This is where it gets complicated for me. Gates value judges the rich person spending money on a yacht and plane. Planes and yachts are pretty complicated gadgets that employ a lot of engineers and others. The plane makers technology might even contribute to some other kind of businesses similar to the space program in the sixties and seventies. Where as tech companies sitting on piles of cash because they don't know how to spend it seems like a bad use of capital to me.
Why Inequality Matters
11–20 of 462 posts
Re: Why Inequality Matters
#12>High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal.
I agree with generally all of Gates' thoughts here, but there are two actors to consider when discussing how to address problems associated with inequality - the government, and those who own capital. There is an implicit assumption by both Gates and Piketty that a government is always powerful enough to control what portion of wealth flows to capital owners, and what portion flows to labor.
The risk with a powerful government that can do this is it can be bought. A perfect example of this is Gates own story with The Common Core. From everything I've read, his own foundation basically bankrolled the lobbying, acceptance, and implementation of this program, much to the dismay of many educators I know. As long as a democracy bequeaths power to its government, there will be moneyed interests lining up to tilt that power in their favor.
The other option is to limit the power the government has to control the flow of wealth. No one wants to buy a democracy that doesn't have any power to protect their interests. What ends up happening is wealthy actors have to figure out other ways to maintain their wealth - consumption in things like yachts and fancy cars goes down and investment goes up. As investment goes up, g goes up because that investment is creating more jobs and more competition for employees, and r goes down because the capital markets become flooded.
Re: Why Inequality Matters
#13I fully agree that we don’t want to live in an aristocratic society in which already-wealthy families get richer simply by sitting on their laurels and collecting what Piketty calls “rentier income”—that is, the returns people earn when they let others use their money, land, or other property. But I don’t think America is anything close to that. Take a look at the Forbes 400 list of the wealthiest Americans. About ha…
Agreed, his definition of rentier income was very narrow. I would certainly consider the "Windows tax" where most consumers have no option but to pay for a Windows license when buying a computer as rentier income. Not surprising that Bill Gates has a bit of a blind-spot here.
Re: Why Inequality Matters
#14I fully agree that we don’t want to live in an aristocratic society in which already-wealthy families get richer simply by sitting on their laurels and collecting what Piketty calls “rentier income”—that is, the returns people earn when they let others use their money, land, or other property. But I don’t think America is anything close to that. Take a look at the Forbes 400 list of the wealthiest Americans. About ha…
It's also pretty silly to expect the makeup of the top .00001 percent to be representative of the top .1 percent. Of course the extreme top would contain a lot of people who are extremely active (and doing riskier things.) That's like characterizing a climate based on its hottest day. Just because Chicago's hottest day was hotter than Tempe's hottest day in a particular year (or every year) doesn't mean that Chicago is hotter than Tempe.
Re: Why Inequality Matters
#15>High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal. I agree with generally all of Gates' thoughts here, but there are two actors to consider when discussing how to address problems associated with inequality - the government, and those who own capital. There is an implicit assumption…
The common core is a just a standard of what should be taught and when. It is not a curriculum. It is not a book or set of books. It solves a real problem: schools in the US cover subjects at wildly differing times so when children change school districts they may have huge holes in their education.
Re: Why Inequality Matters
#16Philanthropy strikes me as anti-democratic. Why should the rich get to choose which causes are more deserving of their generosity? Let the elected government pool the money and make this determination.
Re: Why Inequality Matters
#17I fully agree that we don’t want to live in an aristocratic society in which already-wealthy families get richer simply by sitting on their laurels and collecting what Piketty calls “rentier income”—that is, the returns people earn when they let others use their money, land, or other property. But I don’t think America is anything close to that. Take a look at the Forbes 400 list of the wealthiest Americans. About ha…
Just reading your quote, Gates didn't say "there is absolutely no one who inherits wealth or position." The Waltons are incredibly unusual because they've sustained inherited wealth to a second generation.
Re: Why Inequality Matters
#18Why would we want to tax consumption of the wealthy (or anyone)? Don't we want to promote spending? The tax code should reward those that make investments, purchases, and donations. Not punish them. They should punish those that sit on their wealth and do nothing with it.
Re: Why Inequality Matters
#19>High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal. I agree with generally all of Gates' thoughts here, but there are two actors to consider when discussing how to address problems associated with inequality - the government, and those who own capital. There is an implicit assumption…
I'm not sure I understand your other option. If the government doesn't have control over the flow of wealth, why do you think it will not just increasingly flow to those in power?
I understand the concern over governments that are not acting in the best interest of the people. However, abstaining from the process seems a very shaky way to actually get it to act in an appropriate way.
More to the point, I thought the entire premise was that investment has been going up for the sake of investment lately. Which means the main people benefiting from the investment of the wealthy, are the wealthy that are investing.
This odd conflation of philanthropy with investment just smacks of rationalizing high earnings in an "I deserve it" blanket. Yes, more philanthropy is good. No, more investment isn't the same as more philanthropy.
And, no, we don't need to eliminate consumption any more than we need to eliminate investment. Or, rather, I don't know as that we do. (I'm not that bright, all told.) What I do think we need is to increase the benefit to everyone from investment and consumption (and philanthropy). Not just those that are controlling it.
Re: Why Inequality Matters
#20>High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal. I agree with generally all of Gates' thoughts here, but there are two actors to consider when discussing how to address problems associated with inequality - the government, and those who own capital. There is an implicit assumption…
WRT Common Core, I don't think Gates is doing it to serve some personal benefit - I get that his work with that, and things like Malaria reduction are genuinely motivated by trying to improve the world.
The problem is that it's one man's perspective vs. a whole world of reality, and as such the model might not fit and in some areas cause more problems than good. So you end up with a multi-billionare like Gates being able to basically treat the entire US .edu system like his own testing lab.
(no comment on whether Common Core is good or not - most of thing things I hear about it seem positive)