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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#351

Post by quadrangle »

wildmusings wrote: post #307
vdaniuk wrote: post #306

Earlier quoted context omitted.

Poe's law invoked.

It's depressing that the idea at the core of our prosperity is dismissed by some as an extreme view indistinguishable from parody. Thankfully, people like Friedman and Hayek have laid down a rock-solid intellectual defense of capitalism. We ignore their wisdom at our own peril.

rock-solid my ass. The situation is less about ignoring Friedman and Hayek as about ignoring their critics (which is obviously what you're doing or you wouldn't have made the absurd "rock-solid" claim)

Re: Economic Inequality

#352

Post by cryoshon »

pinaceae wrote: post #132

fits nicely with the stuff @pmarca has been tweeting and retweeting recently. taking absolutely asinine stuff from the likes the national review (everything the left ever did was wrong, starting with the french revolution) to grover norquist (government employees get more money from the government than they pay in taxes, this is disgraceful). there is some massive headfuck going on, don't know if its because of the u…

For the record, Ayn Rand wouldn't support the kind of capitalism we have right now: she was very much against crony capitalism, and very much in favor of workers being able to live comfortably if they were willing to sell their labor in a truly competitive fashion.

Re: Economic Inequality

#353

Post by TuringTest »

wildmusings wrote: post #307
vdaniuk wrote: post #306

Earlier quoted context omitted.

Poe's law invoked.

It's depressing that the idea at the core of our prosperity is dismissed by some as an extreme view indistinguishable from parody. Thankfully, people like Friedman and Hayek have laid down a rock-solid intellectual defense of capitalism. We ignore their wisdom at our own peril.

That's because the laissez-faire market forces you invoke are not the core of our prosperity, just one of the factors leading to it, so your comment did sound as an extreme parody of a right wing position (which may be more or less reasonable depending on how strongly you support it).

Friedman and Hayek wrote their work before we had a thorough understanding of how complex systems are optimized. Thanks to more powerful computers, we now know that search guided by purely local improvements gets stuck in local minimum (in Economics, those are the Pareto points). Those local minima can be incredibly far away from a true global optimum, but can't be improved by "consensual and mutually beneficial transactions".

Sometimes you do need to take actions that temporarily inconvenience one actor to achieve a point that will benefit all them in the long term; see the prisoner's dilemma for a simple example. The GP post mentioned 40-hours work weeks; those weren't brought by laissez-faire economics nor individual negotiation either, 60 or 80 hours a week were the norm before socialism.

Capitalism tends to create immense concentrations of power without checks and balances on the hands of tycoons, of the kind that should make any true libertarian be very afraid of those holding it. The system that really works best is one where wealth is created for a few years through capitalism, and then that wealth is redistributed by government's welfare politics to the wider population. This is what has been going on in Western countries in the last century, bringing us stability and avoiding the frequent revolutions that plagued Europe and the Americas in all its previous history.

Re: Economic Inequality

#354

Post by vdaniuk »

wildmusings wrote: post #307
vdaniuk wrote: post #306

Earlier quoted context omitted.

Poe's law invoked.

It's depressing that the idea at the core of our prosperity is dismissed by some as an extreme view indistinguishable from parody. Thankfully, people like Friedman and Hayek have laid down a rock-solid intellectual defense of capitalism. We ignore their wisdom at our own peril.

>Capitalist wealth comes from repeated consensual and mutually beneficial transactions.

Tech hiring collusion, 2008 financial crisis, environment degradation and global warming, slavery-like conditions at suppliers of multinational corporations, medical bankruptcies in US and lack of guaranteed holidays, ghettos, plundering of natural resources, monopolies everywhere (as prescribed by Thiel btw).

Such a wonderful, mutually beneficial, ethical system with so many positive externalities! /s

You may claim that capitalism is the "best" system at this point, but to state that's wonderful is indeed indistinguishable from parody.

Re: Economic Inequality

#355

Post by ubernostrum »

wildmusings wrote: post #248
geofft wrote: post #146

Earlier quoted context omitted.

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…

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…

The "soak the rich" approach is immoral in my book. Any discourse that doesn't consider the moral angle to these issues is incomplete.

