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Is Inequality Inevitable?

scientificamerican.com

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Re: Is Inequality Inevitable?

#141

Post by notahacker »

lordnacho wrote: post #31

This is a lot more satisfying than just r > g, which although seeming to be well supported in a rather large book somehow is dissatisfying. Specifically, I was looking for some kind of agent model like what this author is presenting here. I've often thought about the "it's expensive to be poor" adage. What's interesting is he takes in this risk preference idea, in which you naturally expect the poor to have to be ced…

r>g is broadly equivalent to the ζ parameter in this model

I don't find the model itself especially compelling as a broad model of the economy myself, though it's nicely written exposition of how variance can wipe people out and largely agrees with my biases. The fact that a curve with three arbitrarily-set parameters can be made to fit empirical Lorenz curves doesn't particularly impress me, and the concept of rich people enriching themselves through wiping out poor people in zero sum trades as opposed to having the ability to transact with a lot more people in positive sum trades doesn't ring especially true of a modern economy.

Re: Is Inequality Inevitable?

#142

Post by [deleted] »

dlp211 wrote: post #128
whatshisface wrote: post #106

Earlier quoted context omitted.

Let's say that Jeff Bezos gets twice as rich while I stay the same. Inequality increases, but I'm not unhappy. Now, let's say that Jeff Bezos loses half his money on the same day I lose half of mine. Inequality stays the same, but I'm unhappy. Therefore I conclude that inequality doesn't bother me, and its absence is no comfort. (I'm using money as a stand-in for goods and services, of course. If inflation doubled th…

Now add a neighbor who has no wealth and is unhappy. Does that make you unhappy? This isn't just about you, it's about all of us.

[deleted]

Re: Is Inequality Inevitable?

#143

Post by NovemberWhiskey »

praptak wrote: post #113
lmilcin wrote: post #66

A lot of it misses the point. Equality is unavoidable as long as people are allowed to compete for stuff. If people are allowed to compete for property then those that are better at competing will have more property. It might be possible to have property equality when people have access to same things but compete for different things, for example status, choice of partners, etc. And the most important point people se…

> Equality is unavoidable as long as people are allowed to compete for stuff. The kind of inequality that is perceived as problematic is something different though. It's the rent collection that transfers wealth from the poor to the rich.

Can you give some examples of that? Most of the poor have no wealth in the first place.

Re: Is Inequality Inevitable?

#144

Post by Empact »

It should be self-evident that the accelerating inequality we’re witnessing is not the natural inequality of competition and the power law, easily explained by simple arithmetic.

An accelerating and historically high broad societal effect is naturally a product of broad and unique properties of the current regime, rather than fundamentally consistent properties, which would naturally be seen across all time.

What is more broad and far-reaching than manipulation of the money supply itself? “We have found that inflation (1) worsens income distribution; (2) increases the income share of the rich; (3) has a negative but insignificant effect on the income shares of the poor and the middle class; and (4) reduces the rate of economic growth” http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.295...

It’s not difficult to see why - under an inflationary regime, those holding currency lose out relative to those holding assets, because the former’s wealth is not preserved; and low income wages are facing a constant headwind that their earners are less equipped to navigate.

We in the US have been engaging in an experiment since 1971, which has resulted in a marked discontinuity and a shift in to whom productivity growth accrued: https://wtfhappenedin1971.com/

This is not necessarily the true or only explanation of our accelerating and historically high inequality, but it has the properties of a realistic explanation, in that it identifies a broad, historically distinct cause.

Re: Is Inequality Inevitable?

#145

Post by narrator »

threatofrain wrote: post #135
eej71 wrote: post #127

Earlier quoted context omitted.

The core point remains which is - wealth is not static. It is _created_.

From where? Jeff Bezos space mining ventures? Eventually the question about the size of the economy and endless growth must be answered.

