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Limitarianism: The Case Against Extreme Wealth

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Re: Limitarianism: The Case Against Extreme Wealth

#431

Post by roenxi »

ttfkam wrote: post #402
username332211 wrote: post #318

Earlier quoted context omitted.

Let's see.. "In 1907 there was a financial crisis. We learned our lessons and created an institution to prevent the next crisis. So, the next time things went south in finance, in 1929 there was no crisis. There was a catastrophe instead."

In the wake of the 1929 crash and The Great Depression, a huge swath of regulations were put onto financial institutions so as to limit the riskiest investments with money in personal savings and checking accounts, aka Glass-Steagall. FDIC insurance was also born in this time. Prior to these changes, bank runs and financial crises occurred about every twenty to thirty years. By contrast there were none until the 1980…

> Prior to these changes, bank runs and financial crises occurred about every twenty to thirty years.

That isn't in itself a bad thing. There needs to be a mechanism to punish people who give their money to charlatans and to reign in malinvestment. If there aren't occasional bank runs then that suggests an excessively cautious investment environment that is destroying potential wealth. Or a lot off government bailouts to cover excessive risk.

As you point out in a few lines with the "risk means nothing to them" comment, a situation has been set up where only the government cares about whether the risk profile being taken on is appropriate. Bankers don't care because it isn't their money, depositors don't care because it isn't their problem. That is a very poor outcome, everyone should care about that. People are presently empowering incompetents by flooding money into stupid ventures and they get no feedback about the damage they are doing.

Mass voting once every few years combined with committees of professional bureaucrats is an ineffective way of doing risk assessment. This has to be something that people work out with their bankers on an ongoing basis. The US would look completely different and probably a lot better to live in if these incentives were corrected.

It is interesting that in the crypto space a group of people have gotten so sick of this that they're going and making their own financial system (with hookers and blackjack, one suspects). It is a really interesting ongoing experiment because if the situation plays out in the obvious way, we're going to see a much healthier system in crypto. We've already seen any number of frauds cleaned out that'd probably have gotten away with it in traditional finance. And the way Tether eventually explodes will be a really interesting case study.

Re: Limitarianism: The Case Against Extreme Wealth

#432

Post by dools »

kazinator wrote: post #317
dools wrote: post #123

Earlier quoted context omitted.

The best interest rate policy is zero, which is the natural rate of interested in a floating exchange rate economy. Fiscal policy is the only tool through which equity can be managed. Monetary policy is pointless.

If the interest rate is zero, what is the incentive for lending money?

The interest rate I'm referring to is the cash rate, ie. the rate at which banks lend to each other. That's the interest rate central banks set and defend using the sale and purchase of bonds on the secondary market.

If they didn't prop it up, it would tend to zero because banks have so much liquidity.

Re: Limitarianism: The Case Against Extreme Wealth

#433

Post by dools »

JackFr wrote: post #230
dools wrote: post #123

Earlier quoted context omitted.

The best interest rate policy is zero, which is the natural rate of interested in a floating exchange rate economy. Fiscal policy is the only tool through which equity can be managed. Monetary policy is pointless.

Zero is the natural interest rate? That’s ludicrous. A dollar today is always going to be worth more than a dollar tomorrow.

The overnight cash rate is the interest rate I'm referring to. That's the interest rate central banks use monetary policy to set and defend.

Re: Limitarianism: The Case Against Extreme Wealth

#434

Post by AndrewKemendo »

vacuity wrote: post #380
AndrewKemendo wrote: post #358

Earlier quoted context omitted.

Exactly this This concept that there is a well defined polar opposite to western “freedom” capitalism is so far from reality in literally any economic history understanding Not only that but the USSR was in no sense Marxist Communist. It was well known that the Lenin-Trotskyist Bolshevism was the core, specifically the command economy part. That regime coopted the philosophy of Marxism well after his death. That’s wh…

While I am sympathetic to the idea that we need to burn e everything down, baby steps, first. If we're talking halfway realistic changes, let's get stuff like this wealth limit in place first, and once those been established for a while, we may have a better picture of the ideal state.

I can understand how you can assume catastrophic intent on my part however, that’s not the case.

In no revolution are the poorest and weakest persons ever benefited it’s only typically been to the benefit of some small group they just recycles hands so in fact, the last thing I want is some kind of hard break.

No, I’m an anarcho syndicalist. Which is a gradual reappropriation of the means to worker collectives slowly and peacefully.

Re: Limitarianism: The Case Against Extreme Wealth

#435

Post by Draiken »

FredPret wrote: post #409
vacuity wrote: post #385

Earlier quoted context omitted.

First of all, there's already much to be said on how encouraging private citizens to amass wealth at all costs is highly dangerous to society. Clearly, there are massive problems that our current model has. Second, we don't need to go for a utopia right now. Personally, I'm not a "communist" or whatever fan. I think that we can remove the negative impacts of capitalism without a crusade, through borrowing elements of…

No there isn't. What practical difference is there in your life now that Musk is worth 200B versus when he had 100B or 0B? Probably your life is actually better because there is now Starlink and Tesla and you have more options. Let's say we can push a button and grow the economy 10% in real terms, but some rich guy like Bill Gates gets his wealth not increased 10%, but 10x. Do we press it? Next time we press it, some…

> No there isn't.

