Economic Inequality

I don't think that's insightful. That's a typical neo conservative argument, repeated over and over for decades. Thatcher is famous for using that argument. The problem is the if in the ... "what if everyone was better off, yet with more inequality". We're not sure at all about that if. In fact data seems to say, probably no, people aren't better off when there's more inequality.

What if, actually, high inequality countries (with no free health care, no free schools, no financial sector regulations, and more tax on the poor than on the rich) shoot themselves in the foot? This is what the data seems to show, if anything.

A lot of people agree that a healthy middle class was important for progress in the west. I think they are right. I think the Thatcher argument is going in the wrong direction. Now that doesn't mean you want to waste taxpayer money on random hopeless bullshit. Not all socialist countries spend their money wisely. But taxing and spending wisely, to help the middle class, with schools and hospitals and smart regulations, is probably good for generating innovation and for the economy in the long term. The middle class can be pretty resilient in some countries, with still a lot of resourceful smart people, you can throw a lot at them and they will still survive. But it's probably better to help them a bit. It's probably better, for example, to significantly increase the number of truly smart kids that go to college in a country (there's more poor or low middle class smart kids than rich smart kids, in raw numbers, even if rich kids are more likely to be smart, on average).

The Thatcher argument really is a good example of a purely rhetorical argument, not based on any data, that was spread by neo conservatives, media owners in particular, to their strict advantage. It's an O'Reilly-no-spin-zone worthy argument. It's pretty insidious, a masterpiece of a meme. It basically amounts to accusing poor and middle class people of being jealous jerks for wanting free health care, free schools, wall street regulations and less tax on them than on the rich. Of course it seems to make a lot of sense at first sight. That's why the media uses that over and over again.

It's like saying "Be happy with what you have, because if we had free health care and free school and wall street regulations and taxes on the rich ... you'd be worse off". Well, that's just not true, according to the data. Countries with high inequality are generally the ones where nothing happens, in innovation or in anything else, there's no middle class, and it's sad.

There's nothing worse than dumb people voting against their own interest. That's the recipe for a dictatorship.

If you disagree I'll be happy to hear your opinion. I'm ready to change my mind. Thanks!

Thanks Futurebot for your thoughful, spot on and readable commentary all over the place. I hadn't read this comment in particular before writing mines and I'm really happy to read a lot of the same arguments I gathered in different places over the years.

Absolutely, more safety net produces more innovation. That's also what I thought. Thanks for saying, finally someone else says it!

Some arguments for it:

- the middle class was important for progress in the west. That's a well established idea.

- the map of low vs high inequality countries points more toward high inequality --> less innovation per capita, on average. In particular at least, it's clear that some of the nordic countries can pull off the highest innovation rates per capita while being among the most socialist countries. So at worst, most of the socialist policies won't hurt. Like free school, free health care, financial regulations and less tax on the poor than on the rich. At worst, they just won't affect innovation, and at best they actively contribute to it.

- the law of accelerating returns states that, in rough terms, "computation power" is a function of "world knowledge" which in turn is also a function of "computation power". This is why it's an exponential trend. Well, until we reach a point where computers can innovate on their own, human brains are still going to matter in the equation for progress, still going to be a bottleneck for progress, still for a few decades in the future. Yes more powerful computers is mostly what's driving the exponential tech trend right now, but so is the raw number of brains at work, scientists and engineers in particular. This means that we need more bright kids in college and university.

Neo conservatives usually argue that "making way for investors" is the priority for the economy and innovation -- that it's currently the bottleneck for innovation and the economy. But it's clear for me that it's not the case. Investing might be the easiest part to solve among the "ingredients" that are often cited to generate progress: 1) inventors+computers 2) investors 3) middle class buyers.

For me it's clear that socialism would generally help 1) and 3), as well as 2) (for example with incentives for high risk investors or investors in renewable energy for example) while neo conservatism might help 2) only and be detrimental to 1) and 3) (especially with the current price of a university education and health care, 1) and 2) are affected negatively in non-socialist countries).

Important to point out that the law of accelerating returns formulated by Kurzweil doesn't really acknowledge 2) and 3), except maybe indirectly (if you count the political model, which is currently btw in the US "capitalist with some socialist measures", and say investing practices, as indirectly contributing to the "human knowledge" variable, which of course it is to some extend). In other words, it's probable the only thing that matters significantly for progress and the economy, is more scientists and engineers. 2) and 3) are just helpers and we wouldn't be near a bottleneck on those.

Interesting to point out that Kurzweil notes no significant variation in the exponential tech trend, throughout peace or war times, growth and recession periods. So either the only variable that changed significantly is the computational power available, or more likely the number of human brains at work also increased in the last century.

An interesting question is, would we still get the same rate of progress with the same number of scientists and engineers and investors and buyers that we had 100 years ago? I think not, but maybe I'm wrong.

I think more smart human brains at work, besides having better and better computers, has been the most important variable for progress in the last centuries. And I think it still is somewhat important today, until we get fully independent computer-generated scientific or tech innovation.

Any response to these ideas would be welcome. Great if you change my mind or correct me on some details. Thanks.

Hi Chroma, thanks for your comment, but I disagree with you, please text-search my name on this page and read my comments, and answer them point by point if you can.

Thanks!

