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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”

#131

Post by meric »

sytelus wrote: post #124
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…

No, increased government income is not required to decrease inequality. We just need basic fairness in US. Here are the policies I would suggest: - Capital gains should be taxes at least at same rate as income generated by labor. - Remove incentives from economically unproductive investments such as real estate. For example, discourage home ownership unless its primary residence. - Limit political contributions from…

To encourage the pursuit of financial independence from government at a reasonable retirement age:

- Progressive tax on consumption. No tax on labor.

- Zero capital gains if total assets is below $2M.

To discourage foreign home ownership:

- An non-primary residence or foreign investment in real estate can only be leasehold, maximum 25 years. At the end of which the control of property reverts back to the original owner and/or their beneficiaries.

To minimise effect of money on elected representatives that can't be removed mid-term:

- All bills voted by the public. Every citizen can elect a proxy for their votes. There are representatives, but the term of a representative is continuous rather than discrete 4 year terms, and anyone can be one.

To ensure affordable health care:

- Set up a government monopoly on purchasing pharmaceutical supplies, along with price ceilings for every type of drug that must not be breached to be eligible for purchase by government. Citizens may purchase drugs that are not on the list of drugs the government say they will purchase, but it must be imported from abroad.

The primary goal of government is always be security from other governments, so that it's citizens can live without subjugation. All other concerns should be secondary. Health and education is useless if next month the country will be invaded and its citizens exploited economically. All other concerns are secondary goals.

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

#132

Post by mrrrgn »

ZenoArrow wrote: post #74
SwellJoe wrote: post #8

Earlier quoted context omitted.

That's addressing the wrong side of the equation. The problem is phrased as "income inequality", but that's not the actual problem that needs solving (it doesn't necessarily hurt someone for one person to have a billion dollars, unless they use that money to influence policy in ways that harm others). The actual problem, as I see it, or, at least the variable that needs adjusting is the other side. The problem is tha…

> "But, a maximum wage is a ridiculous rebuttal, IMHO." Of course you're entitled to your opinion, but let's look at why a maximum wage can be used to tackle economic inequality, perhaps you'll not think it's quite so ridiculous after that. > "The actual problem, as I see it, or, at least the variable that needs adjusting is the other side." The main reason that a maximum wage impacts the poorest amongst us is that i…

Massive wealth accumulation isn't just about having money to buy things, it's about influence, and entities with the ability to marshal more than x million dollars per year (Apple, GOOG, Unicorn LLC) would still need to exist. If your policy became law what would stop people from simply dumping huge sums into businesses/non-profits that they control? I believe capping yearly income would introduce a lot of weird bugs into our system without fixing (m)any real problems.

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

#133

Post by pandaman »

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…

I have two theories:

1. Similarly to bourgeois in the Russian Empire they believe they can aim the redistributing horde at their enemies while remaining safe themselves.

2. Note how it's always the income inequality and never wealth? If everybody's income had been the same then wealth had much more value. E.g. if everybody's income had been limited to $100k pa then somebody with just $10M in cash would had more money (and hence influence) than anybody who stated at 0 could possibly make in their lifetime and such a wealth would have never been surpassed. If you are seeking rent from your wealth then limiting everybody's income is a pretty good strategy usually expressed as "fuck you, got mine".

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

#134

Post by js8 »

wstrange wrote: post #80
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" I really don't think that was the case. In a practical sense, communist regimes were the extreme endgame of inequality. Those at the very top of the chain lived like kings, while those at the bottom starved.

> Those at the very top of the chain lived like kings, while those at the bottom starved.

I don't think that was always the case, in particular, I doubt it was the case in Czechoslovakia.

Being a member of UV KSC (board of directors of the Communist party, the central organ) had special benefits such as better access to health care, goods imported from the West and having an american-sized house, but they were quite modest compared to benefits of today's top American CEOs. And in fact, the best paid people out there were probably some popular singers, who had maybe 50x the average salary. Typical director of state enterprise had maybe 5-10x the average salary. At the bottom, people didn't starve even if they made trouble (that meant a prison sentence and a menial job).

There are people who disagree with this assessment, but I have never seen a good evidence for the claim they would "live as kings". I agree there was inequality, but it wasn't so much monetary as it was in power and status.

It was probably one of the reasons why there wasn't a bloody revolution. Everybody, even the top officials wanted a "better" system.

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

#135

Post by PeterisP »

ZenoArrow wrote: post #74
SwellJoe wrote: post #8

Earlier quoted context omitted.

That's addressing the wrong side of the equation. The problem is phrased as "income inequality", but that's not the actual problem that needs solving (it doesn't necessarily hurt someone for one person to have a billion dollars, unless they use that money to influence policy in ways that harm others). The actual problem, as I see it, or, at least the variable that needs adjusting is the other side. The problem is tha…

> "But, a maximum wage is a ridiculous rebuttal, IMHO." Of course you're entitled to your opinion, but let's look at why a maximum wage can be used to tackle economic inequality, perhaps you'll not think it's quite so ridiculous after that. > "The actual problem, as I see it, or, at least the variable that needs adjusting is the other side." The main reason that a maximum wage impacts the poorest amongst us is that i…

Maximum wage would have little impact on maximum income of the wealthy.

