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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#31

Post by Turing_Machine »

whoiskevin wrote: post #12
Turing_Machine wrote: post #3

Earlier quoted context omitted.

"The wealth generated by this astounding leap of productivity went entirely to the shareholders of the John Deere corporation." No, it did not. Mechanization makes food much cheaper, which benefits everybody.

If that were all that happened it would be great. But automation leaves a lot of people off the payrolls without jobs and if those jobs are paying less then less expensive food is not less expensive. And incomes have dropped more than inflation in most cases for the poor which means it is not cheaper for those less able to afford it. Complicated problems are not whisked away with making things less expensive = benefi…

"But automation leaves a lot of people off the payrolls without jobs"

No, it does not.

Before automated agriculture something like 90% of the population was directly engaged in agricultural labor.

We don't have 90% unemployment or anything like it, and we also have social supports for those who are unemployed (also largely nonexistent in those days).

" And incomes have dropped more than inflation in most cases for the poor which means it is not cheaper for those less able to afford it."

This is pure nonsense. Sorry, it just is.

http://www.theatlantic.com/business/archive/2012/04/how-amer...

In 1900, 43% of income was spent on food.

In 2003, only 13% of income was spent on food.

Re: Economic Inequality

#32

Post by danharaj »

We don't need startups. The only reason why we "need" startups is because you can't get anything done in this society unless the property owners and capital holders get the majority of the profit.

I bet a lot of people prefer the version of history where great men do all the great work and drag the rest of humanity along with them: peerless, fearless leaders who need to be rewarded with wealth and power because otherwise they would not contribute their might and talent to the betterment of the world and we would all be living in shit-thatched straw huts because only the great men who own property can save us from our inferior nature.

Re: Economic Inequality

#33

Post by GavinMcG »

jacobolus wrote: post #8

Graham is arguing against an enormous straw man. Nobody is suggesting that we “prevent people from getting rich” or “end all economic inequality”. The most extreme proposals I’ve seen in America are ones like, “institute an unconditional basic income as an alternative to means-tested welfare programs,” or “allow every citizen/resident into a single-payer healthcare system,” or “go back to the tax structure of the 195…

On that note: the most offensive economic inequality isn't the 1% vs. the 99%, which successful startup founders would find themselves on the wrong side of.

It's more about the 80 individuals with more wealth than half the world's population [1] – which, yes, does include "startup founders" such as Gates, Ellison, Bezos, Zuckerberg, Page & Brin, etc. But the vast majority of successful startup founders aren't in this group. Even if they were, the proposals are to keep people from becoming quite as obscenely wealthy, as you've pointed out.

[1] http://fivethirtyeight.com/datalab/meet-the-80-people-who-ar...

Re: Economic Inequality

#34

Post by dominotw »

> pie fallacy: that the rich get rich by taking money from the poor.

I've read this in other pg essays. But I've always wondered if there is some truth to that 'fallacy' and if shouldn't be simply dismissed with an absurd and simplistic example of generating wealth by fixing an old car.

Re: Economic Inequality

#35

Post by danharaj »

[deleted] wrote: post #27
rst wrote: post #21

Earlier quoted context omitted.

Huh? The question isn't even about whether it's possible to create a "vast internet property". The question is about how much of the money the creator, heirs and descendants get to control personally.

[deleted]

Do you think no labor can occur unless someone owns its product?

I mean, that's the implicit conclusion of bourgeois ideology, but it's ridiculous when made explicit.

Re: Economic Inequality

#36

Post by asift »

rst wrote: post #4

Central thesis (hidden a bit): "ending economic inequality would mean ending startups". So, who is the straw man who advocates completely ending economic inequality? Even left wingers in Europe (far to the left of anyone mainstream in the US) talk mainly of reducing it. So, if economic inequality were substantially reduced, would there still be startups? I believe another piece of common advice in this field is that…

Reducing economic inequality is merely a lesser form of eliminating it. I think the tough question people should consider here is whether relative inequality or absolute standard of living is the more important metric. If absolute standard of living rises faster as economic inequality increases, why should we try and limit economic inequality?

