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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#111

Post by efaref »

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.

That depends on the supply and demand ratios of wood and chairs. A chair isn't intrinsicly worth more than wood, and by making chairs you dilute the value of chairs.

If I make a trillion chairs, I'll have to drop the price of them to sell them, and the bottom will fall out of the chair market. Meanwhile, wood will become scarce and the price of that will go up. You'll probably even end up with an industry of people dismantling chairs into wood for use in other purposes.

So it's not a simple as "creating wealth" at all.

Re: Economic Inequality

#112

Post by GavinMcG »

wildmusings wrote: post #51
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…

> "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…

It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course) not the whole story. But that's one narrow slice.

On the scale of 80 people with billions upon billions vs. half of everyone else, it's hardly a disingenuous statistic.

Re: Economic Inequality

#113

Post by pandaman »

iandanforth wrote: post #101
pandaman wrote: post #66

Earlier quoted context omitted.

I hear this from liberals all the time, often in more extreme form of "even if only a cent of a million is left there will be motivation to make that million!". But wtf are you so sure? I for one am not looking for a smaller bump in salary at 50% tax already as I don't see how additional effort would pay for itself. I imagine a lot of people don't consider an effort to found startups at this rate too.

Because the self-made rich don't stop working. Because hugely productive people work on open source. Because hugely productive people work at non-profits. Because hugely productive, active, socially beneficial people spend their lives in poverty working for the benefit of others. It's a bizarre mind that can simultaneously believe that you need huge rewards to motivate people AND know that 95% of startups fail. Start…

I am sorry, I don't see how it follows. Even if such people exists in statistically significant quantities, a lot of people don't work for free at all.

Re: Economic Inequality

#114

Post by wslh »

rdtsc wrote: post #80
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…

He is defending what he is doing and what Y-combinator has been doing. One of the most important roles of a leader is to create vision -- build a story that explains and interprets reality based on it. In general, startup world lives on hopes and ideals. More so than other industries. Founders have to have a "burning desire to change the world". It could be building a better future, moving the technology forward, mak…

It's only me? because when people talk about inequality they are talking about poverty even if they are formally different things. If the lower income segment has good education, health, food, basic housing problem solved, transportation, basic services, and good opportunities based more on their capabilities than their connections the inequality discussion will be more about luxury.

Re: Economic Inequality

#115

Post by tremon »

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…

Because those 80 people don't exist in a vacuum. Consider that there are probably tens of thousands of people required to facilitate the profound changes these few people made. This includes people in the food production chain, education (and as such, textbook publishers and paper manufacturers), and product manufacturing. I'm not even including the scientific advancements that made their change possible.

So yes, there is offense in the inequal distribution, when one unique snowflake controls 1% of the world's purchasing power, while roughly 1% of the world's population was required to make that power possible. Whether that offense is moral or evitable is a separate question, but I understand why people frame it as an offense.

Re: Economic Inequality

#117

Post by wtbob »

MagnumOpus wrote: post #92
wtbob wrote: post #65

Earlier quoted context omitted.

> A person's station in life should not be tied to their parents' income level. Why not? One's genes are rather intimately tied to one's parents' genes, and those genes completely determine one's physical self. One's upbringing is the direct result of one's parents' choices (and one's own reaction to them, which is itself a product of genes and upbringing). It seems patently obvious that one's parents' lot in life (i…

If this is true, then the children of billionaires would rise to the top even if they went to the same state schools and had the same resources/networks as everyone else. (Obviously the billionaires don't agree with you since they send their kids to exclusive private schools that cost more than a normal person earns in a year.) If this were true (and I am not arguing that it isn't), a very high inheritance tax could…

> If this is true, then the children of billionaires would rise to the top even if they went to the same state schools and had the same resources/networks as everyone else.

No, because those private schools are part of the parents' choices about upbringing. Moreover, it's impossible for state schools to be good because it's politically impossible for state schools to teach unpopular truths.

Re: Economic Inequality

#119

Post by wtbob »

asift wrote: post #42
dominotw wrote: post #34

> 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.

He accepts that this is true through various forms of rent seeking behavior. He even explicitly condones such forms of wealth creation.

I think you mean 'condemns,' not 'condones,' rent-seeking.

Re: Economic Inequality

#120

Post by ghufran_syed »

cbetz wrote: post #85
foldr wrote: post #59

Earlier quoted context omitted.

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 writ…

"Democracy can be destroyed by wealth inequalities which then create power inequalities" : citation?
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