Why Inequality Matters • Hacker News Board

Re: Why Inequality Matters

#311

Post by guelo » Thu, Oct 16, 2014, 6:18 PM UTC

Taek wrote: post #177

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…

One thing that always bothers me about wealth distribution is that you can't simply move wealth around and expect things to get better. People who have wealth are going to be better with that wealth than people who don't. They grew up with wealthy people, have managed the wealth for a long time, have witnessed mistakes and successes, and overall have spent a lot of time contemplating wealth. If you take that wealth a…

Representative democracy is the elitist idea that elites will run the government but with an escape valve to let average people have some input into the system to prevent the elites from becoming too insulated and ignoring the needs of the average people.

But representative democracy breaks down when moneyed elites take control of the voting system. Then it's just elites all around with no input from the population.

Re: Why Inequality Matters

#312

Post by aidenn0 » Thu, Oct 16, 2014, 6:23 PM UTC

paulhauggis wrote: post #257

aidenn0 wrote: post #230

Earlier quoted context omitted.

> Also, Companies actually contribute more in taxes than people like to admit. They pay workers' wages..and those wages include tax money that goes to the government. That's still a tax on the workers' wages, not a tax on the company. If we shifted all income tax into a payroll tax, then by your definition workers aren't taxed at all? Anything that increases the cost of employing a worker will reduce the marginal net…

The company is paying the worker from earned revenue, it isn't coming out of thin air. My point is that they are providing the income that is taxed and used by the government.

By that definition companies are very nearly the sole source of all taxes:

Capital Gains? The company increased its value.

Dividends? Comes out of earned revenue.

Sales Tax? Comes out of sales by the company.

Re: Why Inequality Matters

#313

Post by johnpenton » Thu, Oct 16, 2014, 6:24 PM UTC

dragonwriter wrote: post #307

johnpenton wrote: post #282

Earlier quoted context omitted.

That sounds pretty middle class to me. Professional people - lawyers, bankers, management, etc. The US doesn't really have an upper class at all - just lots of rich middle class people. Maybe it's a British thing, but to me class is only minimally about money, so you can't just say the Gates family are rich so they're upper class. In Britain you can be penniless but still be upper class, or a billionaire but still wo…

> That sounds pretty middle class to me. Professional people - lawyers, bankers, management, etc. Professional people (as people who are predominantly workers, but usually not on living paycheck-to-paycheck and often with small capital holdings that may suffice for a comfortable retirement) are general middle class, yes. > The US doesn't really have an upper class at all The US actually does have an upper class, peop…

Yeah I sort of see what you're saying.

But then do you have a different term for what I'm talking about? What would you call someone who comes from a well known family lineage, speaks with a refined accent, was privately educated, went to Harvard, listens to classical music, collects french poetry first editions, but earns a pittance as faculty in the classics department at a college somewhere and has no savings or investments?

They don't earn anything, but you can't lump them in with a poor fast food worker can you? What term do you use for this in the US, if you don't call it 'class'? If the UK they would absolutely be upper class. What would you call them?

Here's an insight into the British class system for you: some Army regiments are essentially segregated by the class of their officers. A state school educated officer could join the Royal Tank Regiment but would probably never join the King's Royal Hussars. Of course this is unspoken.

Re: Why Inequality Matters

#314

Post by aurelian » Thu, Oct 16, 2014, 6:28 PM UTC

vishnugupta wrote: post #263

Taek wrote: post #177

Earlier quoted context omitted.

One thing that always bothers me about wealth distribution is that you can't simply move wealth around and expect things to get better. People who have wealth are going to be better with that wealth than people who don't. They grew up with wealthy people, have managed the wealth for a long time, have witnessed mistakes and successes, and overall have spent a lot of time contemplating wealth. If you take that wealth a…

> If you take that wealth and move it to the average person. Wealth redistribution doesn't necessarily mean taking money/wealth, literally, from wealthy and giving it away to poor. It includes, among others, subsidized education, free access to basic health care, nutritious food, potable water, eradication of epidemics, decent housing, decent retirement income and so on. This is the problem I see in societies that ar…

>Poor are poor not just because they don't have money but also because they are unable to get out of it. They have to go through unspeakable ordeal just to get one meal a day and this places enormous cognitive load on the entire family.

That seems like it should be true intuitively, but if it were true, you'd expect higher benefit levels to correlate with higher rates of getting out of poverty. The data points to the opposite happening.

For example: http://www.manhattan-institute.org/html/cr_17.htm

Re: Why Inequality Matters

#315

Post by maxrann » Thu, Oct 16, 2014, 6:29 PM UTC

michaelvkpdx wrote: post #198

I appreciate Gates' analysis of Piketty, but Gates is still blind to an important point- he came from a middle-class background and therefore had enough capital to gain a footing in the world and to be able to write his initial code without worrying about the basic needs of survival. 40% of youth in the USA today do not even have that, and as such, have virtually no chance at all of being able to even play in the cap…

>I appreciate Gates' analysis of Piketty, but Gates is still blind to an important point- he came from a middle-class background and therefore had enough capital to gain a footing in the world and to be able to write his initial code without worrying about the basic needs of survival.

the BASIC needs of survival

Re: Why Inequality Matters

#316

Post by saalweachter » Thu, Oct 16, 2014, 6:30 PM UTC

Taek wrote: post #177

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…

One thing that always bothers me about wealth distribution is that you can't simply move wealth around and expect things to get better. People who have wealth are going to be better with that wealth than people who don't. They grew up with wealthy people, have managed the wealth for a long time, have witnessed mistakes and successes, and overall have spent a lot of time contemplating wealth. If you take that wealth a…

> It's an unpopular opinion, but I don't think that everyone should have a roughly equal say in how things go.

