Economic Inequality • Hacker News Board

Re: Economic Inequality

#81

Post by vezzy-fnord » Sat, Jan 02, 2016, 6:29 PM UTC

WalterBright wrote: post #69

vezzy-fnord wrote: post #63

Earlier quoted context omitted.

The most extreme proposals I’ve seen in America are ones like... The most extreme proposals I've seen in America are a federal job guarantee and a permanent incomes policy similar to the Nixon wage and price controls of the early 70s. Post-Keynesians and MMT proponents are very enthusiastic about them, and they reject the idea of the basic income FWIW.

The Nixon wage-price controls were a disaster. They also precipitated the oil crisis, which persisted until Reagan finally cancelled the oil price controls.

I'm not advocating either of these policies in the slightest. I'm pointing out their increasing popularity in light of a heterodox renaissance post-2008.

Re: Economic Inequality

#82

Post by hwillis » Sat, Jan 02, 2016, 6:29 PM UTC

pluckytree wrote: post #49

GavinMcG wrote: post #33

Earlier quoted context omitted.

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…

Why is that more offensive? What if they were all startup founders or created companies that made profound and positive change? At what point is the cross-over between being reasonably and unreasonably wealthy? If they have too much money and give most of it away, is that better than continuing to create new ventures that could make a difference? This economic inequality feels similar to racism. Why should a very wea…

https://i.ytimg.com/vi/rMhvYeQPOcE/maxresdefault.jpg

People with more money pay taxes at a lower rate than people without. It's very easy to pick obvious cutoffs where people are wealthy to the point of absurdity compared to their "peers".

Re: Economic Inequality

#83

Post by gethoht » Sat, Jan 02, 2016, 6:29 PM UTC

bko wrote: post #55

asift wrote: post #36

Earlier quoted context omitted.

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…

This correlation of equality breaks down in regards to the justice system however, where the poor are systematically curb-stomped and viewed as revenue generators for local governments while the rich can literally destroy the world economy through fraudulent mechanisms and walk away scot free.

Re: Economic Inequality

#84

Post by baddox » Sat, Jan 02, 2016, 6:30 PM UTC

kelukelugames wrote: post #20

hobs wrote: post #14

The problem with income inequality is not related to a startup founder getting rich, its about the deck being stacked against people before they are even born, and then the super rich continually stacking the deck against anyone coming up and challenging their supremacy.

I like the term social mobility. A person's station in life should not be tied to their parents' income level.

I don't see why low social mobility would necessarily be a consequence of high income inequality.

Re: Economic Inequality

#85

Post by cbetz » Sat, Jan 02, 2016, 6:31 PM UTC

foldr wrote: post #59

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.

Thank You. Paul Graham says:

'Louis Brandeis said "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." That sounds plausible. But if I have to choose between ignoring him and ignoring a polynomial curve that has been operating for thousands of years, I'll bet on the curve.'

You mention a very important argument which Mr. Graham seems to have missed, or simply written off: Democracy can be destroyed by wealth inequalities which then create power inequalities. At this point the "polynomial curve" which was made possible by democracy begins to turn down or flatten as we return to corruption, graft, and cronyism.

In other words: We have to baby-sit the growth of this enormously beneficial polynomial curve, for if it gets out of control it will destroy itself (by destroying democracy).

Re: Economic Inequality

#86

Post by WalterBright » Sat, Jan 02, 2016, 6:31 PM UTC

rst wrote: post #18

jrlocke wrote: post #13

Earlier quoted context omitted.

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.

When the Beatles found themselves taxed at 95%, they wrote a song about it ("Here's one for you, nineteen for me..."), but they didn't hang up their guitars.

They did break up. Also, many wealthy Britons moved to Barbados to avoid the taxes.

Re: Economic Inequality

#87

Post by notahacker » Sat, Jan 02, 2016, 6:31 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…

The weirdest thing is he seems to have written this alongside another article which points out that for various reasons post-war America didn't have the same economic incentives for startups, yet Big Industry and seemed to do just fine with innovation and popularisation of relatively novel technology. You didn't get 140 characters, but you did get jet airliners. For all it's inefficiencies according to neoclassical economic theory and lack of startup culture, it's usually classed as a golden age.

Economic analysts obsessing over equality aren't assuming the pie stays the same size; they're asking if that growing inequality might actually be a factor behind the pie growing at a slower rater than used to, despite all the claims that structural and technological progress has made it easier and more financially rewarding to grow the pie than ever before. And whether, if certain measures suggest median incomes aren't growing in real terms, startups (and other, more common routes to large growth in personal incomes) actually are bringing that much good.

That's a complex and difficult claim to assess even when you don't have a deep appreciation of the work ethic and skills and close personal interest in the outcomes of an unrepresentative subset of people who might be playing something closer to a zero-sum game than you realise. Sometimes looking at macro-level data can yield more useful information.

Re: Economic Inequality

#88

Post by wtbob » Sat, Jan 02, 2016, 6:31 PM UTC

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.

> The actual sale of the chair to someone else is a NOOP, it’s just shuffling assets around.

Nope, because the chair in the woodworker's posession is worth less to him than dollars, and the dollars in the customer's posession are worth less to him than the chair. The actual sale leaves everyone better off.

The woodcutter, the truck drivers who transported the wood, the factor who bundled and graded it, the woodworker, the customer, the Internet entrepreneur who built the website the customer used to compair & contrast chairs: all are better off than if the entire Internet-chair-buying industry were artificially restrained. There are externalities regarding over-harvesting of wood, truck pollution, road construction, factor oligopolies, unsafe chair construction, Internet oligopolies and consumer-protection which need addressing as well, of course.

Re: Economic Inequality

#89

Post by jpmattia » Sat, Jan 02, 2016, 6:32 PM UTC

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.

> it’s just shuffling assets around.

That's kinda what I'm saying, since the money supply is fixed. The act of selling the chair puts a greater percentage of the money supply in the hands of the woodworker, since the value of the wood (and other COGs + paid labor) is less than the value of the chair.

pg is declaring that "creating wealth", others are declaring that "wealth aggregation", which contributes to inequality.

But really the heart of the matter is: How is wealth measured? Because if you do it in a currency with a (relatively) fixed supply, then people who profit more than they spend are going to be wealth-inequality creators.

Re: Economic Inequality

#90

Post by [deleted] » Sat, Jan 02, 2016, 6:32 PM UTC

RobertoG wrote: post #68

[deleted] wrote: post #17

Earlier quoted context omitted.

[deleted]

It is a straw man. In general when people worry about inequality, except the most radical commentators, they worry about a trend, not about differences in net worth. Maybe unconsciously, PG try to sell the idea that this a binary thing, you have 0 inequality or you should leave the market do its thing. This is not true. There is a balance and we have a lot examples that show that. The pie thing don't pass the smell t…

[deleted]