Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

IT is the cause of rising income and wealth inequality since the 1970s [pdf]

economistsview.typepad.com

Post reply on HN
Print view View original

11–20 of 199 posts

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#11

Post by coldtea »

acchow wrote: post #5

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

Serious question: who says it "makes everyone better off"?

Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings).

>if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

Also, humans are not animals to just need food and shelter. For humans it's not just what you have, it's also what you have relative to others. That's why nobody in the US considers a "trailer park" person fortunate just because they don't live in a third world slum or in a cave like people did in 10.000 B.C. -- we consider their position relative to a current baseline. If that gets too out of balance, people have issues.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#12

Post by jstanley »

coldtea wrote: post #11
acchow wrote: post #5

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

Serious question: who says it "makes everyone better off"? Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings). > if technology makes everyone better off but increases inequality, is that a bad outc…

If you can't keep up, that's not other people's fault for being better than you.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#13

Post by oblio »

jstanley wrote: post #12
coldtea wrote: post #11

Earlier quoted context omitted.

Serious question: who says it "makes everyone better off"? Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings). > if technology makes everyone better off but increases inequality, is that a bad outc…

If you can't keep up, that's not other people's fault for being better than you.

Ok, let's say you're right.

1. Are you willing to leave behind, say, 40-50% of the population? Especially since that group could include people such as your parents or your partner or your kids.

2. If you're willing to leave them behind, what are you going to do with them?

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#14

Post by paulajohnson »

acchow wrote: post #5

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

To answer that you need a way of equating money with "utility" (i.e. the use and/or pleasure that people get from their money).

I believe that utility is logarithmic with rate of expenditure. Hence doubling your spending rate gets you a constant increment in utility. This is why we measure pay rises in percent rather than absolute value. Another $100/week would make a huge difference to someone on the breadline, but is lost in the noise for a millionaire.

This means that money transferred from a rich person to a poor person will increase utility, because the decrement in the rich person's utility is more than outweighed by the incremenent in the poor person's utility. This difference can also accomodate the transaction costs (i.e. running the IRS) and the "deadweight cost" of decreasing the rich person's incentive to earn more.

This would seem to suggest that money should be redistributed so that everyone has the same amount, as that would maximise utility if the total amount of money is constant. But of course that condition isn't true: in a world with zero economic incentives there would be no economic activity. In reality of course such a world would go horribly wrong in any number of ways.

So there would seem to be an optimum amount of inequality in a society. Too little, and you destroy incentives to create new stuff, thereby making everyone poorer than they would have been. Too much and you are wasting valuable resources on gold plated baths that would be better spent giving poor people a tolerable standard of living, education, health care etc.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#15

Post by coldtea »

jstanley wrote: post #12
coldtea wrote: post #11

Earlier quoted context omitted.

Serious question: who says it "makes everyone better off"? Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings). > if technology makes everyone better off but increases inequality, is that a bad outc…

If you can't keep up, that's not other people's fault for being better than you.

>If you can't keep up, that's not other people's fault for being better than you.

Who said they were "better than [me]"?

You seem to presuppose what in fact needs proving: that if someone ended richer than someone else, they were better to begin with. Except if you mean "better at getting rich" which is a tautology.

Between inheritance and class status of parents, and between connections and lucky chances (including geography and color), there are so many ways to undeservingly be more wealthy than someone else and so many ways the "starting conditions" are not the same that this is not even wrong.

Now, two types of people usually have difficulty seeing this: those that played life in 'easy mode' (well off parents, good education, etc) and can't see how it's not as easy for everybody, and people who managed to overcome bad chances and who, due to confirmation bias, can't see that the chances for what they did were slim for others in the same boat but attribute it all to their hard work and smarts (and the lack of those in others).

http://thewireless.co.nz/articles/the-pencilsword-on-a-plate

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#16

Post by gadders »

acchow wrote: post #5

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

I think as long as the lowest people have a good standard of living, I would argue it doesn't matter that the richest have a lot more.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#17

Post by contingencies »

paulus_magnus2 wrote: post #8

Noah Chomsky says technology is neutral: it can be used to empower companies, automate jobs away (as it's the case right now). It also could be used to empower employees (into super craftsmen??) but so far this direction isn't pursued.

Makerspaces are sort-of empowering supercraftspeople.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#18

Post by m12k »

Here's another possibility: The highly increased value of intellectual property that comes from IT has made transfer pricing a much more efficient means of tax avoidance for companies, who are free to move almost all their profits to the Cayman Islands and other tax havens. Expecting our tax authorities to judge whether a trade between two subsidiaries of a multinational is at 'fair market value' makes sense if they're trading steel bars, not so much if they're trading e.g. a 'license for the Google search algorithm'. Intellectual property, pretty much by definition, is unique rather than a commodity.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#19

Post by jgtrosh »

paulus_magnus2 wrote: post #8

Noah Chomsky says technology is neutral: it can be used to empower companies, automate jobs away (as it's the case right now). It also could be used to empower employees (into super craftsmen??) but so far this direction isn't pursued.

Not to undermine the increasing inequalities between employees and employers in many aspects, but there is a strong increase in work-at-home thanks to telecommuting and there is an increase in self-employed people thanks to ease of access of new technologies.

Re: IT is the cause of rising income and wealth inequality since the 1970s [pdf]

#20

Post by jstanley »

oblio wrote: post #13
jstanley wrote: post #12

Earlier quoted context omitted.

If you can't keep up, that's not other people's fault for being better than you.

Ok, let's say you're right. 1. Are you willing to leave behind, say, 40-50% of the population? Especially since that group could include people such as your parents or your partner or your kids. 2. If you're willing to leave them behind, what are you going to do with them?

If it's your parent, partner, or kids, (or even if it's not -- it could be anyone) you're welcome to provide for them yourself.

You're also welcome to donate to (or even work for!) charities that provide for them.

But it's not OK to force everyone else to provide for them.

Post reply on HN