Is Inequality Inevitable? • Hacker News Board

Re: Is Inequality Inevitable?

#221

Post by pdonis » Wed, Nov 06, 2019, 10:18 PM UTC

threatofrain wrote: post #187

eej71 wrote: post #183

Earlier quoted context omitted.

The creation of wealth extends far beyond the mere sum of natural resources. It's about the knowledge required to make use of it. Finding it, understanding it, combining it. Knowledge expands the range of our reach and of our ability to re-arrange - to create. In my view, wealth creation has its foundation in the expansion of knowledge.

In other words, materials and how to use materials. How has the worldview of scarcity been updated?

Knowledge does not have the same scarcity properties as physical objects. If there is one harvester, for example, only one farmer can use it. But if there is one new idea for how to harvest crops more efficiently with the harvesters that farmers already have, every farmer that learns of it can use it.

Re: Is Inequality Inevitable?

#222

Post by AnimalMuppet » Wed, Nov 06, 2019, 10:19 PM UTC

turc1656 wrote: post #199

AnimalMuppet wrote: post #165

Earlier quoted context omitted.

Hmm. If they depend on Social Security for 90% of their income, should Social Security be included in their savings? It's not conventional savings, and yet it's funding their retirement. In the same way, should pensions be counted as part of savings? And if you run the calculations that way, what does it do to the distribution of wealth? Note well: I am not saying that this is the right way to run the calculations. B…

I would argue not to include SS benefits as savings purely because SS payments are a tax levied upon the rest of society rather than any sort of fund, trust, etc. that actually has money allotted to someone. It's basically just an IOU from Uncle Sam that they will tax other people to pay you. Therefore, that is subject to change at the whim of those in charge of changing the laws. Sure, it's politically ugly to reduc…

Yes and no. There actually is a trust fund with actual money in it. That money is invested in Treasury bonds. Individuals don't have "accounts", exactly, but they do have benefits allotted to them.

Yes, it's a tax (though they don't call it that). No, it's not a savings account. And yet...

Re: Is Inequality Inevitable?

#223

Post by amelius » Wed, Nov 06, 2019, 10:19 PM UTC

If a model shows that inequality is inevitable, then perhaps we can extend the model such that equality is achieved, e.g. by adding a certain amount of tax to the equation, where the tax is redistributed over the population. This could be called the "fairness tax", and of course would still allow inequality where wealth is created.

Re: Is Inequality Inevitable?

#224

Post by peterwwillis » Wed, Nov 06, 2019, 10:19 PM UTC

There's been hundreds of years of writing on this subject from political and economic theory, but the article doesn't touch on it at all; it's just a weird mathematical model.

Then there's this:

  You might, of course, wonder how this model, even if mathematically accurate,
  has anything to do with reality. After all, it describes an entirely
  unstable economy that inevitably degenerates to complete oligarchy,
  and there are no complete oligarchies in the world. It is true that, by itself,
  the yard sale model is unable to explain empirical wealth distributions.
  To address this deficiency, my group has refined it in three ways to make it
  more realistic.

So, they started with a model that made no sense, and modified it to make it match "reality", and finished with this:

  Given how complicated real economies are, we find it gratifying that a simple analytical approach
  developed by physicists and mathematicians describes the actual wealth distributions
  of multiple nations with unprecedented precision and accuracy. Also rather curious is that
  these distributions display subtle but key features of complex physical systems.

Yeah... curious....

Re: Is Inequality Inevitable?

#225

Post by taneq » Wed, Nov 06, 2019, 10:19 PM UTC

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.

It’s deeper than that. Inequality is unavoidable as long as people are allowed to own some proportion of the fruits of their labour.

Re: Is Inequality Inevitable?

#226

Post by AnimalMuppet » Wed, Nov 06, 2019, 10:20 PM UTC

chii wrote: post #202

AnimalMuppet wrote: post #165

Earlier quoted context omitted.

Hmm. If they depend on Social Security for 90% of their income, should Social Security be included in their savings? It's not conventional savings, and yet it's funding their retirement. In the same way, should pensions be counted as part of savings? And if you run the calculations that way, what does it do to the distribution of wealth? Note well: I am not saying that this is the right way to run the calculations. B…

but social security is funded via taxation, so it's somebody else's savings that's being forcibly taken away. Counting it as savings would give the wrong picture.

