On Inequality and Risk Capacity
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On Inequality and Risk Capacity
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Re: On Inequality and Risk Capacity
#2I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in large businesses, the list goes on and on.
And just as there is no one major cause, there is no one major solution, like a wealth tax. Rather, we need to overhaul much of our financial and business regulation to favor decentralization. Limits on corporate and real estate ownership, corporate board participation, and business advertising would all go a long way toward reinvigorating small business and creating a healthier, less homogenized economy.
Re: On Inequality and Risk Capacity
#3I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in…
I see the solution in another direction. For every monopoly I see I also find a government enforcing that monopoly. Limit government power, not private ownership if you wish to improve the lot of the average person.
Re: On Inequality and Risk Capacity
#4Let's not forget ZIRP and QE Infinity:
https://fortune.com/2019/05/02/fed-interest-rates-income-ine...
Re: On Inequality and Risk Capacity
#5I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in…
I see the solution in another direction. For every monopoly I see I also find a government enforcing that monopoly. Limit government power, not private ownership if you wish to improve the lot of the average person.
A lot of the monopolistic/oligopolostic cartel-like behavior in my industry seems to be the result of free markets. Of course certain instances of government intervention have also encouraged cartel-like behavior.
I think you have to take it on a case-by-case basis and you can't make a general claim. On balance, free markets have probably caused more cartel-like behavior in my industry but abandoning free markets would be strictly worse than the mix that we have now.
Re: On Inequality and Risk Capacity
#6I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in…
I see the solution in another direction. For every monopoly I see I also find a government enforcing that monopoly. Limit government power, not private ownership if you wish to improve the lot of the average person.
You confuse cause for effect. Emerging monopolies gain the power to warp regulations in their favor by virtue of the concentration of wealth and power. That concentration is an inevitable consequence of the wealth-income feedback loop. Without limits on wealth, capitalism collapses in on itself like a black hole.
Re: On Inequality and Risk Capacity
#7I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in…
I see the solution in another direction. For every monopoly I see I also find a government enforcing that monopoly. Limit government power, not private ownership if you wish to improve the lot of the average person.
Government enforcing and supporting monopoly is government not doing its job. Look to the individuals responsible, particularly those who've constructed the incentives for other parts of government to support such monopolies.
Left to themselves, corporations acquire monopolies. The market gravitates towards nasty local maxima when there is information asymmetry, or when people simply don't have enough spare resource to compare options properly (attention asymmetry?). The primary organised force against corporate opportunism is government.
Government does of course have its own failure modes, democracy regardless (for similar reasons) against which corporations and the free market operate.
Claiming that either half of the system is remotely capable of self-regulating is moronic.
Re: On Inequality and Risk Capacity
#8This is really what sold UBI for me. Making it possible for more people to give entrepreneurship a try and explore their business ideas seems like it could be very valuable to our society. I'm not saying it would be a slam-dunk great investment, but it would do a lot to address this inequality of risk-taking ability.
Re: On Inequality and Risk Capacity
#9The cause of inequality is a combination of inherited wealth, workers not having control of means of production, and a lack of real direct democracy in how we make decisions as a society. This inequality is enforced with violence by those hoarding all of the wealth and power. Both capital and the state are to blame here.
Interesting mental exercises aside, this article is hard to take seriously.
Re: On Inequality and Risk Capacity
#10I'd agree that risk capacity (or element of ruin, as it's known in gambling circles) is a big factor in rising inequality. But there are many other advantages that the wealthy enjoy that may also explain the divergence. The wealthy can borrow money at much more favorable rates, they can meet minimum investment thresholds in ventures or funds that provide higher rates of return, they benefit from economies of scale in…
I see the solution in another direction. For every monopoly I see I also find a government enforcing that monopoly. Limit government power, not private ownership if you wish to improve the lot of the average person.
What evidence is there that limiting government power would improve the average person's situation?
Moving from feudalism to democracy clearly improved life for the average person, I'm not sure it's clear after that fact.