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

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

#61
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…

You're missing the commenter's point. If everyone ends up wealthier due to IT, then everybody's utility would be going up. Hence, IT would end up being a net positive thing even if it increased inequality.

In other words, if there were no way to reduce inequality without reversing the gains that everybody made, then reducing inequality in that situation would be harmful.

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

#62
post #4
post #2

Infuriating! An high-priest of the church of the economists does his job of exonerating politics from ugly social change, with "IT" as the sacrificial goat. The obvious counterpunch "what about politics" gets this answer doubling down slimy-leech style: (Quote) A Final Note The IT revolution has brought about improvements in living standards and its great technical achievements enjoy a very high level of consumer and…

Would you please not post ideological rants to HN? Even if you're right, it lowers the quality of discussion below what we're hoping for here. Actually being right makes it worse.

also, how does a two-liner + a quote from the article qualify as a "rant"?

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

#63
post #18

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'…

I'd like to see corporation tax replaced with a Border Adjustment Tax [1]. The tax would be paid on the result of USA Revenue - USA Costs. If you were to move intellectual property offshore and licence it from that subsidiary then that would not be a USA Cost and therefore would not be deductible. If you brought it back onshore then it would only be deductible if there was a cost. If you moved into another company wi…

Okay sounds good in this case but what if a company really needs to buy a licence from an offshore company, let's say a critical technical part in your manufacturing process. Then you can't deduct it but in reality these are your costs.

Remember that the problem is caused by companies abusing the system but the rules are there because honest companies need to operate.

The real solution would fix the issue while allowing honest companies to work just like they did before. The problem is that software companies are composed almost purely out of intellectual property, that is intangible and hard to really track.

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

#64
post #18

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'…

Tax avoidance might be a factor sure, but can it be enough on it's own? If IT wasn't increasing the value of intellectual property, taxing it would be an economy-distorting issue. So I see the tax issue as being the cherry on the top, but not the core issue.

Tax manipulation doesn't change the fundamental value of labour, but IT does. It enables vastly more value to be created using less and less labour and materials, sometimes by many orders of magnitude. That's the game changing trend.

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

#65
post #53

Earlier quoted context omitted.

>The severely disabled, we should provide zero social supports for them and their families so? If "we" want to provide support to any group, it can be done through charity. I'd argue this way is more moral: it's more of a good deed to be generous with one's own money than with other peoples', and it's not much of a good deed to give money if one's only doing so due to threat of imprisonment for failing to comply. The…

> If "we" want to provide support to any group, it can be done through charity. Charity implies voluntarily providing support, leaving it to the benevolence (or lack thereof) of each individual. In the end, it teaches people that being uncharitable is OK and an acceptable trait, just like being charitable. I want a society that mandates that support -- and even more so, one where everybody is OK with that. In other w…

> In other words, instead of pushing out the disabled, in my society I'd rather push out (as useless scum) those that don't wont want society to help the disabled.

Amen to that.

I was merely taking the original comment to one of its logical conclusion. Seems like there are those who would like to bring back charitable almshouses and asylums to replace state institutions, how quaint but also how despicable.

After all: If you can't keep up (even if you're disabled), 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]

#66
post #48

Earlier quoted context omitted.

Yes. I work in IT and I'm rich, aren't you rich like the rest on engineers that read Hacker News? Not like the poor people at finance institutions, they create so much value and get so few in return...

They're also enabled by IT.

Financial institutions are all now IT companies. It's an essential core competency. Money is information.

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

#67

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.

Technology might be neutral, but capitalism is directing it.

(Nothing against capitalism. I just think the general direction will be profit maximisation.)

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

#68
post #53

Earlier quoted context omitted.

>The severely disabled, we should provide zero social supports for them and their families so? If "we" want to provide support to any group, it can be done through charity. I'd argue this way is more moral: it's more of a good deed to be generous with one's own money than with other peoples', and it's not much of a good deed to give money if one's only doing so due to threat of imprisonment for failing to comply. The…

> If "we" want to provide support to any group, it can be done through charity. Charity implies voluntarily providing support, leaving it to the benevolence (or lack thereof) of each individual. In the end, it teaches people that being uncharitable is OK and an acceptable trait, just like being charitable. I want a society that mandates that support -- and even more so, one where everybody is OK with that. In other w…

>Charity implies voluntarily providing support, leaving it to the benevolence (or lack thereof) of each individual. In the end, it teaches people that being uncharitable is OK and an acceptable trait, just like being charitable.

Your use of "teaches" here implies that violence/imprisonment or the threat thereof teaches (if no mandatory charity teaches people that being uncharitable is okay, I assume you mean mandatory charity through taxation teaches people to be charitable?). That certainly isn't a given; how do you know whether people have been taught to be charitable by the threat of violence/imprisonment vs they're only paying taxes to avoid being imprisoned? If you beat a child for swearing, has the child learned that swearing is bad, or or has the child just learned to avoid swearing in front of the parent to avoid beating? I'd argue that one thing it definitely teaches is that violence is an acceptable means of making others do what you want, and to me a person who believes this is far more terrible than a person who's just too cheapskate to give charitably. Millions more people have been killed in the past century by people using violence to compel others and people supporting such ideas (e.g. Stalin, Mao, Hitler and their armies, even the politicians who forced people into the army via the draft) than have been killed from neglect (the 20th century war & genocide death toll far outstrips the death toll from starvation).

>Then, since everybody will be using their own money to pay the "help the disabled" tax, it's a good deed to mandate by law that everybody has to fork out.

Is a good deed a good deed if done unwillingly?

>That would be irrelevant if the desired outcome is to effectively help the disabled, rather than to test honesty of people's charity.

If people are free to donate as they choose and none chose to support the disabled, wouldn't that in fact show that society doesn't really care about helping the disabled anyway? In which case what's the justification for a law forcing something that few in society want? Conversely, given so many people do seem to care about the welfare of the disabled, why wouldn't they express this through charity?

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

#70
post #67

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.

Technology might be neutral, but capitalism is directing it. (Nothing against capitalism. I just think the general direction will be profit maximisation.)

policy & regulation within capitalism determine whether corporations can be commoditised by customers (a lot of market competition) or labour can be commoditised by corporations (monopolies & job scarcity, collusion)
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