Economic Inequality • Hacker News Board

Re: Economic Inequality

#341

Post by wildmusings » Sat, Jan 02, 2016, 9:56 PM UTC

Apocryphon wrote: post #328

wildmusings wrote: post #297

Earlier quoted context omitted.

>but bringing the price down by simply ignoring laws and regulations their competitors are required to abide by. You're right, in a lot of cases (Taxis vs Uber comes to mind) the government has created these sub-optimal local maximums with its unnecessary regulations and industry protectionism. Technology is the big energy input needed to break free and move to a new maximum. When I use Uber, I get much more value th…

It certainly is possible to recognize that disruptive startup businesses provide value and quality over preexisting services, and criticize them for flouting laws that are supposed to protect their workers, and/or customers. It also is certainly possible to recognize that government overregulation has enabled rent-seekers to do great harm in staunching competition and establishing a low level of quality for consumers…

Yes, that's true and it wasn't my intention to say otherwise. The rule of law is a very good thing and flouting the laws is ipso facto a bad thing because it damages the rule of law. I happen to disagree with a lot of those laws, on both the grounds of individual freedom and their own stated goals (i.e. I think that a lot of worker's rights and consumer protection laws are actually bad for workers and consumers). And flouting bad laws can bring good results. Especially laws that have only civil penalties, when people accept the risk of those penalties. It's a delicate issue that should probably be evaluated case-by-case.

Re: Economic Inequality

#342

Post by runesoerensen » Sat, Jan 02, 2016, 9:56 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.

Clarified here https://twitter.com/paulg/status/683389603877789696

"I'm claiming only that technology grows as f(x) = x^n, not f(x) = n^x."

Re: Economic Inequality

#343

Post by Apocryphon » Sat, Jan 02, 2016, 9:57 PM UTC

apsec112 wrote: post #334

Apocryphon wrote: post #323

Earlier quoted context omitted.

How about "no politician in the mainstream with any sort of influence or power" is suggesting that? How about "not even Bernie Sanders" is suggesting that?

Politicians in the US track the median very closely. If 30% of voters believe something, close to 0% of politicians will. If 70% of voters believe something, close to 100% of politicians will. We saw this most clearly with gay marriage - Obama and most of the Democratic Party flipped their positions right when the poll numbers passed 50%.

It doesn't really matter. Even if you have a Pew poll saying that a good amount of voters believes that “prevent people from getting rich” or “end all economic inequality”- those are just vague sentiments and not real policy. There are no mainstream American politicians in either party with any proposals that even remotely resemble that sort of idea.

Re: Economic Inequality

#344

Post by dmoo » Sat, Jan 02, 2016, 9:57 PM UTC

GavinMcG wrote: post #33

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…

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…

Is there any danger that such levels of inequality reach a tipping point where the have nots band together and say why don't we take some of that for us. We have the numbers to either change the law or take by force. Such things are not unknown in history...

Re: Economic Inequality

#345

Post by Futurebot » Sat, Jan 02, 2016, 9:58 PM UTC

x0x0 wrote: post #340

Futurebot wrote: post #329

Earlier quoted context omitted.

I agree with your sentiment but I don't think sarcasm is going to get you anything but downvotes. The person you're responding might be underinformed and/or hasty generalizing, but probably deserves a more constructive reply.

Nutpicking deserves to be mocked. There are plenty of progressive economists, spokespeople, or empowered politicians; any of them are fair game for criticism.

Criticism, yes, I just think a more enlightening reply would do more for the conversation. The way I like to think of it is that you're refuting an argument for the benefit of other readers of the comment who may not be well informed / are persuadable, rather than to oppose the person you're replying to. Think of it as communicating a thoughtful missive to someone (who honestly doesn't know) that has asked you "what's wrong with that comment?"

Re: Economic Inequality

#346

Post by Apocryphon » Sat, Jan 02, 2016, 9:59 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.

Well, at least in the age of fracking and increased investment into renewables, as well as whatever the Saudis are up to, there's no threat of a new oil crisis happening anytime soon.

Re: Economic Inequality

#347

Post by leot » Sat, Jan 02, 2016, 9:59 PM UTC

codeismightier wrote: post #266

leot wrote: post #239

Earlier quoted context omitted.

