk. It makes your current savings become less valuable in the future, encouraging you to try to increase your wealth to compensate. Too much inflation encourages too much risk, and you get a bubble.
Money is valuable because it can be exchanged for scarce resources. Karma is valuable because it gets you attention, which is a scarce resource. There are two kinds of attention: visibility of articles and visibility on the leader board. Karma is the cause of the latter, but only a byproduct of the former. There are a fixed number of articles on the front page and a fixed number of spots on the leader board, but both become more valuable as the community grows, because more eyeballs means more attention.
At this point, the money analogy breaks down. Money is both a unit of accounting and a medium of exchange. Karma is only a unit of accounting. It tells us how wealthy we are, but we can't exchange it for other wealth. Attention doesn't behave like a commodity either. If we give and receive the same amount of attention, that's not the same as simply doing nothing.
So, news.yc really doesn't behave anything like a conventional economy. If any analogy can be drawn at all, I'd say that we're in a state of deflation. As long as the community continues to grow, producing articles now is less profitable than producing articles later.