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Is Inequality Inevitable?

scientificamerican.com

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Re: Is Inequality Inevitable?

#501

Post by pytester »

username90 wrote: post #477
vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> Since virtually all human traits follow a Gaussian distribution, it seems like whatever the wealth-building factor is, it would also follow a Gaussian distribution. But wealth follows more of a power law distribution. You never encounter anyone 1000 times taller than average, but there are many people 1000 times wealthier than average. This is nonsense. Lets take an easy example, books, people don't want to waste t…

If you look at the actual richest people in the world though, they largely make their wealth off the hard work of others (walmart family), through some kind of gamble (finance), some kind of parasitism (unearned income like interest) or by monopolizing that "magically existing wealth the OP doesn't believe in" (e.g. saudi arabian oil).

For every JK Rowling or Steve Jobs there's maybe 100 who either fully or mostly extracted their wealth while going to great efforts to pretend that they're really just another JK Rowling or Steve Jobs.

Re: Is Inequality Inevitable?

#502

Post by roenxi »

mr_toad wrote: post #399
roenxi wrote: post #301

Earlier quoted context omitted.

Increasing the GDP is really easy, the government can pass a law adding a zero to all measures of money (so $10 becomes $100). Reducing inequality is also easy, confiscate people's wealth. The real problem is "people are not secure in their lifestyle" which is not addressed by the first solution and is probably exacerbated by the second. People getting antsy about inequality as a final problem instead of a symptom of…

> adding a zero to all measures of money Do you really think that nobody has ever thought of measuring inflation adjusted GDP?

Add a 0 to all the financial numbers and introduce price controls. No inflation then. Problem solved. As solutions go this is just as stupid and yet this is also a strategy that still gets tried (!) from time to time.

The point I'm making is that the problem is living standards and prosperity. If we try to improve arbitrary single measures, like GDP or Gini, then the easy solution is pick something stupid that games the numbers then work it back towards the Overton window of ideas until it is mainstream enough that people don't understand why it is failing.

The metrics to focus on are real outcomes like living standards which are - and this is the central part of my point today - not negatively affected by someone else in the city being filthy rich.

Re: Is Inequality Inevitable?

#503

Post by Glosster »

Reading through the comments, I was hoping that someone actually pasted the article itself... because it's behind a paywall. But it seems that most comments can be TLDR'ed as the title of the post.

Re: Is Inequality Inevitable?

#504

Post by bildung »

username90 wrote: post #477
vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> Since virtually all human traits follow a Gaussian distribution, it seems like whatever the wealth-building factor is, it would also follow a Gaussian distribution. But wealth follows more of a power law distribution. You never encounter anyone 1000 times taller than average, but there are many people 1000 times wealthier than average. This is nonsense. Lets take an easy example, books, people don't want to waste t…

And yet the reality does not reflect your model at all: Most wealth in the US is inherited. https://www.washingtonpost.com/us-policy/2019/02/06/people-l...

Re: Is Inequality Inevitable?

#505

Post by sokoloff »

username90 wrote: post #475
vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> someone with 1 million dollars is astronomically more likely to make another million dollars than someone with 100 dollars, even if the two people are otherwise identical I'm not sure this is correct, at least not on average. Take two average persons, give one of them a million dollar, then watch what their net income is the next 10 years. I'd bet that the one you gave a million dollars will have used up a large pa…

That suggests to me only a negative correlation between wealth and income among people who achieve wealth via the lottery.

I don’t see any reason to think this same linkage holds for those with a propensity to make money from entrepreneurial or investing activity.

Re: Is Inequality Inevitable?

#506

Post by username90 »

sdfin wrote: post #380
dragonwriter wrote: post #377

Earlier quoted context omitted.

> Anyway, if the problem is relative deprivation we should focus on that, instead of focusing in inequality. “Absolute deprivation” is having less access to material goods and services than some fixed standard. “Relative deprivation” is having less access to material goods and services than others in one’s social milieu. Relative deprivation is an inherent aspect of inequality; the two are inseparable. > Is inequalit…

> “Relative deprivation” is having less access to material goods and services than others in one’s social milieu. I cannot buy a yacht, while some rich guys can. Therefore I'm relatively deprived, according to that definition. That's not a problem.

The problem comes when "I cannot buy a home, since all homes are prized for people richer than me", or "I cannot see a doctor, since all doctors are prized for people richer than me".

Re: Is Inequality Inevitable?

#507

Post by sokoloff »

jimktrains2 wrote: post #340
emmelaich wrote: post #274

Earlier quoted context omitted.

