Economic Inequality • Hacker News Board

Re: Economic Inequality

#51

Post by wildmusings » Sat, Jan 02, 2016, 6:14 PM UTC

GavinMcG wrote: post #33

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…

>"More wealth than half the world's population"

That's such a disingenuous statistic. A huge number of people, including a huge number of very well off people, have a negative net worth due to debt.

I don't have a car payment or a mortgage, so I have more wealth than at least 30% of America, over 100 million people, combined!

It's disappointing to see that FiveThirtyEight has now become just another outfit twisting the truth for their political agenda. I expected better from them.

Re: Economic Inequality

#52

Post by lucidbee » Sat, Jan 02, 2016, 6:14 PM UTC

This seemed like a blurb for start ups rather than an analysis. One thing that is missing is a quantitative analysis in the factors underlying inequality, and whether / how they relate to startups at all. Also missing is an analysis of the role of rent seeking in increasing inequality. Basically there is a fundamental division in factors of inequality: which are related to the self serving manipulations of the political and economic system by rich people to sustain their position and which are related to innovation by the best entrepreneurs? Then we must also analyze which of these factors are dominant in our environment. He avoids these essential questions so this essay is just opinion. There are some aspects of our situation that make it seem rent seeking is dominant: low productivity growth, stock buy back games by companies rather than investment, a slowing down of new business formation (which can be caused by monopolies). I am sometimes critical of economics as a discipline because there is no scientific method but he could use some immersion in economic data, studies, and theory, to force him to come up with a useful analysis.

Re: Economic Inequality

#53

Post by whybroke » Sat, Jan 02, 2016, 6:15 PM UTC

Turing_Machine wrote: post #3

fivedogit wrote: post #2

Usually pg's essays are spot-on. But this one, I feel, is based on a false premise: People aren't upset about startup founders getting rich -- in fact, society loudly applauds it. What people are upset about is legacy capital growing and growing and growing while the poor and middle class stagnate or even contract. On this subject, I always think about farms. Back in the day, it took ~100 people to work a large farm.…

"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.

Well food prices are significantly lower in the EU than the US. A more dramatic case, Spain, the consumer bread prices can be 1/10 US prices. Vegetables run a fraction of US price, eggs about 1/3. Even corn is less expensive when it reaches the consumer. Yet the median wage is on the order of .75 US and minimum wage including farm worker wages, are higher.

Yet US agriculture is more mechanized and agro-business more consolidated and the country significantly more efficient. So empirically the most significant factor is now something else.

Re: Economic Inequality

#54

Post by kuschku » Sat, Jan 02, 2016, 6:15 PM UTC

[deleted] wrote: post #19

[deleted]

Indeed.

The issue is opportunities.

And our aim should be in ensuring that everyone, at every time, always gets a second chance. That everyone, at every time, has access to the same opportunities.

If you have to steal to get food, because you’re homeless and can’t get a job, you have next to no opportunities.

If you get access to healthcare, education and a basic minimum life standard, you have far more opportunities – you can study again, go into a job, etc.

Our aim has to be in making sure that for everyone, a specific minimum standard of life and opportunities is existing.

This also uncouples your socioeconomic opportunities from those of your parents.

Everyone should have the ability to go from dishwasher to millionaire based just on their own decisions, not advantaged or disadvantaged because of the socioeconomic status of the parents.

    ------------

This is also what the European model aims at: Provide everyone with a minimum standard of life, so that everyone’s success is only based upon their own decisions and work, not based upon what their parents did.

If everyone has the same – free – access to high quality education, to healthcare, if everyone can at minimum get a small apartment and doesn’t have to be homeless, then we have far more mobility.

In a way, Europe makes it far easier to live the American Dream than the US right now.

Re: Economic Inequality

#55

Post by bko » Sat, Jan 02, 2016, 6:16 PM UTC

asift wrote: post #36

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?

The ironic thing is that the wealthiest now try to live a rather stoic, normal life with a focus on whole, local foods and simple agrarian pleasures. Sure, they don't fly coach, but honestly, they don't exactly live extraordinary lives when compared to that of the middle class in America.

Reminds me of a Warhol quote:

> What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.

Re: Economic Inequality

#56

Post by kevindeasis » Sat, Jan 02, 2016, 6:16 PM UTC

What I do know is that there will always be income inequality. There will always be poverty, but we can significantly raise the quality of life for everyone. In fact, I feel it is more important that we raise the quality of life than to fix income inequality.

Thoughts?

Re: Economic Inequality

#57

Post by gethoht » Sat, Jan 02, 2016, 6:17 PM UTC

danharaj wrote: post #32

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 other…

This is truly embodied in the John Galt mythos.

Re: Economic Inequality

#58

Post by refurb » Sat, Jan 02, 2016, 6:18 PM UTC

MisterBastahrd wrote: post #25

People still got rich when the top tax percentage was 90%. I personally don't care what people make, but I care when they use their massive wealth to influence policies which affect me. If you have more access to my representative than I do and you don't even live in my congressional district, then I want that to stop, one way or another.

Nobody actually paid the 90% marginal rate back then. Going back to those rates would mean opening up a huge number of tax concessions as well.

Take a look at a historical chart of which incomes levels paid what percent of total taxes. If anything, the total burden on the highest brackets has gone up not down over time.

Re: Economic Inequality

#59

Post by foldr » Sat, Jan 02, 2016, 6:18 PM UTC

11thEarlOfMar wrote: post #41

To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. The global pie is getting bigger because GDP is growing faster than the population: - GDP Growth since 1999 ~2.5% annually [0] - Population growth since 1999 ~1.3% annually [1] - % of world population living in extreme poverty has more than halved since…

The problem with this line of argument is that relative poverty is a problem as well as absolute poverty. To pick the most obvious example, huge inequalities in wealth inevitably give rise to huge inequalities in power and influence, which can subvert democratic government.

Also, what rising tide? In the US at least, real incomes are stagnating or falling for most people.

Re: Economic Inequality

#60

Post by wtbob » Sat, Jan 02, 2016, 6:18 PM UTC

jrlocke wrote: post #28

Pg, in effect: "if there was no economic inequality there would be no startups (and all the good they bring). The real problem is the number of super poor, not the number of super rich". But this is a straw man: no one is arguing for total economic equality, just a reduction in inequality. Further, pg asserts that startups are wealth creators, and they thus create rich founders without having influence on poverty in…

> This is patently false: the best startups make money eating other people's lunch, and they concentrate this money in the hands of the founders.

No, they concentrate the profits in the hands of their founders, but the big winners are the millions of consumers. Yeah, Jeff Bezos is rich, but not as rich as a world with Amazon in it