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 r…

I don't understand your response. The primary purpose of the proposal was to illustrate what "hoarding" is. Did it accomplish that goal? If not, why?

To address your concerns generally -- every tax policy has a variety of impacts on behavior. Multiple countries already have a wealth tax, so they are definitely workable. There are behavioral and policy methods of addressing potential negative consequences.

To respond more specifically:

> 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?

That's a straw man argument for a host of reasons. We already carve out exemptions for primary dwellings, and there's no reason why this wouldn't similarly apply, up to some limit. But even absent that, real assets are real assets, and there are multiple ways of extracting liquidity from them (and moreover doing so generates wealth for society). You can take on a "reverse mortgage", or rent out one of your rooms, or sell it and rent, or take out an annuity that's secured against your home, among other possibilities.

> 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?

That's fraud/non-compliance/tax evasion, and it's already a massive problem in the current tax system, except now it's cloaked in things like a "double dutch with an irish sandwich". In any case, this is a problem that is dealt with every day, in business, by insurance companies, and there's no reason why the same techniques couldn't be used by tax officials.

> 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.

Yes, and a 95% income tax rate will destroy the labor market. So? And yes, at 7% CAGR on the S+P the wealthy continue to get wealthier (assuming all their assets are in equities, a big assumption). But note that, in the process, we've eliminated income taxes, so everyone else will be getting richer faster. A win-win.

Re: Economic Inequality

#348

Post by Turing_Machine » Sat, Jan 02, 2016, 10:01 PM UTC

whybroke wrote: post #53

Turing_Machine wrote: post #3

Earlier quoted context omitted.

"The wealth generated by this astounding leap of productivity went entirely to the shareholders of the John Deere corporation." No, it did not. Mechanization makes food much cheaper, which benefits everybody.

Well food prices are significantly lower in the EU than the US. A more dramatic case, Spain, the consumer bread prices can be 1/10 US prices. Vegetables run a fraction of US price, eggs about 1/3. Even corn is less expensive when it reaches the consumer. Yet the median wage is on the order of .75 US and minimum wage including farm worker wages, are higher. Yet US agriculture is more mechanized and agro-business more…

"So empirically the most significant factor is now something else."

That "something else" would be the 40%(!) of the EU budget that is spent on agricultural subsidies.

Re: Economic Inequality

#349

Post by Apocryphon » Sat, Jan 02, 2016, 10:01 PM UTC

civilian wrote: post #218

nickbauman wrote: post #169

Earlier quoted context omitted.

"That shit" could be interpreted this way: Having "obscene" wealth accumulate with one or a few persons means the decision-making about using that wealth becomes idiosyncratic and volatile at worst, generally misdirected at best. In market-fundamentalist terminology, huge actors cannot result in optimal results. Markets work best with broadly-held wealth and millions or billions of small bets, lowering the criticalit…

The Gates Foundations is a counterpoint to your theory. Yes they're volatile, but they've helped change the way that charities operate, with numbers and tracking progress. It feels like when single/double-digit millionaires donate their money, they're too often donating to charities which are social status symbols rather than the most effective causes. In addition, places like GiveWell are helping the direction of th…

Not to mention, the jury's still out whether it's more effective to have government programs to alleviate poverty vs. individual or foundations of billionaires spending on charities at their leisure.

Re: Economic Inequality

#350

Post by wildmusings » Sat, Jan 02, 2016, 10:02 PM UTC

x0x0 wrote: post #336

wildmusings wrote: post #248

Earlier quoted context omitted.

Analogies aside, there is a moral component here. Everyone has a moral claim to the fruits of their labor, however rich or poor they are. You need some amount of tax to pay for our collective defense, police, courts, and mandatory education, but much more than that is immoral. Remember what taxation ultimately is: the police coming to your door and picking your pocket at gunpoint. It rarely comes to that, but that's…

You appear to find it inconceivable that people don't share your morals.

Not at all. On some objective universalist level, moral relativism is right. Where it's dead wrong is that we should stop defending our way of life and our moral codes. We all have our own moralities and seek to shape the world according to it.

As an side, capitalism is more effective at achieving socialism's moral ends than socialism is. It's something people should get behind even if they don't place moral value on private property. You might disagree, but we can argue about that on the level of facts.