Is vast inequality necessary?
nytimes.com
Is vast inequality necessary?
1–10 of 27 posts
Re: Is vast inequality necessary?
#2It's interesting that one of the articles in the header says "Why Spin Is Good For Democracy". Seems Krugman takes that hook, line, and stinker.
I personally would reframe the luck argument into one based on scarcity of resources. It's not about whether inequality is "necessary". It's about whether it can even be avoided.
Re: Is vast inequality necessary?
#3It's interesting that one of the articles in the header says "Why Spin Is Good For Democracy". Seems Krugman takes that hook, line, and stinker. I personally would reframe the luck argument into one based on scarcity of resources. It's not about whether inequality is "necessary". It's about whether it can even be avoided.
Did you get to the end? He says explicitly that inequality is inevitable. He's asking whether the American kind of vast inequality is necessary.
Re: Is vast inequality necessary?
#4Personally I think the '3 stylised models' that the author paints as being the possible sources of high inequality are somewhat wide of the mark.
The majority of 1%ers are there because their parents were 1%ers, and western society is broadly set up to allow those with large amounts of capital to protect it and use it to gain advantage & accumulate more capital. It's not necessarily a bad thing, except where those with capital can use it to bias the system in their favour.
An example is access to education. In the US, the lowest ability quartile of high earners now has a better chance of graduating collage than the highest ability quartile of low earners. From memory it was something like 31% to 29% respectively. The real shame there is the 71% of high-ability low-wealth kids who can't graduate college but really should. That value is being squandered.
However... inequality itself is a trailing indicator of other indicators relating to social cohesion, so it's possible that addressing inequality alone won't have a lasting effect. Robert Putnam is an interesting source on this stuff if anyone is interested.
Re: Is vast inequality necessary?
#5> And power is surely a big factor, too. Reading someone like Mr. Graham, you might imagine that America’s wealthy are mainly entrepreneurs. In fact, the top 0.1 percent consists mainly of business executives, and while some of these executives may have made their fortunes by being associated with risky start-ups, most probably got where they are by climbing well-established corporate ladders. And the rise in incomes at the top largely reflects the soaring pay of top executives, not the rewards to innovation.
Most probably got there by climbing well established corporate ladders? Is there a source for this? It seems "Executives, managers and supervisors (non-finance)" is rather broad and does not address whether these are corporate structures that can "set their own compensation".
Re: Is vast inequality necessary?
#6Personally I think the '3 stylised models' that the author paints as being the possible sources of high inequality are somewhat wide of the mark. The majority of 1%ers are there because their parents were 1%ers, and western society is broadly set up to allow those with large amounts of capital to protect it and use it to gain advantage & accumulate more capital. It's not necessarily a bad thing, except where those wi…
Yes, I couldn't agree more.
Generational passing-down of wealth (largely a result of rents that can extracted from resources kept within one's family) is completely elided in the article.
Re: Is vast inequality necessary?
#7> And power is surely a big factor, too. Reading someone like Mr. Graham, you might imagine that America’s wealthy are mainly entrepreneurs. In fact, the top 0.1 percent consists mainly of business executives, and while some of these executives may have made their fortunes by being associated with risky start-ups, most probably got where they are by climbing well-established corporate ladders. And the rise in incomes…
Who decides the classification? Is it the IRS, the taxpayer, or some third party?
Mark Cuban would probably categorize himself as "Entrepreneur not otherwise classified." Someone else may very well put him in that "Executives, managers and supervisors (non-finance)" category.
Re: Is vast inequality necessary?
#8Personally I think the '3 stylised models' that the author paints as being the possible sources of high inequality are somewhat wide of the mark. The majority of 1%ers are there because their parents were 1%ers, and western society is broadly set up to allow those with large amounts of capital to protect it and use it to gain advantage & accumulate more capital. It's not necessarily a bad thing, except where those wi…
Yes, I couldn't agree more. Generational passing-down of wealth (largely a result of rents that can extracted from resources kept within one's family) is completely elided in the article.
Intergenerational wealth transfer accounts for almost none of today's inequality. The vast majority of it is gone within a generation or two.[0]
[0] http://time.com/money/3925308/rich-families-lose-wealth/
Re: Is vast inequality necessary?
#9Krugman channelling his inner Piketty.
They're not wrong though. The greatest growth did come when there was the least inequality, and the gilded age wasn't exactly a time of phenomenal economic growth...
Re: Is vast inequality necessary?
#10Earlier quoted context omitted.
Yes, I couldn't agree more. Generational passing-down of wealth (largely a result of rents that can extracted from resources kept within one's family) is completely elided in the article.
Intergenerational wealth transfer accounts for almost none of today's inequality. The vast majority of it is gone within a generation or two.[0] [0] http://time.com/money/3925308/rich-families-lose-wealth/
It's not contradictory for a majority of wealthy people to be wealthy because of their parents, and for 70% of wealth to be lost by the 2nd generation, even if both sets of stats were accurate and comparable.
What is contradictory is your assertion that the 1st generation wealth, and the remaining 30% at the 2nd generation, translates to "almost none".