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What if incomes grew like GDP?

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Re: What if incomes grew like GDP?

#31

Post by free_rms »

coderintherye wrote: post #26
gruez wrote: post #5

Earlier quoted context omitted.

>Perhaps we need a linear meritocratic function. So basically, some way to prevent wealth from being passed across generations?

There's a better perspective to apply. How can we better incentivize those with wealth into investing it productively. Or perhaps, how can we incentivize the wealthy into investing in increasing the rate of growth of the real standard of living for everyone.

Easy, crank inflation back up.

Coincidentally, we've got a covid relief bill, and you can see what the wealthy and power fear above all else -- blanket grants to the people that make them less beholden while increasing inflation.

Nobody actually cares about the deficit, it's all about maintaining hierarchy.

Re: What if incomes grew like GDP?

#32

Post by lend000 »

A more apt comparison would be incomes vs. (GDP / size of labor force). Therefore GDP growth should always be higher than individual income if the size of the labor population is growing.

However, the article is more-so comparing how this number has changed over time, which should be even more accentuated if you make the population adjustment, since the population was growing faster in the baby boomer period.

The article is just presenting data, but if you're interested in why this phenomenon exists, research Bretton Woods and US inflation figures over the 20th century to the present.

Surprise: when you make your currency inflationary and wealth management becomes more complex than saving money in a mattress, those at the top will fare exponentially better than those at the bottom. Working class people shouldn't be forced to become "financially literate" to accumulate meaningful wealth (which is simply not realistic -- public market investing is game theory and some elements of it are zero-sum), but in today's society it's a prerequisite.

Re: What if incomes grew like GDP?

#33

Post by sudosysgen »

imgabe wrote: post #29
sudosysgen wrote: post #28

Earlier quoted context omitted.

Hmm, not really. The cost of labour is actually generally agreed to be the replacement cost of the labour. As a society, the only thing that we take out of Zuckerberg is his labour, so he shouldn't get anymore than the replacement cost of his labour. In other words, if someone would have done Zuckerberg's work for less compensation - and the GP asserts it is the case - then we as a society lose by having Zuckerberg d…

He doesn't "get" anything. His net worth is due to ownership in the company he made. When people talk about his net worth increasing, that's due to the shares appreciating. He didn't get more of anything. He owns the same number of shares, they just became more valuable. Zuckerberg is not employed by society. We're not all collectively paying him a salary. If you're saying we should completely abolish private propert…

Private property exists because it is an organization of things that is useful to society. That's why we heavily limit it using taxation and so forth.

We allow people to own capital because it motivates them to do some types of work. If we allow people to concentrate more capital than necessary to motivate them to do that work, we lose.

Re: What if incomes grew like GDP?

#35

Post by JMTQp8lwXL »

boh wrote: post #22

Macro-analyses like this aren't particularly representative of any relevant point. For one thing GDP is a poor measure of the general increases of wealth. The US's pivot to services isn't represented in GDP since it only accurately measures physical production (Microsoft/Google/Facebook etc. aren't accurately represented). The actual increases that wind up going into salaries (particularly at the top half) are heavil…

It would seem services like cloud services, ad services, etc (Google, FB, MSFT) would be included in GDP.

> GDP is perhaps the most closely-watched and important economic indicator for both economists and investors alike because it is a representation of the total dollar value of all goods and services produced by an economy over a specific time period.

https://www.investopedia.com/ask/answers/what-is-gdp-why-its...

Re: What if incomes grew like GDP?

#36

Post by rtx »

sudosysgen wrote: post #28
imgabe wrote: post #25

Earlier quoted context omitted.

The amount of value you can obtain by trading something is by definition what it is worth. If nobody is willing to pay you an amount for something, it's not worth that much. > It is implausible that his net worth reflects his replacement cost. Why should it? His net worth reflects the expected value of the portion of Facebook that he owns. Why would it have anything to do with his replacement cost?

