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What if the problem of poverty is that it’s profitable to other people?

theguardian.com

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Re: What if the problem of poverty is that it’s profitable to other people?

#281

Post by aninhumer »

ultramancool wrote: post #190
aninhumer wrote: post #174

Earlier quoted context omitted.

>Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing. It's not the wealth inequality that's good for all, it's the capitalist incentive structures. The wealth inequality itself is a negative side effect of those incentives, because it represents an inefficient allocation of resources in terms of utility created. The question is to what extent th…

Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy. If you put wealth inequality in these terms, I think you'll find most people - especially those who've been exposed to other systems are fairly accepting of it. > Personally, I think the extent of ineq…

>Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy.

Wealth inequality is the mechanism by which the incentives are supposed to work, but the goal is still the incentives, not the inequality itself. If it were possible to achieve the same without inequality that would be better.

But you say they "should" be wealthy, are you suggesting a model of morality that prefers rewarding merit rather than improving outcomes (even in the long term)?

>To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.

Or we could find out that the excessive inequality was unnecessary, and that we've been giving people shitty lives for no good reason. Or we could even find out that happy people are far more productive than people terrified of poverty. These possibilities are just as much a risk as your suggested outcome.

Personally, I'm inclined to think it would be far better for technological progress to ensure every person has the resources to educate themselves as much as they want without worrying about survival. And I don't think you need to offer people loads of money to give them an incentive to try and cure cancer.

> it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more.

At a certain point, inequality can start to act against motivation, because the richest will continue to live in luxury almost regardless of what they do. Higher taxes (and ideally wealth taxes rather than income taxes) can actually encourage them to keep expending effort so they can maintain their standard of living.

Re: What if the problem of poverty is that it’s profitable to other people?

#282

Post by LoSboccacc »

jakobegger wrote: post #266

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing? In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing. And it's amazing ho…

We have those in Italy, as a counter point: it's amazing how fast those got occupied abusively and how local criminals use it to either hide their illegal workers or use it as bargaining chips to gain support and omerta from the population.

Re: What if the problem of poverty is that it’s profitable to other people?

#283

Post by crdoconnor »

thecopy wrote: post #272
crdoconnor wrote: post #267

Earlier quoted context omitted.

If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation. The difference between that and slumlords is simply a matter of degree. Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.

I get the point in your scenario. The simple matter of "degree" in this case might be simple but it is very big. First of all, i would say that your scenario is unrealistic. It is made up and it would never happen in actual real life. First of all, what psychopaths would leave a dying man, woman or child like that? Also, how would these ambulances get customers? Thirdly, who would sign up for their ambulance service?…

The largest fortune in the Roman empire was amassed in almost exactly the same manner (Marcus Linnus Crassus - he ran a fire service).

Desperation is a rich source of profit. Neoclassical economics, instead of analyzing this sordid detail, masks it with assumptions.

That's why you view it as an unrealistic scenario despite the massive amount of historical precedent. Under econ 101 models (perfectly equal wealth; perfectly competitive market) it is an unrealistic scenario.

Re: What if the problem of poverty is that it’s profitable to other people?

#284

Post by lazzlazzlazz »

jakobegger wrote: post #266

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing? In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing. And it's amazing ho…

Artificially decreasing housing prices always creates shortages - that's already well understood. The more people who can take advantage of artificially lowered prices, the more pressure there is in other parts of the housing market to absorb excess demand.

The cost of decreasing those housing prices are paid for somewhere else in the system.

Re: What if the problem of poverty is that it’s profitable to other people?

#285

Post by sokoloff »

jpetso wrote: post #239
ultramancool wrote: post #74

Earlier quoted context omitted.

Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing. If someone does something amazing and unique, they should be able to profit from it. Think about a world with perfect wealth equality and you'd have the opposite sort of problems - like it or not, capitalism and yes, wealth inequality have brought more people out of poverty than any other syst…

I think the question we should ask ourselves is not how to eliminate inequality, but what baseline level of services and opportunities we want to give people at any stage in their life, regardless of their competitiveness and productivity, including when they're otherwise poor and a net drain on society. In other words, is stable housing a basic right or is it a luxury? If it's a basic right (and/or a net positive if…

If the top end is short of "billionaire", I think you get a world without Tesla, Space-X, Blue Origin, the Bill and Melinda Gates Foundation, and several other things that I believe are valuable and worthwhile.

