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My simplified response to Paul Graham's simplified essay

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Re: My simplified response to Paul Graham's simplified essay

#41

Earlier quoted context omitted.

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…

I'm not sure about defeating communism. I'd say communism was destined to defeat itself from its inception, and it did.

Re: My simplified response to Paul Graham's simplified essay

#42
post #18
post #10

PG's simplified essay seems like attack on a strawman; he's mainly arguing that inequality is good, but then mostly everybody agrees with that. The issue people see (and PG conveniently ignores) is increasing inequality - not locally increasing (i.e. an enterpreneur becoming rich because of a successful business idea), but globally increasing inequality, which happens because of rent-seeking, tax avoidance, buying po…

Inheritance taxes on their own will do nothing to change the situation because then you'll simply concentrate all the wealth in corporate structures that transcend the death of their owners. Even if you make it impossible to 'pass down' these structures as property, you will have de-facto inheritance through nepotism and clan structures.

> because then you'll simply concentrate all the wealth in corporate structures that transcend the death of their owners.

That's OK, as long as the ownership of these structures is dispersed (as seems to be the case now for many public companies, which are owned by pension funds and/or sovereign wealth funds). That would also prevent nepotism.

Re: My simplified response to Paul Graham's simplified essay

#43
post #10

PG's simplified essay seems like attack on a strawman; he's mainly arguing that inequality is good, but then mostly everybody agrees with that. The issue people see (and PG conveniently ignores) is increasing inequality - not locally increasing (i.e. an enterpreneur becoming rich because of a successful business idea), but globally increasing inequality, which happens because of rent-seeking, tax avoidance, buying po…

We are all makers and takers.

In elementary macroeconomics you learn it is impossible to make a profit because in a competitive market because it is rational for me to lower my price by one cent to get the deal and then it is rational for the competitors to do that until the point that profit is zero.

Business, however, is all about making a profit, because even if discount personal gain, nothing can be sustainable unless it can get paid for and you need compensation for the investment you make and the risks you take.

Competition of economic and other varieties is a key to a healthy society, yet, for business to exist competition must be imperfect.

Re: My simplified response to Paul Graham's simplified essay

#45
I would leave my simplified response at: income inequality prevents creation of startups and is generally bad for society.

We don't want more income inequality at the end of the day. Our wildest dream is not to have a world in which everyone passes by but some are opulent, but rather a world in which everyone is opulent-- no inequality. In lieu of this greater dream, merely reducing inequality is a good start... the motions about being able to reduce poverty without changing economic inequality are laughably out of touch, still.

Re: My simplified response to Paul Graham's simplified essay

#46
There's one thing PG seems to implicitly which is that the movement from small company to large, dominating company in a vertical is a good thing.

Ultimately startups seem to be producing winner-take-all companies. I do not believe this is a healthy thing for the economy or even rights of the consumer in the long run. There are a lot of services where if you do not like their terms, there may not be a great practical alternative.

I don't want to see much changed, but I do feel the government should be encouraging competition much more than it is today. I do not think Facebook should have been allowed to buy Instagram, and I think WhatsApp should have been fined an enormous amount for blocking the words "Telegram" to stall their competitor. We put in the Sherman Antitrust laws to reign in behavior in the Gilded age and we should have a modern equivalent to encourage not one Google but 10 Googles in a market.

I'm clearly asking for too much, but after all the recent Airline consolidation several studies have proven that prices are now higher in certain markets as a result of lost competition. Capitalism doesn't magically prevent monopoly or oligopoly - it is up to us to put the right checks and balances in place.

