Nothing in the article explains why "economic inequality" is a bad thing. Which seems to be a logical pre-requisite to declaring it to be "worse than you think".
It's not necessary. Economic inequality is widely considered a social ill.
Economic Inequality: It’s Far Worse Than You Think
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Re: Economic Inequality: It’s Far Worse Than You Think
#102Earlier quoted context omitted.
There is an equality in possibilities, not in results. You can't blame anyone because you are bad in investments or can't do business. If you tax people who reach success, why not tax those who was failed? Let's redistribute bankruptcy, depression and suicides.
That's the problem though -- there is not equality is possibilities. Analysis [1] of a study from the Pew Research Center on economic mobility [2] found that you are 10x more likely to be in the top 20% if you're born there than if you're born in the bottom 20%. Someone born in the top 20% who doesn't go to college is still 2.5x more likely to have an income in the top 20% as an adult than someone from the bottom 20%…
Doesn't anybody else find the "equality of opportunity" and other phrases way too abstract for analysis?
There are many facets to how an economy functions and how individuals navigate it, and I think a proper analysis of the action on the ground is needed. For example how individuals learn skills and what prerequisites are needed in terms of access to information, ability to focus and think abstractly, and how one trains those abilities. This affects competition in the market, who gets rich, who gets an opportunity and so forth, and yet all the articles I see talk in these distant abstract terms, like they're appealing to someone in the government to fix it or something.
Another aspect is consumer responsibility and the way we tend to buy what we want but not think of the large scale consequences. People use gmail and facebook out of habit. They buy groceries in a big store out of habit. We use products dependent on petroleum yet expect someone else to fix global warming. Being interconnected and living in a rather fragile world where systems affect each other is not a responsibility us as individuals are ready for, and I haven't even touched on civic responsibility and the need for everyone to almost be lawyers and critical thinkers for law to function. There are so many complex interconnected parts and we always fall victim to the movements of the herd
Re: Economic Inequality: It’s Far Worse Than You Think
#103I think the popular conceptualization of economic inequality (effectively, "inequality is suffering") is misleading because it doesn't take marginal utility into account. What I mean is, take the pizza-dividing example and suppose we have doubled the pizza. The inequality (expressed as the ratio of pizza owned to the available total) would stay the same but those with the smallest part of the divide would be noticeab…
> In a world of plenty inequality would not mean suffering.
This has a nice feel to it mathematically, but I suspect the reality is somewhat different. Access to non-scalable resources like land will remain problematic. In a world where money translates to power, if inequality is high, the power imbalance stays high.
Re: Economic Inequality: It’s Far Worse Than You Think
#104I think the popular conceptualization of economic inequality (effectively, "inequality is suffering") is misleading because it doesn't take marginal utility into account. What I mean is, take the pizza-dividing example and suppose we have doubled the pizza. The inequality (expressed as the ratio of pizza owned to the available total) would stay the same but those with the smallest part of the divide would be noticeab…
The problem with this is that many costs are inherently competitive. The pizza metaphor starts to break down here but I'll try to maintain it.
The problem is that share is a flow, not a fixed quantity to be divided up. Because of competition for resources, people are forced to use part of their share of those resources to compete for future resources. You've got to use part of your slice to ensure that you keep getting slices. When the pie increases but your share stays the same you need increase the amount of your share allocated towards ensuring future slices, meaning that the amount you actually get to eat diminishes.
Re: Economic Inequality: It’s Far Worse Than You Think
#105Earlier quoted context omitted.
I would argue that the state is taking, not the rich (which are not the only people with money invested in the market).
Feel free to head to Somalia then. I hear they have a wonderful libertarian system setup. EDIT: Seriously folks, taxes pay for civilization. If you don't like it, don't work (so you don't have to pay) or leave. Roads, schools, fire, police, infrastructure aren't built with unicorn dust.
The context was the differences in tax rates, not taxes as a whole. You can support the concept of taxation while considering the State takes more than it should from certain groups.
Re: Economic Inequality: It’s Far Worse Than You Think
#106Re: Economic Inequality: It’s Far Worse Than You Think
#107The estate tax should be near 100%. We do not need dynasties. I don't mind people making the wealth, but they can't take it with them. It shouldn't just transfer to their children.
You're being short sighted. Consider the time, money and effort that people put into avoiding taxes under the current system. You would exponentially increase their incentive to do so. Let's think about what would happen if this were to become reality... When wealthy people were approaching death, they'd simply give their money to their heirs and only incur a gift tax. Do you propose that we ban monetary gifts betwee…
Your points are good. I think most people can agree that dynastic wealth is a social ill, but good luck trying to devise a loophole-free way to stop it. But the IRS is not fooled by things that look like a duck, swim like a duck, and quack like a duck. For example, they catch employers who try to pass off employees as contractors. I think if there was political and cultural will, our society is capable of stopping perpetual dynastic wealth transfer.
Re: Economic Inequality: It’s Far Worse Than You Think
#108Or it's far better than you think. What if the cause of the misconception of the true distribution is that standard of living is far closer than ever before, so the relative distance of wealth is less visible.
Seems more likely that it's the increased geographical wealth/income segregation.
Re: Economic Inequality: It’s Far Worse Than You Think
#109Earlier quoted context omitted.
This view seems to come from the mindset that the output of the economy is static and that there is a fixed amount of wealth.
The issue here is that wealth inequality is so massive that it ends up being a net negative even if the economy as a whole is growing. What we are seeing nowadays is stagnant income for the middle class and skyrocketing wealth (and power) for the fortunate 0.1%
And massive increases in the income of billions of workers worldwide - just not in a few developed countries.
Re: Economic Inequality: It’s Far Worse Than You Think
#110Earlier quoted context omitted.
Yeah but few people when asked think like that. It's just a type of "rich".
To consider yourself in the top 1%, you just have to be richer than 99 other people you know. Humans are not good at avoiding sampling bias.
That's not true. Most of my friends and aquaintences are software engineers or masters+ in some other STEM field. (Or are students of a similar caliber). The people you know aren't a good random sample. The top 1% tend to have more friends who are also top 1%.