Why Inequality Matters • Hacker News Board

Re: Why Inequality Matters

#331

Post by hrktb » Thu, Oct 16, 2014, 6:58 PM UTC

aurelian wrote: post #314

vishnugupta wrote: post #263

Earlier quoted context omitted.

> 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…

That's interesting, could you please share the data ?

Re: Why Inequality Matters

#332

Post by hyperliner » Thu, Oct 16, 2014, 7:01 PM UTC

jl6 wrote: post #226

yequalsx wrote: post #22

Earlier quoted context omitted.

The problem with relying, even partially, on philanthropy to correct some of the imbalances of capitalism is that one encounters the free rider problem. There is also the issue where a very wealthy person has as their philanthropic cause something which few others think is a good choice of philanthropy. Such decisions should be made by society as a whole through their elected representatives. I know this wasn't the m…

I wonder if the free rider problem will exist in the zero-privacy everything-public world that we seem to be heading towards. Free riders respond to being outed as free riders.

The problem is when free-riding has become so pervasive as to become an entitlement. Then outing has no effect.

Re: Why Inequality Matters

#333

Post by danielweber » Thu, Oct 16, 2014, 7:02 PM UTC

nhaehnle wrote: post #289

danielweber wrote: post #135

Earlier quoted context omitted.

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

One might call passive investment "hoarding" because it does not really encourage economic activity. See, "investment" is such a loaded term. Somebody who uses their savings to open a restaurant is clearly making an "investment", and this form of investment is directly positive for the economy. When you put your money into e.g. an index fund, the situation is much less clear. You help drive up stock prices, but this…

This is a good response.

In theory, if I put $N into an equity, then someone else will get $N out, because efficient market and all that. That frees the same $N up for that other person to consume/invest.

In practice there is somewhat the detail of equities being bid up a bit by people wanting to own them.

Re: Why Inequality Matters

#334

Post by zo1 » Thu, Oct 16, 2014, 7:03 PM UTC

guelo wrote: post #311

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…

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.

If the noble concepts supposedly behind democracy had any traction with governments, they would have led us to a direct democracy, not a representative one. Instead, we get a half-assed attempt at letting free-people to rule themselves.

Forget money as some sort of concept that breaks democracy by allowing people to game the system. The bigger problem you have to worry about is the smooth-talkers, the influential leaders and all their legions of followers. Their single influential vote, counts a whole lot more than yours, or ours, and that single vote means no equality.

Re: Why Inequality Matters

#335

Post by ivank » Thu, Oct 16, 2014, 7:03 PM UTC

paulhauggis wrote: post #208

esfandia wrote: post #16

Philanthropy 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.

I think we should start something called "time philanthropy". Here is how it works: Since many people have more time than money, they should be required to donate a certain amount of time towards volunteering at working on public projects for the government. This could include: construction, cleaning up trash on the highway, fix roads, etc. An elected government would get to figure out where the volunteers get to all…

That would forego any kind of comparative advantage each person has.

"Just as there is only one best charity, there is only one best way to donate to that charity. Whether you volunteer versus donate money versus raise awareness is your own choice, but that choice has consequences. If a high-powered lawyer who makes $1,000 an hour chooses to take an hour off to help clean up litter on the beach, he's wasted the opportunity to work overtime that day, make $1,000, donate to a charity that will hire a hundred poor people for $10/hour to clean up litter, and end up with a hundred times more litter removed."

http://lesswrong.com/lw/3gj/efficient_charity_do_unto_others...

Re: Why Inequality Matters

#336

Post by dragonwriter » Thu, Oct 16, 2014, 7:04 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…

> They don't earn anything, but you can't lump them in with a poor fast food worker can you?

There's a meaningful economic class distinction to be made, probably, between a tenured faculty member at a university and a fast food worker, even if somehow their income ends up similar (the former having greater economic security than the latter, likely).

But I think the distinction you are making is more about subculture than economic class. This particular axis of subculture may sometimes be referred to as "class" (particularly by the people on the "higher" end of it) -- though its probably less common in the US to do so than it would be in Britain -- but its really a largely orthogonal concept to economic class distinctions. Not completely independent though, as -- as many axes of subcultural variations do -- it can have important relations to social networking opportunities that play a role in economic opportunities.

