My simplified response to Paul Graham's simplified essay • Hacker News Board

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

#61

Post by zepto » Tue, Jan 05, 2016, 4:54 PM UTC

dangerlibrary wrote: post #33

zepto wrote: post #18

Earlier quoted context omitted.

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.

I agree (and I suspect tomp would as well - it's generally best to give others the benefit of the doubt when they've been silent on an issue) that estate taxes are insufficient. I disagree with the implication that they are not a critical component of a solution.

They may be a critical component of a solution, but given what I said earlier about nepotism and clans, I'd argue that they would make things worse because they would further reduce the ability of the poor and middle classes to gain traction against those with corporate power. This is not dissimilar to the Soviet situation.

So, even if they are a critical component, they are irrelevant unless someone can articulate how these other components would work.

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

#62

Post by cmdkeen » Tue, Jan 05, 2016, 4:55 PM UTC

flannelcatering wrote: post #28

retube wrote: 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…

> 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.

Not in the developed West it isn't. I'm a fortunate young professional in that I have a stonking great mortgage and still owe (some, it is the UK) of my student loan. In wealth terms I'm doing OK but not great, certainly not in liquid / disposable wealth terms as well as before my property.

In the long run however my decisions will likely lead to me being much wealthier than if I maximised my present wealth at all times. I'd say for many people in the West that income is a greater factor.

I know plenty of posh people who have inherited money but who have decent but not spectacularly well paying jobs. The cost of modern middle class living in the UK quickly reduces much difference between what they can afford and what I can.

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

#63

Post by samstave » Tue, Jan 05, 2016, 4:55 PM UTC

zepto wrote: post #18

tomp wrote: 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.

Take a look at how the masters pull this off. I'm not claiming everything in this article is true - just pointing out how it is surmised that some families protect wealth in a way that transcends both death and taxes:

http://www.icij.org/offshore/secret-files-reveal-rothschilds...

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

#64

Post by ThomPete » Tue, Jan 05, 2016, 4:55 PM UTC

drzaiusapelord wrote: post #6

zepto wrote: 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…

>I think we're quite close. USA: 5% unemployment, GDP per capita of $55,000, 78.74 years life expectancy, Human Development Index: 8, etc. EU: 9% unemployment, GDP per capita $38,000, 78.82 years life expectancy, Human Development Index: 6 average, etc. Yeah, we're not "close." Meanwhile countries like the BRIC nations, especially authoritarian autocracies like China or Russia, with terrible inequality and 100x the p…

The 5% is meaningless since it's based on how the government define it. Being unemployed means actively looking for a job. So there is a waste amount of people who are not in that statistics. Also a lot of the jobs people have don't pay for their basic expenses.

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

#65

Post by zepto » Tue, Jan 05, 2016, 4:56 PM UTC

tomp wrote: post #42

zepto wrote: post #18

Earlier quoted context omitted.

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.

Please explain how ownership would be dispersed and nepotism be prevented?

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

#66

Post by ikeboy » Tue, Jan 05, 2016, 4:57 PM UTC

http://www.vox.com/2015/1/22/7871947/oxfam-wealth-statistic http://fusion.net/story/44648/why-its-silly-to-add-up-wealth... http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding...

Can we just stop repeating that line?

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

#67

Post by russell_h » Tue, Jan 05, 2016, 4:57 PM UTC

retube wrote: 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…

Does anyone know how Oxfam computes that "the top 1% control fully half of the planet's wealth"?

In particular, if someone has more debt than assets does that count as negative wealth? Negative, in that for the purposes of the calculation it would offset the wealth of others with positive net worth?

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

#68

Post by ThomPete » Tue, Jan 05, 2016, 4:57 PM UTC

It is also important to realize that startups might produce jobs but they are mostly capital intensive companies NOT labour intensive. This is especially true with technology companies who are notoriously hiring relatively few compared to the capital they spend.

This trend will continue as technology removes more and more functions.

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

#69

Post by edanm » Tue, Jan 05, 2016, 4:57 PM UTC

flannelcatering wrote: post #28

retube wrote: 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…

> 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.

Is that true, or are you just saying it?

E.g. this article argues that the numbers are indeed misleading: http://fusion.net/story/39185/oxfams-misleading-wealth-stati...

I have no idea if it's accurate, but you just saying that his comment is a "cherry picked example" doesn't ring true (since most people in the US are indeed in debt). And anyway, you don't provide any reason to think you're right.

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

#70

Post by tomp » Tue, Jan 05, 2016, 4:59 PM UTC

PaulHoule wrote: post #43

tomp wrote: 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 u…

> 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.

Elementary economics fails (as many other social/economic theories) by assuming the ideal state; if the state is not ideal (i.e. the market is not competitve yet), there is a lot of profit to be had. This doesn't mean that you have to abuse monopoly powers to profit; you can simply be better (faster to innovate or spot opportunities) than your competition (until they catch up).