Fossil fuel based energy sources dramatically lowered the cost of food production in terms of how much human effort was dedicated to it. Where the next breakthrough will come from is anyone's guess. That's the nature of capitalism. There isn't a five year plan, and production quotas, but we get there.

Re: Is Inequality Inevitable?

#146

Post by whatshisface »

Qwertystop wrote: post #137
bhupy wrote: post #109

Earlier quoted context omitted.

Is “a house in a modern city” a basic right? Or just “a house”?

"modern city", maybe not, but there's a world of difference between, say, a shack in the woods and an apartment with aircon/heating/insulation (as appropriate) and easy access to groceries. I don't know where the line is, but if you say the basic right is just "house", and that gets enforced, someone's going to try to draw that line as low as they can. Probably a few developers try to argue that if everyone gets a ho…

Evicting Jeff Bezos from wherever he lives wouldn't help a shack-dweller unless you gave Bezos' old house to the woodsman. So, I would say that the woodsman doesn't care about inequality, instead any benefit he could get would come from an improvement in his own fortunes (irrespective of what happens to anyone else). If inequality was the problem, then bad things happening to someone would help everyone who was worse off than them, but if Bill Gates gets cancer, nobody is better off.

Re: Is Inequality Inevitable?

#147

Post by bryanrasmussen »

Retric wrote: post #121
cryptonector wrote: post #76

Earlier quoted context omitted.

You make it sound as though the economic pie is fixed and economics zero-sum. But that's clearly not the case, otherwise we'd still be living with stone age per-capita GDP (i.e., ~0). And it's not just that "those that are better at competing will have more property". Every person is free to make a variety of choices for themselves, including how much they prioritize wealth creation. Since each one of us has only one…

Per capita GDP increased less from the Stone Age to now than you might think. Even if you discount all goods other than food to zero, it’s less than 100x growth in the last ~5-10,000 years. That’s less than 0.1% per year growth over that timeframe. Though valuing ancient goods at equivalent modern prices is debatable, it seems like a reasonable metric.

Where do you get the less than 100X growth from? And if it is less than that, what is the exact amount of growth - since if you know it is less than 100x it seems reasonable to assume that you know exactly what amount it is?

Re: Is Inequality Inevitable?

#148

Post by whatshisface »

dlp211 wrote: post #128
whatshisface wrote: post #106

Earlier quoted context omitted.

Let's say that Jeff Bezos gets twice as rich while I stay the same. Inequality increases, but I'm not unhappy. Now, let's say that Jeff Bezos loses half his money on the same day I lose half of mine. Inequality stays the same, but I'm unhappy. Therefore I conclude that inequality doesn't bother me, and its absence is no comfort. (I'm using money as a stand-in for goods and services, of course. If inflation doubled th…

Now add a neighbor who has no wealth and is unhappy. Does that make you unhappy? This isn't just about you, it's about all of us.

Jeff Bezos losing half his wealth in a stock market crash wouldn't help my poor neighbor any more than it would help me, so I would say the same argument applies.

Re: Is Inequality Inevitable?

#149

Post by QuesnayJr »

tunesmith wrote: post #10

Have there been any efforts to quantify what level of inequality is reasonable? For instance, the GINI coefficient ranges between 0 and 1, where 0 means everyone has the same amount, and 1 means one person at the top has everything. Depending on how it's measured, the US is somewhere between 0.4 and 0.5. You don't want to be at either extreme, so some level of inequality is desirable. Is there an appropriate amount o…

Rawls argued that whenever inequality would allow the worst off to be better off in absolute terms, then it was okay. He gave a thought experiment argument for this that he called the original position: https://en.wikipedia.org/wiki/Original_position

Re: Is Inequality Inevitable?

#150

Post by ryeguy_24 »

> "388 individuals possessed as much household wealth as the lower half of the world's population combined"

My goodness! This completely shocked me. I wonder if we are all complicit in allowing this to happen. I know wealth buys power and vice versa, so it likely would be hard to change but aren't we all indirectly allowing this to happen?

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