Economic Inequality • Hacker News Board

Re: Economic Inequality

#471

Post by surrealize » Sun, Jan 03, 2016, 4:06 AM UTC

cvwright wrote: post #389

coliveira wrote: post #368

Earlier quoted context omitted.

A practical problem of wealth accumulation is that it eventually becomes a moral hazard. If you have people with more $10B and a system of unlimited political contributions as in the US, they have so much power that it is difficult to maintain the democratic equilibrium. It is now known that the Koch brothers and Sheldon Adelson have more power over the republicans than the RNC, having elected hundreds of local and n…

Interestingly, at least according to The Atlantic, the political power of these billionaires seems to be failing. This article [1] frames the rise of Donald Trump (!) in the 2016 presidential race as an effect of the growing disconnect between billionaire donors like the Kochs and the Republican voting base. [1] http://www.theatlantic.com/magazine/archive/2016/01/the-grea...

Donald Trump is going to save us from self-interested billionaires?

This isn't a story about how the political power of billionaires is failing, it's a story about one billionaire winning against some other billionaires. The underlying problem of wealth inequality and its effect on the political system remains.

Re: Economic Inequality

#472

Post by digbyloftus » Sun, Jan 03, 2016, 4:15 AM UTC

throwupper247 wrote: post #394

WalterBright wrote: post #369

Earlier quoted context omitted.

I love coffee. It is one of the great pleasures of life, like chocolate and strawberries. It provides positive value to me.

Hedonism is your ultimate phylosophical truth, is it? Strawberries are hardly as heavily industrialised as coffee, calling your relationship with a hot bevarage a romantic one is doubtful. I am as pessimistic as your logic is flawed. There are few things in live the brain is prewired to feel a need for. Coffee supplis the illusion of fullfilling two or three enssential ones of these, hunger and thirst and sleep, but…

Hedonism is as true as any other. Plenty of people, even if they are not familiar with philosophical terms and wouldn't self describe as such, are living according to hedonistic values. Plenty of people are living according to all sorts of different codes. Any system that defines value in a way that doesn't allow for these people, for example by saying that coffee doesn't have value, is a faulty one.

Economically, if a person is willing to spend $5 on coffee then coffee is worth $5 to them. Trying to attach solid philosophical reasoning behind that may be a fun thought experiment but it's hardly the solved one your responses seem to imply that you think it is.

Re: Economic Inequality

#473

Post by leot » Sun, Jan 03, 2016, 4:17 AM UTC

leot wrote: post #239

wildmusings wrote: post #182

Earlier quoted context omitted.

Hoarding? Do you think rich people just stuff their money in a mattress? Even if they deposited it all in checking accounts, the banks would reinvest it all over the economy.

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…

Wow, first upvotes, now downvotes. And all without explanation.

Re: Economic Inequality

#474

Post by pdonis » Sun, Jan 03, 2016, 4:22 AM UTC

jshen wrote: post #466

pdonis wrote: post #460

Earlier quoted context omitted.

> I do not believe he said this How many of his essays have you read? It's a fairly common theme in them. > it's a non sequitur The argument is pretty simple: people who are more productive are capable of creating more wealth; the best and most straightforward way (and the only one that's been shown to work consistently) to motivate them to exercise that capability is to allow them to get richer by creating more weal…

Please show me a quote where PG makes this argument. I doubt Steve Jobs would have created more wealth if he were allowed to pay 10% lower taxes. Do you?

> Please show me a quote where PG makes this argument.

Once again, how many of PG's essays have you read? This is like asking someone in your English literature class to show you an example of Shakespeare making a joke in one of his plays.

But ok, I'll play along. In the subject essay, PG describes himself as a "manufacturer of economic inequality". How is he manufacturing it? By teaching people how to get rich by creating wealth: "Not just by helping the 2400 founders YC has funded. I've also written essays encouraging people to increase economic inequality and giving them detailed instructions showing how."

So PG obviously is arguing that allowing people to get rich by creating wealth will increase economic inequality. How? By amplifying the variation in productivity between people. And there's no way to get rid of that without getting rid of wealth creation: "Variation in productivity is far from the only source of economic inequality, but it is the irreducible core of it, in the sense that you'll have that left when you eliminate all other sources."

As for the part where wealth creation is what fuels economic growth, do you really need a quote for that? I would have thought it was blindingly obvious. (In fact, I would say wealth creation is economic growth.)

> I doubt Steve Jobs would have created more wealth if he were allowed to pay 10% lower taxes.

I doubt Steve Jobs would have bothered to create much wealth at all if he hadn't thought he could get rich from it. Which is much more to the point.

Re: Economic Inequality

#475

Post by argonaut » Sun, Jan 03, 2016, 4:24 AM UTC

Futurebot wrote: post #427

patrickaljord wrote: post #419

Earlier quoted context omitted.

