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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

#101

Post by nickpsecurity »

My theory is it's a cartel of cartels. It was always a possibility given all the markets naturally seem to develop oligopolies and shift to cartel-like behavior. Buying off politicians to protect profit or market share was also common. So, what happened is that they started acting collectively for whatever interests them. They still compete or argue for other things but certain laws and trends are valuable for all rich capitalists.

Project Censored published a great report that surveys many of the organizations, their boards, and so on. First report whose theory is very similar to my own research.

http://projectcensored.org/the-global-1-exposing-the-transna...

As you can see, the boards have considerable overlap where people who appear to be competing in one sector are working together in another. There's also a clear incentive, per doctrine of maximizing selfish gain, for board members and CEO's to all give each other ridiculously high compensation while driving it down for laborers. The reason: they can. Why else?

So, it's a combination of corrupt politicians, elites at CEO/board level, and media whose boards work similarly. The worst part is that the media is critical to changing the situation but has financial incentive to avoid that ever happening. That's why they so deviously self-censor on these issues to the point Americans can't get mad enough about the specific problem to do something with specific solutions. Media never presents either. Instead, works on side issues or total distractions (esp shootings or celebs) that prevent threats to stability of plutocracy.

EDIT: Given not everyone likes this source, I'd be interested in any similar data and analysis from academics published in a peer-reviewed journal. No paywalls, though. Can't fight elitism with more elitism. ;)

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

#102

Post by CM30 »

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…

Yeah, and to some degree, this feeling is what a lot of reactionary and anti establishment parties are doing well off of at the moment. Growing inequality means that there's a lot of votes for political parties on the far left and right whose solution to this is basically 'destroy everything'.

I suspect fears of this are also why 'identity politics' has become a scourge in the last few years or so. Why immigration is often used as the fear of the moment. Why so much of the media tries to paint people as bigots.

Because things were getting quite bad against the 1% beforehand, with stuff like Occupy being a good example. Getting people to turn against each other over gender, race, personal hobbies and interests, religion and minor social differences diverts the anger to targets that don't threaten them.

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

#103

Post by vixen99 »

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…

For nth time can we please stop talking about 'tax-avoiding' as if it's something we should not do? Every sensible individual so arranges their affairs so as to avoid tax as much as possible within the law. Governments of whatever stripe set the tax rules. We citizens obey. Government is always free to change the rules to suit its tax raising objectives. Tax evasion is of course illegal.

As UK Judge Lord Clyde stated 'No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue'

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

#104

Post by ommunist »

ams6110 wrote: post #70
ommunist wrote: post #25

Earlier quoted context omitted.

'Pravda' stands for 'The Truth'. If you have rich, there will be a lot of poor. Maintain the lifestyle when being rich is immoral, you have no poor, everyone has a job and the streets are safe. This is my impression of the USSR of the 80-ies.

Did you live there?

Yes, I graduated in 1988.

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

#105

Post by Aelinsaar »

praptak wrote: post #85
mbfg wrote: post #41

Earlier quoted context omitted.

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.

"I can hire one half of the working class to kill the other half."

-French Nobles just before the revolution

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

#106

Post by megous »

themartorana wrote: post #72
ParrotyError wrote: post #59

Earlier quoted context omitted.

All kinds of things. Large organisations (supermarket chains like Tesco) holding onto vast "land banks," new property being bought up and left vacant by foreign investors as fast as it can been build (a big problem in London and Cambridge), construction companies and their investors who want to restrict the supply to keep prices high, a lack of suitable places to build new housing (lack of infrastructure, protected c…

Foreign "investments" in property are almost universally bad. I give you Vancouver, London, SF, and NYC as just a few examples. The very rich in other economies buy large amounts of "investment" property and do nothing other than drive up prices against - and out of step with - the local economy. This drives out the locals, and causes many actual residents to wonder how someone, even on a good salary, could afford a…

I always wonder at lack of reciprocal thinking in these kinds of views. People don't mind buying cheap stuff from foreign countries but think there's something wrong or bad when the people that received their money use that money to buy something in their country.

This is exactly part of the whole deal. It's inseparable. Why would they sell you something in the first place if they couldn't buy anything back?

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

#107

Post by aoeusnth1 »

maxerickson wrote: post #90
MichaelBurge wrote: post #82

Earlier quoted context omitted.

I think capital allocation is sometimes too abstract for people to see the value in. If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward. If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigge…

Rent seeking is jargon. It doesn't refer to running a business. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Economic_rent It refers to the economic consequences of things like regulatory capture and corruption.

The original article is naively expanding the definition to include simply "owning things which are worth money/time", i.e. the time value of money is somehow rent-seeking corruption.

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

#108

Post by aoeusnth1 »

MichaelBurge wrote: post #82
oconnor663 wrote: post #39

> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. This doesn't seem very coherent. How could a company ever sell stock to raise capital, if the people who bought that stock didn'…

I think capital allocation is sometimes too abstract for people to see the value in. If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward. If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigge…

For your last point, I would also add that the sale of such a income stream is a private consentual business relationship. Neither the seller or the buyer is being exploited. I feel like communists like the author simply don't understand the time value of money.

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

#109

Post by ommunist »

sbuttgereit wrote: post #95
ommunist wrote: post #33

Earlier quoted context omitted.

Hardly thousands. 240 000 people die every year in car accidents and no one prohibits cars. Millions died in WW2, but it is not the USSR to blame for it. How many Indians were killed for the US to prosper? We are speaking about fhe better system you never tried. No rich, no poor, everyone has a job.

Hardly thousands That is a barefaced lie. Forgetting the rest of the evil attributable to Communist ideology, the Ukrainian Genocide alone is evidence that it was many more than "hardly thousands": http://www.ncas.rutgers.edu/center-study-genocide-conflict-r... Indeed, one need only consider the ease of which one could immigrate out of USSR, or other Communist states for that matter, to know something was seriously f…

This was not equality of misery. It was equality of opportunities. My father was a factory worker, my mother was from peasants family. They were able to put me into high class secondary school and I was in position to select any university after graduating from it.

In the modern UK this is financially impossible for a family like that to give that kind of education to their kids.

Besides, there was no such thing as 'Ukrainian genocide', its a part of modern US political discourse to maintain the US political agenda in the Eastern Europe, hence the research you are referring to.

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

#110

Post by onetimeusename »

There are a few things I disagree with.

1) Income from rent is not unearned. The reason it is called unearned is because nothing new was created. However, many services are this way. For example, fees paid to lawyers, or insurance fees and so on. Income earned from rent is income that comes from providing a service which is shelter or land for other uses.

2) Investment income is not parasitic. A share is a portion of a company. If someone buys a share, they are buying into ownership at a price they think is worthwhile. The prices of the shares are largely based on the value of the company. The value of a company can continue to go up and so profits come from the company being more valuable, not parasitically. Also, many shares provide dividends which is income and the right to vote.

3) It doesn't make any sense to me that rentiers free ride on the labour of others. Do they not have to pay for the goods and services they use?

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