> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. A potentially better mea…
Yeah... the example you gave is meaningless. Knowing that wealth concentrates in 1% of human beings is not a meaningless statistic.
PGs argument does not take into account the majority that make it possible for the few to create things, but instead of being bolstered by those few, are instead being left behind. Its sad to say, but his current social position is definitely influencing his thought process.
I turned down a job in Silicon valley. Even a 100K job doesn't mean anything when most of it goes to rent and my free time is spent sitting in a car or on a train commuting. I can imagine the stress the rent hikes are having on everyone else.
Perhaps I am an ignorant. A little background about me:
* I live in NYC
* I live with my parents, still very young as a recent grad
* I don't make tons of money, but with overtime I probably make 80K? I don't really count my money these days.
* I do spend money on monthly gym membership (I should suspend that to save $100 since I am too busy haven't been there for a few months), netflix and couple other stuff.
* I give my parents allowance (almost half of my paycheck) to help with mortgage and stuff
* I am single all the way (that seems to be a pretty saving...)
* only been working full time for one year
And yet, I am still able to afford nice meal if I wanted to, go to nice places if I wanted to. Of course my wallet will bleed and cry if I were to spend too much, but on a daily basis I have a comfortable life, so I don't really feel an economic hardship, I don't make millions and the wealth is still controlled by that 1%.
It doesn't bother me, until, if I were to have kids to raise, and a mortgage entirely on me.
I think the attitude toward economic inequality needs a context. If you want to go on a cruise 365 days of course we can't afford that. Going to Italy and France once a year? That's gonna bleed for most of us. But in case of affording a good meal? Little but not too much. Then for those who makes significantly less than I make, they will feel the pain the most and I don't see a way out of it.
> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. A potentially better mea…
I disagree, simply because it comes down to how much money the MBA graduate has available to him at any given time, given the country's laws. No one is asking him to pay it off all at once. Having a loan you have to pay off over 30 years amortizes your losses, allowing you to have a net profit every month. And if he ever had the situation of the slum dweller, he could declare bankruptcy AND get rid of the student loan by claiming "extraordinary hardship". Finally, the social programs in this country mean that even a homeless, jobless person is richer than some employed people in Africa or Indian slums.
Karl Marx would argue that his ideas might have worked if someone else implemented them.
Maybe he would, but all the experiments so far have failed for pretty much the same reasons and at enormous human cost. Meanwhile capitalism in whatever form it's tried has proven itself to be an incredible engine of poverty reduction and human/social progress. There's always been tension between capitalism and democracy and we may be at a point where some of the cracks are showing.
It's worth keeping in mind that we do live in the propaganda bubble of the Soviet Union's arch nemesis.
For their KGB, we had our J. Edgar Hoover. For their political purges, we had our House Committee on Unamerican Activities. For their later economic struggles, we had our great depression.
This is pretty silly.
Also, Paul Graham's premise, I'm sorry to say, is sensationalized (by invoking concepts like "inequality" and "startups") but wrong. The premise is, basically, "inequality has bad CAUSES, but startups and technology are never one of them."
Only at the end does he hint at what I believe to be the more accurate analysis: AUTOMATION and OUTSOURCING lowers demand for expensive human labor, therefore reducing one of the main ways that money trickles down to the middle and lower class. The better and more widespread the technology, the more I can
1) Outsource jobs to regions with a lower cost of living, leading to two losses of trickle-down:
1a) local workers don't get the job, and the money goes to someone in another country
1b) either way my company writes the expenses off its taxable income, but my country doesn't get the tax $$ from the worker's income to spend on social programs, safety nets etc.
This by itself is fine, unless you're a nationalist, because it helps reduce poverty where people are poorer, which is outside your country. However, technology also enables:
2) AUTOMATION, which means I now reduce the amount of HUMAN workers, and once again it has two aspects:
2a) Now, the demand for human labor drops, and since the supply of workers remains the same, their average wages drop.