Not really. It's your savings that are forcibly being taken away, at the time you earn the money. Your benefits are (within limits) proportional to your contributions to the system.

Re: Is Inequality Inevitable?

#227

Post by ihm » Wed, Nov 06, 2019, 10:22 PM UTC

SiVal wrote: post #193

There is a popular political perspective that rules on campus these days that treats wealth as something that just magically exists and is simply "redistributed" by one means or another like, say, a phase change in physics where no magnetism/charge/energy/etc. is ever created or consumed. I waited for a point in their model where people actually produced wealth and consumed it, made something or ate it, in addition t…

I don't think your comment is a good faith engagement with leftist understandings of value. This is the starting point of Marx's whole theory of capitalism (it's in the first few chapters of Capital) which is the labor theory of value.

Namely, his starting point is that labor is identified with value. Wealth is created when raw materials and the means of production are combined with labor. In the capitalist theory of value in contrast, one's legal right (inherited or otherwise) is one of the things which is identified with value.

It's not a claim that this value is something metaphysical, just a political assertion that this is what we ought to think of as "value". It's all about what you want to consider as the primary "cost" in production.

This has been refined over the years. I'm not an expert so I may not be able to respond to any and all criticisms but I will try my best.

Re: Is Inequality Inevitable?

#228

Post by lifty » Wed, Nov 06, 2019, 10:23 PM UTC

Empact wrote: post #144

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…

Ray Dalio's recent post agrees and is complementary to your comment: https://www.linkedin.com/pulse/world-has-gone-mad-system-bro...

Re: Is Inequality Inevitable?

#229

Post by CharlesColeman » Wed, Nov 06, 2019, 10:23 PM UTC

billions wrote: post #61

SketchySeaBeast wrote: post #48

Earlier quoted context omitted.

Because "produce more" and "have more" aren't actually related. Have you produced more if you're born rich? Does Jeff Bezos actually produce billions? It's a statement that doesn't actually represent reality.

Jeff Bezos improved global quality of life EXACTLY the amount he's been paid. Otherwise, why would anybody volunteer their money his way?

> Jeff Bezos improved global quality of life EXACTLY the amount he's been paid. Otherwise, why would anybody volunteer their money his way?

That's just the repetition a rather circular dogma: the market is assumed to be right (typically demonstrated by some oversimplified textbook example), so right is whatever our market does.

If you want to use Bezos's wealth to justify the value he's created, you should at least try to make an independent estimation of that value.

Re: Is Inequality Inevitable?

#230

Post by wuliwong » Wed, Nov 06, 2019, 10:24 PM UTC

SiVal wrote: post #193

There is a popular political perspective that rules on campus these days that treats wealth as something that just magically exists and is simply "redistributed" by one means or another like, say, a phase change in physics where no magnetism/charge/energy/etc. is ever created or consumed. I waited for a point in their model where people actually produced wealth and consumed it, made something or ate it, in addition t…

I received a Ph.D. in physics in 2010, throughout my training, my anecdotal experience was that of an echo chamber. I didn't fully realize it until I left academia. Although, it was slowly becoming apparent as the years passed. My experience was of a relatively small and closed group of physicists who reaffirmed each other's assumption that they were at the absolute peak of intellectual thought. Most of the professors imparted this mindset onto their graduate students and post docs. It fits pretty well with my experience that physicists would ignore the history of economic thought and believe that they could create a simple model that would accomplish what economists and philosophers have been hitherto unable to in the prior thousand years. But economics (or praxeology to be more general) is not physics. And a simple model of coin flips with random pairings and one risk limiting function isn't economics. When you have such hubris and make such simple mistakes as to assume that value is objective, it should be embarrassing.

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I will add that I still am a physicist who likes to think about things like this. One addition I would make to the model is that the poorer a person is the larger a percentage they are willing to risk. It still doesn't get around the fact that this whole model is based around the fallacy of object value but I like playing with models.