Hmm, not really. The cost of labour is actually generally agreed to be the replacement cost of the labour. As a society, the only thing that we take out of Zuckerberg is his labour, so he shouldn't get anymore than the replacement cost of his labour. In other words, if someone would have done Zuckerberg's work for less compensation - and the GP asserts it is the case - then we as a society lose by having Zuckerberg d…

What you wrote is very scary. As someone who grew under a communist party rule, I have come to realize that there is no way to rationalize with communist. I think McCarthy came to the same realization.

Re: What if incomes grew like GDP?

#37

Post by jonhohle »

Odd to see no discussion of gold. In 1971 the dollar began to float in relation to gold. For most people operating in the realm of dollars their net worth decreases as the dollar price deviates from gold. For wealthy individuals, most of their wealth is not in dollars but in property and equities. As the value of the dollar decreases, asset prices increase - great if you own assets, bad if you just own dollars.

Not that gold is the be-all, end-all of real money, but in the past when people owned dollars, they effectively owned a commodity with utility. Meanwhile, at the top, the wealthy are largely paid in equity with a much smaller portion of income in dollars.

Re: What if incomes grew like GDP?

#38

Post by imgabe »

sudosysgen wrote: post #33
imgabe wrote: post #29

Earlier quoted context omitted.

He doesn't "get" anything. His net worth is due to ownership in the company he made. When people talk about his net worth increasing, that's due to the shares appreciating. He didn't get more of anything. He owns the same number of shares, they just became more valuable. Zuckerberg is not employed by society. We're not all collectively paying him a salary. If you're saying we should completely abolish private propert…

Private property exists because it is an organization of things that is useful to society. That's why we heavily limit it using taxation and so forth. We allow people to own capital because it motivates them to do some types of work. If we allow people to concentrate more capital than necessary to motivate them to do that work, we lose.

There is no "we" allowing or disallowing anything. Who is this "we" and why do use suppose they have some divine insight into the ideal allocation of capital?

Re: What if incomes grew like GDP?

#39

Post by nine_k »

Rebelgecko wrote: post #27
nine_k wrote: post #13

Earlier quoted context omitted.

Neither Gates, nor Jobs, nor Zuckerberg, nor Bezos, nor Musk inherited their billions. At best they inherited access to the social circles of their parents, and maybe paid-for education (too lazy to check). Knowing the right people is not something you can, or want, to limit or forbid. Should anyone suggest to prevent passing as much as, say, $100k to your child (an approximate price of a university tuition), said an…

It's a lot easier to make billions when you already have millions (like Elon Musk's dad, who joked about how he had too much money in his safe to be able shut the door when his gemstone mine was doing well). It's a lot riskier to be an entrepreneur when you're living paycheck to paycheck and don't have a family fortune to fall back on. Extraordinary people also often have extraordinary childhoods. Most teenagers can'…

The fact that Musk's dad had millions does not imply that Musk himself had access to them; according to Wikipedia, their relations were not very good. But yes, being around people who have businesses and millions does give you certain experience and perspective. Despite that, Musk was heavily bullied at school; apparently dad's money could not buy him a private school, or maybe just a better school.

Indeed some childhoods of billionaires are special, like that of Steve Jobs, a highly problematic adopted child who suffered at school so much his working-class family decided to move to get him to another school district.

OTOH, neither Mark Zuckerberg, nor Jeff Bezos appear to have had extraordinary childhoods, or family wealth above a normal middle-class level.

Many of them, though, were exposed to electronics and computers early, and their parents were wise enough to encourage it, or at least to allow.

[Edited: typos.]

Re: What if incomes grew like GDP?

#40

Post by yyyymmddh »

Applejinx wrote: post #11
hliyan wrote: post #4

I always like to say that we live in an exponential meritocracy , where your accumulated merit enhances your ability to accumulate more merit, eventually resulting in a small minority rapidly pulling ahead of the pack. Goes with the old adage: turning $100 into $120 is work; turning $100 million into $120 million is inevitable. Perhaps we need a linear meritocratic function.

The exponential part ceases to be merit in any sense. It's quite arbitrary.

It’s not arbitrary. It’s defined by one’s relation to the means of production. This is capitalism in a nutshell.
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