Why Inequality Matters

They're all in it for themselves. The key is to ensure that there isn't a big enough state to corrupt so they can consolidate and entrench their power.

A small state prevents monoloploies from being formed and from using those wielding power to consolidate their power. And then it doesn't matter how evil the guy who gets the top job is, because he just can't make a big difference.

At the heart of all this is how England managed to keep its Anglo-Saxon self-government traditions even after the continental Norman invasion and takeover. Because the Normans could only ever wield limited power at the state level, they could never fundamentally change the way the content was run at a local level. So citizen assemblies and English common law continued and was never replaced with continental law, the final iteration of which is based on napoleanic code. Thus in England, and her spun-off colonies, you're fundamentally free to do your own thing unless there is a specific law against it, while most other places state that you can only do something if there law explicitly states it.

This fantastic inheritance was all bequeathed to the citizens of those countries with legal systems based on common law precisely because England had a weak central government which reduced the ability of a king to control everyone, especially when that was a foreign king who had invaded.

Philanthropy is what happens when you manage to escape the reach of Gnon, even for a little while. People like Bill&Melinda are able to directly address the needs that neither markets nor governments can satisfy.

> I'm convinced that it is only the good faith of enough actors that allows any system to function at all.

I think that how many actors displaying good faith we accumulate in a single system is a degree to which we have control over Gnon. It's actually sad that as societies instead of working to increase trust in one another, we're trying to take it out of the equation. We're literally sacrificing our futures to Moloch in exchange for temporary security. The less a system is interruptable by humans enforcing human values, the more any error in encoding those values in the system is squeezing us (hence, FAI problem), and we're both aware of how such systems tend to evolve.

ETA

The way some people don't understand how we're screwing ourselves over with market economy reminds me of a thing I learned in high school physics class.

The equation for potential energy in a gravity field goes like E = -G m_a m_b / r, with r being the distance between the two attrated bodies. But when you're learning about gravity for the first time, you're being taught the E = mgh equation, where g is a constant acceleration and h is the height above the surface. In one case, energy is proportional to 1/r; in the other, it is proportional to r. So how do you reconcile those two views, and how is it that people didn't stumble upon the first equation before the second one, and that we can do a lot of good computations with it?

When you draw a graph of E(r) (first equation) you'll get a hyperbola. But if you zoom in hard enough, to the area of typical values of r we encounter daily, you'll see a straight line. Gravitational attraction linearizes pretty well in the range of parameters we're used to deal with every day.

In a similar way, there is a disconnect between human values and the market that is supposed to help optimize for them. They are aligned, but not perfectly. Many people seem to have zoomed in so far that they see a straight line where they should see a hyperbole, a growing deviation from desired course.

This is exactly what we're seeing today. To put it bluntly, market economy, or Moloch in general, has outlived its usefulness. It is optimizing values increasingly decoupled from our own, so it's high time to start thinking how to get rid of it.

Here's why the latter makes more sense to me. It's only at the risk-free rate of return that the two products you describe are of equal value. In order to realize returns higher than the risk-free rate, investors must do work. I think that the extra gain beyond the risk-free rate should be taxed as ordinary income, because that's really what it is: income produced by work.

Of course, actually implementing this policy isn't quite trivial: it requires a running estimate of the risk-free rate of return that can be agreed on politically, and it requires knowing exactly when assets changed hands (down to the nanosecond, for HFT). But it's well within our computational capabilities at this point.

So, should people who just stick their money in the bank at 0% for some period of time be able to claim a small loss on it? I would be fine with that, actually.

so in his example, investors and philanthropists have more volatility around the potential effects of their wealth, so the multiplier can be >1, key is that it can be >1, which means that it can be value generating. consumers' multipliers are necessarily as an aside, i'm also intrigued by the idea of economic velocity as an indicator of economic health (as opposed to the gini coefficient, which is a rather static measure) that's tangentially related to the idea of economic inequality. of course, for capital to have a stabilizing effect on the economy, it needs to have a high dispersion coefficient, but that's another discussion.