So something that comes up in any discussion like this (economics, politics, global climate change) is that there are several layers of questions to the debate. Some of the questions are matters of preference, some are matters of fact or science. For instance, on the topic of inequality & a wealth tax, we could have these questions:

  * Is a democratic society desirable? (a matter of preference)
  * Does inequality (in wealth) distort the democratic process? (a matter of fact)
  * Does a wealth tax correct the inequality in a way which solves the problem? (a
    matter of fact)
  * Is the wealth tax the best way to solve the problem? (a matter of preference)

For more fun, different people could have different questions, but it still makes for plenty of hilarity when one person is arguing whether a wealth tax is effective and another is arguing whether it is desirable and another is arguing whether it is necessary, and no one understands why they aren't making any headway.

Now, to tie this around to your comment, I would clarify that what I mean by "a democratic society" is one where every person has an equal say in matters of preference. In a rational society, these are the only disagreements. I am happy to debate whether, if climate change is happening, we should do something about it. I have neither the desire nor the time to argue whether it is happening or whether it is man-made; these are matters of science and my preference matters not one bit.

The problem we have now is that both matters of fact and matters of preference are up for debate, and the extremely wealthy have a disproportionate say in both.

Re: Why Inequality Matters

#317

Post by pbreit » Thu, Oct 16, 2014, 6:31 PM UTC

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…

I think Gates bungled the 3 wealth types. There's a fourth that is most common: a wealthy person who puts a bunch of cash into PE and hedge funds which basically just lines the pockets of the fund managers. I'm not nearly as concerned with a wealthy person who actually consumes. At least those dollars are getting cycled through the positive economy.

Re: Why Inequality Matters

#318

Post by carls » Thu, Oct 16, 2014, 6:32 PM UTC

nhaehnle wrote: post #266

Taek wrote: post #177

Earlier quoted context omitted.

One thing that always bothers me about wealth distribution is that you can't simply move wealth around and expect things to get better. People who have wealth are going to be better with that wealth than people who don't. They grew up with wealthy people, have managed the wealth for a long time, have witnessed mistakes and successes, and overall have spent a lot of time contemplating wealth. If you take that wealth a…

> It's an unpopular opinion, but I don't think that everyone should have a roughly equal say in how things go. The average person isn't as well equipped to deal with large problems as the elite are. To really get to the truths behind this opinion, it is important to distinguish one's political goals from the politically implemented policies in pursuit of those goals. I fully agree with you that the average person is…

Well said.

Re: Why Inequality Matters

#319

Post by nether » Thu, Oct 16, 2014, 6:33 PM UTC

johnpenton wrote: post #313

dragonwriter wrote: post #307

Earlier quoted context omitted.

> That sounds pretty middle class to me. Professional people - lawyers, bankers, management, etc. Professional people (as people who are predominantly workers, but usually not on living paycheck-to-paycheck and often with small capital holdings that may suffice for a comfortable retirement) are general middle class, yes. > The US doesn't really have an upper class at all The US actually does have an upper class, peop…

Yeah I sort of see what you're saying. But then do you have a different term for what I'm talking about? What would you call someone who comes from a well known family lineage, speaks with a refined accent, was privately educated, went to Harvard, listens to classical music, collects french poetry first editions, but earns a pittance as faculty in the classics department at a college somewhere and has no savings or i…

> But then do you have a different term for what I'm talking about? What would you call someone who comes from a well known family lineage, speaks with a refined accent, was privately educated, went to Harvard, listens to classical music, collects french poetry first editions, but earns a pittance as faculty in the classics department at a college somewhere and has no savings or investments?

He'd be middle class in the US, mostly because of his income. He's got connections but still middle class. A fast food worker would be lower class. A fast food worker who went to Harvard, with all those connections and hobbies, would largely be the same. But that's an incredibly contrived example. Class distinctions work because of general income-hobby-family background correlations that generally exist.

Also, there isn't much of a "refined accent" in the US that I'm aware of. At least nothing as marked as cockney vs british.

Re: Why Inequality Matters

#320

Post by logfromblammo » Thu, Oct 16, 2014, 6:33 PM UTC

danielweber wrote: post #135

protonfish wrote: post #25

Earlier quoted context omitted.

I'm no supply-side economist, or advocate of Brave New World consumerism, but I believe that taxing the purchase of actual consumer products would not have a positive effect on the economy of the country. I believe a healthy economy is an active one. An incentive to remove money from active circulation (hoarding) could have long-term negative repercussions. And a country where the government encourages the average pe…

Why is investment "hoarding"? Money in the bank is moving around, even without the multiplier of partial reserve banking.

Because the money on one side of the sheet exactly balances the new ownership stake on the other. There is no goods or services gradient that makes the cash flow.

If a business is already bound by the abilities of its personnel rather than availability of resources, the investment won't do anything at all. If you buy 50% of a business with cash that makes it now worth twice as much as it was worth before, you haven't done anything more than move the cash you own in your own name to the cash you own in the name of your business.

That's not spending. That's just playing a shell game with yourself.

Loans are similar in that you are exchanging current cash for future cash of roughly equal value.

To create a cash flow in the economy, there has to be a gradient between producer and consumer. Food flows from farmer to eater, so cash flows back from eater to farmer. The eater cannot resell his food to someone else after he has eaten it. The eater has to produce something--some form of good or service that someone else can consume--in order to pay the farmer. Maybe the farmer gets sore feet. The eater could sell foot massages. Goods and services flow in one direction, and the cash flows in equal amounts in the opposite direction. And it mostly balances out.

Money can't just move around. It also has to change owners.