An Idiot's Guide to Inequality • Hacker News Board

Re: An Idiot's Guide to Inequality

#11

Post by fchollet » Sat, Jul 26, 2014, 2:26 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

They are not. The bottom 50% of people owns a fraction much smaller than 1/2 of all available wealth.

What Oxfam is saying is: if you rank people by wealth on the x axis then plot their wealth of the y axis, the integral (sum, or area under the curve) of the function on the first half of the graph is equal to the integral on the last 85 points. Try actually drawing it, it might help you understand.

Re: An Idiot's Guide to Inequality

#12

Post by wickedlogic » Sat, Jul 26, 2014, 2:26 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

No they are not. If the bottom half owns the same as the top 85, and the top 85 own 30%....

Re: An Idiot's Guide to Inequality

#13

Post by crdoconnor » Sat, Jul 26, 2014, 2:28 AM UTC

autokad wrote: post #7

i grew up in a poor family around a lot of poor people. i'm not rich, but definitely out of the poor category. even as a child, i was amazed at the plethora of bad decisions (or simple refusal to give important things a second thought) of the poor people around me, family included. an example was a couple years ago when i mentioned how wonderful it is that we can take free online classes from institutions like harvar…

Being poor renders it very difficult to think long term as the survival instinct kicks in. If you have to constantly worry about whether you can put food on the table and pay the electric bill tomorrow, you simply stop thinking about what happens next month.

This instinct kicks in on such a low cognitive level that it's almost impossible to suppress.

This makes it very easy to leech profits from the underclasses through payday loans. The profit is made at the point that the survival instinct programs them to ignore.

This is why outright prohibition of payday loans usually has a positive impact on the financial wellbeing of the underclasses.

Unfortunately, even the middle and upper classes who struggle with giving up smoking still look down on the set of people who take payday loans, thinking that their superior intelligence and good sense is what leads them to not be suckered.

Empirical study on the effect of poverty on short term thinking:

http://www.theatlantic.com/business/archive/2013/11/your-bra...

Study on the effect of banning payday loans on the financial health of the underclasses:

http://www.federalreserve.gov/pubs/feds/2013/201381/201381pa...

Re: An Idiot's Guide to Inequality

#14

Post by bane » Sat, Jul 26, 2014, 2:28 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

There's a large group of people between the bottom half and the top 85 people that hold quite a bit of wealth.

Re: An Idiot's Guide to Inequality

#15

Post by CapitalistCartr » Sat, Jul 26, 2014, 2:28 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

The bottom half of the World's population not only don't have a representative half of the World's wealth, they basically own diddly squat compared to their numbers.

Re: An Idiot's Guide to Inequality

#16

Post by gipp » Sat, Jul 26, 2014, 2:29 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

That is absolutely not the same. One is referring to half the wealth in the world, one is referring to the wealth owned by the poorest half of the world (which is strictly less than half by definition, and in this case far less than half).

Doesn't make the fact not-disgusting, just slightly less so.

EDIT: Wow, 5 corrections in two minutes.

Re: An Idiot's Guide to Inequality

#17

Post by [deleted] » Sat, Jul 26, 2014, 2:29 AM UTC

xux wrote: post #9

eamsen wrote: post #4

"Oxfam estimates that the richest 85 people in the world own half of all wealth." This is not what Oxfam's estimates say, it contradicts them. Here is the original quote: "The bottom half of the world’s population owns the same as the richest 85 people in the world."

What point are you trying to make? Those two statements are the same.

[deleted]

Re: An Idiot's Guide to Inequality

#18

Post by CapitalistCartr » Sat, Jul 26, 2014, 2:46 AM UTC

In discussions like this the numbers matter. To quote Heinlein, “What are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!"(1) Piketty's book suffers from poor numbers and bad maths, making his conclusions useless. If he is right, he needs to support it with sound numbers.

Chris Giles in The Financial Times found his numbers wanting. (2) In Piketty's response(3), he downplays the importance of the questions, focusing on the European numbers. FOr5 the US numbers, he recommends substituting the numbers of Emmanuel Saez (Berkeley) and Gabriel Zucman.(4) But those numbers are based on reported capital gains taxes without adjusting for major changes in the law and changes in the definition of capital gains.

I don't know if Piketty is right or wrong, but I know his Excel spreadsheets are not adequate evidence. I'd like him to be right; I think wealth disparity in the USA since 1980 is more due to legal maneuvering than merit. I also know my thinking it isn't evidence.

1) http://www.timeenoughforlove.org/Heinlein.htm

2) http://piketty.pse.ens.fr/files/capital21c/en/media/FT230520...

3) http://www.voxeu.org/article/factual-response-ft-s-fact-chec...

4) http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf

Re: An Idiot's Guide to Inequality

#19

Post by obvious_throw » Sat, Jul 26, 2014, 2:56 AM UTC

crdoconnor wrote: post #13

autokad wrote: post #7

i grew up in a poor family around a lot of poor people. i'm not rich, but definitely out of the poor category. even as a child, i was amazed at the plethora of bad decisions (or simple refusal to give important things a second thought) of the poor people around me, family included. an example was a couple years ago when i mentioned how wonderful it is that we can take free online classes from institutions like harvar…

Being poor renders it very difficult to think long term as the survival instinct kicks in. If you have to constantly worry about whether you can put food on the table and pay the electric bill tomorrow, you simply stop thinking about what happens next month. This instinct kicks in on such a low cognitive level that it's almost impossible to suppress. This makes it very easy to leech profits from the underclasses thro…

In which upper-class HN tells someone who grew up poor how poor people think. And then downvotes the heretic, despite relevant, first-hand experience contribution to discussion. Nice.

Re: An Idiot's Guide to Inequality

#20

Post by jandrewrogers » Sat, Jul 26, 2014, 2:57 AM UTC

crdoconnor wrote: post #13

autokad wrote: post #7

i grew up in a poor family around a lot of poor people. i'm not rich, but definitely out of the poor category. even as a child, i was amazed at the plethora of bad decisions (or simple refusal to give important things a second thought) of the poor people around me, family included. an example was a couple years ago when i mentioned how wonderful it is that we can take free online classes from institutions like harvar…

Being poor renders it very difficult to think long term as the survival instinct kicks in. If you have to constantly worry about whether you can put food on the table and pay the electric bill tomorrow, you simply stop thinking about what happens next month. This instinct kicks in on such a low cognitive level that it's almost impossible to suppress. This makes it very easy to leech profits from the underclasses thro…

You are conflating cause and effect. Being poor does not make it very difficult to think long term but the lack of discipline required to make good short term choices has the effect of keeping you in poverty over the long term. A pattern of good short term choices tends to lead to getting out of poverty whether one is thinking long term or not.

I lived a significant portion of my life in pretty severe poverty; I was raised in it. It requires a decent amount of discipline to not waste money even when you are hungry and can't pay the bills, and many poor people do not have that discipline and therefore stay poor. Many non-poor people have the same lack of discipline but can simply afford to be more wasteful. Given two choices that solve an immediate problem (e.g. hunger) people will often choose the one that is most wasteful of their money even though they know they are poor.

I was never the world's most disciplined person but I did manage to bootstrap myself out of poverty in fairly boring fashion working low-paying jobs. As long as I had an income (never guaranteed) I always managed to spend less money than I earned. It is pretty shocking the percentage of people in poverty that are obviously wasteful with their limited resources but it also explains their long term outcome.

I earn a fine income today but my spending stopped rising with my income a long time ago. Old habits of not spending frivolously on low-value things die hard I guess.