It's analogous to weight-loss arguments. It is true that calories = calories-in - calories-out. It cannot not be true. It just isn't helpful.

That phrase is usually used to remind people that eating less is as if not more important than exercising to lose weight. It takes a lot of effort to burn a Calorie and next to no effort to consume one.

Aka “you can’t outrun the fork.”

Re: Is Inequality Inevitable?

#508

Post by tsimionescu »

taneq wrote: post #449
tsimionescu wrote: post #447

Earlier quoted context omitted.

Why is anyone entitled to own a chip fab? Why is some rich daughter entitled to own a chip fab? Because she is in the current system, while anyone else would have to work their whole lives, and convince hundreds of others to work with them, to create a chip fab, if they wanted to own one.

Ok so they do that, they organise people and get everyone working together (which, while it’s not generally acknowledged in this kind of conversation, IS work and DOES count as creating value) and by the time they’re old, they own a chip fab. That’s ok, right? It’s fair? If they build it, or pay other people to build it in a fair trade of money for services, then they own it? So if they own it, they can do what they…

No. They can't give it to their daughter, because it's not their factory: it's in the ownership of everyone who participated, since we were assuming no capital to start with.

If you aren't born with capital, and don't win the lottery, you can't pay people to build something for you.

You can work very hard, together with other people, and build something as a community. This is difficult and almost never happens in practice, as it requires extreme dedication and some alternate revenue stream to be able to live until the thing being built is done and can be used to produce ongoing value.

But when this does happen, the end result is in the ownership of the community, it is not any one member's to give away or sell.

Alternatively, if you are born with wealth, you can dispense with all that effort, and simply invest several fractions of your wealth in things until you hit on one thing that you can collect rent from. Sure, you'll do some work, but the money accumulated by your ancestors, often built on slave labor, monopolies, theft and other nice things, will do most of the work for you.

Re: Is Inequality Inevitable?

#509

Post by zygimantasdev »

pietrovismara wrote: post #471
sdfin wrote: post #334

I don't get why lately the trend it to focus in inequality instead of focusing in poverty. I mean, if the % of poverty decreases, then economy is moving in a good direction, in spite of inequality, right? Suppose you had one million, and somebody else has one thousand millions, there would be a large gap, but I wouldn't consider it as negative. If there are arguments against what I wrote I would gladly read them and…

Because both inequality and poverty matter. Solving poverty is a matter of decency for all humanity and it would greatly improve our society. Solving inequality is as important, why? Because in a society where greed and profit motive trump any other ethic, we can't have individuals as powerful as states, thanks to the wealth they accumulated, partly, stealing from states. Earning billions and finding ways to not pay…

If you are taxed involuntary - isn't that stealing? Well technically by law it is legal and enforced for everyone, but it still is stealing. For example: if everybody is under the immoral law and some people are better than others at avoiding the immoral law - is it morally okay for those people to avoid that law?

Edit: by involuntary I mean if person can't choose. Not talking about businesses

Re: Is Inequality Inevitable?

#510

Post by Retric »

pdonis wrote: post #430
Retric wrote: post #237

Earlier quoted context omitted.

You’re just describing what makes up that ~100x growth. We still create beef because beef has value to us. So, sure the basket of goods created back then is less valuable than what we create today. But, that does not somehow mean the value created back then is meaningless. In the end combine harvesters are more efficient than hand tools, but they both end up harvesting gains.

> You’re just describing what makes up that ~100x growth. I don't think it's 100x; I think it's a lot more. I was giving reasons why I think that. > the basket of goods created back then is less valuable than what we create today. But, that does not somehow mean the value created back then is meaningless. I never said it was. > combine harvesters are more efficient than hand tools, but they both end up harvesting gai…

> I was giving reasons why I think that.

I am not saying you’re being disingenuous, but you listed stuff without context. A 1% slice of a pie looks tiny, you need numbers to judge these things not lists.

The context is farmers and ranchers still make up 1.3% of the labor force in the US, but globally 28% of the population are just farmers. https://data.worldbank.org/indicator/sl.agr.empl.zs Sure, more productive society’s have whither output for everything but agriculture adds up to ~6% global GDP / per capita GDP.

Now, we can argue that today’s food is better, but meat and fish likely made up a significant fraction of the Stone Age diet. So, suggesting it’s more than 6x more expensive using today’s market value seems unlikely. Note, food going bad is irrelevant as the value existed at one point, and food is temporary.

PS: Of course the population is also ~1,000x as large. So total worldwide GDP should be ~100,000x as large by my estimate, if that makes you more comfortable.

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