Re: My simplified response to Paul Graham's simplified essay

#47
post #3

The only thing I'd disagree with is the statement 'we're nowhere near there' with regard to oligarchy and societal collapse. I think we're quite close. We have an entire generation where a tiny proportion have great prospects and the rest have steadily diminishing prospects and increasing stress, and we have educated people who grew up in the west going to join an expressly suicidal terrorist organization. We have a…

Well, at least this Princeton study seems to disagree with you that US is not already an oligarchy:

http://www.bbc.com/news/blogs-echochambers-27074746

When you have Congress listen to an infinitely larger degree to the powerful and the "will of the people" has a meaningless effect on their decisions, I think that pretty much defines oligarchy.

https://www.youtube.com/watch?v=5tu32CCA_Ig

And before you say "wait a minute - didn't we stop SOPA?", I remember an interview shortly after SOPA was stopped, with Darrel Issa, one of the two most aggressive politicians in Congress wanting to stop it (along with Zoe Lofgren), and he said that what got everyone else to change their minds about SOPA, too, was actually having the big companies join the fight and lobby against it - such as Google, and so on.

That's what apparently got Congress to change its mind about SOPA. There were millions of calls indeed, but a good chunk of those were pushed by Google and Wikipedia on their home page, so I think he's at least half right about that.

If you ask me, I think only two things can change the way the US is right now:

1) a more democratic and representative voting system (IRV/RCV seems good enough for mayors/governors/presidents, and multi-winner RCV/STV for Congress (as well as local councils, etc) would also fix the gerrymandering problem which is a huge issue on its own with American politics and would provide a more representative multi-party government - the end of the two-party system, in other words).

https://www.washingtonpost.com/news/in-theory/wp/2015/10/23/...

As long as the US has the FPTP voting system, people will keep voting for the "Lesser Evil", because they "don't want Mr. Evil" to win (whoever that may be). That's just a terrible way of electing someone democratically. People should have a system that makes them vote with the candidate they like most. Anything else should be thrown out. The FPTP is also what will help Republicans keep winning a majority in Congress with only 40% of the votes, as it tends to happen wherever FPTP exists. Also a terrible way of having a "representative democracy" (even if every now and then it will be the Democrats that will win 51% with 40% support).

2) campaign finance reform (time to end or at least equalize the "money vote", which right now greatly skews the "voting power" in the favor of those with the most money. The vote is supposed to be "equal", but the "money vote" is a sort of parallel voting system that skews who can win and who the winners listen to. Not very democratic at all).

I'm not sure which is more important, but I think the first one could pass more easily, and then over a period of years, people can start electing more representative candidates despite the money the "establishment" candidates will receive. And then those more representative candidates can start supporting changing the campaign finance system as well.

These two changes in the end should be enough to put the US on a more democratic path once again, and act as a catalyst to fix many other political issues, too, whether it's social issues, immigration issues, health issues, copyright issues, and so on.

There's only one candidate that supports changing the voting system (to IRV/RCV) right now (as well as real campaign finance reform), and that's Bernie Sanders (just FYI).

Re: My simplified response to Paul Graham's simplified essay

#48
post #10

PG's simplified essay seems like attack on a strawman; he's mainly arguing that inequality is good, but then mostly everybody agrees with that. The issue people see (and PG conveniently ignores) is increasing inequality - not locally increasing (i.e. an enterpreneur becoming rich because of a successful business idea), but globally increasing inequality, which happens because of rent-seeking, tax avoidance, buying po…

> mostly everybody agrees with that

What???

/me suddenly understands what's meant by "privilege"

Re: My simplified response to Paul Graham's simplified essay

#49
post #16

> 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 suppose you would equalize this by counting the MBA's future wages as an asset. Even after subtracting out his MBA debt, the MBA has much more earning potential than the slum dweller.

Re: My simplified response to Paul Graham's simplified essay

#50
You've reframed the problem to wealth influencing politics, which still isn't something that needs to be fixed by taking money away from people. Redistribution is a decent solution to resource problems, but this isn't that kind of problem.

Ending money in politics is hard to do using the levers of democracy since those levers have already been purchased, so I understand the desire to end extreme wealth instead. There is another solution, though. We can end the influence of wealth on our politics without needing the government to do it for us.

Instead of trying to get the government to stop excess political spending, we should eliminate the incentive to accept excess political spending. People accept money to influence our democracy because they can use that money to get whatever they want from almost anyone, including you. You can't opt out because economic power is invisible. But we can make it visible, and give every individual the freedom to reject economic power that they feel is misused.

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

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