Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Inequality Matters

gatesnotes.com

Post reply on HN
Print view View original

241–250 of 462 posts

Re: Why Inequality Matters

#241

Post by kamaal »

r0h1n wrote: post #10

I must say Bill Gates, in his post Microsoft avatar, continues to surprise me constantly. This is a refreshingly candid and sanguine review of Piketty's book from someone who was a ruthless capitalist not so long ago. Gates rightly (and self-servingly) also points out that Piketty does not consider philanthropy as a means to correct some of capitalism's imbalances. Here's a few of Gates' conclusions: > Piketty is rig…

>>Letting inheritors consume or allocate capital disproportionately simply based on the lottery of birth is not a smart or fair way to allocate resources.

Unfair to whom? And why is that unfair?

Is it fair to a kid born to a rich parent that they must simply be punished because they were born to rich parents?

A lot of people work hard all their lives to give a better life to their children. Having children is a huge investment in time, emotionally and other things which can never quantified by merely calling it a lottery. Parents not just contribute their genes but so many other things.

There fore they also tend to invest in their future not just through things like education but through other means as well.

That's the whole point in investments anyway, you build on top of what you make in the past. If I can't keep what I have earned for my own kids, why should I even make a effort to earn it at the first place?

Re: Why Inequality Matters

#242

Post by [deleted] »

judk wrote: post #103
ska wrote: post #87

"I don’t see anyone on the list whose ancestors bought a great parcel of land in 1780 and have been accumulating family wealth by collecting rents ever since." What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them. I don't know how much the current crop Kochs or Waltons are responsible for t…

Top 400 is misleading. In US capitalism, single winners like Gates and Zuck Rockettes to the top. Look at the next many thousands, the grandchildren of previous barons who each have a share of inheritance, still far in excess of the productive classes. Look at the Bush and Kennedy dynasties in government.

[deleted]

Re: Why Inequality Matters

#243

Post by mkempe »

cylinder wrote: post #164
mkempe wrote: post #56

Earlier quoted context omitted.

Maybe these "older countries" should try --for a century or two-- laissez-faire capitalism and a government limited to the protection of individual rights.

Why would someone want to limit government to protecting individual rights? This doesn't make sense at all. Is the minting of money protecting some sort of individual right? What about providing healthcare for the destitute? Are roads some sort of individual right?

Could it be that some people subscribe to the theory of the proper role and structure of government evinced by the Declaration of Independence?

Maybe some are fond of John Locke's Second Treatise of Government? of rights as an inalienable attribute of the ultimate minority, the individual? and of a government limited in purpose and scope so that it protects us, nothing more?

Re: Why Inequality Matters

#244

Post by memonkey »

ThomPete wrote: post #116
judk wrote: post #100

Earlier quoted context omitted.

Why?

Because it would have been an invitation to debate with facts that are hard to disagree with. His solutions on the other hand are easily pulled apart and so that is what many discussions end up focusing on. This is unfortunate.

The solutions that anybody brings in favor of so called Free Market Capitalism or any other form of libertarian market ideology is also easily pulled apart. I don't disagree with you but academics are expected to give a solution, no matter how stupid it may sound to you. IMO, I think he would be taken less seriously if he didn't give a solution. Every single interview and every single talk would literally be the same thing, "What is your solution then?" and all he says is "I don't know".

Re: Why Inequality Matters

#245

Post by mkempe »

LLWM wrote: post #141
mkempe wrote: post #56

Earlier quoted context omitted.

Maybe these "older countries" should try --for a century or two-- laissez-faire capitalism and a government limited to the protection of individual rights.

It would probably make more of a difference if they tried for a century or two expanding into a sparsely populated, resource-dense area many times their current size.

Which is how Switzerland implemented its version of American government, freedom and prosperity starting in 1848?

Re: Why Inequality Matters

#246

Post by jokoon »

> wealth decays

I don't understand this. I mean you just get poor much quicker when you have less wealth. I understand that you don't stay rich, but it secures your kid's futures.

Re: Why Inequality Matters

#247

Post by JeffL »

mempko wrote: post #223

I am going to repeat here, what I posted on hist site. Mr Gates, I am hoping you posted this not only to express your opinion, but to engage in conversation. And it appears you certainly are. My criticism with your response is that philanthropy distorts economic resources through a similar mechanism that consumption does. That is, by dictate. I believe in the idea that people who are affected by decisions made should…

Very interesting and thought-provoking point. Although on the other hand, I personally think that Bill Gates, acting as a king and trying to figure out what he thinks will do the most justice and good, is going to do better for the world than what people in a democracy will vote for themselves. Democracy has given us unbalanced budgets, runaway debt, pointless wars, and corrupting entitlements. Bill Gates is doing some amazing and wonderful things.

