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Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

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Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#61

Post by WalterBright »

throwaway34241 wrote: post #52
WalterBright wrote: post #31

Earlier quoted context omitted.

> are creating more wealth than they did 50 years ago But they are - this is due to the huge productivity gains brought about by the application of computers. For a small example, in the 1960's and 70s, my dad was writing a book, using a typewriter. Every set of revisions meant typing the book over again (to get a clean manuscript). My mom helped out, spending hours and hours banging out a new manuscript. I still fee…

I think GP’s point is that Bill Gates is not rich because he invented word processing, or because word processing would never have become popular without his help. A big part of Microsoft’s success is network effects, where they are able to maintain market share because compatibility with their software is highly valued (because of their large existing market share). As technologies develop there often seems to be a…

The big value Microsoft brought to the table was standardization. You could write one version of your app and it would work on millions of computers and be compatible with everyone else.

The 8 bit and mainframe world at the time was anything but that. Unsurprisingly, somewhere north of 90% of programming was done for DOS.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#62

Post by WalterBright »

bigcorp-slave wrote: post #50
CryptoPunk wrote: post #47

Earlier quoted context omitted.

>>This is a simple thought experiment that I hope illuminates something important: in an economy where there is year over year growth, inequality grows by default as a function of exposure to the market. This is not true. Investment rates of return are much higher when you have smaller amounts of capital to invest, ceteris paribus.

Can you provide a citation for this? I appreciate that it is a bit unfair to ask for one here, but I fundamentally disagree with your point and would like to learn more about why you believe it to be true. While I concede that at the extreme high end, there are limited ways to invest without distorting the market yourself, it’s just not the case that returns are higher with less money. If anything, returns are lower,…

One example of returns being greater with less capital is your gains are taxed at a lower rate. 0% for gains less than $15,000 for example.

> Fred in this example must pick more conservative investments with his single unit of investable utility - he has only the one to lose!

Must? Clearly not, as lottery "investments" skew heavily towards lower income people, and the lottery is a terrible investment as it has a negative net rate of return.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#63

Post by imtringued »

SamReidHughes wrote: post #24
bigcorp-slave wrote: post #12

Earlier quoted context omitted.

Bob starts with 11 units of utility. Fred starts with 2. It costs 1 unit of utility to exist. Each of Bob and Fred invest their remaining utility in the utility market, which grows at 10% per year regardless of what either of them do. 25 years later, Bob has 109 units of utility, and Fred has roughly 12 units of utility. At the beginning of this thought experiment, Bob had 5.5x the utility units of Fred. At the end,…

But this thought experiment has no connection to what causes most people to make more money than others. That's that they get jobs that pay different amounts of money. There is no guaranteed 10% per year investment. The most significant structural factor that creates wealth inequality is personal conduct and talent, and the second is that some people have crappy parents. Third is location. None of it is society [1],…

>The most significant structural factor that creates wealth inequality is personal conduct and talent, and the second is that some people have crappy parents. Third is location.

If this is true then how come despite people being richer today than in the past they are still less wealthy from a relative perspective? Your statement is obviously incompatible with our current world and fails to explain why we had less inequality in the past where people had less talent and worse personal conduct.

>None of it is society [1], unless you consider refraining from forcibly conscripting everybody into communist slavery to be a structural factor.

I don't know where you get these crazy ideas but the conventional solution to high unemployment is to just increase consumer inflation which makes it lucrative for everyone to work and whatever inflation we have right now is clearly benefiting existing wealth holders at the expensive of workers.

Decreasing wealth inequality is quite simple. Just increase wealth at the bottom. If poor people at the bottom have $100 to their name and Bill Gates has $100 billion then he is a billion times richer but if you made sure everyone at the bottom had $200 then Bill Gate's relative wealth would basically be cut in half and he would only be half a billion times richer.

It's pretty obvious that there are fundamental problems in modern economies and a lot of them relate to government policy.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#64

Post by WalterBright »

imtringued wrote: post #60
WalterBright wrote: post #4

> At the same time that the major factors expanding the economic pie were losing momentum, other powerful forces emerged that would push toward dividing the pie more unequally The framing of the issue influences what conclusions one draws. Here, the authors think of the economy as a "pie" created by "factors" that gets "divided up". What naturally follows is that if some get a bigger "slice" than others, it is inhere…

Whether the economy is fair or not is purely a function of government policy and right now the rules are heavily favoring rich people and companies. Just looking at it from a purely economic perspective doesn't cut it.

Taxes certainly don't favor rich people.

"The top 1 percent paid a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent). The top 1 percent of taxpayers paid a 26.9 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.7 percent)."

  -- google's answer to "percent of federal income tax paid by top 1"

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#65

Post by lopmotr »

WalterBright wrote: post #8
WalterBright wrote: post #5

Earlier quoted context omitted.

I've become more and more convinced that copyright laws do not promote progress of useful arts and sciences. The most obvious example is the incredible success of free and open software. Are people really going to stop writing books, composing music, painting pictures, etc, without copyright protection? Not a chance!

Consider rock musicians. Suppose there were two concerts, one playing a Beatles song with the Beatles performing it (yes I know two of them are gone). Another venue is playing the same songs, just as well, but by a cover band. Which concert is going to make boatloads of money, and which will barely be able to pay the electric bill? Copyright has nothing to do with it.

