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

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

#51

Post by puredemo »

grecy wrote: post #44
rayiner wrote: 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…

> Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart and Amazon? What would happen is that Wal-Mart and Amazon, et al. would pay their fair share of taxes, and the owners (or share holders) would not be multi-billionaires, only single-digit millionaires at most. The effect would be that every single person in the United States would…

lol that is some pretty rosy thinking, I hope you're being sarcastic about the math on this.

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

#52

Post by drewcrawford »

UK-AL wrote: post #16
MrTonyD wrote: post #14

Earlier quoted context omitted.

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.

You can absolutely avoid it. Inequality was so much less in the 1950s/1960s and we still had police and property.

The disconnect here is that property rights are "more guidelines than actual rules", they are quite literally "made up". It used to be that keeping a black person out of your store was a "property right", until we decided it wasn't, and then we got rid of that one. It used to be that preventing airplanes from flying over your farm was a "property right" until it wasn't, and then we got rid of that one. You can only do that if "property rights" are artificial.

I mean just look around you. We live in a world where Smartflash has a "property right" to your in-app purchases, Apple has a "property right" to your iPad, JSTOR has a "property right" to publicly-funded research, etc. etc. That's because we made it that way; let's unmake it, and do it differently!

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

#53

Post by grecy »

puredemo wrote: post #51
grecy wrote: post #44

Earlier quoted context omitted.

> Does anyone really believe that if only the rules weren't "rigged" local shops and businesses would be able to compete against Wal-Mart and Amazon? What would happen is that Wal-Mart and Amazon, et al. would pay their fair share of taxes, and the owners (or share holders) would not be multi-billionaires, only single-digit millionaires at most. The effect would be that every single person in the United States would…

lol that is some pretty rosy thinking, I hope you're being sarcastic about the math on this.

I was being serious.

Have a look at how things are done in Scandinavian countries, Australia, New Zealand.

We have very few obscenely rich people in Australia, and we have no desperate people.

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

#54

Post by analog31 »

UK-AL wrote: post #16
MrTonyD wrote: post #14

Earlier quoted context omitted.

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.

Do you believe in property rights?

It seems like we probably benefit from an arrangement where we control the things in our immediate surroundings that we need in order to maintain reasonably stable and predictable lives. For instance it makes sense for me to control access to things like my glasses, bike, pajamas, etc. Property rights work pretty well for defining that arrangement.

At the other extreme, we have situations where property rights can be overridden, such as taxation and eminent domain, and entities whose value depends on a stable money system provided by the government -- I see no a priori reason why the workable way to manage those things is not through a system of limited property rights. In broad terms, one such limitation is an agreement that taxation is not a violation of a fundamental human right.

The more abstract and artificial "property" gets, the more reasonable that property rights are balanced against other things, such as redistribution.

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

Sure, and to the extent that it works, it's OK. When it doesn't work, then it seems reasonable to manage it in order to make it work better. Some broad-brush ideas are for the government to provide a functioning money system, and a way to redistribute wealth against the tide of inequality.

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

#55

Post by RodericDay »

MrTonyD wrote: post #14
rayiner wrote: 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…

Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this.

How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputers, and reattaching body-parts, and aiming to live forever, and do all sorts of crazy biological engineering.

And yet trying to imagine a world were you don't have billionaires having lavish parties while people starve or drone in soul-sucking jobs, or where sweatshops are deemed "bad but better than the alternative", or indeed any sort of radically different social arrangement is seen as hopelessly naive or regressive.

He had better examples, something about a dude with a bifurcated tongue. But the idea stuck with me- what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?

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

#56

Post by Avshalom »

brbsix wrote: post #17
gnaritas wrote: post #15

Earlier quoted context omitted.

> 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.

You could always dissolve the legal concept of the publicly owned corporation and only allow employee owned corporations. Thats actually less government, because right now we have a government that has to write and enforce laws for both forms of business.

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

#57

Post by lisper »

[deleted] wrote: post #33
rayiner wrote: 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…

[deleted]

> But the prescribed fix is to "raise taxes on corporations and the ultra-wealthy".

Yes, as a first step. Then you use the proceeds to subsidize college tuition and health care to help level the playing field for young people, so they can get into the workplace with an education but without crippling debt. And then as a side-effect, the ultra wealthy will no longer have as much disposable income that they can use to influence politics, so maybe we can get enough non-corrupt legislators in office to roll back some of the unfair laws that were passed that allow, for example, Wall Street bankers to commit massive fraud with impunity.

If you're going to criticize and idea you should at least criticize the whole idea, not just a little piece of it. You can make any proposal look stupid if you ignore 80% of it.

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

#58

Post by natrius »

RodericDay wrote: post #55
MrTonyD wrote: post #14

Earlier quoted context omitted.

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…

Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this. How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputer…

Communism happened. It killed lots of people, and made radical changes in the social order unappealing to most. Now ideas don't just have to sound plausible, but you also have to prove that they won't lead to the deaths of millions.

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

#59

Post by paulddraper »

RodericDay wrote: post #55
MrTonyD wrote: post #14

Earlier quoted context omitted.

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…

Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this. How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputer…

We're talking about getting a couple volunteers to Mars one time, not forcing billions of people there permanently.

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

#60

Post by cjy »

>The Baumol Effect, in case you didn't know, is the tendency of wage increases that come from increases in productivity to "spill over" into jobs where there have been no productivity increases. In other words, it's trickle-down economics under a fancier name.

Mr. Garret gets the definition of the Baumol Effect more or less right, but then mislabels it as trickle down economics and proceeds to attack that. Here is an example of the Baumol Effect:

As improving technology makes computer scientists more productive they will receive higher salaries in the business world. Meanwhile, computer scientist teachers in academia may not see similar productive gains (they still can only teach X number of students a semester). Nonetheless, universities must increase computer scientist teacher pay to prevent them from leaving academia for the business world.

In the context of PG's essay, he is saying that high pay for entrepreneurs forces companies to pay competitive salaries:

>anyone who could get rich by creating wealth on their own account will have to be paid enough to prevent them from doing it.

If Mr. Garret, or others, disagree with this assertion they should attack it directly. Personally, the logic and direct incentives at work seem self evident to me.

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