Already in the current situation their main income is not as wages but simply the value increase of assets (companies, real estate, etc) that they own, and with a minimum of legal paperwork all high-end wage income can be restructured as such unless you prohibit owning and selling businesses.

It would be a symbolic statement with no practical effect.

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

#136

Post by ZenoArrow »

mrrrgn wrote: post #132
ZenoArrow wrote: post #74

Earlier quoted context omitted.

> "But, a maximum wage is a ridiculous rebuttal, IMHO." Of course you're entitled to your opinion, but let's look at why a maximum wage can be used to tackle economic inequality, perhaps you'll not think it's quite so ridiculous after that. > "The actual problem, as I see it, or, at least the variable that needs adjusting is the other side." The main reason that a maximum wage impacts the poorest amongst us is that i…

Massive wealth accumulation isn't just about having money to buy things, it's about influence, and entities with the ability to marshal more than x million dollars per year (Apple, GOOG, Unicorn LLC) would still need to exist. If your policy became law what would stop people from simply dumping huge sums into businesses/non-profits that they control? I believe capping yearly income would introduce a lot of weird bugs…

What's to stop people doing that now (dumping money into corporations and using the corporations as vehicles of political influence)? Strikes me as a separate (but related) bug that already exists.

One way to tackle this issue in the political space is to forbid for-profit corporations from funding political lobbying. All funding for lobbying efforts have to come from individuals or not-for-profit organisations.

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

#137

Post by PeterisP »

tahssa wrote: post #17
jblow wrote: post #5

Earlier quoted context omitted.

If you set a maximum wage like that, a lot of what is good in society would not happen because people would not be able to amass capital. For example, you would not have a SpaceX or a Tesla. You would not have Y Combinator as it exists today. You would not even have the video game that I am about to release next month. Yes, there are a lot of jerks who amass capital and do nothing with it or who do irresponsible thin…

Capital accumulation can still happen without wage accumulation. Just don't pay yourself too much and keep the money inside the business. Naturally the money will get spent on building things like tesla.

Tesla happened because individuals were able to take extremely large sums out of an unrelated business (Paypal), as did a huge part of early stage tech investments, funded at that point mainly by individuals who got multimillion exits in their previous businesses. If the money had been kept inside business, then you'd have the innovation rate that internal subsidiaries of IBM achieved, not the innovation rate of the Silicon Valley.

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

#138

Post by jrochkind1 »

zappo2938 wrote: post #98
jrochkind1 wrote: post #65

Earlier quoted context omitted.

> A small group of billionaires deciding how to allocate resources is better but not by much than a small group of people at the Gosbank in the Soviet Union deciding how to allocate resources. How is it better even at all, even not by much? If we imagine that the small group of central planners were actually democratically elected (in the Soviet Union they were not, although they ideologically pretended to be), it's…

It seems ridiculously simple to me. Let's define wealth equality as 100 people all with 100,000 dollars a piece. Rather than having a small group of people either in a board room on the top floor of 85 Broad St. or a small group of communists allocate resources, let everybody use their money as a vote to decide how to allocate resources. People need to eat so some money will be spent on food. Most people will need tr…

I question your assumption that in the actual real world, having more money has any kind of correlation to being a better decision-maker. Also, more power to people who make the best decisions isn't, I think, what people generally understand 'democracy' to be, in part because there's no "objective" way to determine who are the better decision makers.

I also still don't understand why there'd be some 'threshold' (threshold of what?) at which rich people would start making bad decisions (or at least decisions that are bad for everyone that's not them?), whereas before that they would be making 'good' decisions (meaning decisions that benefit people other than them, I guess?).

I'm still not sure what you think 'democracy' consists of exactly.

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

#139

Post by ZenoArrow »

PeterisP wrote: post #135
ZenoArrow wrote: post #74

Earlier quoted context omitted.

> "But, a maximum wage is a ridiculous rebuttal, IMHO." Of course you're entitled to your opinion, but let's look at why a maximum wage can be used to tackle economic inequality, perhaps you'll not think it's quite so ridiculous after that. > "The actual problem, as I see it, or, at least the variable that needs adjusting is the other side." The main reason that a maximum wage impacts the poorest amongst us is that i…

Maximum wage would have little impact on maximum income of the wealthy. Already in the current situation their main income is not as wages but simply the value increase of assets (companies, real estate, etc) that they own, and with a minimum of legal paperwork all high-end wage income can be restructured as such unless you prohibit owning and selling businesses. It would be a symbolic statement with no practical eff…

Fair point. There are ways to tackle the asset issue, such as a land ownership tax, but I'll give this some more thought. Thanks for your comment.

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

#140

Post by mhaymo »

danhak wrote: post #114
mhaymo wrote: post #103

Earlier quoted context omitted.

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.

How are the issues you listed relative? How does Mark Zuckerberg being super-rich contribute to "huge swaths of our country do not have the ability to fully explore and develop their talents"?
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