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How Paul Graham Gets It Wrong in “Economic Inequality”

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Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#101

Post by bobby_9x »

danhak wrote: post #57
Pyxl101 wrote: post #50

Earlier quoted context omitted.

Excellent! Thank you for clarifying. It sounds like the concern is that some people hold a monopoly on power, such that good ideas don't compete on their merits. Is that a good way of saying it? I ask because that problem does not seem to me to be directly related to income equality. In communist societies everyone had very similar income, and yet a small group had all the power and functioned as kingmakers in busine…

> In communist societies everyone had very similar income... Again we're reverting to the straw man of 100% (or nearly) equal society. Our society must be unequal to some extent because capital is a reasonable and effective reward for figuring out how to best allocate resources. But extreme inequality prevents a large % of the population from fully developing, exploring and disseminating their talents, shutting them…

What you really need to look at is how did they grow up?? A household that values education??

Plenty of immigrants from early 20th century that came to the US now have successful kids/grandkids because they valued education.

Computers are now cheap and you can get lots of free knowledge on the Internet and at the library (MIT has free classes).

There are no excuses. We need to stop with the victim mentality if we are ever going to progress.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#102

Post by throw_away »

danhak wrote: post #84
zo1 wrote: post #83

Earlier quoted context omitted.

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general…

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

I don't understand how estate and capital gains taxes are regressive. Estate taxes (in the United States at least) only kick in on inherited assets > $5M or so (When I think regressive taxes, I think things that are flat fees, or else things like fica, which cut out after a certain income.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#103

Post by mhaymo »

danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

Sounds like you're saying the problem is poverty. That is also what PG is saying. If you want to increase the opportunities for the population as a whole, attacking the income of the rich is not obviously a good solution.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#104

Post by pas »

adamlett wrote: post #91
Pyxl101 wrote: post #58

Earlier quoted context omitted.

> What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate What specific policies are those? Most people who advocate for such policies recommend taxation, which is what the GP is referring to: the government forcibly seizes the money. The GP is not really addressing a straw man when the most commo…

When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made…

Redistribution coupled with corruption (cronyism) results in new oligarchs.

This is a classic trade-off, just like surveillance and security. If you estimate that the chance of abuse is sufficiently low, then yes, those are great things to have.

If not. Holy shit, you know the drill.

So, the problem is not income inequality (lack of redistribution, or the network effects (the compounding) of capital), but the rationality of decision making. The stability of the utility function of those who make the decisions. Which is the aggregate of the whole power structure.

Do we see a stable trend in good governance?

I'd say that the US could use some internal redistribution. Less spending on war on things and more on education and social safety stuff. (It'd be probably much better for the US to stop funding the useless manpower-hungry parts of agencies - like the TSA and all the terror chasers - and send those guys that would get unemployed over to work as social workers, or even just pay them to get a degree and do something useful.)

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#105

Post by danhak »

douche wrote: post #99
danhak wrote: post #96

Earlier quoted context omitted.

No, it has nothing to do with the pie fallacy. Yes, even the poorest in America lead better lives in absolute terms than most people have throughout history. But regardless of the absolute "economic level x" of the poorest, the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc.

> the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc What exactly do you intend to do to change that? If you start everyone at a baseline level, some of them are going to be smarter, stronger, savvier or whatever, and will be more successful, and thus wealthier, and thus have greater access to whatever benefits that wealth can buy. Even if you zer…

It seems to me that there is probably some optimized point between total economic equality and extreme inequality. I believe we are drifting further away from that point.

In concrete terms, I don't believe those with pre-existing access to capital should receive privileged tax treatment. I'm im favor of lowering taxes on earned income and raising taxes on inheritance and investment income.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#106

Post by [deleted] »

douche wrote: post #99
danhak wrote: post #96

Earlier quoted context omitted.

No, it has nothing to do with the pie fallacy. Yes, even the poorest in America lead better lives in absolute terms than most people have throughout history. But regardless of the absolute "economic level x" of the poorest, the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc.

> the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc What exactly do you intend to do to change that? If you start everyone at a baseline level, some of them are going to be smarter, stronger, savvier or whatever, and will be more successful, and thus wealthier, and thus have greater access to whatever benefits that wealth can buy. Even if you zer…

[deleted]

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#107

Post by dvanduzer »

danhak wrote: post #84
zo1 wrote: post #83

Earlier quoted context omitted.

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general…

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

Taxes on inheritance are not regressive when you include a sensible floor. Current US Policy places the floor so this tax only affects families somewhere in the upper 1-10% of wealth.

Taxes on investment are complex. Considering the fact that most humans do not have anything approaching a real investment portfolio, it's hard to understand what you could mean when you say this kind of tax is regressive.

A properly progressive income tax should mean that more people can join the investment class. If the taxation within the investment class is actually regressive, then maybe we worry about that when the majority of humans have this problem.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#108

Post by zappo2938 »

zo1 wrote: post #83
zappo2938 wrote: post #25

Earlier quoted context omitted.

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general…

My argument is that not that the state needs to be 'fixing' things. I'm not saying wealthy people should contribute more just because they are wealthy. It is very unhealthy for the whole if money and the amount of power and control that comes with money gets consolidated into the hands of a very few. We don't need billionaires. I'd much, much rather have 10 people with $100,000,000 than one billionaire; even better is a 1000 people with $1,000,000 to invest. They will keep on make smart investments because they will wont to keep that $1,000,000 or try to get to $2,000,000 or $3,000,000. With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#109

Post by marvin »

appleflaxen wrote: post #82

Why not a death tax? Give a flat amount to the family (capped at say 5 million), then a flat 100% tax after that No living person pays more taxes Children can get an incredible windfall, but not eye-popping. Tax revenue goes through the roof.

While this might look like a superficially good idea, this means that the government gets 100% ownership of all businesses after 50 years or so. There are multiple reasons why this would be very bad, for example politicians would not have the specialized knowledge required to make the owner decisions of every business. It would also give politicians an unprecedented amount of power.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#110

Post by evgen »

throwaway_51661 wrote: post #77
evgen wrote: post #41

Earlier quoted context omitted.

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. Because the state is neither corrupt nor incompetent; this is the big fear of the cyber-selfish libertarians you will find on HN. Tell you what, why don't you start your rant with a list of these rich politicians who will grow even richer. Just a sin…

> Tell you what, why don't you start your rant with a list of these rich politicians who will grow even richer. Just a single name please. Hillary Clinton. https://www.rt.com/usa/327689-clinton-conflicts-state-depart... And BTW grandparent is 100% correct. This is EXACTLY how communism starts. First they come for the people who are rich and successful ... Throwaway account because it could hurt my career to declare m…

A Russia Today link? Seriously that is the best you can do? Back to the bog troll...
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