You should probably read the history of US inheritance laws. They were deliberately designed from the start to "soak the rich", for the express purpose of avoiding a European-style hereditary aristocracy where massive wealth (and the corresponding societal influence/power) would be passed from father to son for multiple generations.

Re: Economic Inequality

#356

Post by Turing_Machine »

wstrange wrote: post #181
Turing_Machine wrote: post #31

Earlier quoted context omitted.

"But automation leaves a lot of people off the payrolls without jobs" No, it does not. Before automated agriculture something like 90% of the population was directly engaged in agricultural labor. We don't have 90% unemployment or anything like it, and we also have social supports for those who are unemployed (also largely nonexistent in those days). " And incomes have dropped more than inflation in most cases for th…

> "we also have social supports for those who are unemployed " Something that the very wealthy are trying to roll back. I think the premise that automation will just shift work to other industries will be severely tested in the age of the self driving car and other forms of advanced automation.

"I think the premise that automation will just shift work to other industries will be severely tested in the age of the self driving car"

Look: we've gone from 90% agricultural workers to about 1% agricultural workers. Hand-weavers and spinners: gone (other than specialized or artsy-craftsy stuff). Neighborhood bakeries: gone (likewise). The list could go on forever.

People have been predicting massive unemployment since the days of the Luddites. It's never happened. What's special about driving that makes it an exception to the historical trend?

Re: Economic Inequality

#357

Post by quadrangle »

Great to see so much discussion about this really controversial article.

If startups create wealth so much, then why is the overwhelmingly used (and accurate!) term about "capturing" value? Most startups do a MIX of adding some value while otherwise benefiting from network effects so that they get to be the ones that capture existing value. Go evaluate any example. Very few are unambiguously creating wealth. The whole concept of disruption is about moving wealth from one place to another.

The BIG issue is about POWER. Wealth inequity corresponds to POWER inequity. This isn't about whether a startup founder gets to have a huge house that dwarfs the poorer folks' homes. The problem is that money is power and the wealthy get to set the rules, and that undermines the democratic structures of our society (to whatever extent they existed at all or could potentially exist).

Re: Economic Inequality

#358

Post by karzeem »

s0uthPaw88 wrote: post #316
karzeem wrote: post #185

Earlier quoted context omitted.

Empirically, how well do you feel the US government spends its budget currently? There's often an assumption in these discussions that if a billionaire isn't spending their money in a socially optimal way, the government will spend it better. But if you look at how governments actually spend their money, you'll find very little evidence to support that assumption.

Government run social welfare programs are actually pretty efficient since they have huge economies of scale [1]. [1] http://www.cbpp.org/research/romneys-charge-that-most-federa...

I'd actually worry more about how efficiently the money is being used after it's been disbursed, not about how much government administrative costs eat up.

E.g. that chart says that ~96% of Medicare spending went to beneficiaries. That sounds good, but all it means is that 96% of the dollars were paid to hospitals/doctors/medical device manufacturers/etc. It says nothing about how efficiently those people are providing their services, i.e. how efficiently those 96% of Medicare dollars are being spent. A lot of those dollars get quickly chewed up by high prices (which I'd argue are themselves caused by the market distortions that these programs foster).

Re: Economic Inequality

#359

Post by natrius »

wfo wrote: post #279
pluckytree wrote: post #49

Earlier quoted context omitted.

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…

There is nothing wrong with the people who have wealth, it is with people having so much wealth. Wealth is economic power; we split power in the government so it is not hyper concentrated in on person for very, very good reasons taught to us by history (power begets more power and corrupts, etc). Similarly we should be trying to split economic power. There's nothing wrong with someone having a lot of money; but there…

I don't think we need to split economic power. I just think the people need to be able to reject economic power over them when they believe it is being misused. That's hard today because economic power is invisible. We can make it visible, then people can decide how they want to let economic power influence their lives.

This is merit capitalism. http://meritcapitalism.com/

Re: Economic Inequality

#360

Post by shawn-furyan »

ghufran_syed wrote: post #120
cbetz wrote: post #85

Earlier quoted context omitted.

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?

citation:

Republic, Lost: How Money Corrupts Congress--and a Plan to Stop It

by Lawrence Lessig

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