Without copyright, how would The Beatles ever have become the celebrities in the first place? They'd have been copied the instant they gained a little success and been diluted away.

People proposing no copyrights always seem to focus on exploiting existing work, not on how new work will be created. It's expensive to create and promote it so why would anyone invest that money if they can't get it back? Are you counting on passionate independently wealthy hobbyists to create everything copyable for free?

Almost all successful open source software is protected by copyright and license terms that restrict its use. Would it really be just as good if it was all CC0 and no MIT or GPL?

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#66

Post by [deleted] »

bigcorp-slave wrote: post #12
WalterBright wrote: post #4

> At the same time that the major factors expanding the economic pie were losing momentum, other powerful forces emerged that would push toward dividing the pie more unequally The framing of the issue influences what conclusions one draws. Here, the authors think of the economy as a "pie" created by "factors" that gets "divided up". What naturally follows is that if some get a bigger "slice" than others, it is inhere…

Bob starts with 11 units of utility. Fred starts with 2. It costs 1 unit of utility to exist. Each of Bob and Fred invest their remaining utility in the utility market, which grows at 10% per year regardless of what either of them do. 25 years later, Bob has 109 units of utility, and Fred has roughly 12 units of utility. At the beginning of this thought experiment, Bob had 5.5x the utility units of Fred. At the end,…

[deleted]

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#67

Post by imtringued »

Animats wrote: post #58

Notes: On the one hand, the FDA’s foot-dragging on approving new (coronavirus) tests The first round of tests were not very accurate. Some that did get approved were withdrawn within months. As of 1940 only 6 percent of young Americans had college degrees, but by 1980 the figure had quadrupled to 24 percent. Put these together, and average years of educational attainment for American workers rose from 9.01 in 1940 to…

>Maybe. US policy people over-focus on monetary policy because it is one of the things governments can control. But it has little effect on what gets emphasized in the economy.

Where have you been in 2020? There was a massive government stimulus for equities. Even before that the way QE is set up it primarily benefits holders of stock, which is basically the opposite of what you want when your goal is to increase consumer inflation. Clearly the government is emphasizing wealthy parts of the economy over the average Joe and that's what's causing the economy to be so lopsided.

>The US has shied away from industrial policy. China and all the "Asian tigers" got to where they are through industrial policy, emphasizing specific sectors of the economy. Britain tried that, though, and ended up with "lemon socialism" - the government was operating all the losers - coal, railroads, etc.

Adding more supply in an already demand starved economy is just adding even more fuel to the fire.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#68

Post by dragonwriter »

Animats wrote: post #58

Notes: On the one hand, the FDA’s foot-dragging on approving new (coronavirus) tests The first round of tests were not very accurate. Some that did get approved were withdrawn within months. As of 1940 only 6 percent of young Americans had college degrees, but by 1980 the figure had quadrupled to 24 percent. Put these together, and average years of educational attainment for American workers rose from 9.01 in 1940 to…

> US policy people over-focus on monetary policy

No, they don't. Its just that the policy people responsible for monetary policy tend to have something of a coherent vision and are located in a single decision making body, while fiscal policy requires either supermajority support in both the House and Senate or concurrence of all of the House, Senate, and Presidency. And the visions of the "correct" fiscal policy between the two major parties have almost no overlap anymore. There's a whole lot more focus by policy people collectively on fiscal policy than monetary policy, just not nearly as much effective action because of the structural impediments.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#69

Post by CryptoPunk »

bigcorp-slave wrote: post #50
CryptoPunk wrote: post #47

Earlier quoted context omitted.

>>This is a simple thought experiment that I hope illuminates something important: in an economy where there is year over year growth, inequality grows by default as a function of exposure to the market. This is not true. Investment rates of return are much higher when you have smaller amounts of capital to invest, ceteris paribus.

Can you provide a citation for this? I appreciate that it is a bit unfair to ask for one here, but I fundamentally disagree with your point and would like to learn more about why you believe it to be true. While I concede that at the extreme high end, there are limited ways to invest without distorting the market yourself, it’s just not the case that returns are higher with less money. If anything, returns are lower,…

I don't have a source. I make this claim based on:

1. The observation that very wealthy people like Bill Gates and Elon Musk saw their net worth increase at a far faster pace earlier in their career.

2. Basic complexity theory. Managing less assets is less complex than managing more.

3. The range of investments that can absorb one's entire capital without market distortions grows as one has less capital to invest. Say one finds a great opportunity in an ice cream stand on a busy corner that costs $50K. If they only have $50K, they can invest the entire amount and get a great return on investment on their entire net worth. If they have $50 million, that ice cream stand could only efficiently utilize 0.1% of their capital. They would need to find 1,000 similar opportunities to match the return on investment they could have obtained if they were able to invest all of their capital into that one opportunity.

Re: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy

#70

Post by WalterBright »

tonyedgecombe wrote: post #57
WalterBright wrote: post #53

Earlier quoted context omitted.

Why is open source not meaningful? Open source software has proven to be very competitive and often superior to closed source, protected software. People even make money writing open source software.

>People even make money writing open source software. Not many though.

Not many make money authoring books, despite copyright protections. Same goes for musicians and artists. By making money I mean not needing another job to pay the rent.
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