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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#221

Post by thanatropism »

collyw wrote: post #30
[deleted] wrote: post #19

[deleted]

Exactly. As someone working in Spain, I can live a comfortable life on my salary, but I don't feel rich. I would certainly struggle to give up working for a year and try and bootstrap a startup from what I can save (it's possible but it would be tough).

http://www.newyorker.com/magazine/2003/07/07/what-ails-us

"There are really two American economies: one that’s getting more productive and one that’s not. In the first—the economy of Dell, Toyota, and Wal-Mart—consumers have grown accustomed to paying less for more. In the second—the economy of Harvard, the Yankees, and Bob’s Body Shop—they pay more for the same. The first economy has policymakers worried about deflation. The second has consumers worried about paying their bills."

Re: Economic Inequality

#222

Post by sailfast »

wtbob wrote: post #65
kelukelugames wrote: post #20

Earlier quoted context omitted.

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

> 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…

Perhaps a more reasonable reading of this is required. "It should not be impossible to change your station in life because of your parent's income level" leads to different conclusions. Of course the wealthy will have an advantage, but that does not mean you completely restrict those with ambition from achievement - it would be bad for society as a whole nevermind productivity gains.

Re: Economic Inequality

#223

Post by codeismightier »

cmurf wrote: post #163
wildmusings wrote: post #51

Earlier quoted context omitted.

> "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…

This is a disingenuous rebuttal. The difference in wealth between someone worth $45B, and two people each worth $1 million and -$1million respectively, is identical. The millionaire is worth less than 0.01% of the first. If this were a card game, the millionaire could go piss himself. If it were possible to put $45B into a typical savings account earning 1% interest per year, that $45B person will make more money doi…

What's the problem with hoarding? There's no difference between a billion dollars stuffed under the mattress, never to be spent, and a billion dollars burned up in a fire. If the rich aren't spending, they are not consuming resources or causing pollution, so it's as if their money never existed. And if they do one day decide to draw down their accounts, then it wasn't being hoarded.

>> If this were a card game, the millionaire could go piss himself.

Thankfully the economy is not in fact a card game, and no billionaire can force you to piss yourself.

Re: Economic Inequality

#224

Post by dang »

hammerandtongs wrote: post #160

I LOVE that Paul Graham posted this just a day after posting Mark Twain's "corn-pone opinions" with no sense of irony or self awareness. """ "You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is."... The black philosopher's idea was that a man is not independent, and cannot afford views which might interfere with his bread and butter. If he would prosper, he must train with the majority; i…

The all-caps sarcasm here seems predictive of the complete factual inaccuracy of what follows. PG posted the Mark Twain article in 2004.

Re: Economic Inequality

#225

Post by civilian »

known wrote: post #217

Self-attribution-fallacy http://www.monbiot.com/2011/11/07/the-self-attribution- fallacy

This is about finance, not about start-ups. Yes, there's overlap, but it's different.

But even if we agree to your point (and I bet PG would agree that there's an element of luck), the pie fallacy is still there. People ought to be able to flip a coin to try to generate wealth.

"If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. " Puh-leez. If wealth was the inevitable result of hard work, I'd be out-performed by every jock I went to high school with. HN readers aren't relying on work-ethic, we're relying on our minds. We learned how to study independently and apply what we've learned.

Re: Economic Inequality

#226

Post by Mikeb85 »

So much material, so little time (today, for me at least).

A few of his key points that I noticed:

> In the real world you can create wealth as well as taking it from others. A woodworker creates wealth. He makes a chair, and you willingly give him money in return for it. A high-frequency trader does not. He makes a dollar only when someone on the other end of a trade loses a dollar.

Not surprising that he uses this example, it's popular. As a retail trader however, the amount of money I lose to a HFT is basically the HFT's commission for making my trade happen. In the old days I would have paid a broker, today I pay much less to my (electronic) broker and an HFT takes a few cents as well. It may seem to be zero-sum, but they are providing a service (liquidity).

But then again, everyone will defend their own interests, as PG is doing, and as finance people do.

> I've seen this myself: you don't have to grow up rich or even upper middle class to get rich as a startup founder, but few successful founders grew up desperately poor.

This really should be the whole article. PG argues for economic inequality the whole time, but this is the real reason why economic inequality is bad.

Economic inequality reduces social mobility, and reduces the pool of potential entrepreneurs.

Also, PG should realize that what he does is basically what finance people do. He's increasing valuations of certain startups, not creating wealth. It's the same game played in the markets.

Re: Economic Inequality

#227

Post by [deleted] »

geofft wrote: post #146
wildmusings wrote: post #127

Earlier quoted context omitted.

In a capitalist system, you become wealthy by creating value for people in mutually beneficial and consensual transactions. Tax discourages that kind of value creation. You can try to hide this effect by using really large numbers (they'll still have $500M!) but that's deceptive because, even if their motivation wouldn't have been affected (which I disagree with), these uber-wealthy people are the exception, not the…

I think the case for their motivation being affected makes sense in a physical-goods economy. If a woodworker sells $500M of chairs, sure, there's suddenly much less motivation to spend the same amount of parts and labor on the next chair for 1% of the profit. But for other kinds of revenue that makes less sense. The 5 millionth copy of Windows does as much good for that particular customer as every previous one, at…

[deleted]

Re: Economic Inequality

#229

Post by supercanuck »

gkop wrote: post #168
supercanuck wrote: post #124

Lots of window dressing to serve up PG'a core thought: >So let's be clear about that. Ending economic inequality would mean ending startups. PG also called those who questioned Mark Zuckerberg's altruistic intentions "losers." In reference to Altman's bewilderment at the criticism of Zuckerberg's donation to his LLC. I have tremendous respect for PG on startup related manners, but in terms of making a better society,…

The philanthropy point is not to be missed. The perception of Silicon Valley super rich people by the rest of the USA is that they are more stingy with their wealth than respected entrepreneurs in other industries. SV super rich are perceived to punt forever: "If I invest my $100M rather than donate it, then I can grow it to $500M and donate half of that, $250M! See, everybody wins." But then they never do end up act…

I think it has more to do with the "I built Facebook" and therefore I am capable of solving "world hunger", when there are people out there who dedicate their lives to the the task but lack resources.

It is incredibly arrogant, in my opinion.

Re: Economic Inequality

#230

Post by civilian »

AndrewDucker wrote: post #77
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…

Look at the quintiles in the second graph here, which adjusts for inflation: http://www.advisorperspectives.com/dshort/updates/Household-... It's very clear that the bottom 60% of the USA hasn't risen even slightly in the last 50 years. And the 20% above that has only risen slightly. While the top 20% has approximately doubled. (I suspect that if you broke it down further the rises would mostly acccumulate to the top…

Who gives a shit about the bottom 60% of the USA? They have their cars, refrigerators, cell phones, television and football teams.

If we're going to be truly global citizens, we should place much more importance of the global reduction of poverty, which has been going great!

Poor Americans live in the best country in the world--- a country that any enterprising poor foreigner would love to immigrate to--- and they squander that opportunity.

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