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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”

#111

Post by js8 »

sradu wrote: post #30

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. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

> 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.

Coming from a former communist country, I can explain why. Because the alternative, capitalistic "free market" where companies eventually end up as oligopolies, is actually worse and gives you less control over the resources involved. For example, botched privatization of water utilities here in Czech Republic hiked prices up 100x.

Yes, real democracy is quite a weak control, but at least it's some means of control. You don't get the same level of control over private corporation as you get as a citizen over public utility. And there are many examples of government run enterprises that prove this point, in Nordic countries and in Switzerland.

So state is something I can at least marginally influence by voting or by being involved in local politics (I have for example information laws that give me some insight about what's going on); and yeah, to me, giving state less control over resources by minimizing it is a losing proposition. If I could vote about the companies, then perhaps we could talk (but then they would be more like customer cooperatives than private companies).

Of course, you probably think competition is the solution, and I don't buy that. First, it doesn't exist in many places (as you're probably painfully aware), and I believe it actually tends to not exist. But the biggest point against the competition solution in my mind is that it's very "low information density" solution. People cannot come and to try to fix things (unless they make their own company, which is unrealistic to expect); they can only signal unhappiness by leaving. It promotes irresponsibility and fatalism. I think it's a kludge, frankly, compared to a possible system where you could really control citizen-owned companies via voting.

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

#112

Post by danhak »

throw_away wrote: post #102
danhak wrote: post #84

Earlier quoted context omitted.

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.

Regressive in the general sense--privileging those who already have access to wealth. The long term capital gains rate is a good example.

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

#113

Post by yxhuvud »

sradu wrote: post #30

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. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

> * They are highly educated.

Huh? You are mistaking cause and effect here. People are highly educated because the state pays for our education and give and lend enough money to handle living expenses while we study.

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

#114

Post by danhak »

mhaymo wrote: post #103
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.

Making it less easy for the wealthy to accumulate wealth exponentially !== attacking income of the rich.

Poverty is always relative and is inextricable from the issue of inequality.

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

#115

Post by throwaway_51661 »

evgen wrote: post #110
throwaway_51661 wrote: post #77

Earlier quoted context omitted.

> 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...

Here's a Wall Street Journal article describing the same thing:

http://www.wsj.com/articles/speaking-fees-meet-politics-for-...

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

#116

Post by douche »

danhak wrote: post #105
douche wrote: post #99

Earlier quoted context omitted.

> 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.

So why should inheritances be taxed again? They've already been taxed at least once - when the original wealth was earned.

If you want positive social mobility, then you need to encourage generational wealth. The rags-to-riches, pull-yourself-up-by-the-bootstraps in a single generation story is more romantic, but the more realistic path to advancement is to build on the foundations of the family nest egg. Taking a haircut on that family wealth each generation makes it harder to climb the ladder from working class to lower middle class to upper middle class.

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

#117

Post by vezzy-fnord »

Jdam wrote: post #70
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…

> Because the state is neither corrupt nor _incompetent_ This needs to be proven. Oh wait, it is proven like every day. Just open a random newspaper on a random date. /european

How someone can make such an unbelievably moronic and utopian statement is beyond my comprehension. A shame so few have yet to internalize the lessons of Buchanan and Tullock, though to presuppose the existence of a perfect government, I'm afraid is much more desperate than that.

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

#118

Post by jgord »

Thriptic wrote: post #79

Out of curiosity, would it be possible to mitigate most of the perceived negative effects of inequality (unequal access to opportunities) by simply re-allocating our existing tax revenue? For example, instead of paying for costly wars in the US / silly development projects like the F35, could we use that money to grant our citizens free college education, better access to health care under a single payer system, basi…

That really would be the rising tide that lifts all boats - trickle up from the bottom.

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

#119

Post by grahamburger »

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…

The same thing happens if someone gets rich and sticks their money anywhere but under their mattress.

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

#120

Post by [deleted] »

douche wrote: post #116
danhak wrote: post #105

Earlier quoted context omitted.

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.

So why should inheritances be taxed again? They've already been taxed at least once - when the original wealth was earned. If you want positive social mobility, then you need to encourage generational wealth. The rags-to-riches, pull-yourself-up-by-the-bootstraps in a single generation story is more romantic, but the more realistic path to advancement is to build on the foundations of the family nest egg. Taking a ha…

[deleted]
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