I think saying that some people are "crazy communists", and that communism is failed, is not enough to discredit all the positive socialist measures that are likely leading to increased innovation and a healthy economy in the long run, in most developed countries.

- debt-free higher education - free health care - financial sector regulations - tax poors less than rich - taxes on corporations, which will be important in the future to deal with automation of most jobs, such as lawyers and truck drivers. - basic income (only exists in Finland at the moment in 2016, was tested a few times in the last decades, with success apparently)

The "Communism is failed" argument is typical of the neo con media, it's disingenuous and completely misses the point. Socialism is very different from communism. Socialism improves on capitalism. Socialism provenly works. Most developed countries are socialist, to different degrees. The most successful ones in innovation per capita happen to be the most socialist ones, literally, scandinavian countries. The US is already socialist to some extend, not just capitalist.

An interesting point to add is that Milton Friedman, the guru of the neo conservative current, actually supports basic income. Basic income just got voted in Finland. Basic income is very different from communism, and was proven to work in many real-life experiments, without affecting people's drive to work. See interesting TED talks on that subject.

… In 1962, the libertarian economist Milton Friedman advocated a minimum guaranteed income via a “negative income tax.”

Btw if Futurebot or anyone else can give arguments against this video, it's Stephan Molyneux on "the myth of scandinavian socialism", ... that'd be interesting: https://www.youtube.com/watch?v=FNtyV0CXfzU

To me it seems an incorrect, incomplete analysis of the factors that lead to wealth generation, but it seems difficult and time consuming to debunk.

-------------------------- ECONOMIC FREEDOM INDEX

I think for one thing that the economic freedom index, created by the Wall Street Journal is as hack, trying to reconcile neo con policies and the data on growth in countries around the world.

That economic freedom index wants to pass as "an argument for capitalism and neo conservatism", while at the same time incorporating scandinavian countries in the "good group" that is "doing it right", "the neo con way". It's then used as an argument to discredit socialist policies .... I'm not sure that index has any validity. It seems totally biased and "after the fact-y" trying to find ways group countries after seeing their wealth output, and find reasons why that was "totally neo con".

My reaction to the economic freedom index is ... well, if those socialist policies implemented in scandinavian countries are compatible with a high economic freedom rating ... how is that an index a measure of how socialist a country is? Then that means we can do everything they do! Yay!

For me the conclusion on the economic freedom index is summed up by these two cases:

A) Maybe that index is nailing it, and in that case, let's do exactly like the countries at the top of the chart ... the scandinavian countries.

B) And maybe it's not nailing it, and that index is totally made up and biased, a total hack coming from the neo con media. In that case we shouldn't feel bad to be socialist, mimic and adapt from the scandinavian countries which do well on progress and innovation.

... Same outcome in both cases, yay! That index doesn't add much to the conversation. It's just concurring on the fact that those countries are doing it right, and then it's trying to label that success as "neo con" and "libertarian". Well, to me call it whatever you want, as long as it has free health care, free school, minimum wage and all the smart socialist goodness, it's what we should be doing.

Is that index really the complete, correct valid answer to build a successful country? Is it the complete recipe, totally spot on? Or is it just a biased measure made up after the fact to incorporate the countries that do well and label them as "neo con"? Thoughts welcome.

-------------------------- SMALL GOVERNMENT = GROWTH

Another idea mentioned in the video is that the size of government is inversely correlated with growth and wealth generation. Can anyone debunk this?

Small yet effective? - One thing that comes to mind is that it's possible that some countries, like the scandinavian countries, are implementing some smart policies, that would be considered socialist, with a small government. And that on the other hand a government can be big and implement the wrong things, the wrong policies.

Big government would mean more corruption and bad ineffective policies? - It's possible that the size of a government isn't so much a measure of how socialist it is, but is rather a good proxy for how corrupt a country is, how dumb its people are, and thus how likely it is to "not pick policies that are conducive to growth and wealth", but are rather instead "conducive to making the rich richer" through manipulation and corruption -- which is typical of countries that don't do that well, they are controlled by an elite that abuses and parasites the middle class, incapable to vote for itself. More middle class emancipation corresponds in general to more wealth and more progress and might be an indicator of more smart people in all classes and not just the elite. More inequality generally corresponds to less progress and less wealth. If anyone disagrees with this please tell me why, thanks!

It could also be that their measure of how small the government is isn't accurate and that there's a lot of small prints about it.

If it's indeed correct, then it's an interesting correlation. I would like to know more about it. Any comments welcome.

In particular, it would be interesting to know if there's any flaw with the idea that "Sweden's decline in growth output relative to the world average is caused by a bigger government starting in the 60s".

------------------------- In any case, the conclusion doesn't change much for me, it still boils down to the fact that some countries are doing it right, in growth and innovation, and at the same time implemented free health care, minimum wage, free schools etc. and we should mimic and adapt from their model, as much as possible since it works.

After that, all the discussions from Molyneux and other neo cons or libertarian, trying to label that success and "theirs" as "due to less socialism" don't really matter. Whatever those countries are doing, whatever you call it, it's the right thing to do.

Being a Pole, I wish more people understood that. :(

We're in the process of dismantling our democracy by removing all of the checks you mentioned, while supporters of the ruling party argue that democratically elected majority is within full rights to do it.