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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#281

Post by devdas »

wildmusings wrote: post #127
geofft wrote: post #109

Earlier quoted context omitted.

These sorts of discussions always go downhill because they very quickly turn into defending (and attacking) people as if their identity is inextricably linked to their wealth, which means that policy discussions are read (and sometimes written) as personal attacks. Can we do better than that, please? I don't see a claim that any of these folks are bad people for their money. Gates, for instance, is doing extraordinar…

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…

However, if your mutually beneficial transaction has negative externalities, those need to be corrected. Taxation is one way of achieving that correction.

Re: Economic Inequality

#283

Post by notahacker »

wstrange wrote: post #170
ghufran_syed wrote: post #120

Earlier quoted context omitted.

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

Let's start with the Koch brothers, who will spend $889 million this year to sway the election.

In fairness, I've always seen the Koch brothers as a heartening example of the limitations to the ability of individuals to buy government. They had to give up on the Libertarian Party and can't buy the Republican caucus, never mind swing the election.

On the other hand, if it wasn't for the Koch brothers it's distinctly possible that few people would have heard of Austrian economics, and most of those would be academics writing it off as of purely historical interest.

Re: Economic Inequality

#284

Post by tonyedgecombe »

wtbob wrote: post #60
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

I don't feel rich when I live in a town with no bookshop, beyond a certain point the availability of cheap goods is pretty meaningless.

Re: Economic Inequality

#286

Post by imtringued »

lazyjones wrote: post #152
cs702 wrote: post #93

For me, the issue with economic inequality in the US is that somehow it has lead to INEQUALITY OF OPPORTUNITY, which makes our economic system unfair . Sample evidence: * US children of wealthier parents grow up to be wealthier than US children of poorer parents, regardless of whether the child was adopted or not.[1] * US children whose families are in the bottom income quartile are eight times less likely (!) than c…

> Why should wealthier children, who simply got lucky and won the "ovarian lottery," have more and better opportunities than poorer children Better genes and epigenetic effects would seem to be a valid and natural reason to me. Let's not exaggerate the opportunities though: average lifespan isn't much higher and a life in luxury isn't devoid of problems. It may be weakening and dangerous if exaggerated. We're doing w…

Did you even read the first point in the list?

>US children of wealthier parents grow up to be wealthier than US children of poorer parents, regardless of whether the child was adopted or not.[1]

Re: Economic Inequality

#287

Post by dpeterson »

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…

I think it is great, with everything Paul Graham has to lose, knowing comments like these will be at the top of something he helped create, he still has the courage to say what he believes. Yes, there are many people/politicians that will use other well meaning people to prevent others from competing with them by eliminating the ability to get rich.

Re: Economic Inequality

#288

Post by adamzerner »

There seems to be an assumption that if you tax the rich, they won't be motivated to grow the pie. I don't think that that's true. I don't think people would say, "Tax rates doubled. Now I only expect to make $100M instead of $200M. It's not worth it any more; I'm quitting."

Here's how I see it:

A: Double taxes; 10% smaller pie.

B: Keep taxes; inequality grows.

C: Increase taxes such that innovation stops.

Graham seems to be arguing that B is better than C. I agree, but he doesn't seem to address A.

Re: Economic Inequality

#289

Post by hammerandtongs »

runesoerensen wrote: post #273
hammerandtongs wrote: post #243

Earlier quoted context omitted.

Citation needed. Your quibble over the precise date of the post seems predictive of an inability to deal with the larger points raised.

> Citation needed. Actually just a bit of research was needed, but I've done that for you: Internet Archive[1] and previous Hacker News discussion[2]. If you want people to take your points seriously I wouldn't recommend such unnecessary and unwarranted sarcasm. [1] https://web.archive.org/web/*/http://www.paulgraham.com/corn... [2] https://news.ycombinator.com/item?id=189873

Actually thanks for the web archive method I'll use that again.

I was factually confused by this undated repost, but what was unneccessary or unwarranted?

Does the timing in posts make this deeply self involved opinion ok?

Re: Economic Inequality

#290

Post by nhaehnle »

noobermin wrote: post #174
foldr wrote: post #96

It's hard to take this seriously when pg asks us to believe, on the basis of a single out of context quote, that Stiglitz is a simple-minded victim of the "pie fallacy". Stiglitz explicitly anticipates and addresses this criticism: > One can think of what’s been happening in terms of slices of a pie. If the pie were equally divided, everyone would get a slice of the same size, so the top 1 percent would get 1 percent…

That still sounds like the pie fallacy. The idea is that wealth is not a global conserved quantity, but can be created by individuals. One need not "enlarge the pie" globally so that the poor can have more of it. It's more like the rich create more of it and the poor create/obtain less of it.

It's interesting that you focus on the individual when it comes to wealth creation. This is not random, and it predisposes you to believe that there is a pie fallacy going on when in fact there might not be one.

The truth is that almost no wealth creation is done by individuals. There is a vast range of levels on which wealth creation is a shared enterprise and it would be boring to trot them out again, but usually, all or at least most of society is involved directly or indirectly (if only by agreeing to the social contract of peacefulness towards one another).

Because of this, the question of the rewards for wealth creation is one of distribution from the very beginning. Logically speaking, there is no single point in time where the startup founder's product can be declared to be just his or her own according to a universal philosophy.[1]

There is no neutral default distribution that you can derive from first principles.

Instead, in the example of startups, to what extent the overall benefit of the creation should go to the startup founder, and to what extent it should go to employees, the people providing the underlying tech stacks, and other parts of society depend on your value system and on your objective function.

So, to make explicit what this has to do with the pie fallacy: Since wealth creation is generally not done by individuals, inequality is a concern even when the pie is growing, and even when each individual's absolute income or wealth is growing, because despite all this growth, the resulting distribution might still be unjust.[2]

Graham tries to side-step this discussion, and unfortunately our society is generally not well-equipped to defend against such rhetoric moves. You may end up agreeing with him,[3] but I hope you at least recognize that if you do, you do not do so by purely applying logical deduction from first principles. There is necessarily a subjective value judgement that reasonable people with different values and objectives will disagree with.

[1] It is also no accident that Graham chooses the example of a woodworker at the beginning of his essay. Since woodworkers have existed for millenia, including through time periods where people really were more self-reliant than today, it makes the reader subtly predisposed to be mislead into accepting the story of wealth creation by individuals.

[2] And/or it might be inefficient, but that's a different can of worms.

[3] And you may well be right to do so, depending on your values!

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