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Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

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Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#181

Post by 21echoes »

witty_username wrote: post #172
BobTheCoder wrote: post #162

Earlier quoted context omitted.

I agree people seem to be either "the free market solves all problems" or "capitalism is slavery and must be destroyed" (but don't focus on an actual viable alternative). I'm chipping away on my own alternative which is a bit of a hybrid. Competition and inequality between individuals but not between groups within society. https://opensocialism.com/tldr-for-software-people is a good intro for IT people.

Ignoring human envy and jealousy, what is wrong with inequality between groups?

> Ignoring [the mental state of the people being optimized for], what is wrong with inequality between groups?

A bit cheeky, I know, but I don't think you can just write off emotional results of systems.

But to answer in better faith: I think [Rawls's Veil of Ignorance thought experiment](https://en.wikipedia.org/wiki/Veil_of_ignorance) is a good response here. In short (skipping how he arrives at the conclusion): when judging the quality of life a system produces, measuring by maximums (or even averages) is probably not the way to go. Median and mode are also very important dimensions to pay attention to.

Also worth noting: if we did live in some future utopia where "inequality" really meant the difference between "all my needs are easily met with little stress" and "I experience nearly constant bliss"... yea, we can have some inequality. But, pockets of the developed world aside, we're not there yet. Not even close. So long as we have around 50% of the world in poverty, and more than 1 billion children in extreme poverty, aiming to "lift all boats" faster than the amount a "rising tide" does is a discussion worth having.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#182

Post by crazy1van »

quadrangle wrote: post #145
4WIW wrote: post #117

Earlier quoted context omitted.

You can say the same thing about National-Socialism or any other ideology out there. There are just not enough countries to try them all on, and I am not sure why should we...

National Socialism (i.e. Hitler) was based fundamentally on nationalism and racism. We can reject it because the principles themselves are unethical. We can reject it even if it had succeeded economically! If you want to make an argument that the principles of communism are unethical, that's an independent argument from the claim that certain historic attempts had various atrocities and therefore you reject the princ…

> We can reject it because the principles [nationalism and racism] themselves are unethical

I'd also contend that it's unethical for a society to reward all people the same regardless of effort and talent.

Should I make as much money as a singer as Taylor Swift? I have terrible pitch. I can't write music. I can't play an instrument. I have no stage presence.

Now, you might say that based on my talents, I shouldn't be allowed to be a singer at all. But not allowing someone to choose what they do with their life also seems unethical.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#183

Post by lambertsimnel »

trapperkeeper79 wrote: post #11

Wonderful talk. One thing he called for was a wealth tax, which is something that makes complete sense but is going to be very unpopular. On the otherhand, he also calls for progressive income taxes (something that is reported by the media and an easier pill to swallow) - in my country, Canada, progressive income taxes are not the answer IMHO. We didn't have as much inequality for education (i.e. lots of decent Unive…

Something PM Trudeu could do to reduce inequality in Canada is to introduce proportional representation, as he promised to. PR correlates with lower economic inequality, presumably because all votes have equal value under PR, coalition governments are harder for special interests to sway, and PR promotes majority rule (protecting against a minority group using the government to enrich itself or entrench its relative wealth).

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#184

Post by BobTheCoder »

crazy1van wrote: post #179
BobTheCoder wrote: post #176

Earlier quoted context omitted.

It isn't so much the inequality itself is bad, but rather having distinct groups that compete with each other. (Group inequality is an inevitable outcome of this but not the root issue). Group competition is bad simply because it is less efficient if your goal is for the maximum good for all people. Say you have a valley and two tribes in it. If they fight for control of the valley they are expending resources in tha…

> Group competition is bad simply because it is less efficient if your goal is for the maximum good for all people. Humans are lazy and self interested. They work hard when they need to and competition provides the need. That goes for individuals as well as groups. Would people try as hard to woo their future spouse if they were matched and promised to each other at birth? Why did my comcast service get faster and ch…

Indeed I agree competition is necessary.