Re: Economic Inequality

#37

Post by obrero »

Robert Morris and Paul Graham are criminals. Morris crashed a large portion of the Internet in 1988. There is a large amount of evidence Graham had foreknowledge of this worm, which was presented in court.

How much jail time did Morris do? Nothing. I don't think Graham was even charged.

This is what inequality is. I know people who were arrested for hacking in early 1990, with less evidence, less destruction etc. But they were "spics, niggers and white trash" as one security consultant put it. Not the son of an Ivy League kid whose father had connections to the military-industrial state, or whose father was a physicist.

You can't have a better example of two born to the manor, silver spoon kids. They consider crashing a large number of machines on the Internet a prank, a hack etc., because people in their class can get away with such things, like the affluenza kid who was arrested. You don't get away with things like that as a kid. A few months after Morris crashed a sizeable percentage of Internet hosts, with indications of Graham's foreknowledge, three MoD hackers were arrested for crashing ONE machine. The evidence was flimsy - because while all had been on the machine (along with many others), none had crashed it. They had public defenders, and all three went to jail for crashing a machine none of them crashed. Morris walked for crashing thousands of machines, as did Graham who was never even charged.

Of course people in such a class want to keep things the way they are.

I don't even want to go into the other nonsense about wealth. It's the difference between rentier wealth and the wealth created by labor. You're not going to read about that in any mainstream economics text though.

This is the truth, which is why it will be downvoted to oblivion, or possibly even erased. Because his essay is bullshit, and we all know it.

Re: Economic Inequality

#38

Post by collyw »

braythwayt wrote: post #23
jpmattia wrote: post #16

Great essay. I was struck by this though: > A woodworker creates wealth. There's an odd can of worms in that simple statement, which is roughly reduced to: How do you measure wealth? Part of the controversy is that wealth is often a summation of net worth in [dollars | yen | euro | yap stones]. However, if you look at the simple act of the woodworker selling a chair, the total dollars in circulation before and after…

Not exactly. Before the woodworker builds the chair, they have some wood. The value of the wood is less than the value of the chair. So building the chair increases the total value of the economy. The actual sale of the chair to someone else is a NOOP, it’s just shuffling assets around.

This is the problem that I and many others seem to see. The people getting the richest in our current society are the ones doing the asset shuffling and not those who create the wealth.

(BTW,what is NOOP?)

Re: Economic Inequality

#39

Post by orangecat »

jrlocke wrote: post #13
rst wrote: post #4

Central thesis (hidden a bit): "ending economic inequality would mean ending startups". So, who is the straw man who advocates completely ending economic inequality? Even left wingers in Europe (far to the left of anyone mainstream in the US) talk mainly of reducing it. So, if economic inequality were substantially reduced, would there still be startups? I believe another piece of common advice in this field is that…

Exactly. There would still be sufficient economic motivations for startups and startup founders in a world where startup founders were taxed at a 75% rate.

I'm not sure about that. Work your ass off for four years, successfully exit with equity worth $4 million, and you only keep $1 million? That's about what you could have made at Google.

Re: Economic Inequality

#40

Post by protomyth »

The change in Federal government power started long before WWII. Its origins came with President Lincoln and the Civil War and its aftermath. The strong Federal power picked up quite a bit of steam in the 1900's with several Supreme Court rulings allowing the commerce clause to intrude into state's business. The Presidency's of Wilson, both Roosevelt's, Hoover, and Truman[1] continued the rise in Federal power that setup later Presidents. Nixon[2] had a wages and price controls board too.

1) Truman was stopped from continuing to fund the government at a wartime budget by the House. The time period from 1945 through 1950 makes for some fascinating reading.

2) “I am today ordering a freeze on all prices and wages throughout the United States.” President Nixon Aug. 15, 1971

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