You may argue that the cost is too high and that we'd be better off without those things.

Re: What if the problem of poverty is that it’s profitable to other people?

#286

Post by pyrale »

thecopy wrote: post #272
crdoconnor wrote: post #267

Earlier quoted context omitted.

If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation. The difference between that and slumlords is simply a matter of degree. Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.

I get the point in your scenario. The simple matter of "degree" in this case might be simple but it is very big. First of all, i would say that your scenario is unrealistic. It is made up and it would never happen in actual real life. First of all, what psychopaths would leave a dying man, woman or child like that? Also, how would these ambulances get customers? Thirdly, who would sign up for their ambulance service?…

> First of all, what psychopaths would leave a dying man, woman or child like that?

Apparently, the same kind that would leave children living in a cardboard box in front of their job.

Life as described in the article sucks, but it's still orders of magnitude better than living on the street.

Re: What if the problem of poverty is that it’s profitable to other people?

#288

Post by tmptmp »

tamana wrote: post #196
tmptmp wrote: post #166

Earlier quoted context omitted.

Get some land off from the existing land-owners who have it in excess over some threshold (by legislating some "ceiling on land-holding" act). Of course, that should not be done entirely in the "communist style" though, i.e. it can be done by giving them reasonable compensation. I guess, some "ceiling on land-holding" act is a must if we want reasonable check on inequality. Currently the US economy stinks of the prob…

"Land Value Tax". This is well studied area of economics.

I am not saying "Land Value Tax", which basically is a levy on the "unimproved" value of land.[1] What I am saying is nobody (including corporations) should be allowed to own land for the sake of renting purposes. If you own more than a threshold, you should just hand it over to the government, for some compensation and then if you think you have any excess land left over that you can rent, you should just sell it.

In short, no renting of land at all. I know, there are some issues to it, but I guess, those can be resolved, without much harming the economy of the 99.99% of the people.

Please correct me if I am wrong w.r.t. "Land Value Tax" vs "ceiling on land holding".

[1] https://en.wikipedia.org/wiki/Land_value_tax

edit: added clarification at end.

Re: What if the problem of poverty is that it’s profitable to other people?

#289

Post by crdoconnor »

bardworx wrote: post #145
ubernostrum wrote: post #73

Earlier quoted context omitted.

That doesn't subsequently mean "non-exploitive" alternatives would exist, it just means those customers/employees would have no options (not even "exploitive" ones). The hidden assumption here is that producing the goods and services required to keep a single human being alive in relative comfort (fed, sheltered, educated, healthy) necessarily requires an expenditure of manual effort roughly equivalent to what that h…

Isn't Communism very similar to your perfect world? All the people were provided for and they worked for everyone and everyone was equal. However, that didn't work out too well. In any system, some folk will always squatter and some will always attempt to gain power/advantage. Your world sounds too much like Atlas Shrugged.

>Isn't Communism very similar to your perfect world? All the people were provided for and they worked for everyone and everyone was equal. However, that didn't work out too well.

A system where everybody was equal was never tried.

A system where the necessities were guaranteed was tried - in the Soviet Union - and it was, by and large, very successful.

It was successful enough, in fact, that Western elites responded to it in the 50s by implementing similar guarantees - NHS, social security, medicare, etc. (McCarthy's witchhunts and the Vietnam war weren't the only responses to communism).

What made the Soviet Union finally unable to keep up economically was the prohibitive cost of the arms race and declining oil export revenues, not the lack of capitalist profit motives.

Re: What if the problem of poverty is that it’s profitable to other people?

#290

Post by erikb »

It's really hard for me to start reading. Yes, there are other reasons for poverty, and yes people make money out of poor people. But that doesn't really mean that this reasoning replaces the reason that many poor people don't know how to handle money, family, friends well enough to keep their head above the water. And most of the examples they use seem to underline that as far as I can see.

Poverty has a lot of facettes. Here's one that wasn't even mentioned: Because you can recognize poor people by their dressing preferences, richer people give them less opportunity. And there are quite a few opportunities that come with being at the right party, having the right friend, having the right hobby (like playing Golf). Poor people aren't at that party. And they don't feel comfortable in a suit.

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