2b) The worst one: monopolies with server farms, contracts of adhesion, and all the power. Like Amazon, Google, Apple, Microsoft, Facebook, Uber, etc. extracting rents from users and providers, until open source disrupts them.
By commoditizing the providers and workers, they get squeezed. See Amazon's dealings with wage slaves, and its tactics with publishers (middlemen which it eliminates). But those same workers are also supposed to be spending money back into the economy on things they need.
It takes time to invent new industries and educate everyone, there is no guarantee that will happen forever, and there is no guarantee that demand shocks for labor won't be severe. So, there should probably be unconditional basic income, negative tax or some other scheme for people to KEEP BEING ABLE TO AFFORD THE BASICS even if they face no prospects of making money, which a growing unemployed class will.
On the bright side, automation will help wean countries from their dependence on an ever-growing population to fund social security schemes. Endless population growth is unsustainable, and countries are currently worried about birth rates mainly because of that. So in a global sense, the solution is: tax the gains from automation, redistribute the proceeds, use condoms.
It is like that Laffer curve. If your tax rate is too high, you get less revenue because of the negative effects.
It is not just that "taxes kill the economy", but also that when the tax system is corrupt and inefficient people don't pay the tax. For instance the situation is crazy in Italy where officially 30% of the population is unemployed but actually most of them are working "off the books".
This is to not to say Laffer was right or wrong that tax rates were too high circa 1980, but there is truism that taxation has good and bad effects.
In a "perfect equality" scenario there is not incentive to raise your game, but the same is true in "perfect inequality."
We did the experiment in Ithaca where local activist Paul Glover started "Ithaca Hours", a local currency. The system is still there, but it has mostly failed because a few businesses that accepted Hours could not spend the ones they got, so they have accumulated in a small number of places and do not circulate.
Also I see people in situations where inequality causes them to "not try". For instance I know people with student debt or who owe a lot of child support who perceive that if they make another dollar it will just get taken away, so there is no point in busting your ass or taking things seriously. I funded a business run by one of them, by a guy who knew his market so well and had many of the skills of an excellent salesmen, and it ended it tears.
I know some people, both black and white, who really have been the victims of poverty, discrimination, and such and feel they "can't win." You can point to examples such as Barack Obama and Ben Carson who overcome both real and perceived discrimination to succeed brilliantly, but most don't.
Once when I was teaching I had a black student who was intelligent and very much liked by myself and the other teachers and we all wanted him to succeed and we were all proud that he got a respectable grade in the end in one of the most difficult classes at our school but had his own challenges and one day came around and told us we were treating him differently from other students and he was right, yet it was not at all that we did not want him to succeed but that we didn't entirely understand what to do to help him.
> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. A potentially better mea…
> This is a meaningless statistic
It's only meaningless if you cherry-pick your examples and draw your opinions from those examples. For 99 percent of the population, wealth is a fair reflection of the actual comparative wealth of individuals.
> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. A potentially better mea…
It is further ridiculous that the wealth itself is circularly defined with being rich.
Own a house in Denver = Awesome
Own a house in Manhattan = Super Rich
Own a Dinghy = Awesome
Own a Super Yacht = Super Rich
So by this simple example the Denver Dinghy owner is much less wealthy on paper than the Manhattanite with a Super Yacht.
But you can see that the Denverite has both a house and a vessel and may not need a yacht or a downtown house. The extra 'wealth' is of no impact to the happy Denver guy.
This wealth is based on social cohesion, which can fall apart in a generation or two. Genghis conquered half of Asia and built an empire of great wealth and high culture, but lack of cohesion tore it apart not long after.
>Genghis conquered half of Asia Are we really comparing this to a country that's nearly 240 years old and is a global superpower that has weathered everything from civil war, a major depression, defeating communism, a moon landing, inventing the internet and all the technologies you're using right now, the largest economy by GDP, the most powerful military in history, etc? This is like saying the The Who or The Stone…
Yes - why not? Are you saying that civil war and defeating communism means that the US is immune to internal problems? There are many previous examples of societies that survived a civil war and defeated similar sized opponents, but later collapsed. Why not this one?