With the right system though competition between individuals is sufficient. Humans will try and get ahead to woo their spouse by whatever means are available. Having individuals compete for prestige and salary is enough to engage humans to strive for excellence.

Group competition doesn't relate to this aspect though. In a one group system individuals incentivized by individual reward won't be lazy or they lose out so group competition is not necessary.

For example, take a series of tribes in one area competing for resources. If all but one tribe die out due to disease, the individuals of that tribe won't suddenly become lazy. Why? Because they still need their personal acclaim to attract a mate and be successful.

In a multi group system (capitalism) there is no incentive for groups to compete (as in increase consumer value at the expense of profit) without competition, so yes in this system group competition is necessary. However, this attribute is not true of all systems.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#185

Post by ryandrake »

wyager wrote: post #69
tmnvix wrote: post #23

Earlier quoted context omitted.

Exactly. We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income). Taxing productive activity is literally counter-productive. This will only become a more pressing issue once automation (esp. of the transport industry) gets into full-swing. Eventually we won't have a choice in the matter. There are a whole host of current issues that are culminating in wealth and income dist…

The fundamental premise of your argument - that investment "isn't productive" - is entirely wrong. Investment is what provides capital for growth.

If I buy stock in Company X, it doesn't go to Company X, it goes to some other dude who sold me that stock. How is that "providing capital for growth"? It's a casino.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#186

Post by BobTheCoder »

21echoes wrote: post #181
witty_username wrote: post #172

Earlier quoted context omitted.

Ignoring human envy and jealousy, what is wrong with inequality between groups?

> Ignoring [the mental state of the people being optimized for], what is wrong with inequality between groups? A bit cheeky, I know, but I don't think you can just write off emotional results of systems. But to answer in better faith: I think [Rawls's Veil of Ignorance thought experiment]( https://en.wikipedia.org/wiki/Veil_of_ignorance ) is a good response here. In short (skipping how he arrives at the conclusion):…

Cheers, hadn't seen the 'Veil of ignorance' concept before. Quite thought provoking.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#187

Post by throw2016 »

I think the US culture of exceptionalism puts individuals in 2 simple buckets, winners and losers. I think everyone wants to be a winner and then not improve the overall system but to look down on the 'losers' and signal 'success' status.

The idea that they won't be able to validate themselves and their 'specialness' in this way makes them subservient to the status-quo, vulnerable to hubris and immune to the problems of inequality. Do we have a social identity because we seem to predominatly seek validation and identity from our work.

This in group out group is an integral part of US culture and this base survival of the fittest 'superman' ideology is inherent in a frontier type economy exploiting new resources.

The system is fine tuned to exploitation but what happens when there are no resources to exploit. The US problem goes way beyond mere capitalism and communism. At some point you would need to build a society that values people independently of their work, success or money or you run the risk of creating a modern exploitative unfeeling dystopia.

A lot of these discussions especially here are marked by a distinct lack of emphathy, dehumanization and blame the victims mentality that a quick reading of the evolution of political, social and economic systems from feudalism till now will quickly dispel. Power concentrates itself.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#188

Post by om2 »

tome wrote: post #81
om2 wrote: post #75

Earlier quoted context omitted.

One thing that always puzzles me about r > g is that it's comparing a first derivative to a second derivative. How can this be meaningful? To explain further, r is return on investment, which approximately means rate of growth of wealth of capital. That is, it is a the first derivative of a stock, or equivalently a flow. g is the rate of growth of income, where income itself is a flow. So it's the second derivative o…

> How does it even make sense to compare these two quantities when they don't have the same units? They both have units T^-1, don't they? For example, they could both be measured in "Percentage increase per year".

It doesn't really make sense to take "percentage increase" as dimensionless, because it leads you to compare growth rate of incomparable things. One of the most basic rules of economics is that you can't compare stocks and flows. Why would it be meaningful to compare their % increase per year?