We simply don't know if a different system could produce the same, because the few attempts we had were either corrupted or actively sabotaged. I'd argue if we look at China we actually can see how something other than capitalism can improve people's lives: hundreds of millions raised out of poverty through basic planning.

Another aspect is that many of the issues with previous attempts at something other than capitalism happened without the technology we have today. This would change everything.

> The rational thing to do is to smash that button an infinite number of times. That button exists and is called economic growth.

Of course it would be if there were zero bad consequences from it. But every time you press that button more people starve, the planet dies faster, workers conditions deteriorate, more people go homeless and so on.

But the big issue with your entire premise is that growing the economy means we improve people's lives. That's exactly the issue with the wealth gap: it doesn't. The economy right now basically only grows for the rich, not for everyone else. It's always money being siphoned from the bottom into the top.

It's very easy to pretend that everything is alright when you are in a privileged position, but the main reason 1st world countries like the US "grow" is by exploiting the poorer countries. You get access to better living standards at the cost of child labor in another country, deforestation, workers without a living wage or all the other nastiness that we don't want to know about.

There's no free lunch. It's the same siphoning of wealth, at all levels.

Re: Limitarianism: The Case Against Extreme Wealth

#436

Post by briHass »

sackfield wrote: post #46
dbingham wrote: post #6

Adding this to my reading list. I've thought for years that we should place at hard cap on wealth somewhere around $10 or $15 million. Because that's the point at which you have enough wealth to live a comfortably middle class lifestyle for the rest of your life, still pass down a substantial chunk to your children, and never have to earn another cent. I've argued we should combine this with a move towards a worker o…

Whenever people talk about how much wealth is comfortable (or ethical) to have, its usually just a notch above their own (well within their social class status). To be fair I don't know your wealth at all but its just an observation I've had from talking with others about this. The end result of this would be to make these people some of the wealthiest in the country by dragging the wealth curve to just above their l…

"Everyone driving slower than me is a slowpoke, everyone driving faster is a maniac"

This was on full display back in 2017-2018 when tax code was changed to limit the amount of State and Local taxes (SALT) that could be deducted from your Federal tax liability. The original SALT deduction, before the change, clearly benefited the wealthy, with large mortgages and living in high-tax (read: expensive) areas.

Cue articles like this one [1], which shows just how out of touch the wealthy can be:

> estimate the tax law’s impact on the value of a theoretical house in the New York City suburb of West Orange, New Jersey, purchased for $800,000 in 2017 by a theoretical family with a $250,000 annual income. Those home value and income numbers are very high by national standards — but middle class by the standards of large parts of suburban Essex County.

In 2017, $250K/HHI was in the top 5% of the entire US. Someone living in a house that cost 3X the median house, in one of the richest areas of the country, making more than 95% of everyone else considers themselves 'middle class'.

[1] https://www.propublica.org/article/trumps-trillion-dollar-hi...

Re: Limitarianism: The Case Against Extreme Wealth

#437

Post by vacuity »

AndrewKemendo wrote: post #434
vacuity wrote: post #380

Earlier quoted context omitted.

While I am sympathetic to the idea that we need to burn e everything down, baby steps, first. If we're talking halfway realistic changes, let's get stuff like this wealth limit in place first, and once those been established for a while, we may have a better picture of the ideal state.

I can understand how you can assume catastrophic intent on my part however, that’s not the case. In no revolution are the poorest and weakest persons ever benefited it’s only typically been to the benefit of some small group they just recycles hands so in fact, the last thing I want is some kind of hard break. No, I’m an anarcho syndicalist. Which is a gradual reappropriation of the means to worker collectives slowly…

Sorry for the mischaracterization. Your position sounds interesting. When it comes to how the means of production should be structured, I envision a microkernel kind of model: enforce strict protections for worker pay, fairness, and whatever, and let the dice fall where they may. If it's worker collectives that result as the optimum, so be it.

Re: Limitarianism: The Case Against Extreme Wealth

#439

Post by kazinator »

dools wrote: post #432
kazinator wrote: post #317

Earlier quoted context omitted.

If the interest rate is zero, what is the incentive for lending money?

The interest rate I'm referring to is the cash rate, ie. the rate at which banks lend to each other. That's the interest rate central banks set and defend using the sale and purchase of bonds on the secondary market. If they didn't prop it up, it would tend to zero because banks have so much liquidity.

Why would a bank lend money to another bank for nothing, instead of the alternative course of action of not lending?

Re: Limitarianism: The Case Against Extreme Wealth

#440

Post by wslh »

crotchfire wrote: post #268

Will you cap the wealth of corporations too? Because if not, people with insatiable appetites will simply seek control of those corporations rather than direct control of piles of money. Personally I'm an advocate of the exact opposite of what seems to be proposed here: controls on corporate size rather than individual wealth. Living cells don't grow without bounds; at a certain point they get too big and are forced…

Will you cap military spending? Beyond the side people take there is some human natural tendency to power that cannot be artificially capped or if it you try to artificially cap it, there is a flow with a lot of pressure that go somewhere else.
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