Not saying that monarchy is better than democracy. Democracy is best at protecting rights, which is the function of government. But as for making the world a better place, really, individuals are probably best at that.

Re: Why Inequality Matters

#248

Post by AnthonyMouse »

marcosdumay wrote: post #82
saalweachter wrote: post #42

Earlier quoted context omitted.

The problem with differentiating between the "good investor" and the "lavish lifestyle guy" is that the good investor is actually the one that you (rather, Piketty) need to be most worried about. People worried about inequality aren't (just) worried about the morality of consumption -- a fat cat sitting atop a mountain of cash drinking champagne and eating caviar while the peasants starve. They're worried about maint…

The elephant that everybody pretends that isn't in the room is that what you just called weapons is the ability to create wealth. Do we really need to take it away from everybody? Recently, capitalists aren't the ones disrupting the economy in the US, here in Brazil, in the PIIGS, or any other place that I looked. That position is always held by people with power, but little capacity of creating wealth themselves. At…

> The elephant that everybody pretends that isn't in the room is that what you just called weapons is the ability to create wealth. Do we really need to take it away from everybody?

Any time you're considering a tax system you have to consider the incentives it creates for people.

If you have a "wealth tax" then we have to consider how the rich will try to avoid it. First, people will convert from savings and investment to consumption. You ordinarily want to tax wasteful consumption and create an incentive for wealth creation, so that's doing the exact opposite. Second, people will convert wealth into forms that are either easy to hide from the government (e.g. gold bullion in a foreign bank vault) or are not considered wealth by the tax code or that have indeterminate market value. None of that is good.

Most importantly, the only way that a wealth tax is going to do what Piketty wants is if the rate is higher than the typical rate of return on capital. If it's lower then the effect can be no more than it would be by fiddling with the tax rate on capital returns. But if it's higher then the economic incentives it creates are catastrophic. It literally becomes more profitable to hoard cash in a mattress than invest it in anything that would disclose its existence to the government, or to move it all into foreign investments and take whatever steps necessary (up to and including renouncing citizenship) to eliminate any claim the country imposing the wealth tax has on it.

> If I had to choose, I'd tax consumption (with a VAT) and redistribute a fixed rate of it by a basic income. But that's mostly because of procedural simplicity and resistance to corruption.

This is actually a very strong alternative. VAT has an unintuitively strong similarity in effect to corporate income tax with the exception that it's much harder to avoid by diverting income to foreign subsidiaries because the VAT applies the same to imported goods as domestic. The existing corporate income tax is effectively a huge subsidy for goods imported from countries that have no or less corporate income tax.

And a basic income does exactly what you want in order to reduce the concentration of wealth: It gives people at the bottom and in the middle the ability to take the risks that promote upward mobility without having to worry about starving or freezing if it doesn't work out.

Re: Why Inequality Matters

#249

Post by dllthomas »

judk wrote: post #103
ska wrote: post #87

"I don’t see anyone on the list whose ancestors bought a great parcel of land in 1780 and have been accumulating family wealth by collecting rents ever since." What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them. I don't know how much the current crop Kochs or Waltons are responsible for t…

Top 400 is misleading. In US capitalism, single winners like Gates and Zuck Rockettes to the top. Look at the next many thousands, the grandchildren of previous barons who each have a share of inheritance, still far in excess of the productive classes. Look at the Bush and Kennedy dynasties in government.

"Gates and Zuck Rockettes"

That's a strange image.

http://en.wikipedia.org/wiki/The_Rockettes

Re: Why Inequality Matters

#250

Post by TeMPOraL »

lmm wrote: post #187
judk wrote: post #97

Earlier quoted context omitted.

Paying someone to do worthless work (lavishing luxury on someone) does not help society much. That's just gaming the numbers, like saying "going to war" helps the economy. Paying someone to alleviate basic needs does. Not all consumption is equal.

But consumption has a tighter feedback loop that ensures money spent on consumption is never truly wasted. If something is useless you stop buying it, and there's a limit to how much one person can waste - you can only eat so many meals, wear so many nice suits, take so many private jet flights. People who lose fortunes don't do so through consumption, they do so through bad investments.

That would be true in practice were it not for the existence of marketing, job of which is to create random arbitrary needs to keep people buying, and planned obsolescence, which makes sure that needs don't stay fulfilled for long. The market found a way to increase the limit to how much one person can waste to the point that the waste keeps accelerating.
Post reply on HN