I live in France, I can tell you that most of the countries you list here built their wealth before building their huge welfare state and that it's now turned into a money losing machine nightmare which are being urgently reformed as you read this. It's also turned people against one another and created more racism for a simple reason. Given that the welfare state takes money from people and redistributes it to other…

Welfare discouraging work has largely been refuted: http://www.nytimes.com/2015/10/21/business/the-myth-of-welfa... Where it does discourage work, the effects are extremely minor. Your contention that their wealth was before the welfare state is completely incorrect and ahistorical. Even the crudest measures show that to be wrong. Examples: http://www.tradingeconomics.com/denmark/gdp http://www.tradingeconomics.com/s…

> Welfare discouraging work has largely been refuted

Did you read your own link? Your own link says: "There is little doubt that welfare can discourage employment, particularly when recipients lose benefits quickly as their earnings from work rise. Still, the effects are muted."

Re: Economic Inequality

#476

Post by argonaut » Sun, Jan 03, 2016, 4:26 AM UTC

Futurebot wrote: post #459

patrickaljord wrote: post #456

Earlier quoted context omitted.

Sorry but if you are just going to dismiss my sources because they are too biased then there is no point in continuing this conversation. Not to mention the irony of following that with a Krugman article which as biased as can be.

There's little irony. Krugman has publicly changed his opinion on several items over the years, and isn't an advocacy organization or a think tank. Cato's raison d'etre is the promotion of "negative liberty" to the exclusion of virtually everything else. I regularly read Cato, and I even agree with some of their work (things like replacing the welfare state with a GBI, free speech absolutism, etc.), but I still consi…

I consider myself center-left and I like Krugman a lot, but you can't deny he's just as biased as Cato/AEI (on the right), and the Brookings Institute (on the left). They are all biased. That being said, they are all reputable enough not to outright lie or distort. At worst they selectively omit, or their opinions/editorializations/analysis are wrong or speculative.

Re: Economic Inequality

#477

Post by Futurebot » Sun, Jan 03, 2016, 4:28 AM UTC

argonaut wrote: post #475

Futurebot wrote: post #427

Earlier quoted context omitted.

Welfare discouraging work has largely been refuted: http://www.nytimes.com/2015/10/21/business/the-myth-of-welfa... Where it does discourage work, the effects are extremely minor. Your contention that their wealth was before the welfare state is completely incorrect and ahistorical. Even the crudest measures show that to be wrong. Examples: http://www.tradingeconomics.com/denmark/gdp http://www.tradingeconomics.com/s…

> Welfare discouraging work has largely been refuted Did you read your own link? Your own link says: " There is little doubt that welfare can discourage employment , particularly when recipients lose benefits quickly as their earnings from work rise. Still, the effects are muted."

Yup.

> largely

> the effects are muted

Re: Economic Inequality

#478

Post by dpweb » Sun, Jan 03, 2016, 4:31 AM 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…

* 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? - You do that now. Property taxes.

* What if the ultra-wealthy buy property and then mark it down? - People lie to the IRS now, system still functions.

* A 3% wealth tax is still less than the growth rate of many financial assets. - Not necessarily. Safe stores of huge amounts of money yield very little. I don't know all the implications on interest rates, etc.. but it's an interestng idea.

Re: Economic Inequality

#479

Post by argonaut » Sun, Jan 03, 2016, 4:32 AM UTC

Futurebot wrote: post #231

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…

Even those in what remains of America's radical left don't make this argument (the few that do aren't taken seriously by their fellow leftists anymore); even in Europe, which is far more generous in terms of social welfare provision has some level of wealth inequality. So it's definitely a huge strawman. PG makes several statements which shows that he understands important parts of the problem (poverty, mobility), bu…

In the spirit of PG's essay, his response would likely be that the fact that economic leverage affects politics substantially at all is the direct cause of distorted preferences, and wealth inequality is the indirect cause. So what you really want is campaign-finance reform (and other reform for areas outside of politics like higher education, etc.)

EDIT: emphasis added.

Re: Economic Inequality

#480

Post by Futurebot » Sun, Jan 03, 2016, 4:33 AM UTC

pdonis wrote: post #474

jshen wrote: post #466

Earlier quoted context omitted.

Please show me a quote where PG makes this argument. I doubt Steve Jobs would have created more wealth if he were allowed to pay 10% lower taxes. Do you?

> Please show me a quote where PG makes this argument. Once again, how many of PG's essays have you read? This is like asking someone in your English literature class to show you an example of Shakespeare making a joke in one of his plays. But ok, I'll play along. In the subject essay, PG describes himself as a "manufacturer of economic inequality". How is he manufacturing it? By teaching people how to get rich by cr…

This thread has gotten a bit muddled, but I don't think the thrust of the argument is that Jobs didn't want to get rich (did someone upthread actually argue that?); instead, its "if he had to get somewhat less rich, would he have done what he did?", to which I think it's far to ask "yes, but how much less would he have been OK with before he said 'no way'?"

The discussion is about marginal tax rates without stating it as such. He might not have been OK with a 95% MTR, but would he have done it with a 45? a 50? People could opine on what he would have or would not have done given that, but I think it's reasonable to say that many people would, and do (given that successful innovators and businesses exist in higher tax countries.) Higher marginal tax rates don't mean you don't get rich; they mean you don't get quite as rich, which is what much of the proposals are about.