This is clearly even more visible, and arguably more substantive, in the United Kingdom -- where, in addition to the kind of examples you cite, there are, for instance, still hereditary peers in the House of Lords, and, heck, still a House of Lords -- than the United States.

Re: Why Inequality Matters

#337

Post by tszyn » Thu, Oct 16, 2014, 7:06 PM UTC

jmckib wrote: post #270

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…

What about the common libertarian viewpoint that we should limit the scope of government so that the rich guys don't have any significant political power to hijack? This comes without the slowing of economic growth that would be caused by higher taxes on capital.

The rich don't need the government to exert influence and rig the game in their favor. For example, they can: - buy up their competitors to create monopolies - use one monopoly to build another one (e.g. "if you buy our competitor's coal, you can't use our railroad") - gain control over natural resources - collude with their competitors - abuse the legal system to kill competitors - hire marketers and fund NGOs for propaganda purposes - control the media etc.

Once they have gained control over an industry, let's say steelworking or railroads, they become like feudal lords in that industry, setting wages and prices however they wish.

Power is subject to a positive feedback loop, whether it's political power or economic power. Having power makes it easier to gain more power. That's why it will always tend to concentrate in the hands of the few.

Government power in a democracy comes from a game of "artificial equality": elections in which every person has one vote, regardless of their power "in real life". (This is different from the economy, where your power is proportional to your wealth.) For this reason, it can act against the natural tendency towards concentration of power.

Re: Why Inequality Matters

#338

Post by johnm111888 » Thu, Oct 16, 2014, 7:07 PM UTC

Omniusaspirer wrote: post #147

brandonmenc wrote: post #95

Earlier quoted context omitted.

> I’m also a big believer in the estate tax As a third-generation American, I find the estate tax, even in its current form, extremely offensive, because it strives to reset every generation to zero instead of letting families establish themselves over time by building on the sacrifice and efforts of the parents. The current level of taxation, even though it's been recently, "graciously" increased, greatly extends th…

It's just a different mentality towards life and entitlement- there's nothing sad about it. Hitting all your points in order: 1) 1 million dollars is a lot of money to come out of nowhere. It's simply dishonest to pretend that isn't a life changing amount for a middle class family. At the very least it's going to be like you said- modest home paid off(100-500k), car loans all paid off(50k), and student loans paid off…

Property rights are the basis of human freedom. All these comments supporting the government taking your property after you've already paid taxes on it is troubling.

Re: Why Inequality Matters

#339

Post by ajcarpy2005 » Thu, Oct 16, 2014, 7:11 PM UTC

humanrebar wrote: post #324

ajcarpy2005 wrote: post #304

From the comments on the site: >>>A poor person, will spend all his income on consumption of food, clothes, water and all the basic things that he can pay. >>>A rich person, will only spend a small fraction of it's income, so in the end, proportionally, poor people end paying more taxes then rich people, and that's actually something that's hurting poor people here. ^^^This seems to actually be a sensible argument fo…

No, the solution is to separate the concerns, keep flat taxes (because they are more transparent and therefore more fair) and introduce direct subsidies to the working class (again, transparent and fair... I favor a guaranteed income or an earned income tax credit) so average citizens can buy necessities and even get ahead. It's a fair point that a flat tax, in a vacuum, is harder on the poor, but we're not in a vacu…

Yeah I agree with you completely that a guaranteed income would probably be the best way to take society to the next level in terms of economic stability and as a way to care for the best resource we have which is human capital.

There are plenty of dynamics which would still be at play that would be capable of incentivizing the appropriate people to work in response to needed labor. (eg. landlord responsibilities to apartment tenants)

Re: Why Inequality Matters

#340

Post by tszyn » Thu, Oct 16, 2014, 7:20 PM UTC

brandonmenc wrote: post #112

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.

> Paying someone to do worthless work (lavishing luxury on someone) does not help society much. Tell that to the people feeding their families by working at the resort, or in the vineyard, or the tannery. There is a demand for luxury goods, and there always will be. A tax in the consumption of those goods cuts into the wages of the non-wealthy involved in their production.

Yes, but the tax money goes to the poor, which increases their consumption. So you should end up with fewer jobs in luxury resorts and more jobs in industries which produce necessities. The problem is that luxury goods and services tend to be labor-intensive, so you might end up with a net loss in jobs. Which is better? 10 people serving daiquiris to rich people, or 5 people producing socially beneficial things and 5 people out of a job?