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Challenging the myth that the rich are specially-talented wealth creators

blogs.lse.ac.uk

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Re: Challenging the myth that the rich are specially-talented wealth creators

#41

Post by mbfg »

adwhit wrote: post #35

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. The…

i understand your sentiment here, and in the view of history this is true. The problem is that now, or very soon, we are/will be in a state where the 1% can easily put down the 99% politically, socially, financially and yes militarily. So there may be a reckoning at some point. But it will and badly for the 99%. This was mostly true throughout history as well, it's just become a more certainty now.

Re: Challenging the myth that the rich are specially-talented wealth creators

#42

Post by petra »

hueving wrote: post #27
11thEarlOfMar wrote: post #17

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.

In Israel, in the 50's-80's, in government housing there was a kind of rent that accumulated towards payment of your house. And i'm not 100% sure, but maybe even if you needed to move houses(in coordination with government rent company), the collected money would have transported with you to your new house.

EDIT: just to add context - Israel had a huge challenge - it was created with the goal of being a home for every jew globally - and most have come - which lead for a huge demand for housing, for many poor people. And for the first decades of it's history it was mostly successful at that. And it didn't seem to inhibit growth or employment.

Re: Challenging the myth that the rich are specially-talented wealth creators

#43

Post by ommunist »

ausjke wrote: post #34
nathan_f77 wrote: post #6

What's the solution? I hear rants all the time, but no-one ever offers any concrete steps, or suggestions for new laws.

Revolution is the final answer, as always, the majority will win no matter what. Taxes, welfare etc slow-down/mitigate that, but that's not enough for the so-called 99%.

No. But rich will not give up their power. Anarcho-syndicalism has the answer and there are very successful experiments in modern days Spain with communas.

Re: Challenging the myth that the rich are specially-talented wealth creators

#44

Post by ams6110 »

jonathankoren wrote: post #16
_yosefk wrote: post #2

TTIP is pushed by corporations , not individual rich people. A corporation will want that even if every one of its stockholders has a below-median wealth. More generally, organizations and people working for them will pursue their goals and these goals will be misaligned with the interests of the population at large even if nobody is involved whose net worth is particularly remarkable. If corporations are eliminated…

Please. Corporations are run by people. People with agendas. And at the upper echelons it's agendas to make them selves as rich as possible. This idea that somehow people aren't responsible is absurd. Presumably you work for a corporation. Do you check your brain at the door when you go in and turn yourself over to Master Control at the start of each day? No, of course not. It's long past time to give up this fiction…

There are people at all levels of society who's agenda is "make them selves as rich as possible" from drug dealers and pimps to restaurant owners, car dealers, realtors, lawyers, doctors, you name it. Nothing special about corporate executives.

Re: Challenging the myth that the rich are specially-talented wealth creators

#45

Post by asuffield »

brador wrote: post #28
asuffield wrote: post #26

Earlier quoted context omitted.

Yes, it is precisely that. It's very easy to take shots at extremely rich people, because they won't bother to show up and defend themselves and nobody else will either. The main problem I have with this is that it's not very interesting and doesn't solve anything.

Should extremely rich exist as a thing? What benefit does it bring humanity over the alternative?

That depends primarily on what alternative you are proposing. If you aren't discussing a specific alternative, then it's just the kind of unproductive sniping that I object to.

Re: Challenging the myth that the rich are specially-talented wealth creators

#46

Post by lgieron »

ausjke wrote: post #34
nathan_f77 wrote: post #6

What's the solution? I hear rants all the time, but no-one ever offers any concrete steps, or suggestions for new laws.

Revolution is the final answer, as always, the majority will win no matter what. Taxes, welfare etc slow-down/mitigate that, but that's not enough for the so-called 99%.

I'm not sure I call a revolution "a win" - see the French revolution (hundreds of thousands dead in cleansings, country ruled by ruthless dictator) or Bolshevik or Chinese Communist Revolutions. I'm finding it hard to come up with a positive counterexample.

Re: Challenging the myth that the rich are specially-talented wealth creators

#47

Post by styrophone »

hueving wrote: post #27
11thEarlOfMar wrote: post #17

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.

Access to capital gives larger landlords preferential rates, terms, and prices compared to individual buyers.

Unless the rental unit is a standalone single family home (and sometimes even then), economies of scale in maintenance and upkeep result in those costs being cheaper to a landlord.

Downpayments required for loans with good terms have opportunity cost to the buyer. On average over the long term, it has been appropriate to assign that downpayment a discount rate which is a net negative against average market returns.

If realestate markets are stable or reasonably increasing, mortgages are safe. But renting reduces risk of being stuck in an upside down loan, and risk reduction has value.

Despite all of these factors, you're right that rent includes profit, so in many cases it's wiser to purchase. But it's not as globally true as the parent comment suggests. The best choice comes from a balanced assessment of a variety of factors.

Re: Challenging the myth that the rich are specially-talented wealth creators

#50

Post by ams6110 »

ParrotyError wrote: post #37
11thEarlOfMar wrote: post #17

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

"In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they w…

The answer to this is build more housing. Who or what is preventing that?
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