Economic Inequality • Hacker News Board

Re: Economic Inequality

#261

Post by wildmusings » Sat, Jan 02, 2016, 8:32 PM UTC

civilian wrote: post #254

cko wrote: post #214

Earlier quoted context omitted.

But is it wrong for a rich person to hoard wealth, or to spend only on luxuries for themselves? Why do they have to "contribute to society"? I'm by no means wealthy, and at my age of 29 I've donated more money than many of my coworkers. And I'm all for a portion of tax dollars supporting the underprivileged. But when I read about Larry Ellison's yacht-racing hobby, I think to myself, "good for him." He can spend his…

> Why do they have to "contribute to society"? This gets to the core of the question! How did a rich startup person get wealthy anyway? They built something that people wanted. People said: "hey, that thing you built, I value it at $20 and you're giving it away at $10, so I'm happy to buy it!" Anyone who made money from business has already created wealth and contributed to society, via the market. To the people who…

I couldn't agree more. Capitalist wealth comes from repeated consensual and mutually beneficial transactions.

If you want to get rich, create value for people. It really is a wonderful system.

Re: Economic Inequality

#262

Post by Frondo » Sat, Jan 02, 2016, 8:32 PM UTC

cko wrote: post #214

xiler wrote: post #102

Earlier quoted context omitted.

There's nothing wrong with someone getting rich provided they contribute a proportional amount of value to society. Problem is that since the post-WII period (also called the Golden Age of Capitalism) such rewards have been happening less and less [1,2]. In fact, I think reducing inequality is essential for promoting productivity. [1] https://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_econ... [2] https://upload.…

But is it wrong for a rich person to hoard wealth, or to spend only on luxuries for themselves? Why do they have to "contribute to society"? I'm by no means wealthy, and at my age of 29 I've donated more money than many of my coworkers. And I'm all for a portion of tax dollars supporting the underprivileged. But when I read about Larry Ellison's yacht-racing hobby, I think to myself, "good for him." He can spend his…

Ultimately, they have to "contribute to society" because enough of us believe that that is how society should operate. If you're looking for a "society molecule" to study its properties and see if "rich people gots to pay more" is one of its properties, you won't find such a thing, because all of this is human inventions.

Re: Economic Inequality

#263

Post by WalterBright » Sat, Jan 02, 2016, 8:33 PM UTC

minimuffins wrote: post #184

WalterBright wrote: post #69

Earlier quoted context omitted.

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 aware of the relationship between Nixon era wage policies and the oil crisis. Do you have some info on that?

Nixon enacted price controls on oil in 1971. This meant that US prices for oil could not rise, and the oil from non-Arab sources got shipped to other countries who outbid the US. Price controls prevented finding new sources of oil.

There's more, a thorough treatment is in George Reisman's book "Capitalism" pg. 188.

Re: Economic Inequality

#264

Post by W09h » Sat, Jan 02, 2016, 8:33 PM UTC

I don't think anyone will argue with the idea that working hard should and by nature results in good rewards. but what about the idea that one person putting in 500lbs of innovation generates less than a tenth of another's same force?

what if the outcry against inequality refers to the capacity to join the upper echelon and the requirement of other 1%'ers to groom and select future 1%'ers, not it's elimination?

not to mention the people who affect the largest change are folks in the 1% club

One culture or group thought should not keep other cultures from affecting the world.

IE the rich white guy you hear about that has it so easy when compared to someone of lesser means. They aren't referring to the color of their skin. They are referring to the family ties, the unfair education, the modeling of the 1% clubs culture, which opens an incredible amount of doors by itself.

It is not that we are upset with some people having more money than others, it's that some people have unfair tools and advantages to get wealth, and that wealth directly translates into influence and power. Thus, where you are born, what culture you grew up with, where you went to school, have profound affects on how others treat you, the influence you have on this world, and your ability to create true change.

I'm not saying this is something new, but just as civil rights have been huge issues in the past, the current issue, an new issue to tackle, to advance our society and understanding is inequality of ability to amass power/money/influence.

IE at one pole we might find that incumbents to money are no more likely to generate additional money than those without money, at the other, the only way to generate wealth is to have wealth.

It's a fascinating issue, you know where I am if you want to nerd out about it.

Re: Economic Inequality

#265

Post by asift » Sat, Jan 02, 2016, 8:35 PM UTC

wtbob wrote: post #119

asift wrote: post #42

Earlier quoted context omitted.

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.

You're correct. Using swipe to type on my phone can lead to some dumb mistakes...

Re: Economic Inequality

#266

Post by codeismightier » Sat, Jan 02, 2016, 8:35 PM UTC

leot wrote: post #239

wildmusings wrote: post #182

Earlier quoted context omitted.

Hoarding? Do you think rich people just stuff their money in a mattress? Even if they deposited it all in checking accounts, the banks would reinvest it all over the economy.

