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Degrees of Wealth

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Re: Degrees of Wealth

#41

Post by slibhb »

hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

> The Netherlands has made the intentional decision to reduce wealth inequality and to achieve a fairer society.

The Netherlands does redistribute more, but the main reason China is less equal is that China is a massive, developing country with huge divides between rural and urban areas, and between east and west.

Re: Degrees of Wealth

#42

Post by arjie »

It’s just the age of the civilization. The Dutch were the originators of much of modern trade capitalism - the joint stock corporation being instrumental to their ability to run long voyages and so on. This happens to everyone. They prosper and then switch to retirement mode and start extracting wealth from the younger people. The speed of your growth determines the top most point of your arc (which is not parabolic but concave down) and after you hit the top you do this sort of thing.

So one way to live a good life is to move to a growth-oriented country in your youth and to a retirement-oriented country in your old age. In this way you get the benefits of both.

Re: Degrees of Wealth

#43

Post by ertgbnm »

hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

I think you nailed it. If the author was a billionaire in the Netherlands he might not notice the differences as they do in the article.

Re: Degrees of Wealth

#44

Post by bluGill »

hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

That isn't the full picture. Nannies are not common amount the wealthy in the US - they exist, but they are less common even though the money to pay a full time nanny is there. Also where they exist they often are part-time, often young people who are doing the job for the experience of living in a different country: the primary pay isn't money, it is the legal right/ability to live there for a year with minimal responsibilities.

Re: Degrees of Wealth

#45

Post by dahart »

anovikov wrote: post #19
hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

This is striking. So much for the "socialist" society in China as opposed to "capitalist" in Netherlands.

Yeah there is a little bit of irony versus the common narratives, though if you ask Google what type of economy these two countries are, it will tell you the Netherlands is a “social market economy” and China is a “socialist market economy” (and an example of “state capitalism”), at least since 1978 (~50 years). There is a difference between social and socialist in those terms, but both countries are still summarized as market economies…

Re: Degrees of Wealth

#46

Post by sm-silversight »

engineer_22 wrote: post #36
smokedetector1 wrote: post #18

Earlier quoted context omitted.

In fact, a lot of wealth is only created by inequality. If wealth is power to effect your will, you have more of it when others are more desperate. The Shanghai wealthy have to spend less to get the same service - they have more real dollars DIRECTLY BECAUSE someone else has less.

Wealth != power But you hit on an important point that wealth cannot accumulate unless consumption is disciplined. Sometimes discipline is self-imposed (e.g. calvinists), other times by the organizing authority (e.g. state, church). In the 2nd type, authority as the source of discipline, there’s debate on the right balance of disciplining the elite classes vs the under classes. This debate will never cease, as long a…

Can you elaborate please?

Re: Degrees of Wealth

#47

Post by maerF0x0 »

Abuses of power (of which wealth can be used to acquire it) aside[1]. The main arguments that allow inequality are arguments against the costs of enacting outcome leveling policies.

Some examples.

- The growth rate of an economy which enacts redistribution policies will be stymied, leading to lesser outcomes for all, particularly in aggregate, but over the long run also for the bottom percentiles. The rough idea is in absolute terms now is one of the best times to be in the bottom quartile basically ever. This is measured in things like total consumption, access to medicines and technology, number of TVs and airconditioners etc. By changing the growth trajectory through redistribution today we improve the lives of todays people at the cost of lowering the lives of future people who would have had their lives lifted by higher amounts of growth over time.

- Redistribution as a form of injustice -- property rights are an important element of a functioning non-authoritarian society, and taking from someone in an unjust (using that word beyond "legal" or "democratic"-- remember the tyranny of majority issue) represents a degradation of society of sorts. There is little difference, in many folks minds, between a mob with pitchforks versus a mob with ballots. The cost of redistribution might be less "justice" in a system. This deters people from viewing the state (city, region, country) as an investible market.

- So long as wealth is able to generate wealth (such as owning an income producing asset) inequality will be inherent to reality. The compounding effect of purchasing assets with asset derived income will accelerate the gap in individual earnings. Making failing bets (hence why gov't bailouts are really bad), and the regression towards mean outcomes (hence why maximizing the bottom half's opportunity is critical), are crucial to the system. And in the US we've essentially done the opposite through bailouts, only hiring from expensive universities, denying certain investment classes only to the elite accredited folks, and by erecting regulatory barriers to entry that disproportionately encumber the little guy in the market.

- Assets buying assets results in increased average price of a dollar of earnings which creates net opportunities for those who transition from employee to entrepreneur. One way to see historic S&P p/e multiples is to see it as the reward for creating a dollar of income stream as being highly compensated today, whereas it was less compensated in the past.

[1]- Particularly citizen's united in the USA context, and any similar issues in other countries

Re: Degrees of Wealth

#48

Post by jandrewrogers »

hackyhacky wrote: post #12
credit_guy wrote: post #10

Earlier quoted context omitted.

Wealth is not a terrible measure of good life. "Money does not bring happiness" is a trope that rich people would like poor people to believe. I don't think poor people fall for it, though.

The more accurate version is "Money does not bring happiness, but poverty really sucks." A billionaire is not orders of magnitude happier than a millionaire. But a millionaire is much happier than someone who is worried about being able to pay rent, afford food, etc. Thus, the solution to maximize happiness is to distribute wealth evenly.

I would much rather optimize for life satisfaction than happiness.

If happiness is only weakly correlated with economics then it is poor policy to use economics as a lever to increase happiness. Life satisfaction, on the other hand, is correlated with economic opportunity. It is also more durable than happiness.

Re: Degrees of Wealth

#49

Post by woopah »

hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

While it's true that a lot of China's conveniences come from essentially labor market arbitrage and rural/urban inequality, the fact that the Netherlands can afford to attempt to reduce wealth inequality is a sign itself that it's a very wealthy country. I would also prefer the pace of life in the Netherlands, but I wonder to what extent you also have to buy more fairness and a slower pace of life?

Re: Degrees of Wealth

#50

Post by choutos »

steveBK123 wrote: post #16
hackyhacky wrote: post #5

This is an insightful article but it misses the elephant in the room, which is wealth inequality . In Shanghai, there is vastly more wealth inequality than in Netherlands. The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is mu…

I do worry that the “app / gig economy” independent contractors with weak i9 verification is basically trying to import the developing-world inequality permanent underclass service sector here.

Do you mean in terms of a loss of employment rights?
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