Let's say that for construction company A, the total number of houses it has built increases by 10%. (This is comparable to an r of 10%). And let's say that, each year, construction company B builds 5% more new houses than it built the year before. (This is comparable to a g of 5%). No matter how much of a head start A starts with, under these assumptions, B will always eventually have more total houses built.

Or to put it more generally, a stock growing at fixed rate grows linearly, but a flow that grows linearly implies a stock growing at a quadratic rate. O(N^2) will always outpace O(N).

It seems to me that all the hoopla about r > g is based on an elementary mathematical error.

Or really, more honestly, assumptions about savings rate are doing all the work, and r and g really have almost nothing to do with it.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#189

Post by om2 »

Mikeb85 wrote: post #116
om2 wrote: post #75

Earlier quoted context omitted.

One thing that always puzzles me about r > g is that it's comparing a first derivative to a second derivative. How can this be meaningful? To explain further, r is return on investment, which approximately means rate of growth of wealth of capital. That is, it is a the first derivative of a stock, or equivalently a flow. g is the rate of growth of income, where income itself is a flow. So it's the second derivative o…

> One thing that always puzzles me about r > g is that it's comparing a first derivative to a second derivative. How can this be meaningful? It's not. It's Piketty trolling the economics field, which has become overly math-y, and try too hard to distil complex interactions into basic formulae. It's basically his way of saying that capital's share of income is growing faster than labour's share of income, or that the…

r isn't the growth rate of capital's share of income though.

r represent the return on capital (which is proportional to capital's share of income), not the growth rate of the return on capital, or the growth rate of capital's (share of) income.

On the other hand, g isn't the return on labor, or labor's share of income. It's (approximately) the growth rate of the return on labor.

Would you rather have $100 and then get 200% of it every year (r = 200%) or get an amount that increases at 100% every year (g = 100%) starting with $1? With the second option you'll have twice as much money in just 11 years. So in this picture income eventually wins, even though r > g. It's not just "not a formula" it is total nonsense. It doesn't make sense to compare a growth rate of an amount to a growth rate of an annual increase!

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#190

Post by lliamander »

ap22213 wrote: post #153
loki49152 wrote: post #140

Earlier quoted context omitted.

Communism is a very specific ideology with a well-known, well-documented content and intellectual history. It isn't "just a process" for anything. Communism is evil because its ideology has no relationship with reality and will inevitably be a practical disaster anywhere it's implemented to the degree that it's implemented as a result. There's no escaping it any more than you can escape the laws of physics.

By that description, it sounds like a Bogeyman [1] to me. Anyway, I live in a mostly Capitalist system, and it's also authoritarian. The only thing that seems to keep it from spiraling into complete evil is that a democratic Leviathan [2] happens to rule over it. (Of course, the capitalism is always in a constant assault for control). What's funny to me is that I have several neighbors who fervently describe themselv…

> What's funny to me is that I have several neighbors who fervently describe themselves as pro-capitalist libertarians. Yet, when I'm out of coffee or I need my driveway plowed, they do it for free. Why is that? Probably because we are all friends and have common culture and mutual trust.

I don't wish to presume anything about you specifically, but I find that your neighbor's behavior only seems paradoxical to those who don't understand what it's actually like to think like and be a libertarian. It's not that libertarians want to assign a price tag to every interaction (as if money were the only thing of value) it's that they would rather appeal to people's self interest to achieve social outcomes than resort to force (which they see as an inevitable result of any form of socialism/communism).

> When people invoke the idea of communism they usually mean: why can't we all have a society where we all act as neighbors. Sure, that's a daunting goal, of course. But, it's no less impossible as when people invented the idea of the social contract. Or any of the other million inventions that people said were crazy or impossible.

A distributist/communitarian might say that, regardless of whether we can be neighborly with all of mankind, we can certainly be neighborly with people who are actually our neighbors, and thus we should aspire to the former without sacrificing the latter. Yet sacrificing the latter is what I tend to see from those who invoke the idea of communism.

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