Yes, the problem is hoarding. Which is proportional to the delta in potential and actual productivity of the already wealthy (and their assets). Here's a quick demonstration: imagine all US taxation (apart from excise taxes) was replaced by a 3% yearly tax on household net wealth. No income taxes. No corporate taxes. No cap gains. No weird deductions based on expected future whatever. The question now is: cui bono? T…

You clearly have not thought though the consequences of your proposal. Here are just a few of the problems:

* What if I own a house but have no cash? Will I have to sell it and live on the street to pay the taxman?

* What if the ultra-wealthy buy property and then mark it down? I.e. they buy paintings, then "accidentally" "damage" them. Whoops, a billion dollars in artwork gone, sorry IRS. Later, it is miraculously repaired. Will the IRS have to start sending undercover agents to inspect people's art collections?

* A 3% wealth tax is still less than the growth rate of many financial assets. I.e. the stock market grows at ~7%. So the rich will still get richer. And if you increase the tax to say, 8%, congrats, you just destroyed the financial markets.

Re: Economic Inequality

#267

Post by Plough_Jogger » Sat, Jan 02, 2016, 8:36 PM UTC

Empirically, the transition of American workers from large corporations to smaller ones described both here and in PG's 'Refragmentation' has not taken place.

If one considers a firm employing > 500 workers to be large (as per the Government's definition), the percentage of employed individuals working for large companies has remained nearly flat (actually increasing slightly). The same holds true if your definition of large is employing more than 1000, 5000, 10000 etc [0].

A dead giveaway that this observation was anecdotal rather than empirical was Paul's statement: > you find what most would have done back in 1960... was to join big companies or become professors.

The percentage of individuals working as professors has historically been such a small percentage of the overall workforce that their inclusion in a statement about national employment trends highlights the author's dependence on the availability heuristic rather than data.

[0] https://www.sba.gov/sites/default/files/files/bds_firmsize.x...

Re: Economic Inequality

#268

Post by ScottBurson » Sat, Jan 02, 2016, 8:36 PM UTC

DominikPeters wrote: post #158

Whenever he says "polynomial", he actually means "exponential", right? Economic growth over the last couple of centuries looks pretty exponential, at least.

Yeah, I think so. In fact, I get the feeling that he originally wrote "exponential", and someone talked him out of it. I'm as opposed to the misuse of "exponential" as anyone -- and it is frequently misused by science journalists and others -- but in this case I think it is appropriate. For one thing, polynomials don't have a flat left tail!

Re: Economic Inequality

#269

Post by wildmusings » Sat, Jan 02, 2016, 8:36 PM UTC

notahacker wrote: post #253

wildmusings wrote: post #130

Earlier quoted context omitted.

The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.

On a global scale, this is nonsense. The number of people globally who have negligible net worth because they earn less than $10 per day vastly exceeds the number of people who have negligible net worth because they've only just started paying down the mortgage on their McMansion and still have student loan repayments remaining. The purchasing power of those 80 people isn't going to start looking insignificant if you…

I disagree. If you take the 3 billion poorest people in the world and properly account for their future earnings, it will certainly exceed the combined expected wealth of these 80 billionaires. You couldn't have anything close to this sensationalist statistic.

Also, global poverty is not the fault of Western riches. It's not something we (Westerners) can do anything about either, except engage in mutually beneficial trade. Most of the world is being held back by bad governance, dictatorships and democracies alike. The West has the only economies of significant size that still have the broad outlines of a true free market system.

Re: Economic Inequality

#270

Post by whistlerbrk » Sat, Jan 02, 2016, 8:36 PM UTC

wtbob wrote: post #103

braythwayt wrote: post #46

I don’t think “income inequality” has much to do with the rich getting richer, especially startups. I think the concern has to do with whether those same startups make the poor, poorer. Some do, some don’t. I believe that Github, for example, makes it easier for the world’s poor to become richer. Amazon or Walmart, on the other hand... Some of these disruptive industries make a lot of people poorer by driving busines…

> Amazon or Walmart, on the other hand... Some of these disruptive industries make a lot of people poorer by driving businesses into bankruptcy. Amazon and Walmart make the poor richer, because they need spend a smaller proportion of their incomes on food & goods. That's why Amazon & Walmart out-competed the mom-and-pops of a generation ago. This was bad for the owners of the mom-and-pop stores, but it was good for t…

I cant believe you're serious. People didn't vote with their dollars. They needed to eat so they sacrifice the long term for the short.

companies like Walmart are able to leverage their miniscule effective tax rate compared to mom and pop stores to offer cheaper goods, combined with the FACT that they artificially lower prices to a point where an individual store loses money all for the sake of driving the local competition out of business which has no other operations to soak up losses.

Walmart has innovated in logistics and supply chain management but make no mistake they offer poor quality goods which exploit cheap foreign labor at the long term expense of our middle class