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Income inequality is not the problem, it's a symptom

blog.rongarret.info

11–20 of 242 posts

Re: Income inequality is not the problem, it's a symptom

#11

"At the very least, we should strive for a non-regressive tax system, which is what we have now." I'm super pro regressive taxes. Regressive taxes are fantastic for the poor. They get more than they put in AND the elite are less able to avoid paying them. The socialized promised lands of Scandinavia are highly regressive. http://krugman.blogs.nytimes.com/2010/11/17/why-im-soft-on-s...

Lets add increased sales tax for all domestic yacht purchases also, it's not like wealthy people can go elsewhere or do other things with their money.

Re: Income inequality is not the problem, it's a symptom

#12

>So why doesn't Graham recognize and advocate this? Perhaps it's because two of his biggest golden geese — Uber and AirBnB — are actually relying on exactly the kind of political influence I'm calling out here in order to survive and prosper. Whether this is true or not, we need to realize PG has motives. He doesn't write essays just for his health.

Having read PG's essays since 2002, I suspect his motive is that he wants to have good ideas. The kind that will be remembered after his death. He even said as much in one of his essays [1]. He's writing for legacy, not for profit.

YC itself was one of those ideas - it started out as an experiment [2], derived from a talk at Harvard Computer Society [3]. The easiest way to test if an idea is a good one is to go do it, so he did, and it turned out it was, and that led to profit.

I don't think it's fair to attribute Machiavellian scheming to PG. There are some other people in Silicon Valley that will take a position and then influence public opinion to make that position come true, but it's pretty rare, and I don't think it's the case here. Rather, it's the same reason all VCs talk their book: they start with a hypothesis about how the world is, then invest their book according to the hypothesis, and then tell everyone what the hypothesis is. The worldview comes first, the investments come second.

[1] http://paulgraham.com/speak.html

[2] http://www.paulgraham.com/bronze.html

[3] http://www.paulgraham.com/start.html

Re: Income inequality is not the problem, it's a symptom

#13
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

I don't think that the rigged rules lead to consolidation of wealth per se, but I do think people would be much less upset about consolidation of wealth if the rules weren't rigged.

Re: Income inequality is not the problem, it's a symptom

#14
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore. Really, when you start to closely examine "free market", you come to realize that is it a chimera made real by those with power and money.

Re: Income inequality is not the problem, it's a symptom

#15
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

> It's wishful thinking. The rules don't drive rewards to the top. It's intrinsic to the free market.

No it isn't, we make the rules of the market, and we could just as easily change those rules to force companies to give more of their earnings to their employees rather than filtering it all up to the top. The market is what we make it, it has no intrinsic nature. The rules are rigged, by and for the wealthy, that is a fact.

Re: Income inequality is not the problem, it's a symptom

#16
post #14
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just…

Do you believe in property rights?

Having a legal/police system to catch people who forcebly take property?

Using trade to exchange property?

This is the core of our system. And that system will always generate inequality.

Not necessarily a bad thing.

You can have laws to take the edge off inequality generated, but at the core of the system you can't really avoid it.

Re: Income inequality is not the problem, it's a symptom

#17
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

> It's wishful thinking. The rules don't drive rewards to the top. It's intrinsic to the free market. No it isn't, we make the rules of the market, and we could just as easily change those rules to force companies to give more of their earnings to their employees rather than filtering it all up to the top. The market is what we make it, it has no intrinsic nature. The rules are rigged, by and for the wealthy, that is…

The companies themselves don't really have any capacity to enforce these "rules", they have to petition the government to do so. The end result is regulatory capture. How do you expect to "force companies to give more of their earnings to their employees rather than filtering it all up to the top"? More government, I guess? We've seen how this goes.

Re: Income inequality is not the problem, it's a symptom

#18
post #14
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just…

Some things, like you say, are closer to rules that we can change.

Other things, however, are a lot closer to physics:

https://en.wikiversity.org/wiki/10_Principles_of_Economics

It's very important to understand when you're talking about the former and when you're talking about the latter.

Re: Income inequality is not the problem, it's a symptom

#19
post #14
post #10

Mr. Garret quotes Sanders: > The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country. I am rather puzzled that this idea gets so much traction. Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart a…

It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just…

[deleted]

Re: Income inequality is not the problem, it's a symptom

#20
@pg is basically arguing that fragmentation is leading to the end of oligarchy and this author is arguing we are headed toward it.

Who's right? The comments I've read today on a few of these posts today are so divisive that I'm not certain they come from the same universe.

FTA: On the other hand, I also want an effective, democratic government to provide infrastructure, protect people from extreme economic contingencies (like war and hurricanes), prevent people from profiting from economic externalities (like pollution) and provide oversight for well-regulated, free and transparent markets. And that's not the direction we're heading. We're heading towards political power being concentrated irreversibly in the hands of a small minority. We're heading towards oligarchy.

And that is a problem.

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